crises

Economists are cautiously optimistic that advances in artificial intelligence could boost productivity across major economies, potentially helping governments manage soaring debt. Debt levels in most rich nations already exceed 100% of GDP and are projected to rise further due to ageing populations, higher defence spending, climate commitments, and rising interest payments.

U.S. policymakers, in particular, see AI as a potential driver to lift post-2008 productivity and free workers for higher-value tasks. Yet experts warn that even a strong AI-driven growth surge would not fully offset the structural pressures on public finances.

AI’s Potential Impact on Public Debt

The OECD and economists working with Reuters estimate that a productivity boost from AI could lower projected debt in OECD countries by up to 10 percentage points by 2036. That would reduce the expected rise from roughly 150% of GDP to around 140%, still sharply higher than current levels of approximately 110%.

In the U.S., best-case scenarios suggest debt could rise to 120% of GDP over the next decade instead of 100%, with one economist projecting little change. The key variables include whether AI creates more jobs than it displaces, whether firms pass productivity gains to workers via wages, and how governments manage spending.

Demographics and Limits

Demographics remain a central constraint. Ageing populations and entitlements tied to them are the root causes of long-term debt growth. Economists note that even with a productivity surge, labour shortages and slower immigration could offset AI gains. Countries like Italy and Japan may see smaller benefits from AI due to lower adoption rates and smaller sectors that can leverage the technology.

Fiscal Uncertainty

AI could raise government revenues through higher productivity and wages, but the effect is uncertain. If automation primarily benefits profits and capital rather than labour, fiscal gains could be limited. Additionally, public spending may rise alongside growth, dampening potential debt relief. Social security and other entitlement programs, indexed to wages, will continue to pressure budgets regardless of AI-driven efficiency.

Interest rates and debt servicing costs add another layer of uncertainty. Economists warn that recessions or financial shocks could prevent AI-driven productivity gains from providing timely relief.

Analysis

AI offers a potential “breathing room” for overstretched economies, buying time for governments to tackle structural deficits. Even if growth rises to 3% in the U.S. through 2040 above Federal Reserve expectations it will not solve fundamental fiscal challenges.

Economists stress that AI is a supplement, not a replacement, for fiscal reform. Rising productivity may help governments manage debt growth more sustainably, but without structural policy adjustments addressing demographics, entitlement programs, and spending priorities, the debt trajectory remains precarious.

Ultimately, while AI could improve efficiency and output, it is unlikely to carry the heavy lifting required to stabilize public finances on its own.

With information from Reuters.

Qatar has pledged $1 billion to support the Board of Peace’s mission in Gaza, with Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani backing Donald Trump’s 20-point plan and reaffirming support for Palestinian statehood and Israeli security.

A fire at a key fuel refinery in the capital comes amid Cuba’s mounting fuel emergency due to US-imposed restrictions.

A fire broke out at a key fuel processing plant in the Cuban capital Havana, threatening to exacerbate an energy crisis as the country struggles under an oil blockade imposed by the United States.

A large plume of smoke was seen rising above Havana Bay from the Nico Lopez refinery on Friday, drawing the attention of the capital’s residents before fading as fire crews fought to bring the situation under control.

Cuba’s Ministry of Energy and Mines said the fire, which erupted in a warehouse at the refinery, was eventually extinguished and that “the cause is under investigation”. There were no injuries and the fire did not spread to nearby areas, the ministry said in a post on social media.

“The workday at the Nico Lopez Refinery continues with complete normalcy,” the ministry said.

The location of the fire was close to where two oil tankers were moored in Havana’s harbour.

Cuba, which has been in a severe economic crisis for years, relied heavily on oil imports from Venezuela, which have been cut off since the abduction of the country’s leader Nicolas Maduro by United States forces last month.

US President Donald Trump has also threatened Cuba’s government and passed a recent executive order allowing for trade tariffs on any country that supplies oil to the island.

The country has seen widespread power outages due to the lack of fuel. Bus and train services have been cut, some hotels have closed, schools and universities have been restricted, and public sector workers are on a four-day work week. Staffing at hospitals was also cut back.

United Nations Secretary-General Antonio Guterres warned last week of a humanitarian “collapse” in Cuba if its energy needs go unmet.

On Thursday, two Mexican navy vessels carrying more than 800 tonnes of humanitarian aid arrived in Havana, underscoring the nation’s growing need for humanitarian assistance amid the tightening US stranglehold on fuel.

Experts in maritime transport tracking told the AFP news agency that no foreign fuel or oil tankers have arrived in Cuba in weeks.

Cuba can only produce about one-third of its total fuel requirements.

Cuba’s Deputy Foreign Minister Carlos de Cossio accused the US of carrying out “massive punishment” against the Cuban people in a post on social media Friday.

Cuba requires imports of fuel and “the US is applying threats [and] coercive measures against any country that provides it”, the deputy minister said.

“Lack of fuel harms transportation, medical services, schooling, energy, production of food, the standard of living,” he said.

“Massive punishment is a crime,” he added.

Mexico’s President Claudia Sheinbaum has said her government seeks to “open the doors for dialogue to develop” between Cuba and the US and has criticised Washington’s oil restrictions as “unfair”.

Humanitarian operations have been impeded by attacks, looting and restrictions on movement.

Ajok Ding Duot crouches on the dusty floor of a displacement camp in South Sudan’s Lakes state, cracking nuts open one by one.

She and her family of 10 arrived here about two weeks ago, fleeing intensifying fighting between government and opposition forces in neighbouring Jonglei state.

While they have found temporary shelter, Duot said there was hardly anything to eat at the camp. To survive, they rely on these nuts and wild fruits.

“We don’t know anything about what the government is doing. They’re fighting, but we don’t know what the problem is,” she told Al Jazeera.

“We’re in darkness. It’s only ever the humanitarian organisations who help.”

South Sudan has seen renewed fighting in recent weeks between government soldiers and fighters loyal to the Sudan People’s Liberation Army-in-Opposition (SPLA-IO).

The United Nations says an estimated 280,000 people have been displaced by the fighting and air attacks since late December, including more than 235,000 across Jonglei alone.

The UN’s children agency UNICEF also warned last week that more than 450,000 children are at risk of acute malnutrition due to mass displacement and the halting of critical medical services in Jonglei.

Nearly 10 million people need life-saving humanitarian assistance across South Sudan, a country still reeling from a ruinous civil war that killed nearly 400,000 people and displaced millions between 2013 and 2018.

Humanitarian operations, however, have been crippled by attacks and looting, with observers saying both sides in the conflict have prevented assistance from reaching areas where they believe civilians support their opponents.

The UN’s World Food Programme (WFP) suspended its activities last week in Baliet county, in Upper Nile state, following repeated attacks on a convoy carrying humanitarian assistance.

The WFP said the suspension would remain in place until the safety of its staff could be guaranteed and authorities take immediate action to recover the stolen supplies.

Separately, medical humanitarian NGO Doctors Without Borders, known by its French initials MSF, said last week a hospital in Jonglei was hit by a government air attack, marking the 10th attack in 12 months on an MSF-run medical facility in the country.

In addition, the MSF health facility in Pieri, also in Jonglei, was looted by unknown assailants, forcing staff to flee. The organisation said the violence had left some 250,000 people without healthcare, as the NGO had been the only medical provider in the area.

MSF said the targeted attacks on its facilities have forced the closure of two hospitals in the Greater Upper Nile and the suspension of general healthcare activities in Jonglei, Upper Nile and Central Equatoria states.

On Sunday, UN chief Antonio Guterres “strongly” condemned the escalating violence in the country and warned that civilians continue to bear the brunt of the conflict.

In a statement, the secretary-general called on all parties “to immediately and decisively halt all military operations, de-escalate tensions through dialogue, uphold international law, protect civilians, and ensure safe and sustained humanitarian access and the security of aid workers and United Nations peacekeeping personnel and their assets”.

Feb. 9 (UPI) — The fuel shortage in Cuba began to simultaneously impact air transportation and tourism after an international aviation alert reported that Havana’s José Martí airport will not have fuel for one month.

The government also began to close hotels and relocate tourists as part of an emergency plan in the face of one of the worst energy crises in the island’s history, worsened by the end of oil shipments from Venezuela and pressure from the government of Donald Trump on crude oil supplies.

An operational notice from the international NOTAM system Sunday confirmed that Havana’s José Martí international airport will not have Jet A-1 fuel, the standard for commercial aviation, for one month between Tuesday and March 11, digital outlet CiberCuba reported.

The notification not only warns of the fuel shortage, but also of temporary limitations in landing aid systems, in addition to the inoperability of the runway visual range system, which is used to measure visibility when weather conditions are unfavorable.

The restriction is not limited to the capital. Similar notifications indicate fuel shortages at the country’s nine other airports.

Aviation authorities warned airlines that reserves could run out within a short period if supplies are not restored.

The measure compromises commercial, charter, cargo and executive aviation flights, and forces companies to arrive with extra fuel, make refueling stopovers in other countries or reschedule operations, reported Cuba Noticias 360.

This situation contrasts with recent statements by Transport Minister Eduardo Rodríguez Dávila, who had said operations at ports and airports remain guaranteed.

So far, international airlines have not communicated how they will deal with the contingency.

The impact is projected directly on tourism, the island’s main source of foreign currency.

Cancellations, delays and reduced air connectivity threaten the arrival of visitors from key markets such as Canada, Russia and Europe, in a context in which traveler confidence already shows signs of deterioration.

According to official figures, the arrival of international tourists to Cuba fell to 1.8 million in 2025, 17.8% less than in 2024. The result fell well short of the government target of 2.6 million visitors and marked one of the lowest records in more than two decades.

The energy crisis has as its backdrop the interruption of oil supplies from Venezuela, the island’s main supplier, following the capture of Nicolas Maduro.

This was compounded by the recent decision of the United States to declare a national emergency regarding Cuba and warn that it could impose tariffs on countries that supply oil to the Caribbean nation, in an escalation of pressure that has further complicated Havana’s access to fuel.

In parallel with the airport problem, the government has begun to close hotels in key tourist destinations and relocating foreign guests. The measure is part of an emergency plan to reduce energy consumption and reorganize facilities.

At least eight hotels closed in Cuba’s main tourist destinations and their clients are being relocated to other resorts amid the worsening national crisis and the shortage of fuel and supplies, Diario de Cuba confirmed from the island.

The hotel closures are occurring in the middle of the high season but amid travel advisories over the deterioration of internal conditions. The reduction of flights, energy uncertainty and hotel reorganization add pressure to an industry that is strategic for the Cuban economy.

Vice Prime Minister and Minister of Foreign Trade and Foreign Investment Oscar Pérez-Oliva Fraga said on state television that the executive branch “has designed a plan in tourism to reduce energy consumption, compact tourist facilities and take advantage of the high season,” digital outlet Cuba LLama reported.

Sources from the sector indicated that destinations such as Varadero and the northern cays concentrate much of these measures, where international chains operate.

Authorities are maintaining an emergency plan that includes broader energy restrictions, a reduction of state activities and measures to manage available fuel.

Cuban President Miguel Díaz-Canel said Thursday he was willing to initiate a negotiation process “without pressure” with the United States to help economic difficulties facing the island.

He acknowledged that the lack of Venezuelan oil has placed the country in a “complex” energy situation, affecting not only electricity generation, but also the population’s basic economic activities.

While the United States has sent more than $5.95 million in humanitarian aid managed by the Catholic Church, a measure criticized by Havana because of its “grossly opportunistic political purposes,” it has insisted on the blockade regarding hydrocarbons.

Meanwhile, countries have sent assistance. China was behind a financial package of about $81 million and a food shipment of 60,000 tons of rice in January. Mexico, sent two Navy vessels Sunday loaded with 800 tons of humanitarian aid.