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Exit the almighty “Doing Business” ranking, published every year by the World Bank. It was definitively abandoned on Thursday, September 16, 2021. So much the better, rejoice all who have been contesting it for many years.
And there are plenty of them. There are, of course, the poorly rated and thus dissatisfied states. But there are also hundreds of NGOs. In March 2021, 360 economics and development organizations or researchers signed a petition to demand its abolition. The pendulum broke with the resignation of the world bank’s chief economist in 2018, just over a year after his arrival. American Paul Romer, who is crowned Nobel laureate a few months later, is shocked by the lack of intellectual honesty in the ranking. He had publicly denounced the manipulation of Chile’s score. Downgraded after socialist Michelle Bachelet came to power, then upgraded when liberal Pinera became president. Only to fall back again when Michelle Bachelet was re-elected, while the business climate was more or less stable during this period.
It took one final controversy with the director of the IMF before the “Doing Business” could be abandoned
A few weeks before the annual meetings of the two financial institutions, it was urgent to extinguish the fire as quickly as possible. Kristalina Georgevia, who previously served at the World Bank, suspected of exerting pressure in favor of several countries, including China. The facts go back to 2018 for China. The bank then has an urgent financing need. The first contributor, Donald Trump’s United States, is unenthusiastic, in this context, difficult to insult the third contributor, China, which would fall by 8 steps in the rankings that year. China finally retains its 78th place. If true, facts showing to what extent the direct interests of the institution prevail over its independence.
On the merits, the opponents of the ranking insist that the World Bank cannot be a judge and jury
On the one hand, the Bank finances and advises the governments of poor countries or countries in crisis, and on the other, it gives them a rating that plays a decisive role in their future. Roles that increasingly clash because this relationship, which began almost twenty years ago, has become disproportionately important. Some states, such as India or Rwanda, are only implementing reforms to better meet the expectations of ‘doing business’. For developing countries or emerging countries, it is a much-discussed business card, especially if the result improves, to attract foreign investors. It is taken into account when calculating country risk, which has an impact on the interest rate at which a government borrows. And until 2019, the World Bank even gave paid advice to countries that wanted to improve their ranking, advice requested by the United Arab Emirates or Saudi Arabia, among others. Faced with the outrage caused by this practice, it was stopped.
He is also criticized for his Anglo-Saxon prism
This is a critique of France in 2015. Paris was furious at the time that it was ranked 44th that year, behind Jamaica. France believes that the liberal vision of the Anglo-Saxon world predominates in the analysis. Moreover, the promulgation of laws is taken into account, but not their application, which leads to a very distorted view of reality. Keynesian economists believe that this “business” is the natural son of the monetary adjustment programs of the 1980s and 1990s, painfully imposed by the IMF. The elements facilitating the liberalization of the economy push up the average and the protections put in place by the states make it fall, as they play a stabilizing role in the event of a crisis, as evidenced by the Covid-19 pandemic .
► The Hong Kong stock market fell sharply. It lost 4% this morning due to the sinking of Chinese promoter Evergrande, listed on this exchange. Evergrande, on the verge of bankruptcy, lost 17%, dragging down other real estate giants and a Chinese insurance giant.