Embrace AI For Growth Or Be Left Behind, World Bank Tells Developing Nations  

The World Bank has urged developing countries to rapidly adopt artificial intelligence (AI) technologies to improve governance, strengthen public service delivery and accelerate economic growth, warning that delaying adoption could leave them further behind in the global economy.

The call was made on Tuesday by the World Bank Group’s Chief Economist and Senior Vice President, Indermit Gill, during the launch of the institution’s latest World Development Report, which highlights AI as a transformative tool capable of addressing long-standing development challenges.

According to Gill, developing economies do not need to build expensive large-scale AI systems or massive data centres to benefit from the technology.

“AI has thrown developing economies a lifeline, and they should seize it,” he said.

“They do not need large models or big data centres to reap its benefits,” Gill added, encouraging governments to adopt affordable AI solutions tailored to local needs, particularly in healthcare, education, agriculture and the justice sector.

The report notes that while advanced AI models—mostly developed in the United States and China—are capable of processing vast amounts of information and automating complex tasks, they require enormous computing infrastructure, electricity and water resources, raising environmental concerns.

Despite these challenges, the World Bank believes developing nations can leverage smaller, localized AI systems to drive meaningful improvements in public service delivery without incurring the high costs associated with cutting-edge models.

The report comes at a time when many low- and middle-income countries are grappling with sluggish economic performance.

According to the World Bank, developing economies are experiencing their weakest average growth in three decades, but AI presents an opportunity to reverse that trend before the end of the decade.

“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 report stated.

The Bank said AI could dramatically expand access to essential services by helping governments provide healthcare, legal support, education and agricultural extension services more efficiently.

It argued that the technology could enable countries to achieve within a decade what might otherwise take a century.

The report comes against the backdrop of what the World Bank earlier described as a “lost decade” for many developing economies following a series of global economic shocks.

Earlier this year, the institution downgraded its global growth forecast for 2026 to its weakest level since the COVID-19 pandemic, citing the economic impact of the Iran conflict and other geopolitical tensions.

The World Bank said lower-income countries have borne the brunt of these disruptions, with Asia among the hardest-hit regions.

To maximise AI’s potential, the report recommends that governments invest in reliable electricity infrastructure, expand access to computing power, improve digital connectivity and develop high-quality local datasets that can support AI applications suited to domestic realities.

“The window to get this right is narrow. AI presents a once-in-a-lifetime opportunity to solve problems that have resisted solutions for generations,” said the report’s director, Gaurav Nayyar.

The report estimates that about 6.8 billion people—roughly 83 per cent of the world’s population—live in low-income and developing countries, making it essential for AI solutions to be designed around local languages, infrastructure and levels of digital literacy.

It cites examples of successful AI deployment, including increased diabetes screening in Bangladesh and the use of advanced weather forecasting tools to help Indian farmers reduce production costs.

The report also stressed that AI technologies must be accessible to people with limited internet access or basic mobile devices.

“For example, AI solutions will need to be delivered through voice calls on basic mobile phones for those who cannot read or afford smartphones,” it noted, adding that simply importing AI systems developed elsewhere would not guarantee success in different local contexts.

While highlighting AI’s enormous potential, the World Bank cautioned policymakers against ignoring the technology’s risks.

The report urged governments to establish strong safeguards for privacy, transparency and fairness in AI deployment to build public confidence.

“Improved public services and better learning outcomes in schools will reinforce trust—but if AI embeds bias in government decisions or erodes data privacy, that trust will be difficult to recover,” the report warned.

It further cautioned that AI could widen inequality between and within countries, concentrate economic power in a few companies, weaken public trust in institutions and create new challenges relating to safety, human rights and social cohesion.

Although the report said AI currently poses limited threats to employment in many developing economies, it warned that, over time, automation could eliminate many middle-income jobs that traditionally serve as pathways to economic mobility.

The World Development Report was produced with support from several advanced AI systems, including tools developed by OpenAI, DeepSeek, Google and Anthropic, according to the World Bank’s disclosure.