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 has stressed.
Pakistan is entering the implementation phase of a 10-year Country Partnership Framework (CPF) deal agreed with the World Bank last year, while also working with the International Monetary Fund to stabilise its economy.
But Islamabad is still facing mounting pressure to deliver sustained growth and jobs.
“We’re trying to move the bank group as a whole from the idea of projects to the idea of outcomes,” Banga said in an interview with Reuters in Karachi during a visit to Pakistan this week.“Job creation is the North Star.”
Generational challenge
Pakistan needs to generate 2.5m to 3m jobs a year – roughly 25m to 30m 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 population dynamics mean employment creation will remain a binding constraint on growth over the long term, rather than a secondary policy goal.
“This is a generational challenge,” he said.
The CPF commits around $4 billion a year in combined public and private financing from the World Bank Group, with roughly 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 per cent of jobs are created in the private sector.
Banga said Pakistan’s job strategy rests on three pillars: investment in human and physical infrastructure, business-friendly regulatory reforms, and expanded access to financing and insurance, particularly for small firms and farmers that typically lack bank credit.
