Download
how has the bank supported downsizing n.
Skip this Video
Loading SlideShow in 5 Seconds..
How has the Bank supported downsizing? PowerPoint Presentation
Download Presentation
How has the Bank supported downsizing?

How has the Bank supported downsizing?

135 Vues Download Presentation
Télécharger la présentation

How has the Bank supported downsizing?

- - - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

  1. How has the Bank supported downsizing? Erika Jorgensen, OPCCE May 3, 2004 “Public Administration Retrenchment: Challenges and Options” PREM Knowledge and Learning Week 2004

  2. Overview • History of Severance Policy • Current Policy • Processing Operations with Severance Pay • Emerging Questions and Issues • Recent Operations Financing Severance Pay

  3. History of Severance Policy • Since mid-1980s, Bank supported retrenchment and severance payments through Adjustment Lending, but severance in Investment Lending was less uniform • The 1996 OpMemo allowed funding under Investment Lending for severance to make public enterprises or sectors more productive • April 2002 OpMemo extended scope to other categories of public employment

  4. Current Policy • OpMemo (April 5, 2002) • Guidance to Staff “Financing Severance Pay in Public Sector Reform Operations” • Replaced OpMemo (March 5, 1996) on Public Enterprise Reform Operations • To be rolled into new OP/BP 6.00 on Expenditure Eligibility but MDO retains oversight

  5. Current Policy • 8 Key Considerations • Basic Facts (Size of severance component compared to loan/credit) • Description of Severance Packages (formula, voluntary, average payment size, pensions and other benefits separate, regional/international comparisons)

  6. Current Policy • 8 Key Considerations (cont.) • Impact and Sustainability of Public Sector Reform (link to operation’s objectives, broader institutional reform, impact on productivity, competitive environment, contribution to poverty reduction) • Sector Policy Framework (adequate, redeployment of resources) • Economic Analysis (costs: pay + other compensation + lost production, versus benefits: savings + efficiency gains)

  7. Current Policy • 8 Key Considerations (cont.) • Sustainability of Retrenchment Component (adverse selection, overpayment, moral hazard) • Legal Aspects and Political Economy Considerations (legal minimum and augmentations, labor laws, labor market, precedents and the future) • Social Impact (beneficiaries: all versus target groups, age, gender, social costs assessment, mitigating measures)

  8. Emerging Questions and Issues • Can severance packages be measured in a standard way to allow cross-country and inter-regional comparisons? • What are the correct comparators to judge the size of packages? • Are redundancy packages preferable to voluntary retirement schemes? • How should fairness to retrenched employees be weighed against general poverty reduction and income distribution concerns?

  9. Emerging Questions and Issues (cont.) • Does calculation of an economic rate of return contribute to assessment of a severance component? • Is sizable retroactive financing a desirable feature of operations supporting severance? • Why have adjustment operations not supported severance in recent years?

  10. Processing Operations with Severance Pay • Summarize assessment in PAD/PD • Keep MDO/PRMPS/OPCS informed • Project Documentation • Memo to MDO on severance covering 8 Key Considerations • Early version to OPCS with PCN • Issue generally with PAD/PD • MDO Review completed before appraisal • OPCS Website: http://opcs/PS/pas-sp.html