Ukraine is “building the most convenient digital state in the world — without corruption, without bureaucracy, absolutely paperless, and open for everyone.” And the UNDP, like USAID, is fully on board.
Through its “Diia” digital ID and governance platform, launched in February 2020, the Zelensky government seeks to create a system that will make Ukraine the most “convenient” State in the world. This is what Ukraine’s Minister of Digital Transformation and Deputy Prime Minister Mykhailo Fedorov told participants of the 2021 edition of the WEF’s Young Global Leaders program, of which he is an alumnus. He is also a graduate of the NATO Educational School in Kiev.
Diia is today used by close to 19 million Ukrainians and has nine digital credentials on its platform: the national ID card, the identity provider (IDP) certificate for network access, birth certificate, passport, driving license, tax number, student card, and vehicle registration certificate.
Accelerating Ukraine’s Digital Transformation, Even During War
Ukraine’s Diia system was recently the subject of a gushing article by the United Nations Development Program. Titled “The World is Very Turbulent, and You Adapt,” the article lays out how Ukraine is accelerating its digital transformation, even during war:
Despite being plunged into war, Ukraine is forging ahead with a comprehensive re-think of how business is conducted, and how Ukrainian people interact with each other and with their government.
“We are building the most convenient digital state in the world — without corruption, without bureaucracy, absolutely paperless, and open for everyone,” Ms. Ionan [Ukraine’s Deputy Minister of Digital Transformation] says.
The online portal and a mobile application for public services is called Diia, which is Ukrainian for ‘action’.
It aims to move all public services online, cover the entire country with internet access, close the gender and generational gaps in digital literacy, and make Ukraine the most welcoming country in the world for IT companies.
The claim that Ukraine’s digitised system of governance will transform the country from one which until recently (i.e., before the war) was widely spoken about as one of the most corrupt in Europe into one where corruption ceases to exist is altogether, of course, risible. So, too, is the notion that an “absolutely paperless” bureaucracy is somehow a desirable outcome despite all the inherent security risks. Also, the idea that Ukraine will become the most welcoming country in the world for big tech companies once the Russian bombs have stopped falling seems a little far-fetched. For a start, it assumes that the West will retain significant control of Ukraine once the dust from the war has settled.
That’s not to say that Silicon Valley big tech companies and large financial institutions are not heavily involved in Ukraine’s Diia project. After all, the purpose of Diia is not just to digitize public services but to automate, outsource and privatise them, as Fedorov told the WEF’s 2021 class of Young Global Leaders:
The Government needs to become as flexible and mobile as an IT company, to automate all functions and services, significantly change the structure, reduce 60% of officials, introduce large-scale privatization and outsourcing of government functions.
The government has been true to its word. Ukraine’s e-banking system is predicated on a Memorandum of Understanding with Visa while an electronic census is run by Apple. Amazon Web Services used its AWS Snowball — a petabyte-scale data transport service that uses secure devices to transfer data into and out of the AWS Cloud — to help Kiev migrate huge troves of data from multiple ministries to Poland in the early days of the war, picking up a Ukrainian peace prize in the process. Meanwhile, Google is effectively running large parts of Diia, as Fedorov proudly admitted last December:
“Google services have become our infrastructure. The tools provided by the company allowed the Government to function quickly and efficiently despite the shelling and constant threats of cyber attacks. In addition, Google ensures protection and security of Ukrainians’ data and promotes development of our entrepreneurs. On the other hand, the company pays great attention to human capital. In particular, it supports the initiatives of the Diia Digital Education project.
“State in a Smartphone”
In its article, the UNDP does not raise a single concern about the Zelensky government’s “State in a Smartphone” model of digital governance, which includes plans to hold local, parliamentary and presidential elections through the Diia app — an idea that was endorsed way back in February 2020 by Washington-based think tank the Atlantic Council as a means of “greatly reduc[ing] the scope for electoral fraud” in the country.
Yet just two months later the American Association of the Advancement of Science issued an open letter to US governors, secretaries of state and electoral boards urging them “to refrain from allowing the use of any internet voting system” warning of possible vote manipulation and numerous security vulnerabilities, “including potential denial of service attacks, malware intrusions, and mass privacy violations, remain possible in internet voting.”
A group of Ukrainian cybersecurity analysts have flagged a host of other concerns including Diia’s potential for use in frauds and scams; the lack of an account disabling option; its exclusionary effects (some citizens cannot afford or do not know how to use the Diia app); its dependence on an Internet connection and a functioning electricity grid (currently not the case in Ukraine, or for the foreseeable future); and the lack of transparency and accountability of the organizations running the app. The app also creates an excessively centralized form of governance as well as a highly automated system of social and economic control and exclusion.
As the even the World Economic Forum, one of the world’s biggest supporters of digital IDs, admitted in a 2018 report, while verifiable digital identities “create new markets and business lines” for companies, especially those in the tech industry that help to operate the ID systems while no doubt vacuuming up the data, for individuals they (emphasis my own) “open up (or close off) the digital world with its jobs, political activities, education, financial services, healthcare and more.”
None of these concerns get a mention in the UNDP article. Instead it is full of effusive praise for Ukraine’s bold experiment with digital governance. At one point Ms Ionan is quoted as saying that her goal is to “make everyone fall in love with digital:”
We want this communication between citizens and government to be a few clicks and that’s all. You don’t need to spend some time standing in some queues, waiting for some paper. It’s nonsense.
The article concludes by stating that “Diia is ready to go international, and Ms. Ionan is eager to share Ukraine’s knowledge and resources with the world.”
Exporting Diia
A slightly closer look at the article reveals why UNDP is so enthusiastic about Diia. In small print under one of the photos is this disclosure:
“The UNDP, with funding from Sweden, supported the development of 23 e-services, which were launched by the Ministry of Digital Transformation of Ukraine on the Diia app and portal.”
Diia also receives funding from the European Union’s eu4digital initiative and USAID. As readers may recall, USAID’s administrator and inveterate neocon Samantha Power announced at this year’s Annual Meeting at Davos that Washington is hoping to export the “success” of Ukraine’s e-governance digital identity app, Diia to other countries around the world that are struggling with corruption.
Power was joined on the panel by Fedorov, who thanked USAID for all the help it had given in setting up Diia. That help included purchasing and delivering tens of thousands of Elon Musk’s Starlink wireless broadband terminals so that the Diia app could continue to function even as war descended on Ukraine. But within weeks outages in the communication devices were being reported across the country, making it impossible for many people to use the government app.
Fedorov also said that Kiev is ready to share its “expertise with other countries, because digitisation is the foundation of transparency and democracy,” which is probably news to most readers.
Ukraine’s digitization of government services predates the conflict with Russia but as I noted in my post, USAID Quietly Unveils Plans to Export Ukraine’s Digital Governance Model Around World, it has been significantly expanded since the hostilities began, in the eternal spirit of never letting a good crisis go to waste:
Just as the combat theaters of Iraq and Afghanistan served as testing grounds for the mass harvesting and storage of sensitive biometric data, some of which fell into the hands of the Taliban when the US abandoned Afghanistan, war-torn Ukraine is being used to pilot the rapid construction of an all-encompassing digital governance system.
That system is now being exported to other countries. One country that is currently working to replicate Ukraine’s digital ID system is Estonia, which is already one of the world’s most digitized countries. As Estonia’s Prime Minister Kaja Kallas noted a few months ago, the move represents a “new chapter” in the two countries’ digital cooperation.
#Estonia tests new government app based on Ukraine’s #Diia – great example how governments share and build technology together. It's also a new chapter in our digital cooperation.#Ukraine has built a stong digital government. State and services are running well also during war. https://t.co/BhUx2ZLIlO
— Kaja Kallas (@kajakallas) January 18, 2023
Big Moves on Both Sides of the Atlantic
Both the EU and the US are scrambling to set up their own respective digital ID and government systems. At the same time their central banks are working around the clock to develop a digital euro and a digital dollar. The two go hand in hand together. In 2021, the FT noted “it will be nigh on impossible to issue [retail CBDCs] outside of a comprehensive national digital ID management system.” Then, a few weeks ago, Christine Lagarde admitted in a telephone conversation she thought she was having with Zelensky but in fact was having with a notorious prankster that a digital euro will be used to control what payments people can make.
Also, the fact that governments around the world are developing central bank digital currencies without fully thinking through their potential ramifications is hardly comforting. As the managing director of the International Monetary Fund (IMF) Kristalina Georgieva recently admitted, the world would see a very “significant transformation” as a result of retail CBDCs:
We think that wholesale CBDCs [which are meant to be used in inter-bank settlements] can be put in place with fairly little space for undesirable surprises. Whereas retail CBDCs, they completely transform the financial system in a way that we don’t quite know what consequences it could bring.
By next year all EU member states will have to make a Digital Identity Wallet available to every citizen who wants one, providing (in the words of the European Commission) “a powerful enabler of digital operations that require cross-border identity recognition”. On the other side of the Atlantic, unbeknown to most US citizens, the US Senate Homeland Security and Governmental Affairs Committee recently passed the Improving Digital Identity Act by 11 votes to one. The legislation now awaits debate at the full Senate.
If the legislation is passed, setting up the necessary infrastructure should be relatively easy. Speaking on a panel about Digital Public Infrastructure (DPI) at the IMF’s Spring Meetings a couple of weeks ago, India’s digital ID architect and Infosys co-founder, Nandan Nilekani spelled out what every nation will need to build their own digital public infrastructure (DPI):
If you think, ‘what are the tools of the New World?‘ — Everybody should have a digital ID; everybody should have a bank account; everybody should have a smartphone. Then, anything can be done. Everything else is built on that.
"What are the tools of the New World? Everybody should have a digital ID; everybody should have a bank account; everybody should have a smartphone. Then, anything can be done. Everything else is built on that": @NandanNilekani to @IMFNews #DigitalID #DigitalIdentity #IMFmeetings pic.twitter.com/6HIAqfBigz
— Tim Hinchliffe (@TimHinchliffe) April 19, 2023
The United Nations is also playing a leading role in promoting digital identity and digital governance systems around the world. In September last year, the 77th session of the UN General Assembly hosted an event titled “The Future of Digital Cooperation: Building Resilience Through Safe, Trusted, and Inclusive Digital Public Infrastructure.” The event brought together “high-level representatives from governments, civil society, the private sector, philanthropy, and international organizations” to discuss ways of “scal(ing) up efforts to build safe, trusted, and inclusive digital public infrastructure (DPI) for a more sustainable, equitable world.”
The UN Secretary-General António Guterres hailed the event as “an opportunity to set in place building blocks for a bold vision of inclusive Digital Public Infrastructure that leaves no one behind and accelerates implementation of the Sustainable Development Goals.”
The initiative’s four sponsors — the Bill and Melinda Gates Foundation (who else?), the Kingdom of Norway, the government of the Federal Republic of Germany and the EU’s Horn of Africa Initiative — pledged $295 million to “support the development and adoption of inclusive DPI (digital public infrastructure), scaling technical assistance, and deeper capacity building.” The event showcased “pioneering” DPI initiatives being rolled out in countries around the world, including Estonia, Norway, Peru, Sierra Leone, Singapore, Timor-Leste, Togo, India, and, yes, Ukraine.
But who is leading the charge here: the United Nations or the World Economic Forum?
This is a hugely important question given the influence the WEF wields over the UN today after signing a strategic partnership agreement with the multilateral body in June 2019 “aimed at accelerating the implementation of the 2030 Agenda for Sustainable Development.” As the International Network for Economic, Social and Cultural Rights, which connects over 280 NGOs, social movements and advocates across more than 75 countries, warned at the time “the agreement gives transnational corporations preferential and deferential access to the UN system at the expense of States and public interest actors.”
A few months later, Yves cross-posted a stark interview with Harris Gleckman, senior fellow at the Center for Governance and Sustainability and the author of ‘Multistakeholder Governance and Democracy : A Global Challenge,‘ who described the agreement as a betrayal of “We the Peoples”:
The UN Charter starts with the words “We the Peoples”. What the Secretary-General is doing through the Global Compact and now through the partnership with the World Economic Forum is tossing this out the window. He is saying: I’m going to align the organization with a particular structural relationship with multinationals, with multistakeholderism, and set aside attention to all the different peoples of the world in their particular interests of environment, health, water needs and really talk about how to govern the world with those who have a particular role in creating problems of wars from natural resources, of creating problems relating to climate, creating problems relating to food supply and technologies.
As I document in my book Scanned, the WEF has been pushing for the roll out of digital IDs since at least 2018, when attendees of its Annual Meeting in Davos — including representatives of the world’s biggest banks, corporations and tech companies — “committed to shared cooperation on advancing good, user-centric digital identities. Since then,” the resulting report notes, “a broader group of stakeholders have joined the conversation: experts, policymakers, business executives, practitioners, rights advocates, humanitarian organizations and civil society.”
Their vision is now unfolding before our eyes, and one of the biggest testing grounds is war-torn Ukraine.
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The UN is now officially beyond parody.
As for the imprimatur of the world’s biggest banks, didn’t one of them just nearly collapse in Switzerland?
“The app also creates an excessively centralized form of governance as well as a highly automated system of social and economic control and exclusion . . . [and] will be used to control what payments people can make . . . Then, anything can be done.”
And there you have it. Orwell was just forty years or so out in his forecast.
yup, this is how you control information, this is how you continue to issue lies, propaganda whilst shutting up anyone who tries to let you in on the truth. No more free comments on forums, news comment sections, everything will be linked to your ‘digital ID’ everything traceable to you and then your CDBC stops getting paid until you comply The future is compliance, the future is fake smiles, fake news, fake money, a brighter, shinier new fake you.
All of this still assumes that the cost of entry is paid for by the citizen, who has a smart phone and access to the platform via data. And forget it if you are deemed a criminal in the society you live in by the state. Congrats, your access to all of this information will be denied!
Despite what the article implies, the Ukrainians didn’t invent open source digital government, it’s been around for a while – many municipal governments have tried to implement various kinds of it, the Canadian government has been toying with the idea.
Even during Occupy Wall Street one of the key driving concepts was Parecon, participatory economics, economics based on direct participatory democracy – where the traditional problem is we’ve constructed society based on distant people in distant cities making decisions that impact all of us, with almost nobody having any say or influence in those decisions, let’s instead restructure society in a way where we can influence decisions, where power isn’t concentrated in the hands of a few, instead weighted toward people having more or less influence depending on how much they are impacted by a decision. And let’s also rejig the economy to instead of using money, we use credits for labour, etc.
Basically, let’s remove solve for the problem of power.
As you can imagine, the only way to reasonably implement Parecon would be digitally.
The Ukrainians didn’t invent it, but if they pull it off and it spreads across the world then that would be good. I think it’ll have kinks to work out but it’s a good idea, so I’m on board.
A further thought, it may literally be the only way for the Ukrainains to solve their deep corruption problem, assuming they implement it as I’ve described – which I seriously doubt. Power won’t give up easily.
Trust the algorithms?
It’s not like that. If done open rather than closed source then anyone can review the code to ensure it’s not doing anything sneaky. In the implementations I’ve seen it’s a referendum and voting mechanism which should allow ordinary people review the government’s documentation and presentations on a topic or issue, assess the information at hand, read the transcripts or watch the presentations if desired, then to cast a vote on a given issue.
No doubt at all malicious states and actors would try to hack it. But the vote is already hacked, so this is still something of an improvement, makes an attempt to take power away from the powerful, return it to the powerless.
The alternative is people don’t get to have a say at all, that we entrust all decisions to corrupt representatives? This is better no matter how you slice or dice it, the only drawback is actually the tyranny of the majority problem, which is something we’ve seen with Switzerland’s form of direct democracy – it has tended to have a racism problem, reinforces bias and prejudice.
Assuming existing power would allow that is, imo, like the quit about economic models: “assume a can opener.” (see the Twitter Files). / ;)
What does “open source digital government” even mean? Parecon sounds warm and fuzzy – but again sounds like a bunch of buzzwords thrown together.
Russia seemed to switch to “digital visas” in an effort to fight corruption endemic to their visa bureaucracy – but I don’t think there is any silver bullet. Ukraine actually joining the EU would fight corruption the most, but then lets be honest about the fact that what we want is for Ukraine to resemble post-NAFTA Mexico, right?
This is a really great post that Nick has put together but there is one thing that I would note. It’s crazy. It’s nuts. This could even be turned into an article by The Onion or the Babylon Bee. They are testing this system in what is the most corrupt country in Europe – and that was before the start of the war and the inflow of tens of billions of dollars. The electrical/internet grid is only still working at the indulgence of the Russians and the opportunities for gaming this system are mind-boggling. And it is not even half the population that is signed up for this. Nick has stated that 19 million people are signed up for it but the population of the Ukraine was once about 45 million people. And under the Zelensky regime, I can see political dissidents finding their accounts being deleted leaving them in never-never land. And this is the system they want to foist on the rest of the world?
Yes, they do. They are deadly serious about it.
TBH I doubt the population of Ukraine is even 19 million today.
> It’s crazy. It’s nuts.
And everybody with an “In This House….” sign on their front yard is going to buy in with no resistance at all. Then they’ll stigmatize those who don’t.
I tend to support it but I acknowledge that would be a key weakness – if a government is able to delete accounts then yeps, it doesn’t work at all. For it to work there would at least need to be a law on the books preventing the government from removing ANY citizen. And it’s extremely likely the Zelenskyy government will try to remove all Russian-Ukrainians. And if the model were applied elsewhere, Israel for example, we can see Israeli-Arabs and Palestinians being excluded. This aspect would need to be controlled for or it’s useless, otherwise it would be wonderful.
Whereas retail CBDCs, they completely transform the financial system in a way that we don’t quite know what consequences it could bring.
I’m pretty sure I know what consequences it will bring, civil war and an underground payment system. Silver retail premiums are outta sight right now. Dealers can barely keep stock to fulfill orders and there are longer than normal delays on fulfilling orders because of the volume of demand. The cheapest you can buy 1 oz of silver is $4 over spot, circa a 16% premium. American Silver Eagles are selling for $19 over spot. That is a 73% premium. YT is littered with silver bugs predicting doom over CBDC’s, and the banking crisis is giving them plenty of new recruits. Gold is still easily obtainable at 5% over spot. Reading between the lines, it would appear that there is a high demand now coming from lower income classes preparing for the worst.
These online financial governance systems are also being developed by crypto proponents and that has frightened the central banks into making their own systems. They can then ban the crypto versions, which are built on a fixed quantity of tokens, and replace them with fiat versions where inflation can still be used as a form of unseen taxation. There are still problems with the technology in both versions of digital governance since the poor and elderly often won’t have the ability to use smart phones or keep them running.
John Ray: the poor and elderly often won’t have the ability to use smart phones or keep them running.
Not only them. When I was last in the US two years ago, I lived in a county just outside the inner SF Bay Area when wildfires took off and burned down some of the electrical infrastructure.
This was one of the richest counties in the US and the damage was only partial. Nevertheless, in even the richest communities, when there’s no electricity to charge the Teslas and cellphones — to run from the fires or to call for help — or to power the air-conditioning systems in your house and the ATMs to get your cash out of the banks, it’s very obvious how stupid an idea reliance on these online systems of governance is, and how very vulnerable they are to being knocked over.
As for cryptocurrencies, I think I understand the deep social urges behind cryptoculture and that, for all it may arguably be a Ponzi, it isn’t going away, which is something many here on NC haven’t got their heads around. But everything that can be said about TPTB’s online financial governance systems’ vulnerabilities applies to cryptocurrencies in spades.
One of the reasons I think this is more or less a done deal is that the various “risk” analyses I read of CDBCs, while listing privacy and even control concerns, “never” mention power outages or even hacking (except, I suppose, under the heading of fraud). Yet rolling power outages simply due to supply inadequacies are becoming common and power outages due to disasters aren’t infrequent.
As for the poor and elderly, they’ll just be issued limited-function phones for free and given help using them, also for free. If it doesn’t work out for them, it will be their fault. If it does work, it will only be within the parameters of their limited-function phones.
I hope I’m wrong.
Will Americans who can’t afford food or housing in a country with poorly maintained electrical grids need to buy a smartphone? Maybe San Francisco’s City Hall will start handing out solar powered phones to the homeless living right across the street or go to the Tenderloin about three blocks away.
In the rush to control the peons, they don’t seem to have put any thought on how to keep society or the infrastructure stable and functional. More evidence of magical thinking maybe?
Whenever you hear the word “convenient,” run away as fast as you can.
The thought occurs that if this CBDC virtuosity can “prevent “ unwanted payments, unwanted transactions, it is in an effort to put up a firewall between western currency settlements from other settlement systems. And Ukraine is the perfect place to set it up. It will be a blunt instrument with all the charm of a computer multiple choice questionnaire which comes to absurd and useless conclusions not just once but always, sending all transactions to be processed by the federation of CBDCs that want to be isolated. Then the next thought – if it can prevent settlements between antagonistic systems it can also facilitate new age barter. It’s just an app away to eliminate currencies and rules altogether and create a big online auction and delivery service. But that part will never happen because finance is an industry without anything to barter. And the whole enterprise is a scheme to protect finance. Or so it looks. Specifically at this point to prevent the Euro from transactions with the EAEU.
Notice how all these “neat” new tools that are supposed to make life better around the globe are always launched first in countries that are among the poorest and most unstable, and that have the sketchiest governments?
For another example, observe how many “research biolabs” are set up in countries where it would seem that security problems would be paramount. There are at least a dozen such labs in Ukraine, and just recently we were warned about the “biohazard threat” to the globe presented by such a lab that was in a battle zone in Sudan?
If all this stuff is going to be such an obvious benefit to the world, why do they always work on it first in places such as these? One would think we’d want to pursue this stuff first in advanced nations with stable governments and security situations. Unless it is believed there would be too much resistance from the public, of course….
Less rules in sketchy 3rd world countries, and ‘baksheesh’ can accomplish miracles. I read a book by a guy whose job was inspecting Indian drug factories for American pharmaceutical firms–no surprise–they had endless ways of evading the rules. When I lived in India, I recall the phone company came and disconnected the lines just before Christmas so everyone would bribe them to reconnect.
Thanks very very much to Nick for an excellently constructed piece. And the thoughtful and astute commentary.
Some feedback I consider valuable and which I hope readers absorb to share for posterity. It is :
‘always read the legislation’
My example. In recent years Australia implented a digital surveillance program for travellers entering the country. Regardless of nationality, those arriving at an international airport needed to have completed an onerous digital questionnaire about their lifestyle and associations, by smartphone, and scan their passport for verification (with the phone. Not sure how that functions). Plus take and upload a self potrait ‘to prove they are out of the country’
All of this information would be stored forever, in a centralised database, and would be freely shared and accessible to basically anyone that asked. These facts were easily discovered in the fine print.
This system has since been disbanded. It started with a paper form that was then replaced by an electronic version, that regularly didnt work.
Friends leaving Australia on trips were very concerned about this process of data harvesting. I looked into it on their behalf and made some surprising discoveries. Firstly, airlines had paper versions of the process available but were keeping it quiet. In no official source was there any suggestion the older paper versions could be used or still existed.
Secondly, all government spokespeople and websites, screamed the new e-system was mandatory and anyone not complying before arrival in Aus. faced imprisonment and fines. It literally said this on the Australian government Department of Home Affairs. I read everything I could find to educate myself in order to help my friends travelling.
Then I read the legislation. The Migration Act, 1952 or something. Which included the amendments since, including for this new questionnaire.
VOLUNTARY.
It explicitly said “the new system is voluntary’ ‘ at no time can it be mandatory’ “at no time can it be mandatory to require more information than what is stated in the basic provisions of the original Migration Act for arriving travellers, namely, country of origin and name’.
It was so explicit! Everyone was lying! The government websites were lying! It was not and could not be anything but voluntary! So, read the legislation!
Something missing here, or at least needing to be emphasised is the difference, in the EU specifically but presumably relevant worldwide, between ‘citizens’ for whom the digitised governance is already underway, and those with various forms of residency / visa licence.
This comment addressing the push / pull aspect of the discussion but leapfrogging privacy concerns.
Many of these, spun out from Brexit or Visa access programmes and officially registered in that EU member state (i.e. not migrants shooting through), are computer literate and online – particularly if entering as Digital Nomads.
Yet a 2 tier heirachy means that, although presumably registered on multiple databases already, they cannot access their ‘digital’ administration system and need an ‘expensive’ lawyer or some other ‘professional’ to make arrangements that a citizen can do with ease at little or no cost.
EU member states need to incentivise (the pull) these outsiders to come on board but at the moment are ‘pushing’ many away from citizenship with, in differing degrees, requirements for a minimum amount of inward investment, specified periods residing in that country and language proficiency.
I sure wish someone would look into Diia, the I T city, where the elites are funneling billions