AI shockwave ahead: IMF chief warns of massive job losses

Speaking at the World Economic Forum (WEF) in Davos, Georgieva said around 60 per cent of jobs in advanced economies would be impacted by AI in the coming years, either through enhancement, transformation or elimination. Globally, about 40 per cent of jobs are expected to be affected.

“This is like a tsunami hitting the labour market,” Georgieva said, according to WION. “Tasks that are eliminated are usually what entry-level jobs do at present, so young people searching for jobs find it harder to get to a good placement.”

Her remarks come amid growing concerns over AI-driven job displacement, particularly in developing economies.

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In December, United Nations economists warned that millions of jobs across Asia could be at risk as the AI industry expands, potentially deepening inequality between wealthy nations and poorer countries still struggling with basic digital access and literacy.

Just as industrialisation in the 19th century “split the world into a wealthy few and the impoverished,” the AI revolution could have a similar effect, the UN cautioned.

“Countries that invest in skills, computing power and sound governance systems will benefit. Others risk being left far behind,” said Philip Schellekens, Chief Economist for the UN Development Programme (UNDP) for Asia and the Pacific.

In a new report, UNDP said women and young adults face the greatest threat from AI-driven workplace disruption, potentially undermining broader gains in health, education and income.

At the same time, AI is projected to generate nearly $1 trillion in economic gains across Asia over the next decade, highlighting a stark divide between opportunity and risk.

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The report noted that while China, Singapore and South Korea have invested heavily in AI and reaped substantial benefits, entry-level workers in many South Asian countries face “significant exposure” to automation and job displacement.

“Limited infrastructure, skills, computing power and governance capacity constrain the potential benefits of AI while amplifying risks, including job displacement, data exclusion, and indirect impacts such as rising global energy and water demands from AI-intensive systems,” UNDP said.

For countries such as Cambodia, Papua New Guinea and Vietnam, the immediate priority is not advanced AI development but the adoption of simple, voice-based digital tools that can support frontline health workers and farmers, even in low-connectivity environments.

The Asia-Pacific region, home to more than 55 per cent of the world’s population, sits at the centre of the global AI transition. According to UNDP, the region hosts more than half of the world’s AI users and is rapidly expanding its innovation footprint.

China alone accounts for nearly 70 per cent of global AI patents, while six countries in the region host more than 3,100 newly funded AI companies.

UNDP estimates that AI could boost annual GDP growth in Asia-Pacific by around two percentage points and raise productivity by up to five per cent in sectors such as health and finance.

However, the agency pointed to stark income disparities across the region, noting that average income in Afghanistan is around 200 times lower than in Singapore, underscoring why AI adoption remains concentrated in a small number of wealthy countries.

“We’re not starting from a level playing field in this region,” Schellekens said. “This is the most unequal region in the world.”