By
Godfrey Benjamin
April 23rd, 2024
The IMF has also warned that AI could further broaden income and wealth inequality among countries. AI benefits and challenges would be key points of discussion at World Economic Forum (WEF) meeting in Davos.
The International Monetary Fund (IMF) issued a cautionary statement, indicating that the proliferation of artificial intelligence (AI) could impact nearly 40% of jobs worldwide. The assessment, released on Sunday from the Washington D.C.-based institution, highlighted that high-income economies face more significant risks compared to emerging markets and low-income nations.
The IMF, led by Chief Kristalina Georgieva, emphasized the potential exacerbation of overall inequality due to AI technology and urged policymakers to address this concerning trend. Georgieva stressed the importance of proactive measures to prevent AI from escalating social tensions. The IMF chief also stressed:
“We are on the brink of a technological revolution that could jumpstart productivity, boost global growth and raise incomes around the world. Yet it could also replace jobs and deepen inequality”.
According to the International Monetary Fund, approximately 60% of jobs in high-income nations could see the integration of artificial intelligence. Around half of them are likely to experience enhanced productivity due to AI adoption. In contrast, the exposure to AI impact is projected to be 40% in emerging markets and 26% in low-income countries, respectively.
The IMF’s findings suggest that emerging markets and low-income nations may encounter fewer disruptions from AI in the short term. The report highlights that many of these countries lack the infrastructure and skilled workforce to immediately harness the benefits of AI, thereby raising concerns about the potential for increased inequality resulting from technological advancements.
AI Can Exacerbate Income Inequality, Says IMF
The International Monetary Fund (IMF) has issued a cautionary note about the potential impact of artificial intelligence (AI) on income and wealth inequality within countries, highlighting the risk of “polarization within income brackets.”
The IMF report emphasizes the possibility of workers benefiting from AI experiencing increased productivity and higher salaries, while those unable to access these advantages may face a widening gap.
This concern aligns with previous warnings from Goldman Sachs, which estimated that generative AI could impact up to 300 million jobs globally. However, the Wall Street bank acknowledged that AI technology has the potential to drive labor productivity, economic growth, and boost gross domestic product by as much as 7%.
The release of the IMF report coincides with the World Economic Forum (WEF) meeting in Davos, Switzerland, where global business and political leaders are convening. The WEF event, themed “Rebuilding Trust”, focuses on open and constructive dialogue between policymakers, business leaders, and civil society. The benefits and challenges of AI are likely to be a central topic of discussion at Davos, as leaders address the evolving landscape of technological advancements. The annual event has faced criticism in recent years for perceived shortcomings in relevance and effectiveness.