WASHINGTON (Thomson Reuters Foundation) – The World Bank has unveiled details of a major reorganization, designed to better unify the development bank’s operations and deliver on its twin goals of ending extreme poverty by 2030 and reducing inequality.
The plan, the signature work of President Jim Yong Kim which he discussed with World Bank staff on Monday, will be the first restructuring in nearly a decade. It puts a new emphasis on technical experts organized into 14 Global Practice groups, each focusing on a specialty such as Environment and Natural Resources, Water and Governance.
The World Bank also will have thematic areas – gender; climate change; jobs; fragility, conflict and violence; and public-private partnerships – that cut across all its operations and replace the current system of networks.
The changes potentially would move some power away from the country-based and regional structure and centralise more responsibilities.
Kim’s goal is to make the World Bank more nimble and relevant in a fast-changing global environment where knowledge moves rapidly across borders and fewer countries depend upon its help. World Bank revenues are declining as middle-income borrowers such as Russia, Brazil and China tap the capital markets themselves. He wants to raise the bank’s profile as a center of development expertise, not just as a lender.
“It will need to invest in knowledge, technical skills, information technology and the ‘solutions’ platform, break down silos and focus on multi-sector approaches. Increasing flexibility and speeding up delivery will be key,” the strategy paper that Kim delivered to the bank’s executive directors for their Sept. 10 meeting said.
The restructuring would make the World Bank more streamlined, offering client countries a range of services from lending to expert consulting, and it would focus more on partnering with the private sector and other development institutions. Kim wants staff to be judged on how effectively their work contributes to reducing poverty and spreading prosperity. The World Bank often is criticized for focusing too much on shovelling loans out of the door with too little regard for their impact.
But the plan, outlined in the strategy paper and in documents circulated last week within the World Bank and seen by Thomson Reuters Foundation, gave no details on budgets or staffing levels, making it difficult to evaluate how the new structure might work in practice.
“The money will be the driver,” said Gerald Hyman, global development expert at the Center for Strategic and International Studies in Washington. “The budget is most important, and who has to sign off on it is second.”
If regional vice presidents continue to hold the purse strings and the lines of responsibility and accountability are not re-aligned, it will be much harder to implement the changes, he and other development analysts said.
Sanjay Pradhan, formerly head of the bank’s research arm, the World Bank Institute, and an authority on governance and anti-corruption, is responsible for implementing the plan in his new post as Vice President for Change, Knowledge and Learning.
Staff cuts are widely expected at the bank as part of the reorganisation. For instance, each Global Practice will have one global director, who will replace the four regional heads and the vice president in a specialty area, which would eliminate four senior jobs per expertise. The cross-cutting areas would replace the current system of networks.
The Global Practice directors will report up through several layers of senior managers to a newly created position of Chief Operating Officer, held by Sri Mulyani Indrawati. The regional vice presidents also report to Indrawati, the widely respected Indonesian former finance minister who is a managing director at the World Bank.
Alan Gelb, a foreign aid expert at the Center for Global Development, said the design makes sense, but the accountability for programmes needs to be clear and it will need to be implemented quickly and effectively to get staff to buy in. “If done right, it addresses important issues. It does identify meaningful clusters that are global in nature. The risk is that you end up prolonging uncertainty, which is not good,” he said.
Since Kim was appointed in July 2012, World Bank staff have faced considerable upheaval including departures of key top managers as they awaited the unveiling of his strategy. It now goes to the World Bank’s 188 member countries for approval at its annual meetings on Oct. 11 to 13. The Global Practices will not be operational before July 2014, Kim said.
While regional vice presidents and country managers will continue to lead discussions with governments over country programmes, a Global Practice leader will also be positioned in countries to tap expert knowledge from the centre.
“Our ultimate goal is to deploy the best skills and expertise to our clients at the right time, and become the leading partner for complex development solutions,” Kim said in a message to staff.
The other Global Practices are agriculture; education; energy and extractives; finance and markets; health, nutrition and population; macroeconomics and fiscal management; poverty; social protection and labour; trade and competitiveness; transport and infrastructure; and urban, rural and social development.
(Additional reporting by Anna Yukhananov at Reuters)