Last Tuesday saw the release of the World Bank Group (WBG)’s annual World Development Report 2026. The main theme of the report is ‘The Promise of Artificial Intelligence’, particularly as it concerns low- and middle-income countries like Pakistan. According to the report, AI could allow developing countries to do in a decade what might otherwise take a century – provided that governments act swiftly to close the gaps in power, connectivity, skills and institutional quality that threaten to leave them behind. It finds that jobs in high-income countries are more than three times as likely to be at risk of automation by generative AI than those in low- and middle-income countries, where 4.5 per cent of existing jobs are at risk, compared with 14.2 per cent in high-income countries. At the same time, 16.2 per cent of jobs in developing economies could see productivity meaningfully boosted by AI. Experts have also underscored that developing economies do not need large models or big data centres to reap the benefits of AI and that, 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.
This would indeed be a boon for countries like Pakistan, supplementing the power of the existing system to provide basic services to more people. However, this largely optimistic picture is not without challenges. While the report claims that developing countries have less to fear in terms of job losses, even concentrated losses can be damaging. Pakistan has few highly-skilled jobs to go around and the ones that do exist, most notably in the IT sector, have been one of the country’s few bright spots in terms of growth, investment and exports in recent years, even if they account for a small share of employment. What happens if AI displaces jobs in this sector? Will the benefits make up for it? Will the high unemployment among the nation’s educated youth be exacerbated? There is also no getting around the fact that improvements in basic infrastructure and competencies are needed even to get the most out of the most basic AI tools. Pakistan produces plenty of engineers, but its power and connectivity systems are lacking. The country has some of the most expensive electricity in the region and, while internet penetration is growing, speed and reliability leave a lot to be desired.
The report also emphasises the importance of adapting AI to local needs. In Nigeria, for example, a medical AI trained on data from wealthy countries recommended more laboratory tests than local conditions warranted. This would call for boosting both the quantity and quality of data in a country where many still do not have a bank account, a salary slip or even an email. An AI-based tax collection tool for Pakistan would need to account for this rather than copy-pasting what works in a rich country. The report does not call for Pakistan and other developing countries to come up with their own frontier AI models, at least not immediately, but that does not mean the AI revolution and its associated benefits will fall into the nation’s lap. This is without even considering the downsides that come with AI, such as misinformation, threats to privacy such as increased surveillance and the potential to deepen digital gaps. The last one might end up being the country’s most serious challenge. The ones most readily adopting AI are those who already had good connections and electricity to begin with. As the solar revolution makes the affluent even more isolated from the dysfunction around them, AI’s most lasting legacy in the developing world might be even deeper inequality.
