AI offer lifeline to developing economies in an era of weak growth – World Bank

Artificial intelligence (AI) holds the potential to transform developing economies, enabling them to achieve in a decade what may otherwise require a century of progress, according to the World Bank Group's World Development Report 2026 titled "The Promise of Artificial Intelligence." The report highlights how AI could revolutionize sectors such as healthcare, education, judicial services, and agriculture in these nations.

In high-income countries, about a quarter of existing jobs are at risk of automation by generative AI, compared to just 4.5% in developing economies. However, 16.2% of jobs in developing countries could see productivity gains from AI, closely matching the 18.7% expected in high-income nations. The World Bank emphasizes that AI's greatest benefit lies not in job displacement but in augmenting human capabilities.

Senior Vice President and Chief Economist Indermit Gill of the World Bank emphasizes that developing economies should seize this opportunity. "AI has thrown developing economies a lifeline, and they should seize it," he stated. Gill stresses that large AI models or extensive data centers are not necessary to reap the benefits. Instead, adapting small, low-cost AI tools to local conditions can bring advantages like better medical care, education, judicial services, and agricultural extension to millions.

However, time is of the essence, as AI is advancing rapidly and is more context-specific than previous general-purpose technologies like electricity and the internet. The report underscores the urgency for developing countries to act swiftly to address gaps in power, connectivity, skills, and institutional quality. The World Development Report 2026 is the first comprehensive assessment of AI's implications for developing countries, showcasing how businesses and governments are already utilizing AI to solve problems, analyze information, improve forecasts, and deliver services at scale.

The report reveals that AI is already benefiting people, businesses, and governments by helping doctors diagnose patients, farmers make informed crop decisions, and businesses enhance productivity. Governments can also leverage AI to improve tax collection, social programs, disaster response, healthcare, and education.

Despite these opportunities, the report warns that AI risks widening the gap between countries, increasing inequality within nations, concentrating market power, weakening trust in public institutions, and creating new risks for safety, rights, and social cohesion. To avoid these pitfalls, the report recommends a three-step path for developing countries: first, adopt available AI tools; second, adapt them to local conditions; and third, progressively advance towards frontier AI development.

The report stresses that this approach avoids costly and inefficient attempts to replicate advanced AI prematurely. For instance, in Sub-Saharan Africa, nearly one-third of rural schools still lack reliable electricity, and over two-thirds lack dependable internet access. Investing in these foundational elements is crucial, as the World Bank is working with partners through Mission 300 to provide energy access to 300 million people across Sub-Saharan Africa by 2030. This effort lays the groundwork for broader digital and AI inclusion.

Furthermore, governments must expand access to computing power and improve the availability of local data, including in local languages, to tailor AI tools to their people and economies. Encouraging new firms to attract investment, test ideas, and scale successful innovations is also essential. Many AI pilots have already been initiated, but the challenge lies in identifying those that yield tangible results.

To ensure success, improved evidence, stronger skills, and clearer procurement and evaluation frameworks are necessary.

Building public trust in AI is equally important, particularly as the technology evolves rapidly. Governments should start by drawing on voluntary industry standards to encourage responsible AI use, guided by international cooperation to prevent regulatory fragmentation. If voluntary measures prove insufficient, governments should apply existing laws to address AI-related harms directly.

As AI transforms public services and learning outcomes, trust in governments will be reinforced, provided AI does not embed bias in government decisions or erode data privacy.