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Public Statements

World Bank Reform Efforts

Floor Speech

By:
Date:
Location: Washington, DC

Mr. LEAHY. Madam President, the World Bank-IMF Annual Meetings are this week, and President Kim is expected to propose and seek approval for significant changes to the Bank's strategy, organization, and budget. After years of promised but undelivered change, serious and lasting reform at the World Bank is long overdue.

An October 9th Washington Post article, entitled ``Wider Impact Eludes World Bank,'' describes the limited impact of billions of dollars spent by the Bank on some 700 projects in 100 countries since the global financial crisis because of delays, poor oversight, cost overruns, and projects that did not deliver promised economic benefits.

This track record raises serious questions about the World Bank's relevance as developing countries struggle with growing demands for energy, water, food, education, health care, and jobs.

There are many capable, dedicated people at the World Bank who chose to work there because of their belief in its development mission. But for too long the Bank has been an insular, inflexible, arrogant, and risk-adverse institution, more responsive to government elites than the needs of the poor.

Beyond that, an October 7th New York Times article entitled ``World Bank, Rooted in Bureaucracy, Proposes a Sweeping Reorganization,'' describes a recent survey of the Bank's 10,000 employees. The survey revealed a ``culture of fear'' and a ``terrible environment for collaboration.''

I have voiced concerns about this culture myself. Fiefdoms are jealously guarded by Bank managers. Staff has been retaliated against, ostracized, and had their careers destroyed because they had the audacity to complain about incompetence, corruption, waste, or instances of sexual harassment and abuse.

For literally decades, I have heard promises of reform from one president of the Bank after another, yet the Bank's bureaucracy has defended the status quo. The Bank has become expert at appearing open to reform while fiercely resisting change.

So it is refreshing to hear a World Bank president openly acknowledge that the Bank has drifted away from its core mission of fighting poverty, and that its bureaucracy has become ``concretized.'' President Kim has denounced the culture of fear that leads to risk avoidance, and he has shown a willingness to challenge the conventional wisdom.

He has said that the employees of the World Bank's multiple components must work together if they are to have any hope of meeting the goals of eliminating extreme poverty by 2030 and increasing the incomes of the poorest 40 percent. He has also said that the World Bank must become more efficient and responsive to balance the increasing influence of countries like China. And to get there, he is proposing the first major strategic realignment in 17 years.

How does President Kim propose to change the Bank?

He has already shaken up senior management and brought in new people from outside. And he is proposing changes to the way the World Bank is organized and does its work. He wants to take down the bureaucratic silos that are inefficient, promote rivalries, and keep people from working together.

President Kim wants the technical staff to have greater influence within the Bank and he wants them to share their knowledge with countries. He thinks the Bank should be a better partner, helping governments make sound education, health, and job training investments for their people.

President Kim recognizes that the Bank requires increased resources to achieve its goals but that the Bank's long-term financial health is ultimately dependent on its ability to become more self-reliant. He wants to leverage private sector funding, increase revenue, and seek new financial tools to support country development.

He proposes to cut the World Bank's operating costs by $400 million over 3 years. He estimates that for every $100 million reduced in the Bank's operating budget an additional $1 billion would be available for new loans.

I am encouraged by President Kim's energy, focus, and willingness to address long-standing entrenched problems at the World Bank. He and the Bank's many employees should know that those of us in Congress who are responsible for appropriating the funds for the U.S. share of payments to the World Bank will be strongly supporting his efforts, and basing future appropriations on the results.


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