While Policymakers Tackle Immediate War Impact, World Bank Chief Warns Of Job Crisis In Long Term

While the world is busy taking a shield from the immediate impact of the United States-Israel-Iran war, World Bank chief Ajay Banga has warned of a bigger crisis looming in the long term: unemployment.

According to a report by Reuters, the World Bank President said that almost 1.2 billion people will enter working age in developing countries over the next 10 to 15 years. But current economic trends would generate only around 400 million jobs, leaving roughly 800 million unemployed or underemployed.

Banga said that policymakers may get distracted by short-term shocks such as the Iran conflict, even as structural employment challenges worsen.

He acknowledged that tackling the immediate crisis was important, but the focus should also be maintained on long-term priorities such as job creation, clean water access, and electrification.

He cautioned that if the issue of job creation was not addressed adequately, the crisis may lead to geopolitical challenges such as illegal migration and instability.

“We have to walk and chew gum at the same time,” he said, describing the current environment as a “short-velocity cycle” dominated by geopolitical shocks.

He highlighted that more than 117 million people were displaced globally in 2025, according to UN estimates.

To address the looming job crisis at its level, the global lender is pushing developing countries for economic reforms in order to create a favourable investment climate. The Bank’s Development Committee is working with developing countries to ease business regulations, improve land and labour laws, strengthen logistics, and reduce corruption.

Banga said companies from emerging economies, including India’s Reliance Industries and Mahindra Group, and Nigeria’s Dangote Group, are increasingly expanding globally.

Efforts are also being made to attract private investment in sectors less susceptible to fluctuations in global trade shocks such as infrastructure, agriculture, healthcare, tourism, and value-added manufacturing.

Banga’s comments come after he had already warned last week of the economic impact of the West Asian war.

He had said that the global economy may be lowered by up to 1 percentage point if the war prolongs.