World Bank update: It addresses a world that has ceased to exist

Its latest development report on South Asia focuses on jobs, AI and trade but overlooks realities of today's political economy

- SALMAN SOZ

As world leaders gathered in Washington for the Annual Meetings of the World Bank and the International Monetary Fund, a slew of reports on the global economy have come out.

A report of particular significance to India is the World Bank's South Asia Development Update, whose theme this year is 'Jobs, AI and Trade.' It highlights the region's growth performance, exudes cautious optimism around AI and productivity and prescribes policy reforms, particularly for trade. While the report follows the pattern of competently written World Bank documents, it is based on a world that no longer exists. We need a more clear-eyed perspective, one that's embedded in the political economy.

The world has shifted beneath our feet. Artificial intelligence (AI) is driving today's geo-economic discourse in a way unseen since the rise of the internet, capturing billions of investment dollars along the way. An Al arms race between the US and China is underway, with others, including India, trailing far behind. AI agents are beginning to produce scientific advancements and 'agentic AI' may soon autonomously execute complex workplace tasks. That means fewer workers—even white-collar ones—just as South Asia is banking on moving up the value chain. Fears of rising inequality, both between and within countries, are growing.