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Kim Watch: “a kind of restructuring hell”

The Financial Times has a certain authority, so when it runs a piece on the chaos that is engulfing Jim Kim’s World Bank, readers should take notice, and Dartmouth readers might allow themselves a brief “I told you so” smile:

Jim Kim5.jpg… According to interviews with about 20 current and former staff, however, the bank has descended into a kind of restructuring hell, as Mr Kim undertakes $400m in cost cuts, a complete financial rethink and a structural overhaul - all at the same time.

Mr Kim has brought in expensive consultants, forced 48 top managers to reapply for their own jobs - pushing out three of the most senior without explanation - and upset staff by travelling in private jets at a time when he is proposing deep cost cuts.

What is more, there are doubts about whether internal change should be Mr Kim’s top priority for the bank, which is increasingly battling for relevance. While it remains a pillar of the international financial system, it often finds itself in competition with countries that are its own biggest clients, such as China, when lending to developing countries.

“Does [the restructuring] really go to the heart of the bank’s problem?” said Uri Dadush, a former bank official, now at the Carnegie Endowment for International Peace. “I think it’s a step in the right direction but the bank’s strategic issue is the relevance it retains in middle income countries.”

At stake is not just the success of Mr Kim’s presidency but the world’s collective effort to help developing countries. If the World Bank fades, the alternative is a future of individual countries jockeying for influence via bilateral aid, with less regard for the needs of the poor.

A senior G20 official from one of the bank’s largest client countries questioned Mr Kim’s strategy and the manner in which he was carrying it out.

“We didn’t ask for these changes. We are willing to give them a chance, but we’re worried about the way they’re being done,” says the official. “Nobody wants to tell the emperor he has no clothes on.”

Expensive consultants, personnel chaos, smoke-and-mirrors cost reduction — all this from a man who has no experience at all in the business that he is leading. We can say with absolute certainty that Jim Kim will leave yet another institution weakened at the end of his tenure. Read the entire article here.

Addendum: Anyone offering odds that Kim, who is still less than two years into his five-year term, will make it to the end?


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