Ajay Banga Warns of 800 Million Job Gap in Developing Economies

Ajay Banga Flags Massive Employment Gap

WASHINGTON, April 13, 2026 — :Ajay Banga, president of the World Bank, warned that developing economies face a projected shortfall of 800 million jobs over the next 10 to 15 years, even as global attention remains focused on the ongoing West Asia conflict and its economic fallout.

Speaking in an interview ahead of the spring meetings of the World Bank and the WTO in Washington, Banga said that approximately 1.2 billion people will reach working age during this period, but current trends indicate only about 400 million jobs will be created, leaving a significant employment deficit.

War Overshadows Long-Term Economic Risks

Banga acknowledged that the ongoing U.S.-Israel war with Iran has dominated discussions among global finance officials, particularly due to its impact on inflation and growth. He noted that while a temporary ceasefire has reduced immediate hostilities, disruptions such as Iran’s control over the Strait of Hormuz continue to affect global energy supplies and economic stability.

He said policymakers must balance immediate economic shocks with long-term structural challenges. Banga emphasized that short-term crises, including those stemming from geopolitical conflicts, should not divert attention from critical issues like employment generation, infrastructure development, and access to essential services.

“We have to address both immediate and long-term challenges simultaneously,” he said, referring to the need to manage current economic volatility while planning for future workforce demands.

Policy Reforms and Investment Priorities

The World Bank’s Development Committee is working with governments in developing countries to implement reforms aimed at improving job creation. These include measures to enhance transparency in permits, strengthen anti-corruption frameworks, reform labour and land laws, and reduce barriers to starting businesses.

Banga said discussions also focus on improving logistics, trade systems, and addressing non-price barriers that hinder economic activity. These policy adjustments are intended to attract investment and create an environment conducive to sustained job growth.

He identified five sectors with strong potential for employment generation that are less dependent on global trade dynamics: infrastructure, agriculture for small farmers, primary healthcare, tourism, and value-added manufacturing.

Private Sector Role and Global Expansion

Banga highlighted the importance of private sector participation in addressing the employment gap, noting that public institutions alone cannot meet the scale of the challenge. He pointed to companies in developing countries that are expanding globally, including :contentReference[oaicite:3]{index=3}, :contentReference[oaicite:4]{index=4}, and Dangote Group in Nigeria, as examples of growing economic capacity.

The World Bank plans to prioritize attracting private investment during upcoming meetings, including discussions scheduled for Bangkok later this year. These efforts aim to mobilize capital into sectors that can generate large-scale employment opportunities.

“This is not something governments can solve alone,” Banga said, stressing the need for coordinated efforts between public and private stakeholders to meet employment targets.

Broader Development Goals and Risks

Beyond employment, Banga said the World Bank is also focusing on improving access to basic services. The institution, alongside other development banks, is preparing initiatives to provide secure access to clean water for one billion additional people and to expand electricity access to 300 million households in Africa.

He warned that failure to address the employment gap could lead to significant social and economic consequences, including increased migration pressures and instability. According to United Nations data, more than 117 million people were already displaced globally as of 2025.

Banga added that while achieving universal employment within the next 15 years may not be realistic, substantial progress is necessary to mitigate risks associated with large-scale unemployment among young populations.

The warning comes as global financial institutions prepare to revise growth forecasts amid ongoing geopolitical tensions, with the employment challenge emerging as a central long-term concern alongside inflation and energy disruptions.