Anyone in charge of the International Monetary Fund would be concerned about what is happening in Ukraine, but Kristalina Georgieva has a personal reason for being anxious about events in eastern Europe. In London, two days before Vladimir Putin launched his invasion, the IMF’s managing director tells the Observer she has a family connection to the north-eastern city of Kharkiv – an early target for Russian air strikes.
“My brother married a Ukrainian and he and his wife went there to look after her mother,” says the Bulgarian-born economist. “They stayed because they didn’t want to leave her in a time of uncertainty. I speak to him every day.”
Since taking the IMF job in 2019, Georgieva has spent most of her time dealing with the economic fallout from the biggest global health crisis in a century. She is already anxious about what the pandemic has done to the world: a war is something she could do without.
“I’m very worried. For the first time in at least two decades, countries that used to be catching up are falling behind. Poverty is growing, hunger is growing and instability is growing. There is a dangerous divergence between well-to-do countries and the rest of the world, because of levels of vaccination and the availability of policy support.”
In one respect, Georgieva is no different from the 11 IMF managing directors who preceded her. A deal dating from the 1940s means Europeans always choose the head of the IMF in return for the job of running the World Bank going to an American.
Georgieva is different, though, in that she is the first IMF head to come from a former communist country: she was born in Sofia in 1953 – the year Joseph Stalin died. It is safe to say none of her predecessors had a great-grandfather who was a prominent revolutionary.
Sitting with her back to the London skyline on the top floor of a hotel beside the Thames, she says: “I was very fortunate to grow up in a loving family. I would walk back from school, the windows were open and I could hear them singing.
“There were difficulties, and the more I grew up the more I recognised them. The biggest one was the restrictions of freedom and the way keeping people in the dark can severely impact them.”
Her upbringing was, Georgieva says, a good preparation for running the IMF, a multilateral organisation that provides advice and financial aid to 190 member countries. “I saw the impact of bad policies on the lives of people,” she says. “I saw my mother’s lifelong savings evaporate in the 1990s as a result of hyperinflation. I remember getting up at 4am and queueing to get milk for my daughter.”
CV
Age 68
Family Father Ivan was a civil engineer; mother Minka worked as a scarf weaver and later as a shop manager. Her great-grandfather, Ivan Karshovski, was a prominent Bulgarian revolutionary. Married to Kino Kinov, with a daughter, Dessi, and two grandchildren.
Education PhD in Economics and MA in political economy and sociology from the Karl Marx Higher Institute of Economics in Sofia. Postgraduate research at the Massachusetts Institute of Technology and the London School of Economics.
Last holiday “New Year’s Eve with my family in Sandanski, a beautiful town in south-western Bulgaria.”
Best advice she’s been given “In my father’s words: ‘Do something good and throw it behind you’.”
Biggest career mistake Being late to recognise the importance of gender equality. “Doing my bit now to compensate for the past.”
Word she overuses “Wholeheartedly.”
How she relaxes Playing her guitar (Beatles songs are favourites) and recording bedtime stories for her granddaughter.
Before taking over from Christine Lagarde at the IMF, Georgieva was number two at the World Bank, during which time she oversaw the annual Doing Business report, which ranked countries according to how easy it was to set up and run a company there. An allegation that Georgieva ordered Bank staff to doctor the 2018 edition so that the findings were more favourable to China put her job in jeopardy.
Top economists such as Joseph Stiglitz and Lord Stern rallied to her defence and the IMF board eventually said it had full confidence in her. There were rumours she had been the victim of a dirty tricks campaign.
Lagarde says of her successor: “One needs the membership support to better support the members in trouble, and what matters is what is achieved: under Kristalina’s leadership the IMF response to the consequences of this unprecedented global health crisis was prompt, powerful and exceptionally calibrated in its support of as many countries as possible.”
Georgieva herself says: “From the very beginning of the Doing Business saga I was clear I had done nothing wrong. I stand in front of the world with 40 years of professional experience, 30 of them in international organisations. What I care about is doing the right thing and serving the membership.”
Perhaps unsurprisingly, she prefers to talk about the global economy and the post-pandemic challenges facing it. The IMF is not, she insists, the economically hardline organisation it is often perceived to be, but rather has been a vital source of support for struggling countries. “We dramatically increased support for our membership. We have done more for more countries faster than ever in our history. Countries without financial capacity were not left to fight the Covid-induced crisis alone.”
Georgieva says she wants a new IMF financial instrument – the Resilience and Sustainability Trust – to be up and running by the organisation’s annual meeting in the autumn. This $50bn trust fund would be provided by rich countries donating a portion of the $650bn of IMF reserve assets allocated last year. The plan is to provide affordable long-term finance to assist in the green transformation of developing countries before it is too late.
She says the Cop26 conference in Glasgow was only a partial success, because it set targets for 2050 but not for the next decade. She’s an environmental economist by training, and her message is blunt: “All the beautiful plans will mean nothing, they won’t be worth the paper they’re written on, if in this decade we are hesitant and don’t accelerate the transition to low-carbon, climate-resilient, economies.”