Geopolitics and AI
How will artificial intelligence and geopolitics shape the future of international development?
The changing global landscape and the role of policy
Geopolitical alliances are shifting and technological innovation is accelerating. Countries in the Global South must navigate these new risks and opportunities. In this episode of VoxDevTalks, Tim Phillips speaks with Nobel laureate Simon Johnson about the global economy, impacts of deglobalisation, and rise of artificial intelligence (AI). Johnson provides a historical perspective while addressing the contemporary challenges policymakers must grapple with.
Johnson asserts that we are witnessing a historical turning point, shaped by political shifts and technological disruption.
AI and the global economy: Opportunity or threat?
The rapid advancement of AI poses profound questions for economies across the globe, particularly for low- and middle-income countries. Johnson highlights the significant impact of AI, especially in service-oriented sectors:
“All of these jobs can already be done by AI, and that statement was true last week, and this week, there's new releases of the technology that are better than the previous releases.”
While AI has the potential to increase efficiency, it also threatens traditional jobs, particularly in industries that have historically provided stable employment. Johnson warns that if nations fail to prepare for these shifts, economic disparities will widen.
The challenge of deglobalisation: What’s next for trade?
With a renewed emphasis on protectionism in the US, many countries are reassessing their trade policies. Deglobalisation has led to higher tariffs, reduced international cooperation, and a shift toward regional trade agreements. However, Johnson cautions against retreating from global markets entirely:
“In the 1950s and early 1960s, the development economists of the day felt that Latin America was going to do rather well, and they were more sceptical about Asia, East Asia in particular. And of course, what turned out was the opposite, that East Asia did well, primarily because of the export focus, and Latin America proved disappointing.”
For developing nations, regional trade agreements and strategic partnerships could offer a viable path forward. Johnson suggests that African and Asian nations should prioritise lowering intra-regional trade barriers to foster economic resilience.
The rise of China and Russia’s role in global politics
China has been a dominant force in global trade and investment, particularly in Africa and other emerging markets. However, Johnson notes that China’s Belt and Road Initiative is losing momentum, in part due to US pushback.
Meanwhile, Russia’s involvement in global politics, particularly in Africa and Eastern Europe, is largely seen as opportunistic rather than strategic:
“The Russians... are mostly about political control, and perhaps take control over government and then try and get some raw materials into their own economy. But they're not big players right now.”
IMF and World Bank reform
Given the high levels of debt among many low- and middle-income countries, international financial institutions such as the IMF and World Bank remain critical players. However, Johnson questions whether they are still fit for purpose:
“Well, the IMF, the World Bank, always need reform and adjustment. I mean, it's quite remarkable that they still exist, honestly, because they were created in 1944 at the Bretton Woods Conference for a very different world.”
While reforms are necessary, Johnson believes that these institutions will continue to play a role in global development. However, he warns that the influence of China within these organisations is likely to grow if the US disengages.
The power of tech giants: A new form of control?
A key theme in Johnson’s book Power and Progress is the growing influence of technology entrepreneurs. He draws parallels between today’s tech magnates and historical figures who amassed immense power through innovation:
“He's [Musk] definitely bringing technology people into all kinds of federal agencies, and he's using tech to centralize at least executive authority, so the authority of the President within the executive branch is going to become a lot stronger because of what Mr. Musk has done.”
This centralisation of technological power raises concerns about democratic accountability, especially when AI-driven decision-making becomes embedded in governance and economic structures.
What should developing countries do about AI?
For policymakers in developing nations, the key challenge is how to harness AI for economic development rather than becoming mere consumers of foreign technology. Johnson advises:
“The play here is to think about what you want to achieve with this technology…. What’s the problem you want to solve? What is it you could with AI? What would help your society?”
He suggests that governments in emerging economies should form coalitions to negotiate better deals with AI developers, ensuring that technology serves local priorities rather than reinforcing economic dependence.
Conclusion: Navigating an uncertain future
In the face of these profound shifts, what should policymakers prioritise? Johnson argues that countries must actively shape their industrial policies rather than passively accepting global trends. He highlights Europe’s clean energy transition as an example of a region seizing an economic opportunity that others have abandoned.
The world is in the midst of historic transformations. AI, shifting geopolitical alliances, and economic restructuring will shape the future of global development. Johnson’s message is clear: nations that adapt strategically will thrive, while those that ignore these changes risk falling behind.
Whether through trade policy, AI adoption, or institutional reform, governments must make conscious choices about how they engage with the global economy. As Johnson warns:
“If you let the big powers push you around, and go for the military intervention and so on, of course it ends badly…. But, if you turn it against them, and you play the game in a smart way, then you can get your hands on technology quite cheaply, you can use it to solve problems.”
As the world continues to change at an unprecedented pace, the decisions made today will determine the prosperity and stability of nations for decades to come.
artificial intelligence AI geopolitics globalisation
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