Developing economies should combine tighter management of public finances with major investment in digital connectivity, leaders said during the World Bank and IMF Annual Meetings in Bangkok.

The proposed approach comes as poorer and climate-vulnerable regions contend with rising energy costs, climate hazards and heavy debt burdens. At the same time, economies that export technology are gaining from a boom in artificial intelligence and related industries.

The strategy discussed at the meetings seeks to address both pressures. Fiscal consolidation would help countries service high levels of debt while preserving social safety nets, while investment in connectivity would give more people and businesses access to technological opportunities.

Uneven gains from the technology boom

Wayne Henry, chairman and director general of the Planning Institute of Jamaica, said developing economies, including countries in the Caribbean, needed to do more to benefit from advances in technology.

Henry said technology-producing economies and countries involved in artificial-intelligence supply chains had received upward growth revisions as a result of the boom. Many developing economies, however, remained outside those gains.

He argued that greater digital connectivity was necessary for developing countries to narrow that gap and participate more fully in technological progress.

“We need to catch up … to infuse greater digital connectivity to benefit in a greater way of technological advances,” Henry said.

Debt, inflation and climate pressures

The discussions took place against a difficult global economic backdrop. The International Monetary Fund’s latest World Economic Outlook put global growth at 3.1 percent and global inflation at 4.7 percent.

According to the information presented at the meetings, more than 60 percent of low-income nations are in or near debt distress. High debt limits the resources available for development and increases the importance of fiscal measures that can support debt servicing without removing essential social protection.

Henry also pointed to the effects of geopolitical developments on oil and transport-fuel prices, saying these pressures could intensify inflation. He linked those risks to the vulnerability of developing countries facing increasingly severe climate hazards.

Describing the Caribbean region’s exposure, Henry called it “the second most vulnerable.” No comparison or ranking method was specified for that description.

The call for stronger digital connectivity did not include details on the scale, financing or implementation timetable for potential investments. However, the discussions placed technology access alongside fiscal management as part of a broader response to the economic challenges facing developing and climate-vulnerable economies.