World Bank head warns of looming employment crisis after war ends

The war in the Middle East will dominate discussions among global financial officials this week in Washington, but World Bank President Ajay Banga is sounding the alarm about a larger looming crisis: a massive job deficit for the 1.2 billion people who will reach working age in developing countries over the next 10-15 years, UNN reports with reference to Reuters.

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On current trajectories, these economies will generate only about 400 million jobs, leaving a deficit of 800 million jobs, Banga told Reuters.

The former Mastercard CEO acknowledges that getting people to focus on the long term is a challenge, given the series of short-term shocks that have hit the global economy since the COVID-19 pandemic, the latest being the war in the Middle East.

He noted that he is determined to ensure that financial officials focus on long-term challenges such as job creation, connecting people to the power grid, and ensuring access to clean water.

"We have to 'walk and chew gum' at the same time. We are going through a short-cycle. The faster one is the circumstance related to jobs or water," Banga said in an interview recorded on Friday.

The World Bank's governing body, the Development Committee, outlined plans to work with developing countries to improve policy and regulatory environments that have hindered investment and job creation for years.

According to Banga, discussions will cover transparency regarding permits, combating corruption, labor laws, land laws, barriers to starting businesses, logistics, improving trade systems, and non-tariff barriers to trade.

He is optimistic that solutions can be found to provide jobs – and dignity – for young people and create opportunities for private companies to meet their needs.

"I don't know if a utopia can ever be achieved where everyone is taken care of in the next 15 years. I doubt it will happen, but if it doesn't, the consequences will be quite severe in terms of illegal migration and instability," Banga said. United Nations data showed that as of 2025, over 117 million people were displaced worldwide.

Banga said that companies in developing countries themselves are starting to expand globally, including India's Reliance Industries and Mahindra Group, as well as Dangote in Nigeria.

Banga said his discussions with officials from developing countries showed their interest in creating more – and better – jobs for the next generation.

In addition to jobs, water will be a major topic. The World Bank, along with other development banks, is to announce efforts to provide safe access to clean water for another billion people, complementing existing initiatives to connect 300 million households in Africa to electricity and improve healthcare.

The World Bank focused on the human and physical infrastructure needed to create jobs during last year's IMF and World Bank annual meetings, and will continue this cycle by focusing on attracting private sector investment during this year's annual meetings in Bangkok, Banga said.

The Bank has identified five sectors that will benefit from investment and are not dependent on global trade or outsourcing from developed countries: infrastructure, agriculture for small farmers, primary healthcare, tourism, and value-added manufacturing. These sectors are less susceptible to the immediate impact of advances in artificial intelligence, he said.

"The problem is that we can't do it alone. We need to get this snowball rolling downhill, picking up a lot of snow along the way, to reach that amazing figure of 800 million," he said.

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