Bold claim: talking about hope won’t create jobs is not just a sentiment—it’s a reality check Pakistan can’t afford to skip. When Ajay Banga, president of the World Bank, urged Pakistan to generate 25–30 million jobs over the coming decade, he wasn’t tossing out a flashy headline. He was pinpointing the single most binding constraint on the economy: the job shortfall itself.
Banga is correct to call job creation the central policy outcome, the critical north star that should guide decisions. It’s also encouraging that the World Bank’s Country Partnership Framework aims to channel roughly $4 billion each year, with more emphasis on outcomes and private-sector mobilization. Yet simply diagnosing the problem and pledging funds won’t suffice. A tougher, often unmet, question remains: how will these jobs actually be created when the World Bank itself says Pakistan’s growth model is broken, and the current macroeconomic setup focuses on balancing books rather than building real economic capacity?
Without facing this contradiction head-on, Pakistan risks a familiar pattern: inflows of external finance briefly stabilizing numbers, while debt climbs and the gap grows between what the economy reports and what people experience daily.
The World Bank’s diagnostics are blunt: Pakistan’s economy is structurally uncompetitive. Exports are too small for a country with 250 million people. Firms contend with high and volatile energy costs, a complex and poorly designed tax system, distorted tariffs, weak contract enforcement, and unpredictable regulations. Productivity growth is sluggish, private investment remains chronically low, and firms struggle to start and scale.
This isn’t a cyclical slowdown waiting for confidence to return. It’s a structural failure. Yet policy responses keep treating growth as automatic once short-term macro stability returns. Pakistan has tried this repeatedly: stabilisation without transformation yields neither lasting stability nor sustainable growth. The pattern is predictable: austerity, a brief uptick in headline indicators, rising unemployment and poverty, then another crisis.
It’s easy to frame the problem as a lack of funding. True, external inflows have been volatile, domestic savings are thin, and fiscal space is tight. But that’s only half the story. The tougher reality is that funds Pakistan does mobilize are often wasted.
Fragmented programs, politically influenced allocations, weak execution, and little accountability turn scarce resources into activities rather than tangible outcomes. Roads go up while logistics stay broken. New power plants appear without fixing distribution and governance. Skills programs launch without enough jobs to absorb graduates. The result is a growing stockpile of assets that don’t boost productivity, exports, or employment.
This clash between funding constraints and governance failure helps explain why Pakistan swings between stabilisation and crisis, never building an economy capable of delivering mass, productive employment.
To be precise, Pakistan has rarely produced coherent, implementable national economic strategies with clear political ownership, aligned institutions, and accountability for results. Instead, it tends to produce plans and policy documents that survive political transitions only briefly before fragmenting.
The deeper problem is incentive design. The state is organized around inputs, approvals, and control, not outcomes. Budgets reflect spending levels rather than impact. Ministries are judged by how much they spend and how many projects they count, not by job creation, export growth, or productivity gains. Federal and provincial planning are misaligned and often contradictory. Development spending may look large on paper but delivers little because it’s fragmented and misdirected.
Planning Minister Ahsan Iqbal highlights a severe coordination deficit: every rupee flowing through a disjointed system is at risk of duplication, leakage, or capture. Solving this requires more than procedural tweaks. It demands a whole-of-government approach anchored in shared priorities, outcome-based budgeting, empowered coordination, and credible monitoring.
A telling comparison: countries that escaped middle-income traps spent as much effort fixing decision-making processes as building roads, ports, and power plants. Pakistan has largely done the opposite—investing in tangible hardware while neglecting the institutional framework that turns inputs into outcomes.
This governance gap is amplified by a policy contradiction. The World Bank diagnoses a broken growth model and calls for job-creating, private-sector-led expansion, yet Pakistan’s IMF-backed macro framework concentrates on fiscal balance. Deficits and current accounts have been trimmed more by shrinking the economy than by boosting competitiveness. Revenue targets rely on high, regressive taxes and penalties, often squeezing a shrinking formal sector. External adjustment comes from import compression driven by high interest rates and weak demand, not from competitive export growth.
This is contraction, not productivity-led adjustment. Even more concerning, the “books” being balanced are distorted: cash-based accounting hides assets, liabilities, arrears, guarantees, and future obligations. Timing maneuvers create the illusion of surpluses. So while fiscal targets are tracked, the books aren’t truly repaired, and the economy isn’t being rebuilt to generate jobs.
An economy cannot plausibly create three million jobs per year if government borrowing crowds out capital, if taxes drive firms away, if energy costs erode competitiveness, and if policy uncertainty heightens risk premiums to unsustainable levels. A broken model won’t be fixed by applying more force.
This persistence isn’t accidental. It’s driven by incentives. The state rewards incumbents: powerful political actors, protected firms, and entrenched cartels survive behind tariffs, discretionary subsidies, preferential credit, and regulatory barriers. These privileges create vested interests that fight reform with impressive effectiveness.
The outcome is a two-tier economy: inefficient incumbents serving sheltered domestic markets, and a narrow band of exporters—often in low value-added activities—that struggle to scale. Consumers pay higher prices; workers find fewer opportunities; productivity stagnates while rents persist.
To deliver jobs at scale, Pakistan must confront this political economy head-on. Protecting inefficiency amounts to economic sabotage. Jobs don’t come from simply meeting fiscal targets. They come from firms that invest, expand, export, and innovate—enabled by access to finance, affordable energy, predictable regulation, skilled labor, and growing markets.
A macro framework that treats growth as a risk and private enterprise as a tax base cannot plausibly support a jobs agenda. The tension between diagnosing a broken growth model and pursuing contraction-led stabilisation explains why Pakistan keeps hitting targets while missing its future.
Banga’s right that the World Bank is “in the business of hope.” But hope alone won’t create 30 million jobs. Without reconciling the rift between growth diagnostics and macroeconomic policy, Pakistan will keep balancing distorted books while shrinking its productive base.
The country faces a stark choice: endure decline through accounting optics and the preservation of the status quo, or overhaul its political-economic architecture to reward productivity, competitiveness, and enterprise. The first path prolongs the crisis; the second is hard, but feasible.
In a follow-up piece, the author will outline the governance, political economy, and policy framework Pakistan must adopt if it truly aims to build a competitive economy capable of delivering jobs at scale.
About the author: a former managing partner of a leading professional services firm with extensive work on governance in both public and private sectors. Reach him at @Asad_Ashah on X.
Disclaimer: The views expressed are the author’s own and may not reflect Geo.tv’s editorial policy.
Originally published in The News (https://www.thenews.pk/print/1399922-hope-won-t-get-us-jobs)
