WASHINGTON D.C.- The World Bank has recently announced a series of upcoming drastic cuts totaling $400 million from the Bank’s budget over the next three years, or in other words, approximately an eight percent budget cut. The organization, which employs over 10,000 individuals and has 120 offices spread across the globe, has decided to limit its operations to meet difficult new targets and compete with rivals.
The difficult new goals that the Bank’s president Jim Yong Kim has set include cutting poverty in half from 18 percent to nine percent by the year 2020. To meet this goal, Kim is streamlining and redefining power in the Bank’s structure by creating 14 “global practices” in significant development areas such as education and agriculture, which will involve the current country-based structure the Bank already implements.
Though this operation streamlining is alarming to spectators, Kim is confident that it will result in greater efficiency for the Bank. Nevertheless, Kim, in a recent article published by The Guardian, also alluded to the fact there would be reductions in staff personnel.
In fact, managing director Caroline Anstey and vice-president Pamela Cox, two long-time executives of the Bank with a combined 51 years of dedication, resigned from their positions last month. These recent resignations have also resulted in the uncertainty among current executives on the status of their jobs, even though Kim has stated that there would be no more management cuts, despite the fact that the Bank has to cut expenses at this moment in time.
“The Bank has no choice but to be smaller. The lending that the Bank makes money from is drying up,” Oxford University professor of global economic and governance Ngaire Woods recently said in an article published by The Guardian.
According to the author of The Bottom Billion, Professor Paul Collier, the Bank has no choice but to implement changes, especially due to the fact that middle-income nations are no longer in need of grants or conditional loans. Therefore, the Bank needs to redirect its focus to underdeveloped nations that have not been helped sufficiently by other donors. Nonetheless, Kim’s reforms of the World Bank’s structure according to global practices have become a topic of anxiety for staff that do not know how they fit in with these new policies.
As of last month, Kim’s strategy has been approved by all 188 member countries and shareholders of the Bank, demonstrating that Kim is doing something right. The president is also devoted to end the ongoing debate concerning the World Bank’s position in a world with an ever increasing number of NGOs and regional development institutions, all dedicated to lending aid to developing countries.
“We are going to be the best in the world at bringing global knowledge to a local context. No one combines knowledge with real money and real projects the way we do,” Kim was quoted in The Guardian article as saying.
– Elisha-Kim Desmangles
Sources: The Guardian, International Monetary Fund
Photo: Daily Finance