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The IMF’s Big Week

The fund must decide whether to retain leader Kristalina Georgieva amid claims she is too soft on China.

By , the newsletter writer at Foreign Policy.
A man walks past a poster announcing the upcoming annual meeting of the World Bank and International Monetary Fund.
A man walks past a poster announcing the upcoming annual meeting of the World Bank and International Monetary Fund (IMF) outside of the IMF headquarters in Washington on Oct. 7. MANDEL NGAN/AFP

Here is today’s Foreign Policy brief: The International Monetary Fund and World Bank hold annual meetings in Washington, Andrej Babis narrowly loses Czech elections, and the world this week.

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The IMF and World Bank’s Crucial Week

Here is today’s Foreign Policy brief: The International Monetary Fund and World Bank hold annual meetings in Washington, Andrej Babis narrowly loses Czech elections, and the world this week.

If you would like to receive Morning Brief in your inbox every weekday, please sign up here.


The IMF and World Bank’s Crucial Week

The International Monetary Fund (IMF) and World Bank hold their annual meetings in Washington this week with the credibility of the two Bretton Woods institutions once again in question.

As meetings begin today, a political pall hangs over the proceedings as IMF chief Kristalina Georgieva fights for her position amid allegations she personally interfered—to China’s benefit—regarding an influential business ranking when she was the No. 2 at the World Bank in 2017.

The issue centers around a recently published investigation from law firm WilmerHale, which found that Georgieva improperly influenced her subordinates to prevent China from dropping further on the World Bank’s annual “Doing Business” rankings.

Georgieva “fundamentally” disagrees with the conclusions made in the report and reportedly met late into Sunday night with the IMF’s executive board to defend her position.

(For a deep dive on the issue, see FP columnist Adam Tooze’s account, or better yet, listen on the latest FP podcast Ones and Tooze.)

The episode has provoked the powers behind the IMF. According to the Financial Times, the United States and Japan want Georgieva to go—U.S. Treasury Secretary Janet Yellen has reportedly stopped taking Georgieva’s calls—while Europe’s strongest powers, along with Russia and China and much of the developing world, want her to stay.

The wrangling over Georgieva’s future reflects the larger debate over how much power the United States is willing to let China wield in institutions that have U.S. primacy baked into them from their inception. (The United States currently has almost three times the voting power of China at the IMF, for example.)

As Edward Luce writes in the Financial Times, “it takes little imagination to picture China losing interest in bodies such as the IMF if it does not receive its due as one of the world’s two great powers.” A Chinese departure would also risk losing out on “key tools for engaging China in an increasingly bifurcated world,” Luce adds.

Breaking up the club. One way to ease the evolution of Cold War institutions could be to break the U.S.-Europe duopoly on the top positions at the IMF and World Bank. As Devesh Kapur and Arvind Subramanian write in the Indian Express, meritocratic choices for the top jobs could provide both a clean slate and more effective messengers: “These heads often go around the developing world, preaching the virtues of good governance, from arguing against the scourge of corruption to improving data integrity. … How credible can such policy messages be if their carriers are themselves compromised?”

Global growth stumbles. Aside from palace intrigue, there is the small matter of the world’s economy. On Tuesday, the IMF is expected to estimate slightly lower economic growth in 2021 than the 6 percent it forecast in June. The reduction is based in part on the uneven growth trajectories of wealthy countries and their poorer counterparts. Speaking last week, Georgieva said most advanced economies would return to pre-pandemic levels by 2022 while emerging economies would take “many more years” to recover.

Masood Ahmed, president of the Center for Global Development, summarized the business that can still get done this week, despite the distractions. Top of the list: a serious plan for vaccinating the world.


The World This Week

On Tuesday, Oct. 12, the International Monetary Fund launches its biannual World Economic Outlook.

The G-20 holds an extraordinary summit on the future of Afghanistan.

The Russian Duma reconvenes following elections in September.

On Wednesday, Oct. 13, the International Energy Agency releases its annual World Energy Outlook.

G-7 finance ministers and central bank governors meet in Washington. A G-20 finance ministers meeting also takes place.

The World Trade Organizations council on Trade-Related Aspects of Intellectual Property Rights, known as the TRIPS council, holds a two-day meeting.

On Thursday, Oct. 14, The U.N. General Assembly elects new members to the Human Rights Council.

On Friday, Oct. 15, UNICEF, the U.N. children’s fund, releases its annual State of the World’s Children report.

On Sunday, Oct. 17, Cape Verde holds its presidential election.


What We’re Following Today

Czech election aftermath. Andrej Babis’s days as the Czech Republic’s prime minister are numbered after his ANO party suffered a shock defeat in national elections over the weekend. A bloc of five opposition parties defied the polls, winning 108 out of 200 seats in the Chamber of Deputies, setting the stage for Babis’s exit.

A potential transition is complicated by the sudden hospitalization of Czech President Milos Zeman on Sunday with an undisclosed condition. If Zeman’s condition does not improve, the task of choosing the leader of a new government falls on the speaker of the Chamber of Deputies, a position currently held by a member of the ANO. The opposition is expected to vote in a new speaker later in the month, and the legislature could declare Zeman unfit to perform his duties—which would send the country into constitutionally uncharted waters.

Iraq’s election. The results of Iraq’s parliamentary election are expected today with turnout figures suggesting most Iraqis voted with their feet. A turnout of just 41 percent in Sunday’s vote marks the lowest voter participation since elections were introduced following the fall of then-Iraqi dictator Saddam Hussein in 2003.


Keep an Eye On

South Korea’s presidential contest. Lee Jae-myung, the governor of South Korea’s Gyeonggi province, will stand for the ruling Democratic Party in next year’s presidential contest after winning 50.3 percent of the vote in the party’s primary on Sunday. Lee has led most opinion polls heading into the March election, when he is likely to face conservative challenger Yoon Seok-youl, who most recently served as South Korea’s prosecutor general.

China-Taiwan tensions. Taiwanese President Tsai Ing-wen vowed not to “bow to pressure” from Beijing on Sunday following earlier remarks from Chinese President Xi Jinping reiterating calls for unification with the island it claims as its own territory. Both were speaking at events commemorating the 110th anniversary of the end of Chinese imperial rule. The remarks come amid increasing tensions in the region exacerbated by repeated incursions into Taiwan’s air defense identification zone by Chinese planes and the recent revelation that U.S. troops have been training Taiwanese forces for at least a year.

Sankara trial. Fourteen people go on trial today in Burkina Faso for the murder of revolutionary leader Thomas Sankara, 34 years after his assassination. Blaise Compaoré, Sankara’s immediate successor as president up until he fled to the Ivory Coast in 2014, will be tried in absentia.


Odds and Ends

Spies looking for the classified details on French and British weaponry have a new shortcut: the online forum for the video game War Thunder, which is prized for its accurate designs of modern and historical combat vehicles.

The most recent security breach came after a user—claiming to be a French tank crew member—posted sections of the French Leclerc tank’s classified manual to win an argument over whether the game’s representation matched up with reality.

It is the second time this year that the game’s forum has been the site of a classified leak. In July, a user claiming to be a British Challenger 2 tank commander posted the machine’s classified specifications to help improve the in-game tank. Responding to the most recent breach, moderators on the forum reminded users “it’s not funny to leak classified documents of modern equipment.”

Colm Quinn is the newsletter writer at Foreign Policy. Twitter: @colmfquinn

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