Tourism’s Golden Cage: How CARICOM’s Economic Dependence Stifles Fintech Innovation and Youth Potential in the Age of AI

It turns out in the Caribbean; tourism is both lifeblood and bind, a blessing and a plague. For decades, the allure of turquoise waters and sun-drenched beaches has served as the region’s primary economic engine, fuelling hotels, restaurants, and the service and hospitality economy that orbits around them. In many CARICOM states, tourism accounts for as much as a quarter of GDP. In the Bahamas and Saint Lucia, for example the figures are even higher, shaping national economic identity and public policy priorities.

Beyond the beaches lies a hidden barrier—CARICOM’s reliance on tourism limits fintech growth and youth potential, leaving innovation trapped in a golden cage.

But beneath the postcard imagery lies a deeper structural problem: the overwhelming dominance of tourism has constrained the region’s capacity to develop robust, forward-looking sectors like financial technology (fintech), stifling innovation, economic resilience, and, crucially, the potential of its youth. As artificial intelligence (AI) reshapes the global economic order, CARICOM is in dire danger of becoming an economic backwater admired for its scenery, but irrelevant in the digital age.

A Sectoral Straitjacket

The reliance on tourism creates a form of economic monoculture and new slavery. When nearly all national incentives such as tax breaks, foreign direct investment facilitation and workforce training are channelled toward hospitality and related services, other sectors languish. This narrow focus is not merely a matter of policy neglect; it is a deliberate strategy of risk aversion. Governments understandably prioritise low-hanging economic fruit in the face of fiscal pressure and international debt obligations. Yet in doing so, they forfeit the structural transformation needed for long-term development. Ultimately “sweating an asset into oblivion”.

The COVID-19 pandemic laid bare this vulnerability. Tourism-dependent economies like Saint Kitts and Nevis and Antigua and Barbuda saw GDP contractions of over 18% in 2020, highlighting how dependence on foreign foot traffic leaves entire economies exposed to external shocks. Despite this, post-pandemic recovery strategies largely sought to rebuild the same old vulnerable model, more resorts, more airlift, more cruise ships. The digital economy, if acknowledged at all, is treated as a peripheral aspiration and that is a fatal flaw.

The Fintech Opportunity and CARICOM’s Inertia

Globally, fintech has redefined how capital flows. From digital wallets to decentralised finance (DeFi), technology is breaking down long-standing barriers in traditional finance, especially for underserved populations. Yet CARICOM’s fintech footprint remains modest, undercapitalised, and regionally incoherent.

The establishment of a regional fintech sandbox by the Caribbean Development Bank and some central banks was a symbolic start. However, in practical terms, the initiative has failed to catalyse a genuine innovation ecosystem. Entrepreneurs still face a regulatory thicket when attempting to scale across jurisdictions. Each member state has its own financial services commission, data protection laws, know-your-customer (KYC) requirements, and tax regimes. What is touted as regional integration often remains a mirage for digital innovators.

As Ricardo Allen, CEO of One-on-One Educational Services, noted during the CaribExport Innovation Series, “We don’t lack ideas in the Caribbean. What we lack is a coherent framework to take those ideas to market and, more importantly, to scale them regionally. Each territory has its own sandbox, its own rules, its own pace. That’s not how fintech works.”

In high-functioning fintech jurisdictions like Estonia or Singapore, regulators act as enablers. They co-create innovation pathways with startups while managing systemic risks. In CARICOM, regulatory culture remains conservative, even adversarial, shaped by traditional banking lobbies and an outdated suspicion of disruption. In short Regulators in the Caribbean see themselves as sheriffs whose goal is stop and if possible, destroy. Startups routinely report delays of over a year in obtaining licenses, with limited regulatory guidance and scarce dialogue between innovators and policymakers.

Meanwhile, capital remains elusive. According to the Caribbean Development Bank, fewer than 1% of venture capital transactions in the region go to fintech. Investors cite small domestic markets, legal uncertainty, and weak exit opportunities as deterrents. The irony is that fintech—by definition can and should transcend geography. Yet the institutional scaffolding needed to support such growth remains rickety and underbuilt.

Youth: An Underutilised Demographic Dividend

Nowhere is the cost of this policy inertia more visible than in the lost potential of Caribbean youth. With nearly 60% of the population in many CARICOM states under the age of 30, the region is uniquely positioned to harness a demographic dividend. But instead, it faces a demographic dilemma. Youth unemployment remains stubbornly high, reaching nearly 40% in Jamaica and over 30% in Saint Vincent and the Grenadines in recent years. At the same time, thousands of digitally literate young people emigrate annually, seeking opportunities in Canada, the US, and the UK.

“There is a fundamental mismatch between what our economies train young people for and where the global economy is going,” said Dr. Terri-Karelle Reid, a Jamaican public speaker and digital strategist. “We are preparing people for jobs that may not exist in 10 years, while failing to equip them for jobs that already exist in the digital economy.”

Educational systems across CARICOM remain overly academic and under-technological. STEM curricula are patchy and underfunded. Coding, data science, AI literacy, and financial modelling are seldom taught in secondary schools, let alone in a way that connects to regional economic strategy. Where digital education initiatives exist, such as Guyana’s “Coding Bootcamps” or Barbados’ Youth Empowerment Scheme, they tend to be donor-dependent, fragmented, and under-scaled.

As Dr. Carla Barnett, CARICOM Secretary-General, recently remarked: “It is easy for older policymakers to make policy for young people as opposed to making policy with young people. You get a different result when young people are involved.” But such involvement remains the exception, not the rule.

AI, Automation, and the Looming Threat of Irrelevance

As artificial intelligence becomes a foundational layer of the global economy, CARICOM’s underinvestment in human capital could have existential consequences. AI is already transforming sectors such as finance, agriculture, logistics, and public health. In fintech, AI enables smarter credit scoring, anti-fraud detection, customer onboarding, and predictive analytics—all areas where the Caribbean lags far behind.

The Inter-American Development Bank has warned that digital exclusion risks compounding existing inequality. “The combination of AI, big data, and digital payment infrastructure is making financial services more inclusive worldwide,” it noted in a 2024 report. “Countries that fail to develop AI capabilities will not only miss economic opportunities but may also deepen existing poverty traps.”

In the absence of a coordinated strategy, CARICOM nations risk becoming users not creators of AI. That would relegate their economies to the periphery of global value chains, echoing the colonial-era dynamics of dependence and marginalisation.

A Strategic Roadmap: From Rhetoric to Execution

To alter this trajectory, CARICOM must confront the structural biases that prioritise tourism over technology. First, a region-wide educational overhaul is necessary. This means embedding digital fluency, financial literacy, and AI fundamentals from primary school upwards. It also means treating vocational and technical training not as a fallback, but as a central pillar of development strategy.

Secondly, the region needs a unified fintech regulatory framework comparable to the EU’s Digital Finance Package, that allows startups to operate seamlessly across borders. This would require political will, harmonisation of KYC norms, and stronger coordination among financial regulators.

Third, governments must establish innovation funds and guarantee schemes to de-risk early-stage investment in fintech and AI ventures. Caribbean Development Bank financing can be augmented by diaspora bonds or blended finance structures involving multilateral partners.

Fourth, youth engagement must become more than lip service. National innovation councils should mandate youth representation. Public procurement should favour youth-led digital solutions. And CARICOM-wide platforms should be created for cross-border collaboration among young tech entrepreneurs.

Fifth, broadband infrastructure and digital ID systems must be treated as economic infrastructure on par with roads and ports. The successful implementation of the Eastern Caribbean Central Bank’s DCash initiative proves that regional digital finance is possible, but it must be scaled and replicated.

Finally, regulation should act in the role of an enabler. Whilst the role of the Regulator is of pivotal importance in ensuring compliance and integrity, it should be more than just a Sherrif. Regulatory uncertainty is one of the greatest barriers to fintech innovation. By issuing clear, principles based guidelines rather than rigid, prescriptive rules, regulators can give startups the confidence to build products without fear of inadvertently breaching laws.

Moreover, Regulators don’t need to choose between innovation and oversight they can achieve both. By acting as facilitators rather than just enforcers. They can help fintech’s unlock their full potential while ensuring markets remain fair, stable, and secure. The future of finance depends not only on technology, but on the wisdom with which it is governed.

Conclusion: The End of Economic Nostalgia

The era when beaches and hospitality could guarantee Caribbean prosperity is drawing to a rapid close. Climate risk, global pandemics, and digital disruption have made clear that economic nostalgia is no longer viable. The choice before CARICOM is stark: double down on a volatile, low-growth model rooted in services and sun or embrace the complexity and potential of a digital future.

The stakes are generational. Unless the region acts decisively to build human capital in fintech and AI, it will consign its youth to emigration or underemployment and its economies to irrelevance.

The Caricom need to heed the sage advice of Arthur Mensch, CEO of French AI startup Mistral, who has predicted that AI will cause a significant economic shift, impacting the GDP of every country by double digits. So with vision, coordination, and courage, the Caribbean can move from being a beautiful playground for the world’s tourists to becoming a formidable laboratory for digital innovation.