Pakistan faces a critical decade of economic development, requiring the creation of up to 30 million jobs to absorb a rapidly growing youth population and avert potential instability, according to World Bank President Ajay Banga. The warning comes as Pakistan enters the implementation phase of a 10-year Country Partnership Framework (CPF) deal with the World Bank and continues to work with the International Monetary Fund (IMF) to stabilize its economy.
Banga emphasized the need for a shift in focus from simply implementing projects to achieving tangible outcomes, stating, “We’re trying to move the bank group as a whole from the idea of projects to the idea of outcomes. Job creation is the North Star.” He articulated the scale of the challenge during a visit to Pakistan this week, noting that the country needs to generate between 2.5 million and 3 million jobs annually over the next ten years.
A Generational Challenge
Failure to meet this ambitious target, Banga cautioned, could lead to “illegal migration or domestic instability.” The demographic pressures are significant, as millions of young people are entering the workforce each year. Addressing this requires a fundamental shift in Pakistan’s economic priorities, with employment creation becoming a “binding constraint on growth” rather than a secondary consideration. “This is a generational challenge,” Banga stated.
The CPF commits approximately $4 billion per year in combined public and private financing from the World Bank Group, with roughly half of that funding expected to originate from private-sector operations led by the International Finance Corporation. This reliance on private capital reflects Pakistan’s limited government spending capacity and the reality that 90% of new jobs are created within the private sector.
Banga outlined a three-pronged strategy for Pakistan’s job creation efforts: investment in both human and physical infrastructure, the implementation of business-friendly regulatory reforms and expanded access to financing and insurance, particularly for small firms and farmers who often struggle to secure credit.
Specific sectors identified as having significant employment potential include infrastructure development, primary healthcare, tourism, and small-scale agriculture. Banga highlighted that agriculture alone could account for roughly one-third of the jobs Pakistan needs to create by 2050. He also acknowledged the growing number of freelancers in Pakistan, noting their entrepreneurial spirit but emphasizing the need for improved access to capital, infrastructure, and support to enable them to scale their operations and create more substantial employment opportunities.
The Exodus of Skilled Workers
The urgency of the situation is underscored by a growing trend of emigration among skilled Pakistani workers. Data from Gallup Pakistan, based on Bureau of Emigration figures, reveals that nearly 4,000 doctors left the country in 2025 – the highest annual outflow on record. This exodus points to concerns about limited job prospects and unfavorable working conditions driving trained professionals to seek opportunities abroad.
Power Sector Reform as a Priority
Addressing the challenges within Pakistan’s power sector was identified as the most pressing near-term priority. Banga noted that losses and inefficiencies in electricity distribution are hindering economic growth despite improvements in generation capacity. Pakistan’s power sector has long been burdened by mounting debt stemming from distribution losses, poor bill recovery rates, and delayed government subsidies, straining public finances and discouraging private investment. These issues have been a recurring focus of IMF-backed reform programs, with successive governments struggling to contain losses while maintaining affordable energy prices.
Banga stressed the importance of progress in privatization and attracting private-sector participation in electricity distribution to improve efficiency, reduce losses, and restore the sector’s financial viability. He also cautioned that the rapid adoption of rooftop solar power, while beneficial for reducing energy costs for households and businesses, could create grid instability if distribution reforms are not accelerated.
“Electricity is fundamental to everything — health, education, business and jobs,” Banga emphasized.
Climate Resilience by Design
Beyond immediate economic concerns, Banga advocated for integrating climate resilience into mainstream development spending rather than treating it as a separate agenda. Pakistan is highly vulnerable to the impacts of climate change, frequently experiencing floods, heatwaves, and erratic monsoon seasons.
He argued that climate-resilient investments should be incorporated into infrastructure projects, housing developments, water management strategies, and agricultural practices to support job creation while mitigating long-term risks. “The moment you start thinking about climate as separate from housing, food or irrigation, you create a false debate. Just build resilience into what you’re already doing,” he said.
Looking ahead, Banga expressed optimism about Pakistan’s potential, stating that he does not view the country through the lens of fragility or crisis, but rather as a long-term opportunity for job creation. “We’re in the business of hope,” he concluded.
