World Bank Warns Developing Countries to Embrace AI or Be Left Behind

• The World Bank has called on developing countries to adopt artificial intelligence tools to improve governance outcomes.
• AI can significantly boost economic performance in these countries before the end of the 2020s while delivering tangible benefits to people.
• Developing economies do not need large models or big data centers to reap the benefits of AI, but rather lower-cost AI tools adapted to local conditions.
• The World Bank's warning that AI could widen gaps between countries and increase inequality within them underscores the importance of careful consideration and planning when implementing AI solutions.

The World Bank has issued a call to action for developing countries to adopt artificial intelligence tools to improve governance outcomes. This warning comes as the bank has lowered its global growth forecast to its lowest level since the pandemic, citing the economic fallout from the Iran war and successive shocks that have hit low-income and developing countries hardest. The report emphasizes that AI can significantly boost economic performance in these countries before the end of the 2020s while delivering tangible benefits to people.

The World Bank's chief economist, Indermit Gill, stressed that developing economies do not need large models or big data centers to reap the benefits of AI. Instead, they should adapt lower-cost AI tools to local conditions to improve health, education, justice, and agriculture. The report highlights examples of AI applications in governance, including increasing diabetes screening in Bangladesh and reducing costs for Indian farmers through advanced weather forecasts.

However, the report also warns that simply importing an AI model does not mean it will work well locally. AI solutions need to be delivered through voice calls on basic mobile phones for those who cannot read or afford smartphones.

The World Bank's call to action on AI adoption raises concerns about data privacy and bias in government decisions. The report emphasizes the importance of building public trust as policymakers expand the use of AI. 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 also highlights the need for developing countries to invest in electricity generation and distribution, expand access to to computing power, and improve the availability of local data. This is essential for adapting AI tools to meet local needs and ensuring that they are effective in improving governance outcomes.

The World Bank's warning that AI could widen gaps between countries, increase inequality within them, concentrate market power, weaken trust in public institutions, and create new risks for safety and security underscores the importance of careful consideration and planning when implementing AI solutions.

The World Bank's call to action on AI adoption has significant implications for developing countries. If they fail to adopt AI tools, they risk being left behind in terms of economic growth and governance outcomes. However, with careful planning and implementation, AI can be a powerful tool for improving public services, reducing costs, and increasing efficiency.

Lawyers advising clients in developing countries should be aware of the World Bank's call to action on AI adoption and its potential implications for their clients' businesses and governments. The report highlights the need for policymakers to build public trust as they expand the use of AI and emphasizes the importance of careful consideration and planning when implementing AI solutions.

The World Development Report 2025 provides a valuable resource for policymakers, business leaders, and civil society organizations seeking to understand the potential benefits and risks of AI adoption in developing countries.

Lawyers advising clients in developing countries should be aware of the World Bank's call to action on AI adoption, which could lead to new opportunities for technology-enabled public services delivery, but also raises concerns about data privacy and bias in government decisions.

Source: Original reporting via Courthouse News Service