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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 youth population bulge into an economic dividend, or risk instability and emigration, 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) agreed with the World Bank last year, while also working with the International Monetary Fund to stabilize its economy. But Islamabad still faces growing pressure to deliver sustainable growth and jobs.
“We are trying to move the banking group as a whole from the idea of projects to the idea of 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 annually, or about 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 domestic instability.”
Banga said Pakistan’s demographic dynamics mean job creation will remain a major constraint to long-term growth, rather than a secondary policy objective. “It’s a generational challenge,” he said.
The CPF commits about $4 billion a year in combined public and private financing from the World Bank Group, about half of which is 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 jobs strategy rests on three pillars, Banga said: investments in human and physical infrastructure, business-friendly regulatory reforms, and expanded access to financing and insurance, especially for small businesses and farmers who typically lack bank credit.
Infrastructure, primary health care, tourism and small-scale agriculture are labor-intensive sectors with the greatest employment potential, he said, adding that agriculture alone could account for about a third of the jobs Pakistan needs to create by 2050.
A growing pool of self-employed workers has also highlighted Pakistan’s appetite for entrepreneurship, but they need better access to capital, infrastructure and support to embark on job-creating ventures, he said.
The tension is clearly visible in the exodus of skilled workers. Nearly 4,000 doctors emigrated from Pakistan in 2025, the highest annual flow on record, according to Gallup Pakistan data based on Bureau of Emigration figures, underscoring concerns that poor job prospects and poor working conditions are driving foreign-trained professionals.
POWER FIRST
Fixing Pakistan’s power sector is the most urgent priority in the short term, Banga said, noting that losses and inefficiencies in electricity distribution have limited growth despite improvements in generation capacity.
Pakistan’s power sector has long been plagued by growing debt due to distribution losses, low bill collections and delays in government subsidies, which has strained public finances and discouraged private investment.
Debt has been a recurring priority of IMF-backed reform programs, with successive governments struggling to contain losses while keeping energy affordable.
Banga said progress on privatization and private sector participation in electricity distribution would be key to improving efficiency, reducing losses and restoring financial viability to the sector.
He said the rapid adoption of rooftop solar, while reducing energy costs for households and businesses, risks creating grid instability if distribution reforms are not accelerated. “Electricity is fundamental for everything: health, education, business and employment.”
CLIMATE BY DESIGN
Banga said climate resilience should also be integrated into general development spending rather than treated as a standalone program. Pakistan is one of the most climate-vulnerable countries in the world, repeatedly hit by floods, heatwaves and erratic monsoons.
Banga said climate-resilient investments should be integrated into infrastructure, housing, water management and agriculture to support employment while reducing long-term risks.
“As soon as you start thinking of climate as separate from housing, food or irrigation, you create a false debate. Just make resilience part of what you’re already doing.”
Asked about Pakistan’s place in the World Bank’s global portfolio, Banga said he did not view the country under labels such as fragility or crisis, but as an opportunity for long-term job creation. “We are in a business of hope,” he said.
