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Get out of the almighty “Doing Business” ranking, published annually by the World Bank. It was finally abandoned on Thursday 16 September 2021. All the better, rejoice all those who have been contesting it for many years.
And they are abundant. There have obviously been poorly valued and therefore dissatisfied. But there are also hundreds of NGOs. In March 2021, 360 organizations or researchers in the field of economics and development signed a petition calling for its abolition. The sling erupted with the resignation of the World Bank’s chief economist in 2018, just over a year after his arrival. American Paul Romer, who will be crowned the Nobel Prize a few months later, is shocked by the lack of intellectual honesty in the rankings. He publicly denounced Chile’s score manipulation. Relegated after socialist Michelle Bachelet came to power, then was promoted when liberal Pinera became president. Only to fall back when Michelle Bachelet was re-elected, while the business environment was almost stable during this period.
It took a final controversy that sprayed the CEO of the IMF for the abandonment of the “Doing Business”.
A few weeks before the annual meetings of the two financial institutions, it was urgent to extinguish the fire as soon as possible. Kristalina Georgevia, who was previously at the World Bank, is suspected of lobbying for the benefit of several countries, including China. The facts date back to 2018 for China. The bank is therefore in urgent need of funding. Its first contributor, Donald Trump’s United States, is unenthusiastic, difficult in this context to offend its third contributor, China, which had to drop that year by 8 steps in the ranking. China will finally keep its 78th place. Facts, if true, that demonstrate to what extent the immediate interests of the institution have taken precedence over its independence.
On the merits, the critics of the ranking point out that the World Bank cannot be 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 hand, assigns them a rating that plays a decisive role for their future. Roles that clash more and more because this relationship created almost twenty years ago has taken on disproportionate importance. Some states like India or Rwanda are implementing reforms only to better meet the expectations of “doing business”. For developing or emerging countries it is a highly publicized business card, especially when the result improves, to attract foreign investors. It is taken into account in the calculation of country risk, which has an impact on the interest rate at which a state borrows. And until 2019, the World Bank even provided paid advice to countries wishing to improve their ranking, advice sought by, among others, the United Arab Emirates or Saudi Arabia. Faced with the uproar caused by this practice, he was stopped abruptly.
It is also criticized for its Anglo-Saxon prism
This is a criticism issued by France in 2015. Paris was then furious that it was ranked 44th that year, behind Jamaica. France believes that the liberal view of the Anglo-Saxon world prevails in the analysis. Furthermore, 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 “doing business” is the natural child of the monetary adjustment programs of the 1980s and 1990s, painfully imposed by the IMF. The elements that favor the liberalization of the economy raise the average and the protections put in place by the States push it down as they play a stabilizing role in the event of a crisis, as seen with the Covid-19 pandemic.
► The Hong Kong stock market fell sharply. This morning it lost 4%, due to the sinking of the Chinese promoter Evergrande, listed on this stock exchange. Evergrande, on the verge of bankruptcy, lost 17%, dragging other real estate giants and a Chinese insurance giant down.