Meet the Bulgarian economist with a major influence on Ottawa's big-spending ways

OTTAWA — Who is Kristalina Ivanova Georgieva-Kinova? And how did she apparently convince the debt-ridden Canadian government to spend billions of dollars?  

Georgieva-Kinova, or simply Georgieva as she is known professionally, is a Bulgarian economist who has been the managing director of the International Monetary Fund (IMF) for the last six years.  

But unlike most 72-year-old, eastern European technocrats, Georgieva seems in recent months to have had a profound influence on Canadian fiscal policy.    

At almost every public stop in recent weeks, including Thursday’s post-budget event at an innovation hub in Toronto, Finance Minister François-Philippe Champagne has referred to Georgieva’s apparent endorsement of the Canadian government’s policy directions, particularly its willingness to spend more.    

During his opening remarks at the Toronto event, Champagne said he visited the IMF recently where Georgieva pointed to only two countries — Germany and Canada — that have the fiscal room to spend more on items such as infrastructure and housing.  

Georgieva, a graduate of the Karl Marx Institute of Economics, is even quoted generously in the two-page foreword section of the federal budget itself, saying that Canada “stands out” in the G7 for its decisiveness, including the way it has “modernized the budget framework — separating operating spending from investing, and focussing strategically on pro-growth investments that can lift up productivity.”  

Don Drummond, a former high-ranking executive at the Department of Finance and chief economist at TD Bank, said Champagne has been quoting Georgieva because she is a respected authority who provides the government with political cover for doing what they want to do: more spending.  

But Canada’s debt situation is only strong, Drummond said, when compared with the “fiscal basket cases” that make up the rest of the G7. “Be careful the company you want to keep,” he said.

Champagne and Carney have said that Canada is cutting waste, while spending more on pro-growth items such as infrastructure and lower taxes. But this week’s budget projects a deficit this fiscal year of $78.3-billion, the third highest in Canadian history and the largest ever in a non-pandemic year. The Carney government’s forecast calls for modest dips in the annual deficit over each of the next four years, although the cumulative effect will be another $320-million of new debt before the end of the decade.  

The federal government has now accumulated $1.27-trillion in debt, almost half of which has been added over the last five years. With the budget’s updated forecast for this fiscal year, Ottawa is now on pace to amass $593.1-billion in debt over that five-year span, or 46.7 per cent of the total debt accumulated in Canadian history.  

So who is Georgieva?  

Born in Sofia, Bulgaria, Georgieva’s father was a road worker and civil engineer, while her mother was a shopkeeper. She earned a PhD in economics and a Master’s degree in political economy and sociology from the Karl Marx Higher Institute of Economics in Sofia, now called the University of National and World Economy.  

Georgieva, who could not be reached for comment, started her career teaching economics at her alma mater in 1977. She joined the World Bank in 1993, launching what has been a very successful international career. Since 2010, she has worked mostly in various European political and economic institutions, landing her current position in 2019 as a replacement for Christine Lagarde, who became president of the European Central Bank.  

The first person from an emerging country to lead the IMF, Georgieva has focussed much of her career on gender equality, the environment, and foreign aid and also wrote the first-ever textbook on microeconomics in Bulgarian. She is now in her second term at the IMF.  

Despite the success, Georgieva’s career has not been without controversy. Her leadership at the Washington, D.C.-based IMF has been criticized for being too friendly to authoritarians, particularly Russia. In 2021, an independent inquiry found that she manipulated a report while at the World Bank Group by instructing her staff to alter data so that it boosted the rankings of China and Saudi Arabia.  

The IFM is an international organization that was, along with the World Bank, established in 1944 to help rebuild and stabilize the global economy after the Second World War.  

National Post

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