Pakistan must create up to 30 million jobs over the next decade to turn its growing youth population into an economic dividend or risk instability and outward migration, World Bank President Ajay Banga said in an interview.

Pakistan is entering the implementation phase of a 10-year Country Partnership Framework deal agreed with the World Bank last year, while also working with the International Monetary Fund to stabilize its economy. Pressure remains on the government to deliver sustained growth and employment.

“We’re trying to move the bank group as a whole from the idea of projects to the idea of outcomes,” Banga said during a visit to Karachi.

“Job creation is the North Star.”

‘Generational challenge’

Pakistan needs to generate between 2.5 million and 3 million jobs a year, or roughly 25 million to 30 million over the next decade, as millions of young people reach working age, Banga said. Failure could fuel illegal migration or domestic instability.

Employment creation will remain a binding constraint on growth over the long term, rather than a secondary policy goal, he said.

“This is a generational challenge.”

The partnership framework commits about $4 billion a year in combined public and private financing from the World Bank Group, with roughly half expected from private-sector operations led by the International Finance Corporation.

Banga said reliance on private capital reflects limited government spending capacity and the fact that about 90% of jobs are created in the private sector.

Pakistan’s job strategy rests on three pillars, he said: investment in human and physical infrastructure, business-friendly regulatory reforms, and expanded access to financing and insurance, particularly for small firms and farmers who often 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 farming alone could account for about one-third of the jobs Pakistan needs by 2050.

A growing pool of freelancers highlights Pakistan’s entrepreneurial potential, but they need better access to capital, infrastructure and support to scale into job-creating businesses, he said.

The pressure is visible in the exodus of skilled workers. Nearly 4,000 doctors emigrated in 2025, the highest annual outflow on record, according to Gallup Pakistan data based on Bureau of Emigration figures, underscoring concerns about weak job prospects and working conditions.

Power sector priority

Fixing Pakistan’s power sector is the most urgent near-term priority, Banga said, noting that losses and inefficiencies in electricity distribution have constrained growth despite improved generation capacity.

The sector has long been burdened by debt from distribution losses, weak bill recovery and delayed government subsidies, straining public finances and discouraging investment. The issue has been a recurring focus of IMF-backed reform programs.

Progress on privatization and private-sector participation in electricity distribution is critical to improving efficiency and restoring financial viability, Banga said.

Rapid rooftop solar adoption, while lowering costs for households and businesses, risks grid instability if distribution reforms lag, he said.

“Electricity is fundamental to everything — health, education, business, and jobs.”

Climate by design

Climate resilience should be embedded into mainstream development spending rather than treated separately, Banga said.

Pakistan is among the world’s most climate-vulnerable countries, repeatedly hit by floods, heat waves, and erratic monsoons.

Climate-resilient investments should be integrated into infrastructure, housing, water management, and agriculture to support jobs while reducing long-term risks, he said.

“The moment you start thinking about climate as separate from housing, food, or irrigation, you create a false debate.”

Asked how Pakistan fits into the World Bank’s global portfolio, Banga said he sees the country as a long-term job-creation opportunity.

“We’re in the business of hope.”