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“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.”
The main talking points from the past weekend’s G20 Leaders’ Summit include the struggle to reach consensus on the Ukraine war, a proposed rail transport corridor connecting Europe with India via the Middle East, the role of BRICS founding member India in hosting the event, the participation of the African Union’s 54 member states, and the conspicuous absence of Chinese Premier Xi Jinping. One issue that undeservedly garnered a lot less attention was the interest expressed by the G20 leaders in harnessing the power of “digital public infrastructure.”
“Digital public infrastructure,” or DPI, is an increasingly common buzzword in development, governance, financial and tech circles whose actual meaning is not entirely clear. The G20 Leaders’ Declaration itself describes DPI as “an evolving concept” that denotes “a set of shared digital systems, built and leveraged by both the public and private sectors, based on secure and resilient infrastructure.” DPI, it says, “can be built on open standards and specifications, as well as opensource software, and can enable delivery of services at societal-scale.”
For the sake of accuracy, I would argue that there is an additional “P” missing in the acronym. After all, as the text above acknowledges, these systems are “built and leveraged by both the public and private sectors” — and what’s more for the benefit of both, with the private sectors arguably benefiting more. As such, I would call these systems “Digital Public-Private Infrastructure,” or DPPI.
This year’s Leaders’ Declaration consists of 83 paragraphs, over 50% more than last year’s 52. Of those, seven had to do with “technological transformation and digital public infrastructure (DPI).”
Of course, many of these statements of intent will never come to fruition. Despite the seniority of its participants, the G20 ultimately functions as an informal club with no decision-making powers, and it appears to be losing rather than gaining relevance and influence on the global stage.
That said, the section on DPI in the Leaders’ Declaration is, I believe, worthy of close attention, for three reasons:
- The summit’s host nation, India is, as I will explain later, a major player when it comes to developing and implementing transformative DPI, and is now looking to export its experience, know-how and the DPI platforms and applications it has developed to other countries around the world, particularly in Africa;
- The G20’s statements of intent on DPI are backed up by a 78-page report on the subject from the World Bank, which has spent more than a decade financing digital identity programs — a key form of DPI — in parts of Africa and Latin America, with varying degrees of success;
- The US and its partners are now looking to expand and bolster the World Bank’s role in delivering “inclusive” (such a lovely Orwellian buzzword) economic growth around the world. According to the White House, it will be a “bigger, better, more effective” World Bank. As for World Bank President (and former Mastercard CEO) Ajay Banga, he says that DPI will play a key role in “governance and access” in the future.
“Access” is the key word. As the even the World Economic Forum, one of the world’s biggest supporters of digital IDs, admits, while verifiable digital identities “create new markets and business lines” for companies, for individuals (emphasis my own) they “open up (or close off) the digital world with its jobs, political activities, education, financial services, healthcare and more.”
Digital Vaccine Passports
One example of a full-fledged DPI that has already had far-reaching repercussions in Europe and far beyond was provided by European Commission President Ursula von der Leyen during her speech at the Summit:
“The trick is to build public digital infrastructure that is interoperable, open to all and trusted. Let me give you one example that is reality today. Many of you are familiar with the COVID-19 digital certificate. The EU developed it for itself. The model was so functional and so trusted that 51 countries on 4 continents adopted it for free.“
As readers may recall, digital vaccine passports were already championed at last year’s G20 Summit in Bali. On the first day of the B20 Summit, which is the official G20 dialogue forum with the global business community and is tasked with formulating policy recommendations on designated issues, Indonesia’s Minister of Health Budi Gunadi Sadikin said that G20 countries should adopt a “digital health certificate using WHO standards”:
When we have another pandemic, we understand that to stop the spread of the virus we have to limit, not stop, the movement of people… So let’s have a digital health certificate acknowledged by the WHO. If you have been vaccinated or tested properly then you can move around. So for the next pandemic, instead of stopping the movement of people and the global economy 100%, you can still allow some movement of people.
This year, we had the following statement from the G20 Leaders’ Declaration:
We welcome the establishment of the Global Initiative on Digital Health (GIDH) within a WHO-managed framework to build a comprehensive digital health ecosystem in compliance with respective data protection regulations.”
Said comprehensive digital health ecosystem is currently being negotiated by WHO’s 194 Member States, with a view to presenting a draft accord on pandemic prevention, preparedness and response to the World Health Assembly in May 2024. If approved, it will include a globally interoperable digital vaccine passport system based on the EU’s “Green Pass” COVID-19 certification system, as WHO announced in June this year:
This is the first building block of the WHO Global Digital Health Certification Network (GDHCN) that will develop a wide range of digital products to deliver better health for all.
“Building on the EU’s highly successful digital certification network, WHO aims to offer all WHO Member States access to an open-source digital health tool, which is based on the principles of equity, innovation, transparency and data protection and privacy,” said Dr Tedros Adhanom Ghebreyesus, WHO Director-General. “New digital health products in development aim to help people everywhere receive quality health services quickly and more effectively”.
It is hard to fathom what exactly Tedros Adhanom meant by the two words “ highly successful”, as I noted at the time:
As a means of reducing transmission of COVID-19, the vaccine passports used in Europe (and most other places) did precious little, for the simple reason that the vaccines do not reduce transmission of current variants.
Indeed, COVID-19 vaccine passports may have actually exacerbated the spread of the disease by creating a false sense of security among vaccine recipients. How else to explain the fact that by the end of 2021 the European Union, whose 27 member states had been using vaccine passports to one degree or another for half a year, was once again ground zero for the COVID-19 pandemic? Also, a recent study by Cleveland, now peer reviewed, found that any protection provided by the bivalent COVID-19 vaccine during the Omicron phase wears off “in a few months”. And over time, more prior vaccine doses translated into “increased risk of COVID-19.”
The EU’s digital vaccine certification system has been in gestation since at least 2018, over a year before the COVID-19 pandemic began. In the same year, senior representatives of business, governments and civil society made a commitment at the World Economic Forum’s annual meeting in Davos to advance toward what they called a “good future” for digital identity, of which the EU’s digital vaccine passport is but one of many examples. In the new social contract envisioned by the WEF and laid out in its 2018 report, “Identity in a Digital World”, corporations and governments will have near-total oversight and control over citizens’ lives.
Indian is closer than most countries to fulfilling this vision, thanks largely to three programs launched by the Narenda Modi government over the past decade: the Jan Dhan Yojana, a financial inclusion program that has enabled hundreds of millions of Indians to access basic financial services; Aadhaar, the world’s largest biometric-enabled digital identity system with 1.3 billion users (of a population of 1.4 billion); and the UPI, an instant payments system launched just six months before the government yanked 84% of India’s cash notes out of circulation in its infamous demonetisation campaign.
The results have been mixed. The three programs have massively accelerated India’s digital transformation while also excluding millions of people from government programs and services. As the FT noted a couple of years ago, Aadhaar has helped to speed and clean up India’s bureaucracy while also massively increasing the Indian government’s surveillance powers. For most Indians the transformation appears to have paid off, with Modi consistently ranking as one of the world’s most popular leaders.
But there still remains plenty of work for his government to do. At the G20 Summit Rajeev Chandrasekhar, India’s Minister of State, Ministry of Electronics & IT told Business Today that Modi’s vision is that “there will be no part of the government that will be left without being digitalised. So, effectively, you will see DPI is now spanning the entire spectrum of current government public services and anything that we are planning in the future.”
If this sounds familiar to readers, it is probably because Ukraine’s Zelensky government is on an almost identical mission, with the support of USAID, the European Union’s eu4digital initiative and the UN Development Program. As I have reported for NC over the past 18 months (most recently here), Kiev is hellbent on creating the most convenient State in the world — what Zelensky calls “State in the smartphone” — through its “Diia” digital ID and governance platform, launched in February 2020.
In its report for the G20 Summit, titled “G20 Policy Recommendations for Advancing Financial Inclusion and Productivity Gains Through Digital Public Infrastructure,” the World Bank urges other G20 members to follow a similar path. With almost messianic zeal, the governments of both India and Ukraine, with the help of the UN Development Program (UNDP) and in the case of Ukraine, USAID, are striving to export their DPI models to other countries.
“The benefits of digital transformation should not be confined to a small part of the human race,” Modi said at the G20 summit in Indonesia last year.
The Economist describes it as “India’s low-cost, software-based version of China’s infrastructure-led Belt and Road Initiative.” Speaking on a panel about Digital Public Infrastructure (DPI) at the IMF’s Spring Meetings a couple of weeks ago, Nandan Nilekani, one of the seven co-founders of Indian tech giant Infosys and architect of India’s digital ID system who has in recent years been working with the World Bank to help other governments set up similar digital ID systems, summed up, in just two sentences, what every nation needs to do 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 World Bank report claims that DPI programs have many possible benefits, including bolstering financial inclusion — which often means extending exploitative and abusive financial services to those previously excluded, as Jomo Kwame Sundaram wryly noted in a 2020 article on financialisation — and delivering welfare services in a more targeted manner.
“The impact of DPI goes beyond inclusive finance—it can support health, education, and sustainability,” notes the report quoting United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA) and Honorary Patron of the GPFI Her Majesty Queen Máxima of the Netherlands. “Amid the Covid-19 pandemic, DPI enabled emergency support to be directly delivered to the digital wallets of those in need as well as helped facilitate swift vaccine distribution. The India Stack exemplifies this approach, combining digital ID, interoperable payments, a digital credentials ledger, and account aggregation.”
Who better to give advice about inclusive finance in the 21st century than the Queen of the Netherlands, who also happens to be a member of the Stewardship Board of the World Economic Forum (WEF) System Initiative on Shaping the Future of Financial and Monetary Systems and of the Steering Committee of the WEF’s Digital Currency Governance Consortium?*
CBDCs and Crypto Regulation
The G20 Leaders’ declaration also includes a longish paragraph on the need for global regulation of crypto assets, followed immediately by a much shorter paragraph on central bank digital currencies (CBDCs), a form of financial DPI that first requires the design and implementation of another DPI, digital identity. both of which are worth posting in full (emphasis my own):
Crypto-assets: Policy and Regulation
58. We continue to closely monitor the risks of the fast-paced developments in the cryptoasset ecosystem. We endorse the Financial Stability Board’s (FSB’s) high-level
recommendations for the regulation, supervision and oversight of crypto-assets
activities and markets and of global stablecoin arrangements. We ask the FSB and
SSBs to promote the effective and timely implementation of these recommendations in
a consistent manner globally to avoid regulatory arbitrage. We welcome the shared
FSB and SSBs workplan for crypto assets. We welcome the IMF-FSB Synthesis Paper,
including a Roadmap, that will support a coordinated and comprehensive policy and
regulatory framework taking into account the full range of risks and risks specific to the
emerging market and developing economies (EMDEs) and ongoing global
implementation of FATF standards to address money laundering and terrorism
financing risks. Our Finance Ministers and Central Bank Governors will discuss taking
forward the Roadmap at their meeting in October 2023. We also welcome the BIS
Report on The Crypto Ecosystem: Key Elements and Risks.
From this paragraph, it would seem that a coordinated global regulatory crackdown on cryptocurrencies and stable coins from three of the world’s most powerful global financial institutions (Financial Stability Board, International Monetary Fund, and the Bank for International Settlements) may be in the offing. The timing would certainly be curious given G20 governments are now talking about the “introduction” and “widespread adoption” of CBDCs, whereas just 12 months ago they were using words like “design” and “exploration”:
Central Bank Digital Currency
59. We welcome discussions on the potential macro-financial implications arising from the
introduction and adoption of Central Bank Digital Currencies (CBDCs), notably on
cross-border payments as well as on the international monetary and financial system.
We welcome the BIS Innovation Hub (BISIH) Report on Lessons Learnt on CBDCs and
look forward to the IMF Report on Potential macro-financial implications of widespread
adoption of CBDCs to advance the discussion on this issue.
Unsurprisingly, no mention is made of the unprecedented powers CBDCs will grant governments and central banks over their increasingly restive populaces. Also conspicuously absent from the paragraph is the word “risk,” which appears no fewer than five times in the preceding paragraph on crypto assets. After all, the IMF’s Managing Director Kristalina Georgieva herself warned just three months ago that CBDCs, “if poorly designed,… could… lead to financial stability risks, data privacy and legal challenges, financial integrity and cyber risks, and central bank operational risks.”
* The World Economic Forum is, to all intents and purposes, on a par with the United Nations these days after signing a strategic partnership with the intergovernmental organization in 2019. Arguably the mother of all public-private partnerships, it granted multinational corporations even more influence over global governance in the name of accelerating the implementation of the 2030 Agenda for Sustainable Development. As I wrote in my 2022 book Scanned, “the strategic partnership represented a seismic shift in the UN’s founding commitment from multilateralism to the WEF’s model of multi-stakeholderism, giving corporations a preferential place within the UN system.”