ALULA: Emerging markets are entering a more volatile phase of the global economy better prepared for shocks than in the past, but face mounting risks from weak productivity growth, trade fragility and the rapid advance of artificial intelligence, senior policymakers said. 

Speaking at a core panel on the second day of the AlUla Conference for Emerging Market Economies, finance ministers and global officials warned that structural challenges — rather than cyclical crises — may define the next decade for developing nations. 

Kristalina Georgieva, managing director of the International Monetary Fund, said many emerging economies had strengthened institutions and macroeconomic frameworks after earlier crises, leaving them more resilient. 

“What we have seen over the last decades is that many emerging market economies have taken lessons from the advanced economies… in a way that gives them a better foundation to face the shocks that are now coming more and more often,” she said. 

Georgieva highlighted a “significant improvement” in growth prospects and lower inflation for countries that took a long-term view on building strong institutions. This progress has fostered a new dynamic, she noted: “We now find that emerging markets are more interested to compete with each other for who does better in this policy arena.”  

Still, Georgieva said sluggish growth remains her biggest concern. 

“If there is one thing that wakes me up in the middle of the night,” she said, “is that growth, although reasonable, is too low to meet the expectations of people for a better standard of living.” 

She attributed the slowdown largely to stagnant productivity and warned that artificial intelligence could intensify labor market pressures. 

“AI is like a tsunami hitting the labor market for emerging market economies,” she said, projecting that “40 percent of jobs over the next years would be either augmented or eliminated.” 

She added that many countries lack the skills base needed to capture AI’s benefits. “The skills that are necessary to capture the potential of AI, I don’t think that we are in a good place for that.” 

Ali bin Ahmed Al Kuwari, Qatar’s finance minister, said AI cannot be separated from human capital development. 

“I think, you cannot ignore AI, without the human capital, the human capital is the key element,” he said, noting that many emerging economies are tightening fiscal policy in an effort to stabilize public finances. 

Trade vulnerability remains another pressure point. Mehmet Simsek, Turkiye’s minister of treasury and finance, said export dependence exposes developing economies to geopolitical and regulatory risks. 

“I think emerging markets rely on exports, and that’s clearly an issue. So there is more vulnerability there,” he said. 

Turkiye’s network of free trade agreements, covering 62 percent of exports, provides some insulation, he added, though not full protection. 

“Now that doesn’t give you a full peace of mind,” he cautioned, “but at least for now, as long as our partner stays rule based, FTA provides you with some insulation.” 

From Ecuador’s perspective, Finance Minister Sariha Moya said smaller economies must compete on quality rather than volume. 

“Ecuador is a small country, so our producers have understood that we need to produce quality products,” she said. 

“When you produce the best shrimp, the best chocolate, the best bananas, then you are less sensitive to tariffs,” Moya added, noting that Ecuador now exports more shrimp than oil. 

In a following panel discussion, the themes of navigating uncertainty and strategic adaptation were further emphasized.

Georgieva framed the overarching challenge as one of navigating profound and simultaneous shifts. “The world is changing and it is changing very rapidly. It is more multipolar worlds, one in which, the forces of geopolitics, of technology, of the demography of climate, acting simultaneously are creating unusually high uncertainty, an uncertainty that is likely to be the new normal for all of us,” she said, urging a collective response from emerging economies.

Mohammed Al-Jadaan, Saudi Arabia’s minister of finance, pointed to the importance of disciplined execution while maintaining flexibility, citing the progress of the Kingdom’s Vision 2030 reforms.

“More than 87 percent now of our initiatives are either completed or on track. 93 percent of the KPIs are either achieved or on track. A lot of the mega targets like unemployment, household ownership of their own houses have been achieved,” he stated.

He concluded by emphasizing that strategic plans must evolve with circumstances. “But also remember that we started this 10 years ago and a lot can change in 10 years. And if you are rigid, if you just announce something and you stick to it because that's what you announced, actually, it's not going to be ending wisely.”