UNDP launches jobs and investment push for developing countries

The United Nations Development Programme (UNDP) has announced new initiatives to attract investment and create jobs in developing countries, which its chief says are being hit by crises outside their control while official development aid falls sharply.

UNDP Administrator Alexander De Croo said the agency was deepening its cooperation with the World Bank and forging new ties with the European Bank for Reconstruction and Development, the European Investment Bank, other financial institutions and private investors, Dawn reported, citing Reuters. He was speaking on the sidelines of the IMF and World Bank annual meetings in Bangkok.

“The alarm lights are at least on orange”

De Croo said the crises facing developing countries were in some ways worse than the Covid crisis of 2020-21, as they struggle with high energy costs, rising interest rates and the worst El Nino since 1950.

“The alarm lights are at least on orange, and if this continues for a few more months, countries will come into trouble,” he said.

Countries had been shielding people from the energy price shock caused by the Middle East war with fuel subsidies and other measures, but at a huge cost, he said. UNDP was working with 46 countries to design targeted subsidies that cost less. Many governments were already pulling back as their fiscal buffers ran dry.

He said it was too early to talk about debt relief. Central banks and regional institutions would first need to deal with countries’ liquidity needs, and only then could the question of solvency be addressed.

“Wars need to end”

De Croo warned that if the war dragged on, Gulf countries and others that had kept up their support could cut aid as well.

“We need to find a way to stop (the war), at least to get again safe access to the Gulf region… and it’s the same in Ukraine,” he said. “At some point wars need to end.”

The two new initiatives

The plans come amid warnings of a huge jobs gap, with about 1.2 billion young people set to enter the workforce in developing countries over the next decade, but only 400 million jobs in sight.

• Investment: improving investment policies and regulations, developing specific projects and pipelines, and moving them to implementation
• Jobs: identifying sectors with strong job-creation potential, matching skills to what employers need, and removing barriers to business investment and hiring

UNDP said pilot projects were already under way in Nepal, Yemen, Haiti, Lebanon and Ghana as part of its World Bank partnership.

Insurance gap

UNDP is also working with Italy’s Generali on expanding insurance cover for developing countries. De Croo said this was crucial, noting that natural disasters in Asia caused $65 billion in economic losses in 2025, of which only $5 billion was insured.

Developing countries also needed reforms to improve governance and the rule of law and to raise more domestic revenue, he said, but progress had been slowed by a series of crises since the pandemic. “The way development is being financed is changing, and that’s a good thing, but we need to create some space for those countries to be able to implement those reforms.”

Why it matters

Pakistan faces many of the pressures De Croo described: costly fuel subsidies, high energy prices, a young population needing jobs and the threat of El Nino. Read our reports on the IMF’s new forecast for Pakistan and on the record El Nino.

This article draws on reporting by Dawn and Reuters.