When World Bank President Ajay Banga said Pakistan must create 25–30 million jobs over the next decade, he was not just highlighting a large number, he was pointing to the country’s most serious economic challenge. His view that job creation should be the central focus of economic policy is both timely and necessary. The World Bank’s Country Partnership Framework, which proposes around $4 billion per year with a stronger focus on results and private-sector involvement, is also a positive step.
However, funding and diagnosis are only the beginning. The real question is how these jobs will actually be created when even the World Bank has described Pakistan’s growth model as broken. At the same time, the country’s macroeconomic policies remain focused mainly on balancing budgets rather than building a competitive economy.
Unless this contradiction is addressed, Pakistan risks repeating a familiar pattern: new foreign loans come in, temporary stability is achieved, debt rises, and economic pressures return. Stability on paper does not automatically translate into real growth or employment.
According to the World Bank’s own assessments, Pakistan’s economy faces deep structural problems. Exports are too low for a country of more than 250 million people. Businesses deal with high and unstable energy prices, complicated and heavy taxation, inconsistent regulations, weak contract enforcement, and limited access to finance. Productivity is low, private investment remains weak, and few firms are able to grow and expand.
This is not just a temporary slowdown, it is a structural issue. Yet policy responses often assume that growth will return once short-term stability is restored. Pakistan has followed this path before. The result has been austerity, brief improvements in headline numbers, rising unemployment and poverty, and eventually another crisis.
It is easier to say that the main problem is a lack of funding. While limited financial resources are a challenge, the deeper issue is how existing funds are used. Poor coordination, political interference, weak implementation, and lack of accountability have meant that many development projects fail to deliver real economic impact. Infrastructure has been built without improving logistics systems. Power plants have been added without fixing distribution and governance problems. Training programmes have been launched without ensuring job opportunities for graduates.
As Planning Minister Ahsan Iqbal has noted, Pakistan suffers from a serious coordination problem. Government institutions often work in isolation, leading to duplication, inefficiency and waste. Budgets focus on spending rather than results. Ministries are evaluated by how much they spend, not by how many jobs they create or how much productivity they improve.
At the same time, there is a clear tension between calls for growth and the country’s current macroeconomic framework, which has largely been shaped by programmes with the International Monetary Fund. These programmes focus heavily on reducing fiscal and current account deficits. In practice, this has often meant shrinking the economy through high interest rates, heavy taxation, and reduced imports, rather than improving competitiveness and expanding exports.
This approach reduces deficits, but it does not generate sustainable growth. High taxes and rising energy costs place pressure on the formal sector. Government borrowing crowds out private investment. Policy uncertainty increases business risk. Under such conditions, creating millions of jobs each year becomes extremely difficult.
Another key issue is incentives. Pakistan’s economic structure often protects powerful groups and established firms through tariffs, subsidies, and regulatory barriers. This creates a system where inefficient businesses survive in protected domestic markets, while exporters struggle to compete globally. Consumers face higher prices, workers face limited job opportunities, and productivity remains low.
If Pakistan is serious about creating jobs at scale, it must encourage firms to invest, grow, export, and innovate. That requires competitive energy pricing, fair and predictable taxation, better governance, skilled labour, and access to finance. A system that focuses only on balancing budgets without improving competitiveness cannot deliver long-term employment growth.
Ajay Banga’s emphasis on jobs as the “north star” is important. But job creation will not happen through optimism alone. Pakistan must align its growth strategy, governance systems and macroeconomic policies toward productivity and private-sector expansion.
The country now faces a clear choice. It can continue to focus on short-term stability while protecting existing structures, or it can reform its political and economic systems to reward productivity, competitiveness, and enterprise. The first path leads to repeated crises. The second path is more difficult, but it offers a chance for sustainable growth and large-scale job creation.
