World Bank President Jim Kim sounded fairly exasperated on Wednesday as he explained the reforms he’s undertaken over the past year to a group of business, NGO, and public sector leaders at the annual meeting of the Bretton Woods Committee.
"It sounds sometimes in the press like we are doing some exotic change process. This is just fundamental management 101,” he said, alluding to recent high-profile criticism of the reform efforts.
For what must have been the hundredth time this year, Kim defended the rationale behind the creation of the bank’s “global practices,” which will go into effect on July 1, but his analysis has gotten more blunt.
“Double matrices don't work.” he said. “They don't take full advantage of all the knowledge inside the house, so essentially we built a single matrix, but that's hard — it's change in a bureaucratic organization that doesn't like it."
Kim also highlighted changes that management has made to “rationalize” the budget process, arguing that the old budget process of department just getting what they ask for was not something the bank would ever recommend to its own clients.
Part of those budget changes is an effort to cut spending. For instance, the “expenditure review” will cut $400 million in real terms from the bank’s operating budget over the next few years. The World Bank chief says savings will be accomplished "just by asking fundamental questions like, why does it cost three times more to do it here — the same thing — than it costs to do it over there?”
“Sometimes there are good explanations because the countries are different the situations are different. Sometimes there's no explanation at all. This is just basic knowing where you are spending your money, and actually then making choices,” he said.
If the reform goals are achieved, Kim stressed, they will keep the bank relevant to its clients, but he sees that vision challenged by an organization resistant to change: "We will be the go-to organization for lending and — at this point — usually free technical assistance that will bring to [clients] everything that's happening in the world that might be of relevance. And that's the organization that I thought the whole house was telling me we needed, but then of course when we actually got into making the changes, it became difficult."
Of course, much of the criticism has not been on the substance of the reforms, but the style of their execution. And one thing is for sure: there’s plenty of exasperation to go around.
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