World Bank Warns Developing Countries: Embrace AI or Be Left Behind

Washington, August 5, 2026 — The World Bank on Tuesday called on developing countries to embrace artificial intelligence technology tools to deliver better governance outcomes, warning that they risked being left behind if they failed to do so — a message with direct relevance for Bangladesh as it navigates LDC graduation and seeks to diversify its economy beyond garment manufacturing.

"AI has thrown developing economies a lifeline, and they should seize it," said Indermit Gill, chief economist of the World Bank Group, as the organization launched its annual World Development Report. "They do not need large models or big data centers to reap its benefits," he added, advocating for the adaptation of lower-cost AI tools to local conditions to deliver results in the health, education, and agriculture sectors.

🧠 AI as a Leapfrog Tool

Advanced AI models — largely developed in the United States and China — offer the ability to quickly analyze data and automate many tasks that otherwise take skilled humans longer to do. These AI models, however, require huge data centers and large amounts of complex computing power, using massive amounts of electricity and water — with implications for climate change. Gill's point is that developing countries do not need to build their own foundational AI models; they can instead adapt existing, lower-cost AI tools to their specific local conditions and governance challenges.

The report calls for countries to use AI to "help extend otherwise costly medical, legal, educational, and agricultural services to underserved billions — doing in a decade what might otherwise take generations." The framing positions AI not as a luxury technology for advanced economies, but as a leapfrog tool that could help developing countries overcome the service delivery gaps that have historically constrained their development.

⚠️ "Lost Decade" Risk

"Developing economies today are in the midst of their weakest average growth performance in three decades," said a World Bank statement accompanying the report. "AI could significantly boost that performance." Lower-income countries have struggled through the 2020s, hit by a series of successive shocks that saw the World Bank earlier this year dub it a "lost decade" for their economic growth.

The Bank has lowered its 2026 global growth forecast to its lowest level since the pandemic, with the economic fallout of the Iran war battering countries around the world. The combination of weak growth, elevated inflation, energy crises, and geopolitical instability has created an environment in which developing countries are falling further behind advanced economies rather than catching up — a divergence that AI could either exacerbate or help reverse, depending on whether developing countries embrace the technology.

📋 Relevance for Bangladesh

For Bangladesh, the World Bank's AI call to action has particular resonance. The country has already taken steps toward AI adoption — the National Cybersecurity Rating System launched on August 4 includes an AI-based automated assessment engine in its future phases, and the government has set up an AI task force. Bangladesh's IT services sector, with companies like 4Beats Limited, TechForing, and Musemind operating from BASIS member offices, represents a potential foundation for broader AI adoption.

However, Bangladesh faces the same constraints that the World Bank report highlights: limited data center infrastructure, unreliable electricity supply (complicated by the gas crisis), and a skills gap in AI-related fields. The World Bank's emphasis on lower-cost AI tools rather than large foundational models is encouraging for Bangladesh, as it suggests that the country does not need to compete with the US and China in building AI infrastructure — instead, it can focus on adapting existing tools to local challenges in agriculture (where AI could help optimise crop selection and irrigation scheduling), healthcare (where AI could extend diagnostic services to rural areas), and education (where AI-powered tutoring could address teacher shortages).

The "lost decade" warning should be taken seriously by Bangladesh's policymakers. With LDC graduation approaching and the garment sector facing multiple headwinds, Bangladesh needs to identify new sources of economic growth — and AI-enabled services represent one of the few sectors where Bangladesh's existing IT workforce, low labour costs, and growing digital infrastructure could create a genuine competitive advantage. The semiconductor industry association (BSIA) has already been established, and the government's 25 percent export incentive for semiconductor exports signals intent to build a tech-driven export sector. Whether the country can translate that potential into reality depends on investment in AI skills, regulatory frameworks for AI deployment, and the kind of public-private collaboration that the World Bank report advocates. The alternative — allowing the "lost decade" to become a self-fulfilling prophecy — is not an option that Bangladesh can afford.