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World Bank bonuses raise eyebrows amid austerity drive

By Vision Reporter

Added 2nd October 2014 09:53 AM

The World Bank has given bonuses to senior officials as it pursues a cost-cutting restructuring, raising employees'' concerns about management demands on them for belt-tightening.

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The World Bank has given bonuses to senior officials as it pursues a cost-cutting restructuring, raising employees'' concerns about management demands on them for belt-tightening.


WASHINGTON - The World Bank has given bonuses to senior officials as it pursues a cost-cutting restructuring, raising employees' concerns about management demands on them for belt-tightening, documents seen by AFP showed Wednesday.
 
"We question the timing of such payments given the sacrifices the rest of us are being asked to make," the Bank's staff association said in an internal memo obtained Wednesday by AFP.
 
A person close to the institution said that at least four senior officials based at the World Bank's headquarters in Washington have received the bonus, called a "scarce skills premium," for fiscal year 2014.
 
A key figure involved in the Bank restructuring, chief financial officer Bertrand Badre, received a $94,000 bonus for fiscal year 2014, in addition to his net annual salary of about $380,000, Bank spokesman David Theis confirmed Wednesday.
 
The World Bank did not reveal the identities of other bonus beneficiaries. Badre was not immediately available to comment. 
 
"The World Bank needs to attract and retain senior management of high caliber, and on rare occasions we extend a 'scarce skills premium' for highly technical or key managerial positions," Theis said.
 
According to the spokesman, Badre, a French national who left his job as CFO of French bank Societe Generale to join the World Bank as finance managing director and CFO in March 2013, "has deep management experience in some of the largest financial institutions in Europe."
 
Under his leadership, "we have been able to nearly double our financial firepower. This increased financial flexibility will allow us to help meet some of the great and pressing needs in the developing world."
 
Critical moment
 
The revelation of the bonuses comes at a critical moment for the World Bank, which is facing lending competition from the BRICS major emerging-market economies -- Brazil, Russia, India, China and South Africa -- and the private sector.
 
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The World Bank Group's headquarters May in Washington, DC
 
Under the leadership of World Bank President Jim Yong Kim, the development lender has undertaken a vast restructuring and reform program aimed at boosting resources to increase its lending capacity, as it strives to eliminate extreme poverty by 2030.
 
As part of the overhaul, the Bank intends to slash $400 million in spending over the next three years, on a total $5.0 billion budget.
 
Some expenditures have already been reduced but job cuts remain an option, feeding uncertainty among the 10,000 employees of the 188-nation Bank, celebrating its 70th anniversary this year.
 
"At a time of employment insecurity, staff downsizing, and belt-tightening, we are mystified as to how President Kim and his senior management could be so blind to the optics of providing these kinds of bonuses."
 
The bonus uproar has spilled outside the walls of the Bank, which is organizing its annual meetings with the International Monetary Fund next week, into the civil sector.
 
"This information is very surprising when it is known that the Bank is in the process of cutting $400 million from its budget," said Nicolas Mombrial, head of the anti-poverty nonprofit organization Oxfam, in Washington.
 
"The bonuses to senior bank staff, and the reported disquiet among staff, re-emphasize civil society concerns about the efficacy of president Jim Kim's strategy and the re-structuring that followed," said  the Bretton Woods Project, an NGO, in an email to AFP.
 
In a sign of the growing staff worries, an anonymous flyer circulated at the headquarters on Tuesday, calling on employees to strike Thursday to protest the lack of information about staffing changes in the pipeline.
 
Among the questions it cited were: "Do you know the criteria, process and timeline for the strategic staffing?" and "Do you know whether the change is driven by improving bank effectiveness or saving the '$400 million'"?
 
"If you don't have answers to any of these questions, pls (sic) shut down your computers and step out of your office" from 10:30 am to 10:45 am local time, the flyer said.
 
Contacted by AFP, the World Bank declined to comment on the situation.
 
AFP

 

World Bank bonuses raise eyebrows amid austerity drive

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