World Bank Mandates 30% Local Labor in Global Projects to Boost Jobs

In a significant move to boost employment and skills development across developing countries, the World Bank has introduced a new procurement requirement mandating that at least 30% of labor costs in large-scale civil works contracts be spent on local labor. The policy, set to take effect on September 1, 2025, applies to internationally procured civil works contracts, including the construction and maintenance of infrastructure like roads, bridges, ports, and energy facilities.

The initiative is part of the World Bank’s broader strategy to address the mounting jobs crisis in emerging markets, where millions of young people are entering the labor force with limited opportunities for decent work.

Driving Jobs Through Infrastructure Investment

“This new requirement underpins our commitment to job creation,” said Gallina A. Vincelette, Vice President for Operations Policy and Country Services at the World Bank. “By prioritizing the use of local labor in World Bank-funded projects, we not only create immediate employment opportunities for people in our client countries but also invest in the long-term potential of local communities.”

Public infrastructure investments—particularly in sectors such as transport, energy, and water—are among the most impactful in generating jobs and stimulating economic growth. By ensuring that a portion of the financial resources dedicated to these projects is channeled into local communities, the World Bank aims to foster inclusive development, strengthen skills, and reduce poverty.

New Requirement at a Glance

• Effective Date: September 1, 2025

• Scope: Civil works contracts procured through international competitive bidding

• Local Labor Threshold: Minimum 30% of total labor cost must be allocated to local workers

• Goal: Increase domestic employment, enhance workforce capabilities, and stimulate local economies

A Timely Response to a Global Workforce Challenge

According to World Bank estimates, 1.2 billion young people are expected to enter the labor market in developing countries over the next decade. Without deliberate policies and job-creating investments, these economies risk facing long-term unemployment, underemployment, and social instability.

The new procurement rules are designed to transform infrastructure spending into a powerful tool for human capital development. By embedding labor-intensive practices into procurement frameworks, the World Bank hopes to align infrastructure development with its mission to end extreme poverty and promote shared prosperity.

Building on a Stronger Procurement Framework

This requirement builds upon earlier enhancements introduced by the World Bank in March 2025, which shifted the procurement paradigm to emphasize quality, innovation, and sustainability over lowest-cost bids alone. Those changes included:

• Weighted Bid Evaluation Criteria: Incorporating life-cycle costs, sustainability measures, and social impact—including job creation—as core elements of bid assessment

• Incentives for Innovative Solutions: Encouraging contractors to propose methods that enhance efficiency, reduce environmental impact, and generate local economic benefits

• Enhanced Bidder Qualification: Raising standards for experience and capacity to deliver high-value, socially impactful infrastructure

The inclusion of local job creation as an explicit criterion in the bidding process reflects the World Bank’s recognition of infrastructure projects as drivers of inclusive growth, rather than merely physical assets.

Long-Term Gains for Communities

Beyond short-term job creation, the World Bank expects the policy to yield long-lasting benefits for communities, including:

• Skill Development: Local workers gain on-the-job training and experience, improving employability for future opportunities

• Household Income Support: Jobs generated through public works enable families to afford better housing, education, and health services

• Multiplier Effects: Incomes earned are often spent within local economies, creating further demand for goods and services

By requiring international contractors to engage with local labor markets, the policy also promotes knowledge transfer, as foreign firms bring global expertise that can be shared with domestic workers.

A Win-Win for Development and Contractors

While the requirement introduces new compliance dimensions for bidders, it also provides them with an opportunity to build goodwill, tap into motivated local workforces, and reduce costs through localized operations. Contractors capable of developing inclusive hiring strategies and fostering local partnerships may gain a competitive edge in future World Bank-financed tenders.

As the global development landscape evolves, the World Bank’s focus on local participation, quality, and sustainability reflects a growing understanding that infrastructure must serve as both an economic catalyst and a platform for empowerment.