- Private investment flows only where the right conditions exist and where there’s a clear probability of return
By Ajay Banga
The World Bank was not born of altruism, but of strategic design. Its original purpose, shaped by US interests, was to forge a global economic landscape ripe for private sector investment. This wasn’t charity—it was a calculated move to promote economic growth and prevent instability. Over time, our mission has evolved, sometimes drifting into humanitarian efforts. But during the past two years of reform, we have refocused on our core mandate: driving development and reducing poverty. The resources needed to achieve this require the private sector to be an active player.
That matters now more than ever. Across both developing and developed countries, a question has surfaced time and again. What does the future look like here—and why should we invest in it? It’s a fair question and must be answered with actions, not words. At its root is a desire for development to deliver not just impact, but real opportunity and greater security.
Key to our approach is making job creation an explicit target. Jobs are the most effective way to build self-sufficient economies, reduce humanitarian need, and create demand for goods. They also strengthen global stability by addressing the root causes of crime, fragility and mass migration.
Our ultimate goal is to help countries build dynamic private sectors that convert growth into local jobs—not by shifting work from developed countries, but by unlocking opportunity where people already live. That means strengthening sectors like energy, infrastructure, agribusiness, health care, tourism, and manufacturing in mineral-rich nations to fuel a more vibrant, homegrown economy.
The World Bank also helps investors deploy capital effectively in these markets—ensuring positive returns while tackling global challenges. And beyond market access, strengthening the foundations of economic growth by reinforcing transparency, anti-corruption and contract enforcement.
But we cannot assume that jobs will automatically follow if we do the right things. A common misconception held us back—the belief, popularized as “from billions to trillions,” that private capital was sitting on the sidelines, ready to be deployed. Not only was this unrealistic, it also bred complacency—the notion development would take care of itself without laying the groundwork.
In reality, private investment flows only where the right conditions exist and where there’s a clear probability of return. And for that, two things are essential: a strong infrastructure foundation and a predictable regulatory environment. Without these, private capital stays on the sidelines.
This is where the World Bank Group comes in. We help governments finance critical infrastructure and ensure resources are used effectively. We advance practical reforms—like better tax systems and land rules—that make it easier to do business. And financing is linked to real results, so every dollar delivers impact.
Once the conditions are in place, our private sector arms—the International Finance Corporation and Multilateral Investment Guarantee Agency—help businesses create jobs by providing financing, equity, guarantees, and political risk insurance. They also support skills development tailored to local needs. This continuum—from public sector support to private sector engagement—isn’t just unique; it’s effective in a moment when development demands both scale and staying power.
Take Mission 300, our commitment to deliver electricity to 300 million Africans by 2030. To achieve this, governments are pledging policy and regulatory reforms and committing to investment, commitments tethered to International Development Association (IDA) financing to ensure delivery. This gives private investors the confidence to engage.
In an era of tight budgets, global challenges, and slowing growth, the World Bank gives shareholder governments a unique way to advance their economic and strategic goals. By leveraging taxpayer contributions up to 10-fold, we turn modest investments into large-scale capital flows.
Over 80 years, $29 billion of paid-in capital to the International Bank for Reconstruction and Development, our central lending arm for developing countries, and to our private sector arms, has mobilized nearly $1.5 trillion for development—a return of more than 50 to 1. For the world’s poorest countries, the IDA uses grants and low-cost loans, multiplying every dollar donated four times. It’s one of the best investments in development—for governments, taxpayers and the world.
The developing world is home to the next generation of workers, entrepreneurs and innovators—a demographic dividend that, if nurtured, will power global growth for decades. And it holds abundant natural resources that can drive industries, feed nations, and transform economies. Development is not just about reducing suffering; it’s about unlocking this vast untapped promise.
This article was originally published in the Financial Times.
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