Artificial intelligence could help offset the economic drag from Asia's ageing populations, but the technology also threatens to disrupt jobs and widen the gap between advanced and developing economies unless governments act quickly to prepare workers, the International Monetary Fund head said on Monday.
IMF Managing Director Kristalina Georgieva described AI as a “slow-moving tsunami” at the IMF and World Bank annual meetings in Bangkok, warning that it would have profound consequences for jobs, growth, education and even how governments generate revenue through taxation, given the expected shift from labour to capital.
The IMF estimates that AI could lead to 40 percent of jobs being augmented, downgraded or eliminated, over time, she said. An initial study showed that 10 percent of jobs in the US already required AI skills.
While routine, repetitive jobs were shrinking, low-paying jobs were increasing in two lower-paying sectors, construction and data centres.
"It is a transformative technology. It so completely changes how we work, how we live," she said, noting that an AI assistant now gave her a 30-second message about her schedule each day.
The US, China and India are the most important producers in the AI supply chain, but many of the firms building the needed infrastructure are in Asia, Georgieva said, referencing Thailand, host of this year's annual meetings.
Who gains from AI?
“We cannot imagine today what the world of work will look like five years from now,” Georgieva said, urging policymakers to study the changes and act on the lessons they provide.
The stakes are particularly high in Asia, where ageing populations are expected to shrink the workforce in major economies. China, Japan and South Korea could lose nearly a quarter of their working-age populations by 2050, according to findings presented in an IMF book on the region's economic challenges and opportunities.
AI-driven productivity gains could more than offset some of that demographic pressure. The IMF estimates that AI could lift growth in advanced Asian economies by between 0.5 and 1 percentage point.
But the benefits are unlikely to be evenly distributed.
Krishna Srinivasan, director of the IMF's Asia and Pacific department, said advanced economies were more exposed to AI but better positioned to capture its gains, while emerging markets faced a greater risk of falling behind.
“What matters is whether AI augments workers or automates jobs,” Srinivasan said, adding that reforms to improve skills and productivity could accelerate adoption in emerging economies by a decade or more.
AI impact on entry-level jobs
World Bank President Ajay Banga, who has made jobs a central focus of his presidency, said the development bank was focused on leveraging "small AI", which is not dependent on large language models, to generate enormous productivity gains for farmers, healthcare systems, educators and others in emerging markets.
Singapore's President Tharman Shanmugaratnam, speaking at the same event, said governments should address how AI was reducing job opportunities for graduates.
"There is a particular problem that we have to address very soon ... and that is that, the first rung in employment, your first job upon graduation, is now seeing less demand," he said.
He said the world should also guard against AI resulting in a "new divergence" in growth and job creation between developing and advanced economies.
"AI is going to widen the divergence if we are too passive about it," he said. "So we've got to do everything we can to first use AI to create good jobs and to create jobs that can be done well by human beings, can allow them to ride up a career ladder despite AI."
