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"If they had chosen me as the Jewish Agency chairman," mused Natan Sharansky in his new office at the Adelson Institute, "I would have closed down 90 percent of the Agency and moved most of the activity over to independent organizations such as Birthright and Nefesh B'Nefesh. They are much more efficient."

It was a disappointed and slightly bitter Sharansky talking. A few months earlier, he had lost the candidacy for the leadership of the largest international Jewish organization to a virtually unknown mayor of a medium-sized town. Sharansky certainly didn't lack the necessary credentials. The former prisoner of Zion and a hero to millions, his ministerial resume included the Diaspora portfolio.

At the time he was also at the height of his international popularity, receiving the Presidential Medal of Freedom from then president George W. Bush, who had recommended his book, "The Case for Democracy," as compulsory reading.

He had the necessary support of the leaders of the major American federations, but lacked only one crucial element to secure the job. Prime Minister Ehud Olmert hadn't forgotten Sharansky's rebellion against his predecessor Ariel Sharon and his resignation in protest over the disengagement from Gaza.

On a personal level, Olmert admired Sharansky. For the key political post, though, he wanted someone who he could depend on. So mild-mannered, slavishly loyal Zeev Bielsky from Ra'anana got the job.

Now that Bielsky has chosen to escape the Agency for the back-benches of the Knesset (his term as chairman can be summed up in one phrase - financial decline and institutional demoralization), and a new prime minister has persuaded Sharansky to accept the candidacy he lost the last time around, it remains to be seen whether the new chairman will carry out the plan he envisaged a few years ago.

There are huge obstacles in his path. Dismantling a large bureaucratic apparatus is never an easy task, and the Jewish Agency has one of the most powerful and entrenched employee unions, which will fight him every step of the way. In addition, throughout his career, Sharansky has proven himself a poor politician; he is the first person to admit this. He isn't much of a manager either, he's a visionary. But visionaries have their limitations.

Sharansky understands the Agency's fundamental weakness. That despite all it has accomplished over the decades in encouraging immigration and working with communities in the Diaspora and Israel, it has always suffered from the lack of a clear mission.

The Jewish Agency should have closed down in 1948, on the day its chairman, David Ben-Gurion, became prime minister of the new state of Israel. From then on, the leadership of the Agency, which had served as the de-facto government of the Jewish community in Palestine, was destined to be no more than the B-Team, a repository for failed third-rate politicians.

For various financial, political and diplomatic reasons, it was convenient for successive governments to leave the Agency with the task of organizing immigration and low-level relations with the Diaspora. But in this role, the Agency has become obsolete. It is steadily being muscled out of the former Soviet Union by the better financed and organized Nativ agency, the apple of Foreign Minister Avigdor Lieberman's eye, on the one hand, and the pervasive efforts of the Chabad-Lubavitch movement, on the other.

In the main immigration markets of North America, France and Britain, it has been almost totally replaced by the private organizations, Nefesh B'Nefesh and AMI. At the same time, its once-impressive fundraising capabilities have been severely eroded, even before the current financial crisis, by violent currency fluctuations and a growing reluctance by private donors and large federations to foot the bill.

The Agency is finding it impossible to maintain its network of emmissaries around the world, while the effectiveness of many of them is rapidly coming under question in a world where everyone communicates and gets information through the internet.

This could be the big opportunity for Sharansky, and the Agency. Get out of the immigration business, leave it to the government and the private organizations. Transform into the biggest foundation in the Jewish world, working with grassroots movements on educational programs.

Jettison the hierarchy, close down departments, buy out the pen pushers and bean counters.

All of a sudden, you will have a budget of hundreds of millions, with which to enable local networks and initiatives. Sharansky's Agency could be a lean outfit, offering guidance, coordination, money and an overall strategy.

It will mean a painful restructuring process, especially for the hundreds of veteran employees who will be shown the door. But it is either that or continuing the long and inevitable descent into irrelevance. If anyone can be assured of the backing from the prime minister and the powerful federations overseas, necessary for facing down the unions and other vested interests, it is Sharansky. All he needs is a clear plan and a small and dedicated team to assist him. And to make it clear from Day One, when he sits down in Ben-Gurion's old office on King George Street, that he means business.