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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 bulge 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) agreed with the World Bank last year, while working with the International Monetary Fund to stabilize its economy. But Islamabad still faces mounting pressure to deliver sustained 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 to Pakistan this week. “Job creation is the North Star.”
Pakistan needs to generate 2.5 to 3 million jobs a year — about 25 to 30 million over the next decade — as millions of young people come of age, Banga said. Failure to do so could give rise to “illegal migration or internal instability”.
Banga said Pakistan’s population dynamics mean job creation will remain a binding constraint on long-term growth, rather than a secondary policy goal. “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 the private sector 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: investment in human and physical infrastructure, business-friendly regulatory reforms and expanded access to finance and insurance, especially for small businesses and farmers who typically lack bank credit.
Infrastructure, primary healthcare, tourism and small-scale agriculture were labour-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 freelancers also highlighted Pakistan’s appetite for entrepreneurship, but they need better access to capital, infrastructure and support to scale into job-creating businesses, he said.
The strain is easily visible in the emigration of skilled workers. Nearly 4,000 doctors emigrated from Pakistan by 2025, the highest annual outflow on record, according to Gallup Pakistan data based on figures from the Bureau of Emigration, underscoring concerns that dim job prospects and poor working conditions are pushing trained professionals abroad.
STREAM FIRST
Fixing Pakistan’s power sector is the most urgent priority in the near term, Banga said, noting that losses and inefficiencies in power distribution have limited growth despite improvements in generation capacity.
Pakistan’s power sector has long been plagued by mounting debt from distribution losses, weak bill collection and delayed government subsidies, which have strained public finances and discouraged private investment.
The debt has been a recurring focus of IMF-backed reform programs as successive governments struggle to contain losses while keeping energy affordable.
Banga said progress on privatization and private sector participation in electricity distribution would be essential to improve efficiency, reduce losses and restore the economic viability of the sector.
He said rapid deployment of rooftop solar, while easing energy costs for households and businesses, risks creating grid instability if distribution reforms are not accelerated. “Electricity is fundamental to everything – health, education, business and jobs.”
CLIMATE BY DESIGN
Banga said climate resilience should also be embedded in mainstream development spending rather than being treated as a stand-alone agenda. Pakistan is among the world’s most climate-vulnerable countries, repeatedly hit by floods, heat waves and irregular monsoons.
Banga said climate-resilient investments should be integrated into infrastructure, housing, water management and agriculture to support jobs while reducing long-term risks.
“The moment you start thinking about climate as separate from housing, food or irrigation, you’re creating a false debate. Just build resilience into what you’re already doing.”
Asked how Pakistan fits into the World Bank’s global portfolio, Banga said he does not see the country through labels like fragility or crisis, but as a long-term job creation opportunity. “We are in the business of hope,” he said.
