World Bank to fire staff in revamp

10/10/2013 | Phil Thornton and Anthony Rowley

Bank chief Jim Yong Kim defends his plans to cut $400m off its budget, saying that the lender needs to make efficiencies to stay relevant

The sweeping reorganization of the World Bank Group, which has stirred up considerable controversy both within and outside the institution, is due to be approved tomorrow by the Bank’s Development Committee and will involve job losses among staff.

The “World Bank Group Strategy” is designed to “consolidate” the currently far-flung World Bank empire, Bank President Jim Yong Kim told Emerging Markets in an interview in which he defended the proposed restructuring of Bank operations and of staff.

His strategy will see the creation of 14 “global practices” within the Bank embracing different project areas and countries and designed to cut $400 million or 8% over three years from the budget of the Bank, which employs some 12,000 people in 120 offices around the world.

Nothing less than “securing the long-term future of the planet and its resources” is the aim of Kim’s new strategy by making the World Bank “work more in partnership with others, including the private sector, and increasing its collaboration across its agencies”.

The reorganization is “the biggest thing in 17 years” for the Bank, Kim said at his opening press conference yesterday. But others question whether the strategy is an answer to the World Bank’s long-standing problems of achieving an optimum size and mode of its operations.

The reorganization – the fourth since 1997 – “may or may not help” according to Harinder Kohli who spent 25 years in senior positions in the Bank. The basic problem is that the Bank has become “too complex and too diffuse,” he told Emerging Markets.

“The key issue is what is the Bank all about and where it wants to be 10 years from now,” said Kohli, adding his voice to others who argue the World Bank spends a great deal of time and money on reorganizations that end up making the institution bigger but not better.

“Patently uninspiring and simply confusing” is how the 1818 Society, a Washington-based association of some 6,000 former Bank employees described Kim’s plans.

“The critical issue of what should constitute the Bank’s business and how it should be financed has been lost sight of,” the Society said in a bulletin which referred to an “unseemly battle between pro-centre and pro-regional forces within Bank management over control of operating staff”.

An organization-wide survey after Kim took office showed the Bank had become “six regional banks that weren’t really talking to each other,” he said.

“What we are doing with the structural change is taking all of the technical people working in any particular area – health, education or water for example – and [making] them part of a Global Practice” to make best practice available universally. The Bank is “not bringing them out of the countries” where they operate, he added.

“We are looking at how we can consolidate and how we can put ourselves on a path of growth,” Kim told Emerging Markets. “There will be staff reductions—there’s no question.

“We are going to go through every single part of the budget and have a minimum of $400 million of cuts over the next three years. That causes alarm at first but I have no doubt in my mind that we can find efficiencies.

“Of course there will be staff cuts but it will be done strategically. I tell my staff ‘if you are a person who is making a critical contribution to ending poverty and boosting shared prosperity your future at the Bank is going to be bright. But if you are doing things that are just adding layers of bureaucracy and checking then we are going to have to make changes’.”

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