New York, 2 Dec 2025 – Artificial intelligence (AI)
unmanaged could increase inequality between countries by
widening divides in economic performance, people’s
capabilities, and governance systems, as the starting point
is so vastly different, according to a new report from the
United Nations Development Programme (UNDP).
The
report, titled The Next Great Divergence: Why AI May Widen
Inequality Between Countries, highlights that while AI opens
important new avenues for development, countries begin this
transition from highly uneven positions to capture benefits
and manage risks. Without strong policy action, these gaps
can grow, reversing the long trend of narrowing development
inequalities.
Asia and the Pacific region, home to
over 55% of the world’s population, is at the center of
the AI transition. The region now hosts more than half of
global AI users and is rapidly expanding its innovation
footprint, from China’s rise to nearly 70% of global AI
patents to over 3,100 newly funded AI companies across six
economies. AI could lift annual GDP growth in the region by
around 2 percentage points and raise productivity by up to
5% in sectors such as health and finance. ASEAN economies
alone could see nearly $1 trillion in additional GDP over
the next decade.
At the same time, millions of jobs,
especially those held by women and young people, face
significant exposure to automation, if core principles of
ethical and inclusive governance of AI are not
considered.
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“AI is racing ahead, and many countries
are still at the starting line,” said Kanni Wignaraja, UN
Assistant Secretary -General and UNDP Regional Director for
Asia and the Pacific.“ The Asia and Pacific experience
highlights how quickly gaps can emerge between those shaping
AI and those being shaped by it.”
For much of the
last half-century, many lower-income countries have
gradually closed the gap with higher income countries
through advances in technology, trade, and development. This
“era of convergence” brought significant improvements in
health, education, and income. The report warns that without
deliberate and inclusive policy choices, AI may now cause
the erosion of these convergence gains.
Digital
readiness varies significantly across the region. Countries
such as Singapore, South Korea, and China are making
substantial investments in AI infrastructure and skills,
while others are still working to strengthen foundational
digital access and literacy. Building these digital
capabilities will be critical to ensuring that all countries
can benefit from the opportunities AI
presents.
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.
Women and young people face particular
vulnerabilities. Jobs held by women are nearly twice as
exposed to automation, and youth employment is already
declining in high-AI-exposure roles, especially for those
aged 22–25, threatening early -career pathways. In South
Asia, women are up to 40% less likely than men to own a
smartphone. Rural and indigenous communities often remain
invisible in the datasets that train AI systems, increasing
the risk of algorithmic bias and exclusion from essential
services.
Looking at the opportunities AI is
transforming governance and public services across the
region. Bangkok’s Traffy Fondue platform has processed
nearly 600,000 citizen reports, enabling city agencies to
respond more efficiently to everyday problems. Singapore’s
Moments of Life service has reduced paperwork for new
parents from about 120 minutes to 15 minutes. In Beijing,
digital twins, a virtual representation that serves as the
real -time digital counterpart of a physical object or
system, are supporting urban planning and flood management.
These examples show the potential of AI to enhance public
administration and service delivery.
Yet only a
limited number of countries have comprehensive AI
regulations, and by 2027, more than 40% of global AI-related
data breaches may stem from misuse of generative AI,
underscoring the need for robust governance frameworks. This
is a key are a of “catch-up” for many countries in the
region and elsewhere.
“The central fault line in the
AI era is capability,” said Philip Schellekens, UNDP Chief
Economist for Asia and the Pacific. “Countries that invest
in skills, computing power and sound governance systems will
benefit, others risk being left far behind. ”
This
report is about how to turn that risk into a path for shared
progress.
