Estonia's digital society | Militants in Mozambique

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🔥. Either that, or Twitter's social media intern got tricked real good and did NOT find it amusing.

This week:

  1. 💻 Estonia's digital society: how a tiny nation emerged from the Iron Curtain to pioneer digital government

  2. ⚔️ Mozambique: a tragic tale of militants, mercenaries, and multinationals

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💻 Estonia’s digital society

By John

If Estonia’s GDP was 550% larger, and the whole country was found to have a penchant for sending illicit photos to their lovers, then Estonia would be the Jeff Bezos of countries.

I’ll start again; Estonia understood the internet decades before any other country.

The same year that the last Russian army battalions left the country, Estonia's government released a policy that set aside 1% of GDP annually as ‘stable-funding’ to turn Estonia into a digital society.

That was 1994; now 99% of Estonia’s public services are digital in 2021.

The post-Soviet development of ‘e-Estonia’ is enough to make those of us in ‘have-you-tried-turning-it off-and-back-on-again’ countries weep:

  • 1996: Developed the first e-banking service

  • 2000: Meetings of the federal cabinet held virtually

  • 2000: 98% of the population filed electronic tax returns; 95% of parking fees paid by mobile phone

  • 2001: Developed and released ‘X-Road’, the backbone of the digital government

  • 2002: Introduced a national ‘e-ID card’ and digital signature

  • 2005: Introduced ‘i-voting’ allowing citizens to vote from any computer

  • 2007: Developed the ‘KIS’ blockchain technology to digitise legal processes

  • 2009: Launched ‘e-health and’ and ‘e-prescription’, a nationwide system integrating data from Estonia’s healthcare providers

  • 2014: Introduced the world’s first ‘e-residency’ program

  • 2015: Built the world’s first ‘data embassy’

And in a major shot across the bow of my former colleagues, Estonia has been piloting a program to replace its Ambassadors with interactive chatbots.

A closer look at the key ideas

  • 🛣 X-Road

    X-Road is the software architecture upon which Estonia’s entire digital public services are built. Its overarching principle is a network of distributed silos of information with centrally managed data sharing protocols.

    Example: 'e-Ambulance' is a program that allows paramedics to enter patient vitals in the field, so a doctor in a hospital can see the data and give feedback. That data is stored within the e-Ambulance ‘silo’ - the doctor must be have the appropriate permissions to view the data according to X-Road protocols. Similarly, the paramedics in the field cannot access the hospital’s e-records without X-Road’s permission.

  • 🏠 e-residency

    Applying to be an 'e-resident' of Estonia takes about ten minutes and can be done from anywhere in the world. Once approved, an 'e-resident' can start an EU-registered company and access Estonian government services.

    Example: An entrepreneur in a country where IP theft is rampant could register in Estonia and take advantage of EU IP protections. This entrepreneur could then run the business from anywhere because, unlike most countries, Estonian ‘e-residency’ has no physical residency requirement.

  • 👩‍💻 The world’s first data embassy

    This one is wild. Estonia is the first government in the cloud. Faced with the existential risk of losing physical control of its servers, Estonia needed to back up servers abroad. But foreign countries can’t always be trusted. The problem was as old as diplomacy itself: how can a government store sensitive information in a foreign country?

    The solution? Embassies. Estonia signed a deal to declare a building full of servers in Luxembourg as Estonian soil. Now, in case of invasion, Estonian leadership could scatter around the country, or indeed the world, and continue to run the country via their laptops.

Which leads us to the bear in the room…


In 2007, Russia launched a crippling cyberattack against Estonia in response to the dismantling of a Soviet WWII statue (arguably an overreaction 🙄).

The incident was a wake-up call for the country, and today Estonia has one of the most advanced cybersecurity sectors in the world. But the broader risk remains:

The larger threat is data integrity: whether what looks secure has been changed. (It doesn’t really matter who knows what your blood type is, but if someone switches it in a confidential record your next trip to the emergency room could be lethal.)

- ‘Estonia, the Digital Republic’ by Nathan Heller in the New Yorker

While sceptics might argue that the risk of hacking outweighs the reward, the reality is that ship has sailed. Our most sensitive personal data - credit card information, health records, intimate conversations - are already digitised by private companies.

Recent Russian and Chinese state-sponsored cyberattacks against private companies exposed more of our data than governments even collect, and governments have been hacking our phone calls for decades.

It’s time for the rest of us to get with it

The benefits of a digital government are clear; Estonia estimates it saves 2% of GDP annually in reduced bureaucracy.

We save with X-Road more than 800 working years annually.

- Sandra Särav, Estonian Global Affairs Director

And by building a digital-first society, the tiny Baltic nation has turned itself into a breeding ground for world class technology start-ups (Skype, TransferWise and Bolt are just three of many).

Estonians engage thoughtfully with the risks and rewards of pioneering a digital society. And while it's true that Estonians trust their government in a way unimaginable to Brits or Americans, it's also true that good government begets trust in government.

Digital governance is the future - that isn't a prediction, it’s an inevitability. Estonian politicians understood that in 1994. The question for the rest of us is: why in 2021 do we still elect politicians who have no absolutely no idea about the internet?

💡 Data embassies are a fascinating concept - if you’d like us to explore them in more detail - let us know via email or leave a comment. Yay crowdsourcing!

⚔️ Mozambique: militants, mercenaries, and multinationals

By Helen

Last week, while you and I shamelessly gorged on years-old Easter eggs found wedged between sofa-cushions like the adults we are (it’s still good!), horrific events were unfolding in Mozambique.

One hundred militants raided the town of Palma in Cabo Delgado, a gas-rich province in Mozambique’s northeast. They hunted down civilians holed up in hotels, displaced 11,000+ people, and caused the suspension of Africa’s largest offshore LNG project which is worth a cool US$23bn.

Ten days after the insurgency broke out on 24 March, Mozambique’s military says it has finally contained the conflict. Whether the military can keep control is another question, as evidence has emerged of soldiers hiding from militants and even dressing as women to escape.

It's already looking too late to prevent the conflict’s spread, let alone convince energy investors to return anytime soon. Continued fighting is likely as neighbouring states, mercenaries, foreign government forces, and… wait for it… ISIS have all now gotten involved.

💎 Mozambique’s resource curse

In some ways, Mozambique is a textbook example of the resource curse. That’s the economic phenomenon whereby a country blessed with abundant natural resources is poorer, has worse development outcomes, and is less democratic than comparable countries without resources.

Mozambique emerged as one of the world’s fastest growing economies in 1992, after gaining colonial independence from Portugal and a subsequent civil war. Once Mozambique developed its coal and natural gas reserves, the country's annual GDP growth hovered around ~7% in the 2010s.

Mozambique’s growth has all but stalled today. Nominally democratic, the country is ruled by a group of elites with few checks and balances. In 2019, it ranked a dismal 146th out of 180 on the Corruption Perception Index published by Transparency International.

The economic benefits of its natural resource windfall are still nowhere to be seen. Food insecurity and poverty remain widespread. 70% of its 26 million citizens are still subsistence farmers with a national per capita income below that of war-torn Afghanistan.

🌾 Cabo Delgado and the radicalisation playbook

Nowhere is that felt more acutely than in Cabo Delgado. This is one of the country’s poorest regions, a majority Muslim area in the north (the south of the country is largely Catholic) with high rates of illiteracy, child malnutrition, and poverty.

Cabo Delgado’s conditions created fertile grounds for radicalisation:

  1. High unemployment: militants in the recent attack were mostly unemployed young men from Cabo Delgado with bleak economic opportunities.

  2. Marginalisation and neglect: the Mozambique government has neglected funding in this region resulting in widespread resentment amongst locals.

  3. Economic inequality: the income from the offshore LNG facility has not flowed through to the local economy. Given the country’s corruption index rating, we can only assume the profits have lined the pockets of officials and powerbrokers.

💀 Joining the ISIS franchise

It is from this heady broth of disillusionment and economic inequality that the militants emerged in 2017 as ‘al-Shabaab’. The militants initially took out their grievances on government officials via gruesome machete attacks. As the group grew, public beheadings and indiscriminate attacks on civilians became more common.

By 2019, they had grown into an armed force using automatic weapons and specialising in hit-and-run attacks. The militants have now killed over 2,700 people and displaced more than 670,000 according to UN estimates.

All this attracted ISIS’ attention. Looking to piggyback off the militants’ ‘success’, ISIS generously extended its franchise and rebranded al-Shabaab as ‘IS Mozambique’. And of course, ISIS has now claimed responsibility for the recent Cabo Delgado attacks.

What next?

  • The militants will become more strategic, targeting valuable energy projects that could give them economic power to fund future operations or funnel money back to ISIS HQ in Syria/Iraq.

  • The region will become less stable. The militants will likely threaten the nearby Mozambique Channel, where 30% of the world’s tankers transit, and recruit disenfranchised fighters from neighbouring states such as Kenya and Tanzania.

  • The US and Portugal are sending special ops forces to help train Mozambique’s military. But without long-term solutions to address the root of the grievances of local populations, the militants will continue winning the hearts and minds of the disenfranchised.

  • Investors and governments will increasingly turn to foreign mercenaries to protect their investments even as concerns remain around the ethics and lack of accountability of hiring private security forces.

  • But Mozambique’s government will do everything it can to save the LNG gas project, which is forecasted to generate billions of dollars in revenue for the state. There’ll likely be tougher crackdowns on militants and more indiscriminate killings of civilians.

Once a real success story of Southern Africa, Mozambique is now in trouble. It looks as though things might get worse before they get better.

➕ Extra intrigue

🔎 Intriguing recommendations

👩‍🦱  Helen: I couldn’t decide between the following two recommendations, so I offer both!

👴  John: I’ve also got two things for you this week friends:

  • If Russian cyberattacks on Estonia and spy thriller TV series are your thing, check out Berlin Station. Season 3 plays out what a Russian invasion of Estonia would look like.

  • Why do I, a 2021 MBA graduate, hate April Fools’ Day so much? This. It got me good. 😭

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