I Am the Former President of Estonia Toomas Hendrik Ilves, and This Is How I Work

Toomas Hendrik Ilves, the son of Estonian refugees who fled the country during the Soviet coup in 1944, saw his country regain its independence in 1991. In 2006, he became the fourth President of Estonia. We had a long conversation about his accomplishments as president, a position that has no executive power and therefore relies on persuasion and consensus. We discussed Estonia’s rapid digitalization, which has revolutionized the impoverished country and made it the envy of governments around the world. And we talked about his work to spread the civic digitization gospel.

In my research, I saw that in Estonia you can become president again after re-election.

Never. Legally yes. But no shit.

Tell me about your past and how you became who you are now.

At my age, this is a long story. I was born in Sweden in 1953, to a family of refugees who left [Estonia] during a short window of opportunity [during the Soviet occupation] in the second or third week of September 1944. My father brought me and my mother to the United States, and we ended up settling in northern New Jersey. I went to school in Leonia, New Jersey, and an important thing happened to me there.

I participated in a one-off experiment in 1969 when my math teacher was doing her doctoral dissertation. at the teacher training college in mathematics, I decided to experiment, if you can teach children to program. So she rented a TTY — a large, purple-ribbon TTY telephone modem — and the modem was plugged into the mainframe 30 miles away. She taught us to program in BASIC. Something like a little Fortran. So I learned to program in 1969 when I was 15 years old. First result: I was never intimidated by technology or programming, and later, when I was in college, I worked as a programmer in a lab.

I went to Colombia where I studied experimental psychology – I published an article last month that was an easy adaptation. I went to the University of Pennsylvania to get my Ph.D. program and decided I didn’t want to do it and spent years in the desert. But over time, I began to write about what is happening in Estonia and Soviet nationality policy, as well as writing essays on Estonian literature.

I worked as an analyst for Radio Free Europe in Munich, then they kicked me up to run the Estonian service. By the time I was 20, I was the youngest director of the service. I think I was 34. I completely overhauled the service. I was the first to come to the Soviet Union officially, legally, which was pretty wild.

Then [Estonia] became independent. And because I have helped different people for many years, in the first democratic elections in 1992, the president asked me to become the ambassador to Washington. I got a salary cut of about 95 percent and they didn’t pay us all the time because at that time Estonia was absolutely ruined. I myself went to the embassy, ​​we had a 10-year-old ambassador’s Mercedes limousine. Sometimes I went to a reception and the valet would say, “Where is the ambassador?” and I said, “I am the ambassador!”

Then the government collapsed. Then I was in parliament, and then in the European Parliament, [where] I was deputy chairman of the foreign affairs committee.

In 2006, conservatives, liberals and social democrats approached me and said, “We would like you to run for president.” I said, “I don’t want to be president.” They said, “Don’t worry, you won’t win anyway. But we need someone who is popular enough to stand up to the incumbent president. ” And then I was chosen. I did this for five years, I really didn’t want to continue, but the new opponent was someone who was so … well, it would be such a bad choice [that] I ran again. I won again, I was president until 2016.

Then I was invited to come to Stanford, and I am there now.

What was the situation when you started your presidential term?

When Estonia became independent, and I was ambassador to Washington, Estonia was extremely poor, extremely backward. Fifty years of Soviet rule have left us far behind. In 1938 – the last full year before World War II – Estonia and its northern neighbor [Finland] had the same GDP per capita. In 1992, the first full year after independence, Finland’s GDP was around US $ 23,000 per capita. GDP per capita in Estonia was twenty eight hundred dollars. Eightfold difference.

There were all sorts of different ideas about what to do in Estonia. For me, two things came together. I knew how to program, and I thought people should do it. And then in June, July 1993, the first Mosaic web browser came out. I had to buy it.

I said, “Well, this is where we are on an equal footing.” In all other respects, we had to overcome fifty years of backwardness. All roads and bridges that were not built, all schools that were falling apart. It was like Zeno’s paradox; Achilles runs after the turtle, but never catches up. But this is where we started with the same thing. I said that we should put computers in all schools in Estonia and connect them all.

Fortunately, we had the Minister of Education who really liked the idea and pushed it through the government. We had a weekly newspaper of the teachers’ union and they devoted at least one article or editorial to denouncing me [weekly] for a whole year. But this thing took off. And by 98 or 99, all Estonian schools were online.

Banks, meanwhile, saw this as a great opportunity. They are always looking to cut costs. And in Estonia we have many, many small villages, and each had at least two, if not three brick banks, which were visited very rarely. It was a huge price to pay. Therefore, we launched a program with banks, in which we traveled around the country and taught elderly people, mainly in rural areas, to use a computer. Part of the project was the installation of computers in all municipal centers, city halls and administrative centers. People did not have computers yet because they were expensive and people were poor. So you could go there and do whatever you wanted, for free. We had these little signs all over the place, [for example] the standard direction signs that are in Europe, except for the little @ symbol with an arrow that says something like “internet access point two hundred meters to the right.”

In the late 90s, we realized that we were rapidly digitizing, we are already one of the most digital countries, but we did not have any real services, except maybe one of the first, but, nevertheless, shaky [digital ] tax systems. We figured we had to do it right and set up a digital identity for everyone that was secure, and then encrypted, two-factor authentication, and legally enforceable, meaning you could sign contracts. Then we realized, okay, we need to create an architecture for this that guarantees security and privacy.

By this time, we had wide, [although] not yet great, support for digitalization. I mean we always had Finland, which had Nokia. By the early 2000s, we had digitized nearly all citizen-government interactions. Plus 99 percent of banking transactions were conducted over the secure Internet. In 2008, 2007, we put all the key data on the blockchain. The main issue was data integrity. If someone publishes your bank account, you might feel annoyed. It could be fatal if someone changes your blood type record.

What were the main opponents of digitization?

Oh, they said it would destroy Estonian culture, make Estonian culture Anglicized, people won’t learn to read. All Luddite arguments.

Estonia now has the most Wikipedia pages per capita. There is a crazy Wikipedia that is constantly releasing something. Estonia took this as a positive moment, receiving widespread support from the population. And the high level of service is something that people appreciate when they go overseas and see how backward he is, including Silicon Valley, where I am now. Where I sit is within a twelve-mile radius of the headquarters of Tesla, Apple, Google, Facebook, Palantir … [but] public services date back to the 1960s. The discrepancy between the level of government services, which are terrible, and the amazing products that are constantly being developed here, is simply amazing.

And that’s an obstacle to that civilian digitization you’re talking about, right?

In the United States, listen, you really have to do this if you want to have any services. And this is politically difficult. You can’t do this without a strong digital identity. People [in the US] say, “Oh, we will never have a national identity.” You don’t need a national identity, it is a federal system. Most of the things that citizens face on a daily basis are regulated by the state: driving licenses, social security programs, banking are all regulated at the state level. And you already have an ID in every state for anyone over 16 or 17 who is your driver’s license. All you have to do is put a chip on it. This is the technical basis for secure communication. It’s a federated system, but you can connect them.

But most of the people interested in what [Estonia] was doing are also not in the United States or in Europe. Mostly it is somewhere else, in countries that want to move forward. I am amazed at the degree of complacency in most of Europe. It’s the same here [in the US]: “We are the most technologically advanced country because we have Apple.” People don’t understand that this is a complete joke for people who … there are still tons of Estonians in Silicon Valley. We get together every couple of weeks and [talk it over].

To enroll my daughter in school, I had to bring a photocopy of my electricity bill. To prove that I live here. What!?

Ok I did it. [I needed to give] permission for her to go to regular [non-ESL] class. They said, “Okay, sign these two papers, leave one at the school office and take the other to the school building.” I come, and there is a line of fifteen people. I said, “Oh, I just have to give the piece of paper.” And then the last person in line turned around and said, “We all just need to hand over a piece of paper.”

I said, “What’s the problem?” “Well, they have to make a photocopy of them.” This was the first sign that it wasn’t quite the 1950s. Because in the 1960s, the US school system began to acquire Xerox machines. And everyone thought it was completely normal!

What are you doing to preserve and develop the legacy of your work in Estonia?

I travel around the world describing what we have done and how to do it, because so many countries are interested.

The problem is that [many countries] want to buy a lot of things. They think they can just buy it. And this, of course, is completely wrong. If you want to digitize, the first thing you need is the political will to make all kinds of decisions that are not so easy. Then you need to get a bunch of smart people together to come up with a policy of what you are going to do. Then find out what laws you need, then submit them to parliament, and you hope that what is passed by parliament will be reasonable. Then you need to create a regulatory framework.

And how long do you travel?

It goes up and down. But I would say maybe three or four days a month, depending on who invites me. I travel when I am invited if I am interested and I do not need to fly more than 200 miles on the bus – because at my age I do not want to sit on the bus for twelve hours.

In which countries is digitization taking place?

Countries of Northern Europe. Netherlands – Singapore, it’s a completely different system, but they are digitalized.

People who have nothing to talk to me. Latin America, the Gulf countries are very keen on this.

What are their problems?

Many countries simply need to deal with connectivity issues. This is a set of problems that we have already solved. All telephony was digitized. You don’t need to build landlines these days. You need broadband for [delivery] Wi-Fi.

The fact is that many countries cannot digitize for purely infrastructural reasons. Once you get beyond that, it all comes down to political will, politics, laws and regulations.

Tell me about the e-residency program in Estonia. Who is this for?

It is part of the broader context of rethinking things that digitalization has made possible. The most fundamental aspect of digitizing society is how governance is turned upside down. Bureaucracy has always been a consistent process. Digitization allows parallel processing.

Therefore, if you want to open a business in the EU, you first need to open a bank account. Then you need to apply for a business. You represent your board of directors, which goes through all sorts of ministries to see if you can start a business. Did everyone on the council pay their taxes, speeding fines, their alimony? All this goes to different agencies, and this is a sequential process – everything goes to one place, some bureaucrat pulls out the file, looks over, says: “Okay, there’s nothing there,” churns it out, he goes to the next agency. In at least one country, it took a year and a half to set up a business. Now everyone who applies has a digital identity and all databases can be queried in parallel and we can check [everything] immediately – I mean, machines can. So you can speed up the process.

Thus, in the world of parallel processing, many things become manageable. The first and most notable is the “just one time” regulation. This means that the government can never ask you for any information it has already received. You simply identify yourself and you do not need to indicate where you live.

When I was filing my tax return, I remember one day I thought, “Wait, I have three children, only two are on the list.” Then I realized: “Oh, my son is no longer a dependent, because he turned 18 years old.” All this is done [automatically].

You acquire this mindset when you leave the 5,000-year history of bureaucracy. In the digital world, [identity] is not necessarily geo-linked. If we know who you are and we have all the data that is required from an Estonian resident to open a bank, why can’t you [do it if you are] not a resident? We take your fingerprints – which we don’t do with Estonians – we do our due diligence. As far as we can tell, you have no criminal record. Why can’t you open a bank account and start a company?

Who would do it? This is not a problem in the EU. People in the EU don’t really get anything [not yet available to them] from [Estonian] e-residency. However, if you are a Ukrainian software company and develop software for the Western world, PayPal hasn’t been working in Ukraine lately. So, you are establishing e-residency. Estonia is in the European Union, Paypal works there, you can receive money there.

Say you are in the UK! From November 1st, you are no longer in the EU. If you’re a big company like Jaguar, you already own a brick skyscraper in Frankfurt, Paris or Brussels. But if you sell, say, handmade wallets over the Internet – I know someone is making a million pounds a year from this – what the hell are you going to do? You will be faced with tariffs. So, you want to settle within the EU without moving there, building buildings there, and without applying for a residence permit. You just open a bank account in Estonia and register in Estonia, and here you are – an EU company.

This is not e-citizenship. You have no political or social rights, no social security, no unemployment. However, you pay taxes for your company in Estonia. This is a benefit for Estonia.

Was there an international rebuff? Countries feel like you are stealing their taxes?

Lithuania is copying it! I saw no resistance [to taxes]. The only real problem was that Western banking authorities did not always understand this. This is rather strange because in this country anonymous shell companies can buy real estate. You can be the consigliere for the biggest mobster, or you can buy an apartment through an anonymous shell company in Trump Tower.

While we do KYC – know your customer. We even have their fingerprints. Laundering money when you know who is doing what is difficult. We do not give you anonymity.

Are other countries trying to do the same?

Countries like Estonia and Lithuania are more impatient, perhaps because they are nimble, but definitely hungrier than the old established countries. It is difficult to get some of these large European countries to move because there is not enough political will.

What were your other responsibilities and initiatives as president?

I had a long-standing belief that a truly advanced society should have a strong civil society, and that was the implication of almost everything I have ever said. And various studies have shown that we are one of the strongest civil societies in the post-communist world. On the same level as Western Europeans.

And what are you doing for this?

I don’t know if this has anything to do with me, but at the time I insisted on it: I was promoting not just digitalization, but digital literacy and the need for everyone to have some understanding of STEM.

This does not concern me, but according to the PISA rating Estonia is ranked in [one of the best] non-Asian countries every year in mathematics and science education at the secondary school level. This is a competition between us and the Finns. I don’t know if this is related to educational systems or that we have such a strange language.

The United States, for example, has shown some rather bleak results from this study. Mainly [estimate] overlaps with high-income countries. And you’d be surprised how bad countries like the US and the UK are doing.

[Estonia] is a non-executive presidential chair, so you are more of a moral decree than anyone else. The worst situation I faced was in 2007, when a massive cyberattack from Russia took place on us. And riots. I had to go to calm people down.

And there were issues that the government did not want to touch, because they lacked political will. One of them is aid to Greece, I understand the government. we had to ratify the EU agreement on aid to Greece. Publicly, the problem was that the average wage in Estonia at the time was below the minimum wage in Greece. In Greece, the retirement age was about 50 years, while in our country it was 63 or 64 years. And the average pension in Greece was very high compared to what we received. Obviously it wasn’t easy.

Parliament was supposed to vote on it, but the government said, “Why don’t you talk about it?” So I did! I gave this speech in parliament, telling them that this is what we have to do, and they basically bought it. But he was not popular, for which I was criticized. The same thing happened with the law on partnerships, a civil partnership for all, so that gay people can create civil partnerships instead of marriage. I insisted on this – talked about why it was necessary and what is good. To this day, I am reviled for it. Now we have a strange government far away, and I am bête noire for them.

Are you still doing this? That some of these ideas still haven’t received the same marks that you have done in many of your other works?

None of this gets any appreciation! Only abroad, not in Estonia! Domestically, it’s a real shock for them that I get a decent amount of money everywhere to talk about things they can’t [believe what I did]. This is the Bible: no prophet is accepted in his hometown.

Do you think over time the country will come to you and appreciate your work?

I don’t know if they will ever be. Of course, success always has a million fathers. You just have to accept it.

What was your day-to-day presidency like? Where is what is going on?

It is a kind of functional office building, two-story, built in 1938, called the Palace. Eighty-five percent is office space, and there is a small apartment there. Everyone says: “Oh, he lives in a palace!” It’s like a weaving.

I had a large office room – turned into an office, because before the war the president did have a palace. My apartment was the aide-de-camp’s.

[The president] had this big office, but it’s all in a historical state of affairs, so nothing can be touched. I couldn’t even plug the computer cable in there. I couldn’t use Wi-Fi for security reasons. It was strictly ceremonial when I greeted a guest, sat down with him.

There was another room with a large meeting table and a couple of other meeting rooms. Obama comes and visits, and he sits on one side of the table, I sit on the other side, what you always see in photographs.

But my office was just a room with my computer. Wherever I am at the computer, this is my office.

Who was in your state?

I had advisers, two foreign policy advisers, one of whom worked with the EU and the other with others. Security Policy Adviser for NATO Staff. The press service, consisting of three people: a press secretary, a typical journalist and a registrar.

I had a lawyer who checked all the laws. One of the prerogatives and responsibilities of the president is to promulgate laws or to veto. I can veto laws not politically, but because they somehow violate the constitution. Therefore, you need a very smart advisor.

Then there were people who were engaged in domestic politics. I spent a lot of time visiting all the municipalities in the country.

For a while, my digital advisor was the former CEO of Skype. And then he moved to the USA. So [then] I met regularly with the CIO for the country.

Was that the official name?

No, but functional. Bureaucratically, he was “Deputy Minister of Economy” or something like that in the Ministry of Economy, but his functional role was much higher than that. We cooperated on all issues because the digitization process was not always obvious to the government.

So we talked about these changes that you have made in general in government policy.

I didn’t really change it, I just nudged. I had no executive branch, but I had a badass.

Have there been internal changes and digitization in your office?

I asked for digital signatures to be used to publish laws. In the US, the president signs a law, gives a pen – pens – to the people [who supported him]. We have the same. But I said our thing is the digital signature. Why am I not publicizing or rejecting laws with a digital signature?

Is this more than just a ceremony?

No, it was a real change! Signing something digitally takes a little longer than signing something physically, but the rest of the paper process is much slower. A digital signature takes a minute, but from now on it exists – it doesn’t need to be sent anywhere.

A prime example is that two years ago I ended up in Asuncion, Paraguay. I received this letter from my bank, I forgot to sign the contract. For example: “If you don’t sign it within the next 24 hours, forget about it.” I find wifi, pull out my ID, my token, sign it and I was saved. In the paper world, there is no chance that he would have got there in time. At best, I would have to deliver it to FedEx.

You talked about “calming people down” in connection with an unpopular initiative. What does this look like in terms of encouraging civic participation?

We had one case in 2011, if you look back, it was insignificant, but all kinds of people were very dissatisfied with the government and the executive branch. I had such a crazy idea, I applied Fishkin’s technique of deliberative democracy. You get a lot of people together to discuss problems. First, all together, and then in small groups. Ultimately, you move towards the center, towards more rational solutions.

Using the identification system, we asked people to submit their proposals for management reform. We had a lot of [opinions], and at that time we could not [analyze] them with machine learning yet, so we asked university professors to analyze them all and categorize them. You can only do this if [everyone] introduces themselves so as not to troll. Fishkin did this all over the world. You introduce a representative group, in our case about a thousand people.

We invited them following the demographic profile of the country, [urban and rural], different parts of the country, different ages, different ethnic groups, and so on. And then they discussed all these issues. And got – in terms of polls – some conflicting results. They have been turned into legislative proposals. And presented them to parliament. Parliament voted for them. Most of them, of course, voted against, but some of them [passed], including one about the minimum size for creating a political party. Which, of course, turned against everyone with a liberal mindset, because it allowed registering a tough right-wing party, which is now in government.

A familiar story. Speaking about unforeseen consequences, you talked about security measures for these citizens. Was the Russian cyber attack targeting this data?

Well, they never made it. They never hacked anything. [It was just] a DDOS attack. They were just trying to close everything. Moreover, if you write the history of cyber war, the military part will start from Estonia. If you take Clausewitz’s definition of war – the continuation of politics by other means – this is the first time that a nation-state has clearly done anything like this. Before that, everything was done: all types of primitive hacking took place in the 80s, more sophisticated ones – in the 90s and early 2000s, but it was always secret, sub rosa. It was revealed.

Would you say that the result showed the strength of the system or any flaws were found?

On the whole it was positive, it was a complete own goal. We have already, many years before, [told] our NATO allies that you have to deal with cyber [security] issues. Almost everyone disapproved of us. After this happened, it quickly became apparent to NATO members that they had to tackle these issues. As a result, NATO opened a Cyber ​​Defense Center of Excellence in Estonia. I mean, it’s funny!

Do you have any concerns that this data, which is so useful in the hands of a responsible government, will become a burden for an irresponsible government?

Well, as long as you obey the law, this is not a problem. All of this is strictly regulated in terms of who has access to what. And no government with any responsibility will go that far because the system is based on trust. And if this trust is broken, the system will fall apart. Estonia is simply becoming another former Eastern European country that has not been digitized. If people don’t use it, it doesn’t digitize.

And of course we have constraints built in. We have two types of data: personal data and public data. My property records are public, all property records are public, so anyone can request what I own, but I can also see who is requesting. Once a month in my country, newspapers wrote: “Wow, what belongs to him?” and you could see it on the list.

There is the equivalent of a visa court where a judge can authorize observation of [data] without [informing]. But as long as we have a high level of the rule of law – and we do this, the international organization dedicated to the rule of law puts us 11th in the world and 6th in Europe. The USA is behind us. So I’m not that worried.

Tell us more about your current job at Stanford.

What interests me most is how democracy survives in the digital age. What comes with ubiquitous connectivity: A cheap smartphone is giving internet access to four or five billion people. And Facebook decides to move to [mobile first], which means about two billion people think Facebook is the Internet.

I post news [on] these issues on the Medium page : what Facebook is doing, who has been hacked, what is privacy legislation. The question is, what are you doing with it, how are we going to conduct elections with all this manipulation, be it on the digital level or manipulation of information.

What are the next steps to digitize nationally and internationally?

There is still a lot to be done in the United States, but in Europe, for example, eight years ago I suggested to the President of Finland that since they adopted our model in Finland, and we have electronic prescriptions and they had electronic prescriptions, it was obvious to do so. its compatible.

Every year we are visited by eight million Finns and only five million Finns. (We receive many repeat visits.) [Already] your prescription is [digitized] in Estonia. The doctor writes a prescription and you can go to any pharmacy in Estonia, digitally identify yourself and get the medicine. So why don’t we [make it] compatible?

It took almost eight years for this to work. This goes back to my main thought about digitization – it is not digitization.

To avoid arbitration, you shouldn’t be able to buy anything cheaper because you are buying it overseas. So, okay, we subsidize certain drugs in Estonia for certain age groups for a certain amount, and they [subsidize] different age groups for different amounts. Finns go to Estonia to buy alcohol at a lower price, and this cannot be done with medicines.

The technical side [of ensuring interoperability] would take a week, two, maybe three weeks. But it took eight years due to other problems. It’s all political and normative.

Taking this as an example, the next challenge for the European Union is to digitize to the level of Estonia and then make these services compatible. So if I go to Spain and lose my cholesterol medicine, I can just email my doctor, he will put it in the system and I will go to a pharmacy in Spain and get it. Or, if I get sick in Greece, I go to the doctor, I give the doctor access to my digital medical record, and he gets everything in Greek, because he doesn’t expect to know Estonian.

This would be a big step forward. The most popular thing Europe has ever done for its citizens is the Schengen area, which allows you to move seamlessly from country to country without an ID. This will be the next level for me as a European.