Humanity has always advanced through innovation, from the wheel to the internet. Today, we stand at the brink of another revolution: Artificial Intelligence (AI). Unlike past shifts, AI evolves at astonishing speed, reshaping societies in real time. But, with it comes both immense opportunity and profound uncertainty.

That is precisely the call sounded by the United Nations Development Programme’s 2025 Human Development Report (HDR), A Matter of Choice: People and Possibilities in the Age of AI. The report warns that progress in human development is stagnating with the smallest increase in the Human Development Index (HDI) in 35 years. Stark inequalities are widening between rich and poor nations, and the world risks slipping decades behind its 2030 goals unless we act decisively.

And yet, amidst this fragility, the report offers a powerful counterweight to despair: AI. Not as a silver bullet, but as a tool if harnessed with human-centered intent to reimagine how we learn, work, govern, and develop.

Global Promise, Regional Potential

HDR’s global survey reveals hopeful optimism. Six in ten people expect AI to positively impact their jobs, especially in lower HDI countries, where 70% believe it will boost productivity and two-thirds anticipate using it in education, health, or work within a year. In the Asia-Pacific, home to immense digital dynamism and demographic diversity, this offers fertile ground for inclusive development powered by AI.

But optimism alone is not enough. Real progress will depend on the strategic choices we make today about how AI is designed, deployed, and governed to benefit people, not just markets. HDR outlines three critical actions:

1. Build an economy where humans and AI work together rather than compete.
2. Drive innovation with intent so that AI advances human needs, not just commercial interests.
3. Invest in capabilities that count by modernizing education, healthcare, and digital infrastructure to enable everyone to thrive in the AI era.

Mongolia at a Turning Point

For Mongolia, AI represents both a challenge and an opportunity amid efforts to diversify its economy and bridge rural-urban divides. The country’s HDI has improved by 26% since 1990, placing it among countries with high human development. However, the country’s progress falls short when compared to over 50% increase in East Asia and the Pacific and South Asia for the same period and still yet to advance to very high human development category. Whether their progress can be accelerated hinges on how it embraces AI for human development.

The government’s recent policy efforts signal growing ambition in this domain through various strategic initiatives such as the Digital Nation programme and the Joint Plan for Enhancing Universal Digital Skills and Competencies. A national AI and Big Data strategy is currently in the making. The Government of Mongolia is also aiming to raise its HDI as outlined in its action plan.

UNDP has supported Mongolia’s AI readiness through initiatives like the AI Landscape Assessment and Foresight Exercise, which found the country in a “Systematization Stage” with a readiness score of 3.0. Foundational structures are forming, but progress remains fragile.

Three challenges persist in Mongolia including capacity gaps among civil servants, unequal rural access to infrastructure, and the absence of clear ethical and regulatory frameworks among others. In short, Mongolia’s journey with AI has begun but the path ahead will be defined by the choices it makes now.

Bridging the Divide: Turning AI Risks into Opportunities for Mongolia

While AI holds a great promise, it also risks deepening the global development divide. The HDR warns that unless low- and middle-income countries act now, they may find themselves on the losing end of a rapidly shifting digital economy.

Three factors drive this risk. First, wealthier countries are better equipped to capture AI’s opportunities through capital, infrastructure, and talent. Second, lower-income countries are less prepared to manage AI’s disruptive effects such as automation-induced job loss. Third, as AI makes both manufacturing and services more capital-intensive making traditional development models lose relevance, weakening pathways to inclusive growth and employment.

But this outcome is not inevitable. If approached strategically, AI can serve not as a threat to tradition or identity, but as a solution for resilience and renewal. For instance, in Mongolia, it could support herders with climate-smart forecasting, help doctors in remote soums diagnose diseases earlier, enable teachers to personalize learning, and empower entrepreneurs to access new markets.

Mongolia can forge its own path by translating global best practices into local solutions. Here’s where it can begin:

• Invest in Digital Infrastructure: Connectivity is foundational for any AI-driven transformation. Mongolia needs to expand high-speed internet access, particularly in remote areas. India’s “Digital India” initiative, which connected over 600,000 villages, offers a powerful example of how digital infrastructure can be scaled inclusively.
• Ensure Reliable Energy: The surge in global AI use is expected to drive a 160% increase in power demand from data centers by 2030. Mongolia will need to modernize its power systems and diversify its energy sources leveraging its vast potential of renewable energy to support future demands.
• Strengthen Education and Skills: Mongolia needs to invest in capabilities that count when it comes to AI by preparing its youth through improved STEM education and digital literacy. Vietnam has already begun integrating AI into its national curriculum, a model Mongolia could adapt.
• Plan for Job Transitions: Mongolia can mitigate potential job losses by adopting proactive policies such as offering tax incentives for businesses that use AI to create rather than eliminate jobs and investing in reskilling programmes similar to Singapore’s SkillsFuture initiative.
• Promote Ethical and Inclusive Governance: Mongolia needs to ensure that AI development is guided by principles of transparency, accountability, and fairness with people being at the heart of it to ensure that AI solutions reflect societal values and serve the public good.

A Matter of Choice

The HDR reminds us that the future is not written in code. It is shaped by the values we encode into our systems, the incentives we design, and the voices we choose to include.

If Mongolia can develop an inclusive, ethical, and people-centered approach to AI aligned with its development priorities and local context, it could chart a new era of progress. Not just digital transformation, but human transformation.

Like every breakthrough before it, how AI impacts human development is a matter of choice. We must go beyond observing what technology can do and instead ask what it can do for people. Real progress requires human leadership: bold innovation, smart investment, inclusive institutions, and a commitment to listening to the communities AI is meant to serve.

It’s a future well within reach. But only if we choose it.