LAHORE: Lasting economic recovery does not come from aid alone. It comes from jobs, and jobs come primarily from private investment. The real challenge for Pakistan is therefore not merely how to obtain more external assistance, but how to mobilise private capital in an economy facing weak growth, high unemployment, regional disparities and a persistent security threat.
A recent World Bank experience in northern Mozambique offers Pakistan an important lesson. In Cabo Delgado, a region scarred by conflict and displacement, the World Bank-supported CONECTA Negocios programme is helping small businesses expand through a combination of finance, technical assistance and access to markets. More than $5.5 billion — $5.5 million, according to the World Bank — of private investment has been mobilised and more than 960 new and better jobs supported. One company combined $150,000 of its own capital with a $400,000 matching grant and created more than 80 jobs.
The lesson is not that Pakistan should distribute grants to businesses. It is that public money can be used to reduce investment risk and crowd in several times more private capital.
This approach is particularly relevant when terrorism and insecurity discourage investors from committing capital in vulnerable areas. Pakistan cannot afford to put economic activity on hold until security conditions become perfect. Instead, it should identify sectors and locations where businesses can operate securely and then deliberately build investment ecosystems around them.
Agriculture and agro-processing offer the biggest opportunity. Pakistan produces enormous quantities of rice, fruits, vegetables, cotton, livestock and other commodities but captures only a fraction of their potential value. Investment in cold storage, food processing, packaging, dairy, meat, animal feed, agricultural machinery and export-oriented processing could create employment far beyond the factory floor. Farmers, transporters, technicians, wholesalers and exporters would all become part of the value chain.
The same principle can be applied to mining. Balochistan and Khyber Pakhtunkhwa possess substantial mineral resources, but exporting raw material creates fewer jobs and less value than processing it locally. Where security permits, government should provide infrastructure, transparent contracts and appropriate risk guarantees to attract private investment into mineral processing.
Renewable energy is another promising field. Solar equipment, batteries, energy-efficiency services and decentralised power generation can attract private investment while reducing the cost and unreliability of electricity. The World Bank’s current Pakistan program explicitly identifies energy, water, and agriculture, manufacturing and digital infrastructure as areas where greater private investment can support growth and job creation.
Information technology offers perhaps the greatest opportunity to overcome geography and insecurity. Software development, freelancing, business-process outsourcing and digital services can create employment without requiring large concentrations of workers or factories. Pakistan should establish digital employment centres in secondary cities, supported by reliable electricity, broadband and skills training.
Small and medium manufacturing clusters deserve similar attention. Rather than concentrating incentives on a few large projects, Pakistan could develop clusters around textiles, garments, engineering components, sports goods, surgical instruments, furniture and food processing. Government provides roads, electricity, security, testing facilities and market access; entrepreneurs provide capital, technology and jobs.
This is also consistent with the World Bank’s 2026-35 Pakistan Country Partnership Framework, which seeks to increase productive and inclusive private investment and use guarantees to help de-risk investments. The fundamental policy change, therefore, is from subsidising businesses to reducing the risks that prevent businesses from investing.
Pakistan does not need to wait for terrorism to disappear before creating jobs. It needs to make investment safer, more predictable and more productive. Public institutions must provide security, infrastructure, skills, finance, insurance and predictable regulation, while private capital does what government cannot do efficiently — build enterprises, compete, innovate and employ people.
Jobs are not merely the consequence of recovery. In insecure regions, jobs can become part of the recovery itself. A young person with a productive livelihood has a stake in stability; a local enterprise creates a network of economic interests that extends far beyond its factory gate.
The African experience therefore offers Pakistan a simple but powerful message: aid can stabilise a crisis, but enterprise can transform an economy.
