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World Bank suspends competitiveness report after suspicion of manipulating data in 4 countries
Economy News - Baghdad
The World Bank said it has stopped publishing its flagship report on business competitiveness to investigate data breaches that may have been improperly altered.
The Wall Street Journal reported, according to a person familiar with the matter, that the data appears to be related to four countries, namely China, the UAE, Azerbaijan and Saudi Arabia, adding that this step renewed the fears that were raised for the first time two years ago by the chief economist of the World Bank Paul Romer that the report called "Doing Business." He was subject to manipulation.
The newspaper pointed out that the report has become the main reference on the international ranking of the business environment in various countries and attracts news headlines around the world regarding the status of individual countries, and it has been cited as a strong incentive for governments to compete and obtain higher rankings by improving their regulatory environment.
Data systematic review
The World Bank said in a statement that it has begun a systematic review of the data, launching an independent audit of the process, and that it will correct the data.
According to sources at the World Bank, Bank employees expressed their concerns to the Department of Development Economics - which publishes the report - in late June. By early this month, violations were verified after a thorough review.
The results were reviewed by the World Bank's executive board last Thursday.
The World Bank stated that the October 2017 and October 2019 reports were affected, adding that the reports will be reviewed over the past five years. The next edition of the report, which was to be published in just over a month, will be delayed.
In the case of China, Azerbaijan, and the UAE, the World Bank has reported significant improvement in business environments in recent years. Five years ago, China ranked 90th in the report. And last year, its ranking climbed to 31st.
Azerbaijan rose from 80th to 34th place during that time. In last year's report, the UAE was ranked 16th, compared to 22 five years ago.
Saudi Arabia’s ranking has slipped from 49th to 62nd in the past five years.
The newspaper says that the embassies of the four countries did not respond to requests for comment.
An example of Chile
In 2018, the World Bank's chief economist, Paul Romer, said the data in the report was subject to fraud. He specifically claimed that the data on Chile appeared to have been manipulated to show the country's deteriorating business environment had improved under a left-wing government. Romer expressed concern about the possibility of political motives behind the change of arrangement.
These allegations caused an uproar in the bank and in Chile, where the Chilean government demanded an apology, and the bank officially apologized to Chile and said that Rumer's accusations of political bias were unjustified, so Rumer announced his resignation from his position as chief economist two weeks later.
The World Bank conducted an audit later that year that said there was no political tampering with the rating, and that the review only erred the bank to change its methodology so repeatedly that the ratings became confusing. Romer said at the time, however, that he believed the audit did not address his main concerns about the potential for data tampering.
Conflict of interest
Justin Sandifor, senior research fellow at the Center for Global Development, a Washington think tank focused on poverty eradication, said the Doing Business report generates deep conflicts of interest and that conflicts are inevitable when the member states that finance World Bank programs are the ones that They are categorized by project, which creates the potential for internal pressure to make some countries look better or worse.
A World Bank spokesperson said that the independence of the bank’s research and data is crucial to informing its work, and that while the bank provides advisory services to countries that request assistance in improving their business environments, these services are not provided by the employees involved in preparing the "Doing Business" report.
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