IMAGE: SUNIL SHARMA/ZUMA WIRE/ALAMY LIVE NEWS
IN 1944 the victors of the second world war gathered at Bretton Woods, New Hampshire, to design a new economic order. One of their creations, the International Bank of Reconstruction and Development, later folded into the World Bank, had a clear-cut mission: rebuild a shattered continent. It financed bullet trains in Japan and nuclear power plants in France. More than 80 years on, the bank’s president, Ajay Banga, has distilled that mission to something simpler. Not reconstruction. Not even poverty reduction, officially the goal. Jobs.
Mr Banga, a 66-year-old former chief executive of Mastercard and PepsiCo’s restaurant division, took over the bank in 2023. He is of the view that the world’s problems—from inequality and instability to extremism—share a cause: too few people have too little to do. The solution is work rather than redistribution.
The bank puts roughly $120bn a year into the global economy, two-thirds of it on near-commercial terms, a third as grants to the poorest countries. Add private capital that the bank helps mobilise, and the figure climbs towards $200bn. That is a small change next to global GDP. But the bank has an advantage that private lenders do not. It holds a AAA credit rating, meaning it can borrow from bond markets at rates no emerging-market government could match. That firepower, Mr Banga argues, should be aimed not at big infrastructure or bail-outs but at the machinery of employment.
The logic is worth taking seriously. For a decade and more, central bankers have marvelled at a puzzle: low unemployment failed to produce the inflation they expected. Perhaps the measure was wrong. Perhaps a job is not just a job. Mr Banga distinguishes between mere earnings and productive, hopeful work. The difference matters for politics as much as economics. A gig delivering parcels in a precarious market is not the same as a stable position with a path upwards. The latter creates what he calls “optimism”. The former stores up trouble.
This is where the bank’s five chosen sectors come in. Mr Banga lists them: infrastructure, smallholder farming, primary healthcare, tourism and value-added manufacturing. Each, he reckons, is a job machine. Tourism in India, he notes, attracts fewer than 20m visitors a year. For a country with beaches, mountains, culture and “cool people”, that is absurdly low. Fixing it would employ everyone from guides to hoteliers to tailors. Primary healthcare, built around local clinics staffed by nurses and diagnostic technicians, would absorb millions while keeping people well enough to work. Farming, done through co-operatives like India’s Amul, can stop the drift to city slums by making rural livelihoods viable.
None of this is revolutionary. Development economists have said similar things for decades. What is different is the emphasis on execution and the rejection of two fashionable alternatives. The first is redistribution. Mr Banga is wary of taking from Peter to feed Paul. Wealth, he says, comes from entrepreneurship and the private sector. Governments should provide the rules and the human capital. The private sector does the rest. The second is a blanket faith in global trade. Here he is more interesting. He points out that 60% of trade within the Association of South-East Asian Nations stays inside the bloc. In South Asia the figure is below 10%. In Africa, below 20%. The potential for regional trade, tariffs and politics permitting, is enormous. That is not protectionism: it is a hedge against a fracturing world.
The dark thread running through it all is demography. The coming 15 years will see 1.2bn young people in emerging markets turn 18. The same markets, Mr Banga notes, are projected to create perhaps 400m jobs. The gap is a disaster waiting to happen. Young people without work do not stay still. They move or they revolt. The “demographic dividend” that economists once celebrated can become a freight train coming the other way. The bank’s job, as Mr Banga sees it, is to lay enough track to keep it on the right side of the tunnel.
Is it working? The evidence is mixed. The bank’s ability to move money is not in doubt. Its ability to move the needle on jobs is harder to judge. Mr Banga points to electrification: a partnership with the African Development Bank seeks to connect 300m people by 2030. As of June, 50m were done with a line of sight to 200m. That is the sort of concrete achievement he wants. But he also admits that the bank only recently started to measure jobs systematically, in conjunction with the International Labour Organisation.
Mr Banga’s career—Nestle in India, then PepsiCo, then Citibank across four continents, then 14 years running Mastercard—gives him a claim to know how the private sector thinks. He is also, unusually for a multilateral banker, willing to admit uncertainty. He does not know what interest rates will do. He does not know how the concentration of wealth will play out. He worries about his grandchildren’s prospects. That humility, disarming in a man of his position, is also strategic. He wants the bank to be a “knowledge bank” as well as a money bank, offering decades of experience rather than just dollars.
The most provocative part of his argument concerns AI. In rich countries large language models threaten white-collar work. In developing countries, he argues, the effect will be different. Compute, electricity, data and skills are all scarce. The real opportunity is “small AI”: a farmer with a phone who can photograph a diseased leaf and get an instant prescription for insecticide. That does not replace jobs. It makes smallholders more productive. The distinction is worth watching. If he is right, the AI panic in the West is a luxury problem.
The World Bank cannot solve global inequality by itself. It can, Mr Banga believes, give a few hundred million people a ladder. For a man who spent his career in the private sector, that is an unusual definition of success. For the rest of the world, it may have to be enough. ■
