Starting September 1, 2025, the World Bank will implement a new policy requiring companies awarded civil works contracts in projects financed by the institution to allocate at least 30% of labor costs to local workers.

The goal of this measure is clear: to create local employment and promote skills development in the communities where projects are carried out. By directly linking labor spending to local hiring, the Bank aims to:

• Increase household income
• Improve living conditions
• Strengthen local economies through reinvestment and productive activity
• Build a skilled workforce suited to future needs

This decision comes in response to a demographic challenge: 1.2 billion young people are expected to enter the labor market in developing countries over the next decade. This pressure demands the creation of sustainable job opportunities, and public infrastructure projects are seen as key tools to achieve that.

According to Gallina A. Vincelette, Vice President for Operations Policy and Country Services at the World Bank, the measure reinforces the institution’s commitment to inclusive development. Prioritizing local labor:

• Delivers immediate benefits
• Builds long-term capacity
• Contributes to economic and social stability

This new requirement complements reforms introduced in March 2025 aimed at improving the procurement process. These earlier measures include:

• Attracting more qualified bidders
• Evaluating proposals based on quality, sustainability, innovation, and life-cycle cost
• Placing greater emphasis on social criteria, such as local job creation

This policy will apply exclusively to civil works contracts subject to international competitive procurement, including energy, transportation, and other public infrastructure projects.

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