Developing economies face a shortfall of about 800 million jobs over the next 15 years as a record generation of young people reaches working age, World Bank Group President Ajay Banga warned on Wednesday.
Speaking at the Climate Finance Summit in Antalya, Türkiye, held alongside the UN-convened COP31 climate talks, Banga said about 1.2 billion people in the emerging world would come of age over the period, while those countries are forecast to create only around 400 million new jobs, Bloomberg reported.
He said the gap has “profound consequences for poverty and prosperity, for migration, for stability.”
The figures are not new, but the warning has become the centrepiece of the World Bank’s agenda this year.
Banga first set out the arithmetic in a February blog post, repeated it in March, and made it the core of his Annual Meetings speech in Bangkok on October 16, where he called the gap “a projection” that “does not have to be our future”.
What the World Bank report shows
The underlying analysis comes from “The Global Jobs Challenge”, a note published on March 2 by World Bank economists Tommy Chrimes, M. Ayhan Kose and Kersten Stamm of the bank’s Prospects Group.
It says about 1.2 billion young people, aged 15 to 24, will reach working age in emerging market and developing economies (EMDEs) between 2025 and 2035.
The bank describes this as “a jobs challenge of historic proportions”, and its research page calls the cohort “the largest youth cohort the world will likely ever see”.
The surge is heavily concentrated.
Just over 330 million of the new entrants will be in Sub-Saharan Africa, with about 280 million each in South Asia and East Asia and Pacific, according to the report.
The Middle East and North Africa region is projected to add 170 million, while Latin America and the Caribbean and Europe and Central Asia account for the remaining 165 million combined.
For Sub-Saharan Africa and the Middle East and North Africa, these will be the largest youth cohorts the regions have ever seen.
By contrast, East Asia and Pacific peaked in the decade to 1988, when almost 350 million young people reached working age, a wave the World Bank links to the region’s “transformative growth experience”.
Why the jobs maths is getting harder
Potential growth in EMDEs has fallen from an annual average of 6% in the 2000s to just over 4% in the 2020s, the report says, which means each year of expansion creates fewer opportunities than it did two decades ago.
Fiscal room is also thinner: the regions facing the largest labour force expansion are, on average, poorer and more indebted than other EMDE regions, the report finds.
Around 270 million young people in EMDEs in 2035 will live in places currently classed as fragile and conflict-affected, it adds.
“There’s rising debt, conflict, challenges with resiliency of infrastructure, and natural disasters, so their resources to meet their development ambitions are increasingly constrained,” Banga said in Antalya.
The report also flags that export-led growth, the model that powered East Asia, may be harder to repeat amid “tepid trade growth, mounting trade tensions, and fragmentation”, while artificial intelligence could create jobs in some areas but uncertainty in others.
The UN has adopted the same numbers. UNDP Administrator Alexander De Croo said on October 13 that “for 800 million of these, there will not be jobs”, adding that the median age in many developing countries is between 18 and 25, UN News reported.
The World Bank’s three-pillar plan
The bank’s response rests on three pillars: foundational infrastructure, a business-friendly environment and the mobilisation of private capital.
It is prioritising five sectors it says can create jobs at scale: infrastructure including energy, agribusiness, healthcare, tourism and value-added manufacturing.
Agriculture employs almost half of all workers in Sub-Saharan Africa and over a quarter in both East Asia and Pacific and South Asia, according to the report, and the World Bank is set to more than double its agribusiness support to $9 billion a year.
Nearly 600 million people in Sub-Saharan Africa lack access to electricity, the report says, and firms in that region are the most likely of any EMDE region to cite electricity as a constraint on doing business.
The bank’s Business Ready (B-READY) 2025 data shows low-income economies scoring 34.12 out of 100 on public services, against 67.09 for high-income economies, with the gap narrower on regulatory frameworks at 58.50 versus 73.43.
That suggests the problem in the poorest countries is less the rules on paper than the ability to implement them, a point the report makes directly when it calls implementation gaps “the central challenge”.
In five case studies of sustained job creation, Australia, Chile, Colombia, South Korea and Singapore, average employment growth reached 3.4%, roughly double its pace in other years, the report found.
What it means for investors and emerging markets
For investors, the World Bank is pitching the jobs gap as an opportunity as much as a risk.
Banga has argued that the same demographics will create “the largest growth in future consumers, producers, and markets”, with sustained demand for energy, food systems, healthcare, infrastructure, housing and manufacturing.
In the fiscal year to June 30, the World Bank Group mobilised $112 billion in private capital, up from about $35 billion in fiscal 2022, with total financing above $230 billion, Banga told the Annual Meetings.
Nearly 55% of that went to the five job-focused sectors, he said.
The catch is where the money lands.
Mobilisation rates were higher in lower-middle and upper-middle income countries, but capital flows were flat in low-income countries, Banga said in Antalya, calling it “the challenge of reaching the poorest markets”.
The iShares MSCI Emerging Markets ETF (EEM) closed at $60.57 on Tuesday, down 0.75% on the day and about 15% below its highest close of the past year of $71.21, according to Yahoo Finance data, with US markets yet to open on Wednesday at the time of writing.
The contrast with developed economies is also sharp: the US added 165,000 jobs in October, beating forecasts, while the World Bank’s concern is a structural shortfall measured in hundreds of millions.
The report’s case studies suggest the pay-off for getting this right shows up in markets: during sustained job-creation episodes, output growth was roughly 50% higher and productivity rose at about twice the usual rate.
If the gap is not closed, Banga has warned of pressure on migration and stability, risks that can feed through to sovereign borrowing costs and currencies.
What’s next
The World Bank Group is at COP31 in Antalya until November 20, where it is pitching what it calls “climate-smart development” as a route to jobs and resilience.
The full edited volume behind the March note, also titled “The Global Jobs Challenge”, is listed by the authors as forthcoming, and will be the next detailed read on whether the 400 million projection is shifting.
For now, the World Bank’s message is that the demographics are fixed, and the policy response is the only variable investors should be watching.
AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.
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