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Positioning South Asia to benefit from AI

Benefiting from AI requires that countries have the right preconditions in place, however, and this is
often not the case, particularly outside India. South Asia scores below the EMDE average in indexes of
five key dimensions of AI readiness: government readiness, digital infrastructure, human capital,
technological innovation and economic integration, and legal frameworks and regulations. Investing in
the technological and institutional framework for a supportive digital economy could help boost growth
and avoid job losses from the spread of AI.

Figure 8: AI Preparedness index

Note- Black- AI Preparedness Index (overall readiness of economy/society)
Red- Government AI Readiness Index (readiness of government institutions and policies)
Source- World bank

4. Global investment data and changing trends- UNCTAD

Global foreign direct investment (FDI) edged up 4% in 2024 to $1.5 trillion. But the headline figure masks
sharp underlying weaknesses and was inflated by volatile financial transactions through several
European economies with high levels of “conduit flows.”

Top FDI destinations and sources

In 2024, the United States remained both the largest source and destination of FDI, underscoring its
central role in the global economy. Asia is emerging as a key driver, with five Asian economies among
the world’s top 10 sources of outward investment – highlighting the region’s growing weight in global
capital flows.

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