Economic Highlights

New Delhi, 1 January 2024

AI To Hit Global Economy

IMPACT POLLS, TOPPLE GOVTS

By Shivaji Sarkar 

The global economy is at stake as both the World Bank and the European Union fear artificial intelligence (AI) manipulating 70 countries, including the world’s largest democracies -- India, the US and Russia -- going to polls in 2024.Others to join the polls include Taiwan, Brazil, Indonesia, Pakistan. And all will be experiencing their first AI election, says British journal The Economist adding “Disinformation campaigns may be supercharged in 2024”. 

The Comptroller and Auditor General of India (CAG) estimates that AI is poised to contribute $15.7 trillion to the global economy. However, the World Bank underscores the challenges posed by AI, labelling 2023 as the year of inequality and 2024 as the year of artificial intelligence. This, in turn, intensifies battles against conflict, violence, food security, and climate change, making economic stability elusive, particularly for the world’s poorest nations, including India.Jobs except for gig, temporary-online work, are not growing. 

The worry among nations stems from the potential for AI to manipulate information on a larger scale than the traditional social media or manual public relations methods. The upcoming elections, particularly Taiwan’s in January 2024, carry global significance. The contest between the Democratic Progressive Party and the Kuomintang, coupled with Beijing’s alleged involvement through cyber warfare, adds a geopolitical dimension to the concerns. 

Ethan Bueno de Mesquita, interim Dean at the University of Chicago Harris School of Public Policy, predicts that the 2024 elections will be an ‘AI election’, comparable to the impact of social media in 2016 and 2020 changing politics. Luminate’s survey reveals widespread European concerns about AI and deepfake technology, with over 70% of respondents in the UK and Germany expressing concern about its potential threat to elections and democracy. 

India grapples with AI controversies involving sophisticated IT cells within numerous political parties, coupled with ongoing debates surrounding electronic voting machines (EVMs). The Opposition’s vocal scrutiny and the suspension of 146 opposition MPs step up the atmosphere leading up to the polls. Concurrently, the nation witnesses a substantial 30.8 percent surge in AI investment, reaching a notable $881 million, according to Nasscom. 

More people think social media companies hurt democracy instead of strengthening it. Referencing historical examples, Professor Paul M Vaaler of the University of Minnesota highlights the influence of multinational corporations (MNCs) in electoral politics, emphasising a potential repeat scenario with AI. He says that between 1987 and 2000 MNCs invested $199 billion in 18 developing countries and replaced governments – right with left and left with right. 

Microsoft’s chief economist, Michael Schwarz, warns of bad actors meddling in elections through AI-driven spams, while also acknowledging the lucrative potential of AI development. Interestingly, AI is likely to generate $30 billion for Microsoft over an investment of $1 billion in 2019. 

Despite previous concerns surrounding the 2020 US elections and ongoing AI battles in Europe, the lack of AI regulations and widespread distrust in political establishments may keep the concerns about technology misuse hidden. It still remains a volatile issue between Democrat President Joe Biden and former President Donald Trump. The G7 and G-20, viewed as hotbeds of global MNCs influencing policies, contribute to growing inequality among countries, leading to social and political unrest globally. 

India, facing a Hobson’s choice regarding AI involvement, grapples with economic challenges, including high debt levels, growing gig jobs, and concerns about the quality of employment. The GDP is growing for sure as high debt figures also add to it. The low value gig jobs being created syncs with the World Bank’s concern of loss in quality employment. 

India debt has touched Rs 169 lakh crore, foreign debt exceeds $629 billion, though the Finance Ministry has allayed IMF fears of debt reaching 100 percent of GDP in 2028-28. The level at present is 81 percent and the Ministry says it is reducing. India’s public and private capital expenditures are shrinking. Private expenses declined by 55 percent and public by 68 percent, according to the Centre for Monitoring Indian Economy (CMIE). 

Fears rise about the use and misuse of AI ahead of next year’s elections around the world that will see billions of people come out to vote.Pime Minister NarendraModi has cautioned against AI misuse in elections in India, echoing fears of deepfake technology after a video of him dancing surfaced. He suspected it was a video generated using AI that appeared real. Some fact-checkers revealed that the garba, a traditional Gujarati dance performance, was done by a Modi look alike and was not an AI-generated clip. 

During Telangana elections, the BRS complained to the Election Commissionthat the Congress used AI to discredit its party President KT Rama Rao. BJP has been using AI campaigns since 2020 with its Member of Parliament Manoj Tiwari’s AI generated videos. The party said that it had partnered with a private company to generate deepfakes that reached 15 million people in 5800 WhatsApp groups. Now other parties are also using it to reach a larger audience.Companies around Delhi have gone into producing many AI-generated campaign materials for the LokSabhaelections from village to national level. Clips can be made for Rs 5000 to higher values. 

An Ernst & Young survey finds Indian corporate CEOs yearning for AI investment but are cautious yet to commit but admit that this is India’s moment to shape the future of the AI-led Industrial Revolution. 

The disruptive effects of AI may also influence wages, income distribution and economic inequality. Rising demand for high-skilled workers capable of using AI could push their wages up, while many others may face a wage squeeze or unemployment. But AI is also about high investments. It can bring in transformative changes in healthcare, education, banking, industry, agriculture, manufacturing, industry, marketing and a host of other applications.  The growth co-efficient suggests that on an average a unit increase in AI intensity can return $ 67.25 billion of 2.5 percent of GDP to the Indian economy.    

As AI’s disruptive effects on wages, income distribution and economic inequality become apparent, balancing technological advancement with cautious regulation becomes imperative. Despite fears of remote political intervention, the inexorable march of technological progress mandates adherence to western practices to ensure responsible use in polling and governance processes.---INFA 

(Copyright, India News & Feature Alliance)