The High Price of Global Job Creation

The World Bank issued a directive this morning. It was a plea for physical capital. They argue that jobs are built on roads and power. This is the classic Keynesian ghost. It ignores the cost of the bricks. Capital is cowardly. It flees instability. The World Bank wants to anchor it with asphalt, but the math is getting harder to justify.

In the first three weeks of January, global bond yields have remained stubbornly high. The 10 year Treasury is hovering near 4.2 percent. For a developing nation, that translates to a borrowing cost of 8 or 9 percent. You cannot build a road with 9 percent money and expect a profit. The math does not work. The World Bank’s latest tweet, released on January 21, suggests that strong roads and reliable power are the foundations of growth. This is a half truth. Jobs are built on credit. Without liquid markets, the concrete never dries.

The Infrastructure Multiplier Myth

The technical term is the fiscal multiplier. In theory, every dollar spent on a bridge generates more than a dollar in economic activity. The World Bank relies on this logic to push for massive capital expenditure in emerging markets. However, the multiplier is not a constant. It is a function of the interest rate environment. According to recent data from Bloomberg Markets, the cost of servicing sovereign debt in frontier markets has reached a ten year high. This creates a crowding out effect. When the state borrows to build a school, it competes with the local entrepreneur. In late 2025, we saw this play out across Sub-Saharan Africa. Private credit growth stalled while public debt surged. The foundations are being laid on a swamp of high interest liabilities.

Reliable power is another pillar of the Bank’s narrative. Power is the denominator of modern industry. Without a stable grid, the factory is just a warehouse. In January, the cost of grid stabilization in Southeast Asia rose by 14 percent. This is driven by the volatility of renewable inputs and the rising cost of imported natural gas. The World Bank calls it a foundation. The CFO of a manufacturing plant calls it a variable cost nightmare. Per reports from Reuters Economy, industrial output in these regions is struggling to keep pace with the rising cost of electricity, calling into question the long term viability of infrastructure led job creation.

Projected GDP Multiplier by Infrastructure Sector (January 2026 Data)

The Human Capital Gamble

Healthcare and schools are the most expensive foundations to build. They are long duration assets. They have no immediate collateral value. You cannot repossess an education. This makes financing schools through sovereign debt a high stakes gamble on future tax receipts. If the demographic dividend fails to materialize by 2030, these 2026 loans will be the next generation’s burden. The World Bank’s optimism ignores the technical mechanism of the debt trap. When a country borrows in dollars to build a school that generates local currency taxes, it is shorting its own currency. Any devaluation in the next decade will make that school twice as expensive as it was on the day it opened.

The data in the table above illustrates the paradox. The sectors with the highest economic multiplier, such as education, are also the hardest to finance through traditional debt markets. They require a stability that the current global economy lacks. The World Bank’s tweet on January 21, 2026, is a marketing effort for a global development model that is under extreme pressure. The foundations are necessary, but the financing is precarious. We are watching a global experiment in whether infrastructure can outrun interest rates.

The next milestone is the March 2026 bond auctions in emerging markets. Watch the bid to cover ratios in Nairobi and Jakarta. If the investors demand 12 percent, the asphalt stops. The World Bank can build the roads, but they cannot force the capital to stay.