World Bank Sounds Alarm: Countries That Ignore AI Risk Decades of Economic Setbacks

Artificial intelligence (AI) is no longer a technology reserved for wealthy nations. The World Bank says it has become one of the biggest opportunities for developing countries to accelerate economic growth, improve public services and reduce poverty—warning that those who fail to adopt it could fall even further behind.

The warning came on Tuesday as the World Bank unveiled its latest World Development Report, urging governments across low- and middle-income countries to integrate AI into key sectors such as healthcare, education, agriculture and justice.

According to the Bank’s Chief Economist, Indermit Gill, AI offers developing nations a unique opportunity to overcome longstanding development challenges without requiring the massive infrastructure investments made by richer economies.

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

He explained that countries do not need to build expensive large-scale AI models or giant data centres to benefit from the technology. Instead, governments can adapt existing AI tools to suit local needs and deliver faster, more efficient public services.

AI Could Accelerate Development

The report highlights AI’s potential to transform essential services by expanding access to healthcare, improving education, strengthening justice systems and helping farmers increase productivity through smarter agricultural practices.

Among the examples cited are AI-powered systems that have increased diabetes screening in Bangladesh and improved weather forecasting for farmers in India, reducing farming costs and improving harvest planning.

The World Bank believes similar localized solutions could help billions of people who currently lack access to quality public services.

A Difficult Decade for Developing Economies

The call comes as many developing countries continue to struggle with sluggish economic growth following years of global crises.

Successive economic shocks—including geopolitical conflicts, inflation and supply chain disruptions—have weakened growth across many low-income nations. Earlier this year, the World Bank described the 2020s as a “lost decade” for many developing economies.

Against this backdrop, the institution believes AI could become a powerful driver of economic recovery before the decade ends.

More Than Just Technology

To fully benefit from AI, however, the World Bank says governments must invest in reliable electricity, improve internet connectivity, expand computing infrastructure and make quality local data more available.

The report also stresses that AI solutions should be designed around local realities.

For millions of people without smartphones or internet access, AI-powered services may need to operate through simple voice calls or basic mobile phones instead of sophisticated applications.

The Bank cautioned that importing foreign AI systems without adapting them to local languages, cultures and challenges may limit their effectiveness.

Trust Will Determine Success

While AI presents enormous opportunities, the World Bank warned that governments must also address concerns surrounding privacy, bias and accountability.

If AI systems produce unfair decisions or compromise citizens’ personal data, public confidence could quickly erode.

The report also warns that AI could eventually widen inequality by concentrating economic power among a few countries and companies while reducing opportunities for middle-income jobs that have traditionally supported social mobility.

A Narrow Window of Opportunity

Despite these concerns, the World Bank maintains that AI represents one of the greatest development opportunities of this generation.

For the 6.8 billion people living in developing economies, the institution says embracing practical, affordable and locally tailored AI solutions today could dramatically improve living standards over the coming years.

The message from the World Bank is clear: countries that move quickly to adopt AI stand to unlock faster growth and better public services, while those that hesitate risk being left behind in an increasingly technology-driven global economy.