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World Bank President Ajay Banga cuts a ribbon during the inauguration of the International Finance Corporation (IFC) office in Karachi, Pakistan, February 4, 2026. SOURCE: REUTERS
KARACHI:
Pakistan must create up to 30 million jobs over the next decade to turn its large youth pool into an economic dividend or risk instability and outward migration, World Bank President Ajay Banga said in an interview with Reuters.
Pakistan is entering the implementation phase of a 10-year Country Partnership Framework (CPF) agreement agreed with the World Bank last year, while working with the International Monetary Fund to stabilize its economy. But Islamabad still faces increasing pressure to generate sustained growth and jobs.
“We are trying to move the banking group as a whole from thinking about projects to thinking about results,” Banga told Reuters in Karachi during a visit this week to Pakistan. “Job creation is the north star.”
Pakistan needs to generate 2.5 to 3 million jobs a year (roughly 25 to 30 million over the next decade) as millions of young people come of age, Banga said. Failure to do so could fuel “illegal migration or internal instability.”
Banga said Pakistan’s demographic dynamics mean that job creation will remain a binding constraint on growth in the long term, rather than a secondary policy objective. “This is a generational challenge,” he said.
The CPF commits about $4 billion a year in combined public and private financing from the World Bank Group, with about half expected to come from private sector operations led by the International Finance Corporation.
Banga said the reliance on private capital reflects a country where the government has limited spending capacity and 90% of jobs are created in the private sector.
Pakistan’s labor strategy is based on three pillars, Banga said: investment in human and physical infrastructure, business-friendly regulatory reforms and greater access to financing and insurance, particularly for small businesses and farmers who typically lack bank credit.
Infrastructure, primary health care, tourism and small-scale agriculture are labor-intensive sectors with higher employment potential, he said, adding that agriculture alone could account for around a third of the jobs Pakistan needs to create by 2050.
A growing pool of self-employed workers also highlighted Pakistan’s appetite for entrepreneurship, but they need better access to capital, infrastructure and support to scale up to job-creating businesses, he said.
The tension is easily visible in the exodus of skilled workers. Nearly 4,000 doctors emigrated from Pakistan in 2025, the largest annual departure on record, according to Gallup Pakistan data based on Emigration Bureau figures, underscoring concerns that weak job prospects and poor working conditions are pushing trained professionals abroad.
POWER FIRST
Fixing Pakistan’s power sector is the most urgent near-term priority, Banga said, noting that losses and inefficiencies in electricity distribution have limited growth despite improvements in generating capacity.
Pakistan’s power sector has long been plagued by mounting debt from distribution losses, weak bill recovery and delays in government subsidies, which have strained public finances and discouraged private investment.
Debt has been a recurring focus of IMF-backed reform programs, with successive governments struggling to contain losses while keeping energy affordable.
Banga said progress on privatization and private sector involvement in electricity distribution would be instrumental in improving efficiency, reducing losses and restoring the financial viability of the sector.
He said the rapid adoption of rooftop solar, while alleviating energy costs for homes and businesses, risks creating grid instability if distribution reforms are not accelerated. “Electricity is essential for everything: health, education, business and employment.”
CLIMATE BY DESIGN
Banga said climate resilience should also be integrated into overall development spending rather than treated as a stand-alone agenda. Pakistan is among the most climate-vulnerable countries in the world, repeatedly hit by floods, heat waves and erratic monsoons.
Banga said climate resilient investments must be integrated into infrastructure, housing, water management and agriculture to support employment while reducing long-term risks.
“The minute you start thinking about climate as separate from housing, food or irrigation, it creates a false debate. It just builds resilience into what you’re already doing.”
When asked how Pakistan fits into the World Bank’s global portfolio, Banga said he does not see the country under labels such as fragility or crisis, but as a long-term job creation opportunity. “We’re in the business of hope,” he said.
