Prime Minister Godwin Friday has called for an overhaul of how Caribbean governments manage public finances, urging officials to move beyond “mere digitisation” and embrace “digital transformation” that is “digital by design” and rooted in sound governance, resilience, and human accountability.
Addressing the opening of the Financial Management for Al: Harnessing Digital-by-Design Workshop on Monday, the prime minister welcomed delegates from across the Caribbean and development partners, including the IMF’s Caribbean Regional Technical Assistance Centre (CARTAC) and the government of Canada.
He framed the workshop as part of a larger struggle by small island developing states (SIDS) to stretch scarce resources, modernise ageing systems, and safeguard fiscal sustainability amid rapid technological change and intensifying climate shocks.
Public financial management as the ‘core of effective governance‘
The Prime Minister said that to the “uninitiated”, public financial management can appear “only technical and highly specialised”.
Each year’s budget masks intense efforts by ministers and senior officials, he suggested. Behind the tables and line items lie hard choices about how to finance various sectors, including healthcare, education, national security, support for vulnerable citizens and investment in economic development.
“For small island developing states,” Friday said, “limited capacity and scarce resources leave very little room for waste, duplication, or poor decision-making. Yet we know these flaws persist.”
He pointed to St. Vincent and the Grenadines’ own fiscal responsibility framework, which recognises that credible budget preparation, disciplined programme execution, and reliable fiscal forecasting are central to maintaining public confidence and ensuring fiscal sustainability.
The challenge, he argued, is that many of the systems underpinning these functions were designed for a bygone era.
Outdated systems and the cost of inefficiency
The prime minister painted a picture of public sectors still dominated by silos, manual data entry and paper-heavy processes, a reality familiar across the region.
The result is an elevated risk of waste, duplication, and poor decision-making, precisely the vulnerabilities that small, resource-constrained economies can least afford.
Against this backdrop, Friday endorsed the workshop’s stated objective of distinguishing simple digitisation from true digital transformation.
He aligned Saint Vincent and the Grenadines’ ambitions with the IMF’s digital solutions guidelines for public financial management.
Friday said that reform must be anchored in three broad shifts:
- Reengineering functional business processes so they are genuinely digital by design;
- Building adaptive and interoperable IT architecture; and
- Modernising legal and data governance frameworks to support responsible, effective use of new tools.
AI: tool, not talisman
With artificial intelligence high on the workshop’s agenda, Friday warned against adopting AI for its own sake or being “misguided by the hype”.
“We are all aware of the incessant drumbeat of AI. We know the times are changing, and as the songwriter says, we better start swimming, or we will sink like a stone,” he said.
But he cautioned that governments must “avoid adopting technology in isolation or getting misguided by the hype”.
He said the test should be whether AI helps solve real, existing problems, not whether systems can be re-engineered merely to create use cases for the latest tools.
“We must not invent problems simply so that AI could solve them. Rather, we must see how AI solves the problems that we have now,” Friday said.
He said that when deployed with clear purpose, technologies “can be of great benefit to us”, but “must always remain a tool, not an end in itself”.
He was equally explicit that technology cannot displace human responsibility.
“Technology such as AI is an enabler for our public offices. It is not a substitute for human accountability,” he said.
AI “cannot fix a fundamentally flawed process, nor can algorithms replace professional judgement, institutional ethics, and public oversight. Not yet, anyway.”
To fully benefit from AI and digital PFM, he argued, governments must continually invest in training people “so they are equipped to work effectively with emerging tools”.