The International Monetary Fund (IMF) released an Artificial Intelligence Preparedness Index (AIPI) Dashboard on their website on June 25, 2024, tracking 174 economies globally for AI readiness. The Index ranks India at the 72nd position, with Bangladesh (0.38) at 113, Sri Lanka (0.43) at 92, and China (0.63) at 31. The rating for each country is analysed based on their digital infrastructure, human capital, labour policies, innovation, integration and regulation. 

The Index has categorised each country into Advanced Economy (AE), Emerging Market Economy (EM), and Low-Income Country (LIC). Singapore (0.80), Denmark (0.78), and the United States (0.77) are among the highest-rated AEs, with India categorised as an EM with a 0.49 rating. 

In the IMF article, Economist Giovanni Melina remarked that their research has already shown how AI is poised to reshape the global economy. It could endanger 33 percent of jobs in advanced economies, 24 percent in emerging economies, and 18 percent in low-income countries. 

"But, on the brighter side, it also brings enormous potential to enhance the productivity of existing jobs for which AI can be a complementary tool and to create new jobs and even new industries", she says.

According to Melina, most emerging market economies and low-income countries have smaller shares of high-skilled jobs than advanced economies, so they will likely be less affected and face fewer immediate disruptions from AI. At the same time, many of these countries lack the infrastructure or skilled workforces needed to harness AI's benefits, which could worsen inequality among nations.

The IMF chart of the week shows that wealthier economies tend to be better equipped for AI adoption than low-income countries. Different countries are at different stages of readiness in leveraging AI's potential benefits and managing the risks. 

Worsening inequality?

Melani remarks that under most scenarios, AI will likely worsen overall inequality, a troubling trend that policymakers can work to prevent. To this end, the dashboard is a response to significant interest from our stakeholders in accessing the Index. It is a resource for policymakers, researchers, and the public to better assess the AI preparedness and, importantly, to identify the actions and design the policies needed to help ensure that the rapid gains of AI can benefit all.

AI can also complement worker skills, enhancing productivity and expanding opportunities. Melani recommends policymakers in advanced economies expand social safety nets, invest in training workers, and prioritise AI innovation and integration. Coordinating with one another globally, these countries should also strengthen regulations to protect people from potential risks and abuses and build trust in AI.

IMF