A Different Story for Ageing Economies
In a significant shift from the usual 'job-killer' rhetoric, the IMF has suggested that AI could be a crucial solution for a pressing problem in many parts of Asia: a shrinking workforce. At recent IMF and World Bank annual meetings, officials highlighted
that for advanced Asian economies facing rapid population ageing, AI is not just a technological novelty but a potential economic saviour. Countries like Japan, South Korea, and China are projected to lose nearly a quarter of their working-age population by 2050. According to IMF Managing Director Kristalina Georgieva, the productivity gains from AI could more than offset the economic drag from this demographic cliff.
The Demographic Divide in Asia
The situation, however, is not uniform across the continent. The IMF's analysis makes a sharp distinction between advanced economies and emerging markets. While Japan and South Korea need AI to fill labour gaps, countries with younger populations, like India and the Philippines, face a different challenge. For them, the risk is that AI could eliminate the routine, entry-level jobs that young people have historically relied on to enter the workforce. Krishna Srinivasan, director of the IMF's Asia and Pacific department, warned that this could create a 'widening divergence', where advanced economies are better placed to reap AI's benefits while emerging markets struggle to adapt.
AI as a Co-Worker, Not a Competitor
The core of the IMF's optimistic scenario rests on the idea of AI 'complementing' rather than replacing human workers. Instead of entire jobs disappearing, AI would handle repetitive and data-intensive tasks, freeing up humans to focus on roles requiring critical thinking, creativity, and strategic oversight. Think of AI assisting doctors with faster diagnostics, helping engineers with complex simulations, or empowering financial analysts to spot trends in vast datasets. The IMF notes that advanced economies in Asia have a higher share of these 'complementary' jobs, putting them in a strong position to boost productivity. In Singapore, for instance, an estimated 40% of jobs are considered highly complementary to AI, a stark contrast to just 3% in Laos.
The Policy Path Forward
The IMF stresses that this positive outcome is not guaranteed; it depends heavily on proactive government policy. To ensure AI's benefits are shared broadly, the Fund recommends a multi-pronged approach. First, robust social safety nets and reskilling programmes are critical to support workers whose jobs are disrupted. Second, education systems must be fundamentally reformed to equip the future workforce with the skills needed to work alongside AI, a particularly urgent task for emerging economies. Finally, establishing clear regulations for ethical AI use and data protection is essential to manage risks and build public trust. Without these guardrails, the risk of deepening inequality both within and between countries remains high.
