Key Takeaways
- The World Bank reports that AI-driven job displacement may hit Pakistan, where high youth unemployment is already a concern.
- Pakistan faces significant risks as educated young people enter the labor market due to increasing automation of knowledge-intensive tasks.
- The report highlights the need for policies promoting job creation and re-skilling to mitigate potential negative impacts.
ISLAMABAD: The World Bank has issued a warning that artificial intelligence (AI) could exacerbate Pakistan’s already strained job market, particularly affecting educated young people entering the labor force.
According to the report 'World Development Report 2026: The Promise of AI', countries in the Middle East, North Africa, Afghanistan and Pakistan (MENAAP) region are especially vulnerable due to high youth unemployment and limited private-sector job creation.
The report notes that educated young people are expected to face significant risks as AI increasingly automates knowledge-intensive tasks, potentially narrowing employment opportunities for skilled graduates.
World Bank data indicates that the projected 2026 capital expenditure of five US AI hyperscalers—Alphabet (Google), Amazon, Meta, Microsoft and Oracle—will reach USD 775 billion, significantly surpassing Pakistan’s nominal GDP of USD 408 billion.
The combined AI spending by these technology giants will also exceed the economies of countries such as Argentina, Singapore, Thailand, the United Arab Emirates, Vietnam, the Philippines, Malaysia, Bangladesh, Colombia, South Africa and Iran.
The report underscores that jobs in high-income countries are more than three times as likely to be at risk of automation by generative AI compared to those in low- and middle-income countries. In Pakistan, 4.5 percent of existing jobs are at risk, while 14.2 percent in high-income countries face similar risks.
However, the report also highlights that 16.2 percent of jobs in developing economies could see productivity meaningfully boosted by AI—close to the 18.7 percent expected in high-income countries.
The greatest promise for developing countries lies not in replacing workers but in amplifying their capabilities. Indermit Gill, Senior Vice President and Chief Economist of the World Bank Group, stated: 'AI has thrown developing economies a lifeline, and they should seize it.'
He added that developing countries do not need large models or big data centers to benefit from AI; small, low-cost tools adapted to local conditions can bring significant improvements in sectors like healthcare, education, judicial services, and agriculture.
The report emphasizes the urgency for governments to act swiftly to close gaps in power, connectivity, skills, and institutional quality that could leave developing economies behind.
'AI has thrown developing economies a lifeline, and they should seize it.'
Indermit Gill, Senior Vice President and Chief Economist of the World Bank Group
