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For many developing countries, the global economic landscape has shifted dramatically in recent years.Lower growth, disrupted supply chains, reduced aid flows, and heightened financial-market volatility represent significant headwinds. Underpinning these changes is a fundamental restructuring, driven by the developed world, of the postwar economic and financial order. Against this background, a handful of factors are becoming critically importent for the current and future well-being of developing countries – and for the fate of multilateral institutions.
Developing countries have navigated a changing world order relatively well so far. But to maintain this positive trajectory, they must create conditions that enable them to exploit the new opportunities created by AI, and multilateral institutions like the World Bank must support them in this multiyear effort.
Beware the Siren Song of Generative AI
Mariana mazzucato
LONDON – The hype surrounding generative artificial intelligence (AI) is reaching fever pitch.From composing emails to creating images, these tools promise to revolutionize how we work and live. But beneath the surface of this technological marvel lies a troubling reality: generative AI is not the neutral, democratizing force it’s often portrayed to be. In fact, it risks exacerbating existing inequalities and undermining the vrey foundations of innovation.
The core problem is that generative AI models are trained on vast datasets, and these datasets are far from extensive or representative. they reflect the biases and power structures of the societies that created them. Consequently, these AI systems tend to perpetuate and amplify existing prejudices, whether in terms of gender, race, or socioeconomic status.
Moreover,the advancement and deployment of generative AI are highly concentrated in the hands of a few powerful tech companies. These firms control the data, the algorithms, and the infrastructure, giving them an outsized influence over the future of this technology. This concentration of power not onyl raises concerns about monopolies and market dominance but also limits the diversity of perspectives and approaches that could drive truly innovative AI development.
The narrative that generative AI will simply “augment” human capabilities is also misleading. While these tools can undoubtedly assist with certain tasks, they also threaten to devalue human skills and displace workers. The focus on automation and efficiency often comes at the expense of creativity, critical thinking, and the development of uniquely human talents.
To ensure that generative AI benefits everyone, we need a fundamental shift in how we approach its development and deployment. First, we must prioritize the creation of more diverse and representative datasets. This requires actively seeking out and incorporating data from marginalized communities and underrepresented groups. Second, we need to break up the monopolies that dominate the AI landscape and foster a more competitive and open ecosystem. Third, we must invest in education and training programs that equip workers with the skills they need to thrive in an AI-driven economy.But perhaps most importantly, we need to move beyond the narrow focus on technological innovation and embrace a more holistic vision of progress. Generative AI should not be seen as an end in itself, but as a tool to help us achieve broader societal goals, such as reducing inequality, promoting sustainability, and enhancing human well-being. Only then can we harness the true potential of this technology and avoid the pitfalls that lie ahead.
Beware the Greek Success Story
Yanis Varoufakis
ATHENS – Greece is being lauded as an economic success story. After a decade of austerity imposed by its creditors, the country is experiencing a surge in tourism, falling unemployment, and a return to growth. But beneath the glossy surface, a darker reality lurks: this “success” is built on a foundation of precarious work, declining wages, and a widening gap between the rich and the poor.
The Greek crisis of the 2010s was not simply a matter of fiscal mismanagement. It was a systemic failure rooted in the country’s integration into the Eurozone, which stripped it of its monetary sovereignty and left it vulnerable to external shocks. The austerity measures imposed by the Troika – the European Commission, the European Central Bank, and the International Monetary Fund – exacerbated these problems, leading to a dramatic decline in
How Developing Countries Can Pursue Inclusive Growth in a Fracturing World
But to maintain this positive trajectory in an increasingly challenging external environment, developing countries must affirm four key policy priorities. The first is to preserve macroeconomic stability while aggressively addressing any structural and financial vulnerabilities, including shallow domestic financial markets, weak regulatory frameworks, and governance deficits.
The second priority is to strengthen international links that boost resilience, improve agility, and expand optionality. this requires coordinated, multiyear efforts to harmonize regulations, foster regional financial integration, and build trade infrastructure.
Third,developing countries should prepare themselves to exploit the new opportunities created by innovation.