The News that the International Monetary Fund will be the first major international financial institution to officially return to Russia since Putin’s invasion of Ukraine in February 2022. This underscores the IMF’s systemic pro-authoritarian impulses and its tolerance of blunt violations of international law by Russia under its current Managing Director, Kristalina Georgieva, who urgently needs to be replaced. With the presidential election heating up in the US, the issue of Georgieva’s anti-Western bias can no longer be swept under the rug.
The IMF’s decision to send an official mission to Russia is far more than just a symbolic victory for Putin. An IMF delegation pledging to visit Moscow next month to meet with senior Russian politicians not only lends the Kremlin a false veneer of legitimacy at a time when other multilateral organizations are rightly avoiding Putin, but also gives its clever economic officials the opportunity to further distort the IMF’s portrayal of the Russian economy, which has unfortunately been reported as fact by clueless Western journalists. Moreover, the IMF has inexplicably agreed to send a former Putin’s cronies under US sanctions.
It is hardly surprising, then, that Putin’s cronies are dancing in the streets and doing victory laps to celebrate the IMF’s false legitimization of the Kremlin. In fact, the news that the IMF would return to Russia was not by the IMF itself, but by the Russian representative of the IMF, who told Reuters that they had been “excluded from the IMF under pressure from our Western friends,” but had nevertheless prevailed.
If this incident were an isolated incident, it would be worrying enough. However, it fits into a longer pattern of pro-authoritarian cronyism and anti-American behavior by the IMF under its controversial and polarizing Director General Georgieva.
Georgieva’s authoritarian tendencies have long been widely suspected. WilmerHale’s damning 2021 investigation incriminated Georgieva was implicated in a data manipulation scandal to improve China’s business climate ratings during her previous stint at the World Bank. Investigators concluded that Georgieva applied “undue pressure” to “make certain changes to China’s data points to improve its ranking, precisely at the time when China was expected to play a key role in the bank’s capital increase campaign,” amid reports of rampant demoralization among staff. Georgieva denies any wrongdoing.
Under Georgieva, the IMF’s pro-authoritarian impulses became particularly pronounced after Putin’s invasion of Ukraine. While other multilateral organizations sought to sideline Russia, the IMF, without setting foot in Russia and based only on economic statistics selected by Putin, inexplicably produced an optimistic forecast for Russia’s economic growth. which even exceeded the forecasts of the Russian Central Bank, which prompted the public to question the effectiveness of Western economic sanctions The Russian economy was already damaged before these sanctions were fully implemented.
When we asked questions about the IMF’s forecast, numerous professional economists expressed great concern about the IMF’s methodology amid great outcry in the mediaIMF economists privately admitted for us that they have no basis for such predictions, no special knowledge beyond what is available to anyone else, and practically no insight into what is really going on in Russia. Despite this admission, the IMF inexplicably continued to reiterate its pro-Russian economic forecasts, predicting that Russian economic growth the entire western world and looked the other way when Putin withheld the timely publication of dozens of presumably unfavorable key statistics on national income.
Since mid-2022, Putin has hidden previously providedstatistics on national income required by the IMF. These now-disappeared indicators include foreign trade data (including those on exports and imports, especially with Europe), oil and gas prices, Monthly gas production dataCommodity export volumes, capital inflows and outflows, annual financial statements of large companies (which previously had to be published by the companies themselves), central bank money supply data, foreign direct investment data, credit and lending data, and other data related to credit availability.
Needless to say, the many dangers associated with endorsing Putin’s economic statistics were clear to virtually everyone except the IMF. Many Sanctions Economists warned against the use of Russian GDP forecasts, especially since their methodology is subject to constant and often unannounced changes and “Recalculations.”
Agathe Demarais, director of global forecasts at the Economist Intelligence Unit, warned: “The real problem lies in Western countries: experts and media quoting the figures on the Russian recession should probably ignore the Time to question their data instead of reinforcing the Kremlin’s arguments.”
Over the past two years, economic indicators have been constantly emerging that contradict the IMF’s rosy forecasts and point to a real strain on the Russian economy, including in our latest release this month with co-authors Anders Aslund and Michal Wyrebkowski.
Kristalina Georgieva’s anti-American, anti-Western and pro-authoritarian bias as Managing Director of the IMF has become too dangerous to ignore. We are far from the first to raise these concerns. Many Biden administration officials previously publicly expressed their distrust of Georgieva’s leadershipand there were widespread Cross-party calls for her overthrow from best chosen Officials in the USA
Representative Patrick McHenry and the leadership of the US House Financial Services Committee called on Georgieva immediate removal this spring: “Ms. Georgieva’s tenure at both the World Bank and the IMF was marked by ethical failures… at the IMF itself, Ms. Georgieva presided over a period in which the Fund failed to hold China to international standards… Ms. Georgieva’s history of intervening in research on behalf of China makes her unsuitable to defend the institution.”
Strangely, Georgieva secured a second five-year term at the helm of the IMF by It appeared to be a case of dark backroom deals, spurred on by the support of a cabal of European Representatives without any public debate or consideration of alternatives.
The IMF’s Board of Governors has been grossly negligent in allowing such misconduct to continue for so long – especially when the United States has by far the most votes and NATO countries control well over 50% of the votes, not even counting Turkey and Hungary. Western countries should have demanded accountability and insisted on changes to reform the organization long ago.
Georgieva’s tenuous grip on power may be one of the few things the two major political parties in the US agree on. Either Kamala Harris or Donald Trump will put their own stamp on the composition of the IMF Executive Board. Regardless of the outcome of the US elections, the next administration will have to deal with Willing European allies to reform the leadership of the IMF – and end its embrace of totalitarian villains.
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