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Estonia mastered the intricacies of a digital society years before government-mandated lockdowns and the emergence of the COVID-19 pandemic.
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Last Week Briefing:
Alexei Navalny, the (formerly) poisoned Russian opposition leader, claims that Russian President Vladimir Putin orchestrated his attempted assassination. Navalny, who is a vocal critic of the Kremlin, has since had his bank accounts frozen and his apartment seized by Russian authorities. — RTE
The People’s Republic of China, in a surprising move, has committed to net-zero emissions by 2060. This move comes shortly after U.S. President Donald Trump criticized Chinese President Xi Jinping for his country’s involvement in the global climate crisis. In 2018, China contributed nearly 30% of global carbon output. — Al Jazeera
Nigeria is expected to pass the transformative Petroleum Industry Bill as a means of overhauling the nation’s sluggish oil industry. Nigeria, who derives 90% of export revenues from oil, will proceed with divesting the Nigerian National Petroleum Corporation. — African Business Magazine
Allegro, the Polish online retailer, raised 9.2 billion zloty ($2.3 billion) in their initial public offering — making their offering the Warsaw Stock Exchange’s largest listing ever. The company pulled in revenues of 1.7 billion zloty, or about $440 million, in the first half of 2020. — Bloomberg
In the above clip, you can see President Obama praising Estonia for their technological capabilities — even joking that he should’ve asked the Eastern European nation for help in building the Obamacare website. Politics aside — consulting the Estonians on anything tech-related is normally a good idea.
Estonia, a country with a smaller population than Dallas, Texas, is one of the most technologically advanced societies in the world. Indeed, Estonia’s formidable technology landscape earns them the honor of the “Most Advanced Digital Society in the World” per the tech savvy Wired Magazine. Following their separation from the Soviet Union in 1991, Estonia immediately recognized the potential of a digitized society. By bolstering their digital infrastructure, the country would be able to lure valuable foreign direct investment to help propel their technological ambitions. Between 1992-2000, Estonia pulled in $2.5 billion in foreign direct investment, equivalent to roughly 45% of their GDP at the time.
Blew a 3-1 Lead: What popular video software was founded in Estonia?
Answer at bottom.
In 1994, parliament released the first draft of the Principles of Estonian Information Policy, a bill that established the foundation for how technology would be leveraged in the new, information society. The bill harped on the four key objectives of Estonia’s development:
The modernization of legislation
Supporting the development of a private sector
Shaping the relationship between the state and its citizens
Raising awareness of the problems concerning the information society
What’s more, the document addressed Estonia’s desire to integrate among developed economies with respect to their technology capabilities. By applying information technology across the full spectrum of the Estonian economy, Estonians could achieve a higher quality of life. Institutions in medicine, government, and education would stand to benefit from the optimization of digital technology. Three years later, the Estonian government would unveil Tiigrihüpe, or the Tiger Leap initiative, which was one of several projects that sought to equip every Estonian school with a computer. By 2000, 90% of Estonians were regular users of the internet.
Estonia’s early wagers on information technology have been successful, to say the least. In fact, their swift transition to a digital economy has warranted intrigue from both developed and emerging countries. Additionally, multinational corporations such as KPMG and Toyota have also tapped the expertise of the Estonians for their digital solutions. Could you blame them? Estonian citizens are mavens of the internet. They are known to pay for parking, schedule medical appointments, and even vote via the internet. The multi-faceted Estonian ID card, which is owned by 99% of Estonians, grants citizens access to just about anything. The ID serves as a European passport, insurance card, and prescription card, if necessary. Nearly all social services can be done online, with the slight exception of getting married, divorced, or purchasing property. Some government benefits are even disbursed automatically — such as the childbirth allowance, which often comes before the child is even born. Besides healthcare, the functions of the Estonian government have been streamlined through a collaborative software known as e-Cabinet. e-Cabinet, which requires members of parliament to read and vote on legislation via the internet, miraculously shortened meetings from an average of 5 hours to as little as 30 minutes. Should a member of parliament wish to discuss a specific issue or question, they must submit their request to speak online, so it is known how long and why they are speaking. The digital sophistication found in Estonian parliament has effectively earned the trust of the Estonian populace. In 2019, 44% of Estonians voted online. For context: Only 36% of Americans voted in the 2018 mid-term elections.
Another fascinating feature of Estonia’s economy is the opportunity for E-Residency. That means that if you’re not from Estonia, never have been to Estonia, or even have no desire to visit Estonia, you can easily open an online business in Estonia, paving access to the European Union. That’s right — Estonia’s digital infrastructure has procured a business landscape in which companies from around the world can bask in the lucrative Eurozone without ever stepping foot on the continent. Business owners can seamlessly operate their enterprise remotely, accessing online services like banking or paying taxes. This attractive landscape, coupled with minimal bureaucracy and taxation, has earned Estonia the title of being the #1 Entrepreneurial Hotspot in Europe per the World Economic Forum. The country will also be eager to mention their four Unicorns, or private technology companies worth over a billion dollars. Companies such as Transferwise and Bolt (formerly Taxify) were born from Estonia’s push into the information society.
Transferwise Office — Tallinn, Estonia
All of this isn’t to say that Estonia is some sort of socialist, surveillance state. In fact, Estonia ranked 10th in the Heritage Foundation’s Index of Economic Freedom, ahead of other democratic stalwarts such as Taiwan (11th), the Netherlands (14th) and the United States (17th). Similarly, Estonia was also the first country to implement a flat tax. The country levies a 20% income tax on everyone, no matter what your income level is. This generous structure has endowed Estonia with the best tax code amongst OECD countries for 6 straight years.
From a Western perspective, it is quite perplexing to see a former Soviet state succumb to this level of government oversight. That said, Estonians don’t mind the oversight because they understand the checks and balances of their system. You see, this system works because there is an embedded element of transparency, aided by the application of cryptographic technology. Almost all of the data in Estonia — both public and private — is housed within one database, known as the X-Road. The X-Road’s vast pool of data is easily sortable and accessible to all. Keep in mind, however, that the database maintains a permanent record of inquiries. In other words— if I wanted to check the medical records of Kersti Kaljulaid, the President of Estonia, I would able to via their e-Health system. However, it’d be prudent not to. Given that Estonia’s e-health system operates on the blockchain, my data inquiry would automatically create a permanent record of this occurrence, visible to any and all. Not only would this be wildly embarrassing, but chances are someone would reach out to me wondering why I was seeking the medical information of Estonia’s President. Nonetheless, this technology helps deter unwanted eyes and procure the element of trust in the system. Think of it like the LinkedIn feature where people are notified after you look at their page.
Before someone says, “Why haven’t we tried that here?” We (The “Western” world) already have. Australia has been flirting with the concept of a digital ID since 2015, with meager progress. Similarly, the Government Digital Service of the United Kingdom has been in operation since 2011, yielding dismal results after nearly nine years of operation. Finally, the Obama administration revealed the United States Digital Service (USDS) in 2014 with the goal of applying IT services to scale efficiency across all realms of government. All of this said, none of the countries listed above have issued an electronic ID.
World Privacy Forum — 2017
Is a digital ID realistic in the Western world? I’d argue that it’s not. Consider the dogma of Western individualism and our newfound emphasis on privacy. If President Trump were to unveil a national, digital ID program tomorrow, what would that response look like? What about Boris Johnson? Joe Biden?
I can’t speak for the Australians. However, I know that in the U.S. and U.K. there is a minimal level of distrust under every kind of government and/or administration. Unlike those two countries, Estonia’s digital ID works because there is a unifying mission behind the digital, transparent society. The country was reborn from the collapse of the Soviet Union, so they are very familiar with the slippery slope of an autocracy. There is a high level of accountability, transparency and integrity in Estonian public office. Could we say the same about Western governments?
Estonia’s digital empire could theoretically be the Eighth Wonder of the World. However, I believe it will be some time before some of the world’s developed juggernauts catch up to them.
Go Team: Estonians are known to partake in what extreme sport involving a swing? Answer below.
Blew a 3-1 Lead: Funny enough, Skype was founded in Estonia in 2003 before it would be acquired by eBay in 2005, then by Microsoft in 2011. Zoom Video, on the other hand, was founded in San Jose, California.
Go Team: Besides Wife-carrying, Estonians are known to partake in what is known as Kiiking, an extreme swinging sport.
The Global Capitalist
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