AI Offers Developing Nations like Nepal a Chance to Leapfrog Decades of Development: World Bank Report

Washington —  Artificial intelligence (AI) could help developing countries such as Nepal achieve in a decade what might otherwise take a century, provided governments move quickly to strengthen electricity supply, internet connectivity, digital skills and public institutions, according to the World Development Report 2026: The Promise of Artificial Intelligence, released by the World Bank on Tuesday.

The report is the World Bank’s first comprehensive assessment of AI’s implications for developing economies. It argues that AI presents a rare opportunity to raise productivity and improve public services at a time when many developing countries are recording their weakest average economic growth in three decades.

Rather than viewing AI primarily as a threat to jobs, the report says developing countries stand to benefit most by using the technology to address shortages of skilled professionals. AI can help doctors diagnose patients, support teachers in classrooms, improve farmers’ decisions and enable governments to deliver services more efficiently in areas such as disaster response, tax administration and social protection.

“AI has thrown developing economies a lifeline, and they should seize it,” said Indermit Gill, Senior Vice President and Chief Economist of the World Bank Group. He said developing countries do not need to build expensive frontier AI models or invest in massive data centres to benefit. Instead, adapting small, low-cost AI tools to local conditions can make healthcare, education, judicial services and agricultural extension more accessible.

The report also challenges concerns that AI will lead to widespread job displacement in poorer economies. It estimates that only 4.5 percent of existing jobs in low and middle-income countries are at risk of automation by generative AI, compared with 14.2 percent in high-income economies. At the same time, 16.2 percent of jobs in developing countries could see meaningful productivity gains from AI, close to the 18.7 percent projected for advanced economies.

For Nepal, where shortages of skilled workers continue to constrain service delivery, the findings suggest AI could help expand access to essential services without replacing large sections of the workforce. The report argues that the greatest opportunity lies in adopting existing AI technologies and adapting them to local languages and institutional needs, rather than attempting to develop cutting-edge AI systems.

The report sets out a three-stage approach for developing countries: adopt existing AI tools, adapt them to local conditions, and gradually build the capacity to develop more advanced AI systems. It warns that attempts to pursue frontier AI before establishing the necessary digital foundations would be costly and ineffective.

The World Bank cautions, however, that the opportunity is far from guaranteed. Many developing countries still face significant gaps in reliable electricity, broadband connectivity, computing capacity, digital skills and locally relevant data. Without addressing these constraints, AI could deepen inequalities and widen the development gap between countries.

The report also calls on governments to strengthen public trust by promoting responsible AI use. It recommends building on existing laws and voluntary industry standards while ensuring that AI systems protect privacy, minimize bias and remain accountable. Countries that invest now in the foundations needed to adopt and adapt AI will be better positioned to harness the technology to improve lives and accelerate development.