AI Offers Developing Economies a Lifeline; World Bank Urges Faster Readiness

KATHMANDU; Jobs in high-income countries are more than three times as likely to be at risk of automation by generative Artificial Intelligence (AI) than those in low and middle-income countries.

Developing economies have a unique opportunity to accelerate economic progress through Artificial Intelligence (AI), but they must act quickly to overcome critical gaps in infrastructure, connectivity, skills, and institutions, according to the World Development Report 2026: The Promise of Artificial Intelligence released by the World Bank (WB) Group.

The report finds that 4.5 percent of existing jobs are at risk in low and middle-income countries compared to 14.2 percent in high-income countries. Stating that AI could allow developing countries to do in a decade what might otherwise take a century, the WB Group suggest the governments to act swiftly to close the gaps in power, connectivity, skills, and institutional quality that threaten to leave them behind, in order to realize maximum benefit out of AI uses.

AI is also expected to help developing economies more than the high-income countries in coming day. Around 16.2 percent of jobs in developing economies could see productivity meaningfully boosted by AI — close to the 18.7 percent expected in high-income countries. "The greatest promise for developing countries lies not in replacing workers, but in amplifying what they can do," reads a press release of the WB Group.

“AI has thrown developing economies a lifeline, and they should seize it”, said Indermit Gill, senior vice-president and chief economist of the WB Group. “They do not need large models or big data centers to reap its benefits. By adapting small, low-cost AI tools to local conditions, they can bring better medical care, education, judicial services and agricultural extension within reach of millions. But they must hurry: AI is spreading faster and is more context-specific than earlier general-purpose technologies like electricity and the internet."

The WB's report is the first comprehensive assessment of AI’s implications for developing countries, revealing how businesses and governments in these countries have begun to use AI. It finds that AI is already helping people, businesses, and governments solve problems, analyze information, improve forecasts, and deliver services at a larger scale.

These capabilities are especially valuable in countries where trained professionals, reliable records, and public capacity are often limited. AI tools can make it easier for doctors to diagnose patients, farmers to improve crop decisions, and businesses to become more productive. The WB Group recommends that the governments, too, could use AI to improve tax collection, social programs, disaster response, health care, and education.

Developing economies today are in the midst of their weakest average growth performance in three decades. AI could significantly boost that performance before the end of the 2020s while delivering tangible benefits to people, the WB report states.

The most advanced AI systems are being built by a small number of countries and companies, while many developing economies still lack the power, internet access, data, skills, and institutions needed to use AI effectively. Without deliberate action, AI could widen gaps between countries, increase inequality within them, concentrate market power, weaken trust in public institutions, and create new risks for safety, rights, and social cohesion.

The report sets out a clear, three-step path to maximize the benefits of the IA use: adopt available tools, adapt them to local conditions, and —over time — advance toward frontier AI development. This sequenced approach helps countries avoid costly and inefficient attempts to replicate advanced AI before the foundational conditions are in place.

Gaurav Nayyar, director of the World Development Report 2026 said AI presents a once-in-a-lifetime opportunity to solve problems that have resisted solutions for generations. "Developing countries that build the foundations now—power, connectivity, skills, and institutions—will be positioned to adopt and adapt AI for their people."

The WB Group suggests that countries also need to expand access to computing power and improve the availability of local data, including in local languages, so AI tools can be tailored to serve their own people and economies.

Governments should make it easier for new firms to attract investment, test ideas, and scale what works. Many AI pilots are already underway, but the bigger challenge is knowing which ones deliver results. Better evidence, stronger skills, and clearer procurement and evaluation frameworks will be essential.

The group has further mentioned that building public trust is equally important. As AI evolves rapidly, governments should begin by drawing on voluntary industry standards to encourage responsible use, anchored in international cooperation to prevent regulatory fragmentation.

Where voluntary measures prove insufficient, governments should enforce existing laws to address harms directly. The report concludes that improved public services and better educational outcomes can strengthen public confidence in AI, but warns that trust could quickly erode if AI systems reinforce bias in government decision-making or compromise data privacy.