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From Divide to Opportunity: AI, Jobs, and Growth

World Bank · World Bank, Washington, DC eBooks · 6 Oct 2026

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Abstract

The conflict that erupted in early 2026 continues to be the principal source of macroeconomic risk for the MENAAP region. Key trade routes have been severely disrupted—especially for the oil and gas exporters who depend on the Strait of Hormuz—and energy costs have spiked. Unlike in previous energy shocks, Persian Gulf oil and gas exporters face the largest growth downgrades, while the effects were more contained in middle-income countries. Conflict has compounded humanitarian needs and existing vulnerabilities in fragile settings. In many economies, higher interest rates and increased uncertainty are delaying investment decisions and increased social protection needs are putting pressure on already strained fiscal resources. Against this near-term background, this report examines how artificial intelligence (AI) will reshape labor markets and productivity across the region in the longer term. Wide differences in capacity and readiness will prevent the region from capturing the full potential of AI. Weak private sector dynamism and inadequate innovation ecosystems remain binding constraints. Three mutually reinforcing gaps—in localization, usage, and foundational human and physical capital—need to be addressed simultaneously. Advances in leading economies, such as Saudi Arabia and the United Arab Emirates, can create opportunities for regional collaboration and generate shared gains across the region.

About this publication

Academic journal. Published in an academic journal — typically peer-reviewed before publication, though indexing alone doesn't guarantee review depth.

Published
2026 (recently)
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