When Ajay Banga, President of the World Bank, warned that Pakistan must create 25–30 million jobs within the next decade, he was not offering a development slogan. He was defining a national survival threshold. Countries that fail to generate employment at that scale do not merely grow slowly – they become economically fragile, socially strained and politically unstable.
In my previous article (‘Hope won’t get us jobs’, February 19, 2026) – of which this article is a continuation – I explained why Pakistan’s current policy framework cannot deliver jobs at that scale. The core problem is structural: a broken growth model reinforced by weak governance, distorted incentives, and inconsistent, flawed policies pursued for decades. Incremental fixes cannot repair a system whose foundations are misaligned with productivity, competitiveness and investment. What is required is disruptive reform – and it must happen quickly.
That urgency is intensified by the global technological transition now underway. Artificial intelligence is transforming labour markets everywhere. Routine work – manual and cognitive – is increasingly automated. Productivity is rising faster than employment. Even advanced economies are adjusting to the effects of job displacement. Pakistan must therefore create tens of millions of jobs precisely when the world economy is learning how to grow with fewer workers. That is the magnitude of the challenge.
Recent official survey data highlighted by Planning Minister Ahsan Iqbal shows the depth of Pakistan’s socioeconomic stress. Poverty has surged to 28.9 per cent in 2024–25, the highest level in more than a decade, up from 21.9 per cent in 2018–19. Rural poverty stands at about 36 per cent, while urban poverty is about 17 per cent. Nearly 70 million Pakistanis now live below the poverty line.
Real incomes have fallen by roughly 12 per cent and unemployment has climbed to around 7.0 per cent, a two-decade high. These are not abstract statistics. They reflect households skipping meals, children leaving school and families slipping out of the formal economy.
Growth over roughly the past four years has averaged only about 2.0 per cent, far below what is required to absorb new labour-market entrants. Investment has declined sharply as a share of GDP and foreign direct investment remains extremely weak – about half a per cent of GDP, among the lowest levels in emerging economies.
Human development indicators reinforce the same story. Millions of children – roughly one-third or more of school-age cohorts – remain out of school. Many who attend fail to acquire basic skills. Universities graduate thousands every year, yet employers consistently report low employability, leaving many graduates without meaningful work. In an era when global labour markets demand higher skills, Pakistan is struggling to provide even foundational ones.
These problems are interconnected. Weak human capital lowers productivity and innovation. Low productivity discourages investment. Low investment suppresses growth. Weak growth limits job creation. And insufficient jobs increase poverty. This is how economies become trapped in structural stagnation.
While Pakistan struggles with slow growth and declining investment, other countries are building the future economy. Consider India. In recent years, it has attracted roughly $70 billion annually in foreign direct investment while sustaining GDP growth of about 6-7 per cent, making it one of the fastest-growing major economies globally.
Global technology leaders have recently committed massive long-term capital there. Amazon plans about $35 billion in investment; Microsoft has pledged roughly $17.5 billion for AI and cloud infrastructure; and Google has committed about $15 billion towards digital and data systems.
These investments are strategic bets on India’s future as a technology-driven economy. They bring supply chains, innovation, skills development, and high-value jobs. Investors do not commit such capital because of short-term incentives. They do so because they see credible direction.
Capital flows where the future is being built. When investment stagnates, it signals doubts about a country’s trajectory.
History is unequivocal: large-scale employment comes from competitive private sectors producing goods and services for global markets. Domestic demand alone cannot absorb millions of workers. Government hiring cannot expand indefinitely. Informal sectors cannot deliver productivity or rising incomes.
Only firms that innovate, scale, export, and compete internationally can create employment at the magnitude Pakistan requires. That means Pakistan must build a new economy. Its foundations are clear: reliable and affordable energy through market-based reforms; predictable regulation and competitive taxation; access to finance for productive enterprises; modern digital infrastructure; and a workforce equipped with globally relevant skills.
Energy reform is central. High power costs act like a tax on industry, reducing competitiveness and discouraging investment. No country has built a strong export base while its producers faced uncompetitive energy prices. Affordable, reliable power is therefore not just a sectoral reform but a national growth strategy.
At the same time, Pakistan must invest heavily in future-oriented skills: software engineering, data analytics, automation systems, advanced manufacturing and AI-enabled services. Exporting high-value services may be Pakistan’s fastest route to job creation because it allows participation in global markets without waiting decades for heavy industrialisation.
None of this will happen without a deeper transformation in political economy, especially a shift in how leadership thinks. Much of Pakistan’s policymaking still reflects a 20th-century mindset focused on control, protection, and short-term fixes.
That approach cannot build a competitive 21st-century economy.
What is required now is futuristic thinking – leadership that anticipates technological change, embraces innovation, prioritises productivity, and understands that competitiveness, not protection, determines prosperity. Countries that succeed in the coming decades will be those whose leaders think ahead of the curve, not behind it.
Pakistan now faces a decisive choice. One path continues current patterns: remaining trapped in cycles of stabilisation, low growth, weak investment, rising poverty and gradual relative decline. The other demands disruptive reform – rebuilding governance credibility through rigorous merit-based systems, aligning incentives with productivity, investing in technology and skills, and creating conditions that attract large-scale investment.
Creating 30 million jobs in ten years is possible. But it is incompatible with business-as-usual. In an age where intelligence itself is becoming automated, countries that fail to adapt will not simply grow slowly – they will be left behind.
Hope is not enough. Only decisive and bold reform, sustained execution and real competitiveness can secure Pakistan’s economic future.
The writer is a former managing partner of a leading professional services firm and has done extensive work on governance in the public and private sectors. He tweets/posts @Asad_Ashah