I'm Former Estonian President Toomas Hendrik Ilves, And This Is How I Work

Photo: Courtesy of Toomas Hendrik Ilves

Toomas Hendrik Ilves, son of Estonian refugees who fled the country during the 1944 Soviet takeover, saw his country regain independence in 1991. In 2006 he became Estonia’s fourth president. We had a long talk about his accomplishments as president, a position that holds no executive power and thus relies on persuasion and building consensus. We discussed Estonia’s rapid digitisation, which revolutionised a poor country and made it the envy of governments around the world. And we talked about his work spreading the gospel of civic digitisation.

In my research I saw that in Estonia, you could become president again after a term away.

No way. Legally, yes. But no fucking way.

Tell me about your background and how you got to where you are now.

At my age it’s kind of a long story. I was born in Sweden in 1953, the child of refugees fleeing [Estonia] in a short window of opportunity [during Soviet occupation] in the second or third week of September of 1944. My father brought my mother and me to the United States, and we ended up settling in northern New Jersey. I went to school in Leonia, New Jersey, and there a seminal thing happened to me.

I was in a one-off experiment in 1969, when my maths teacher, who was doing her Ph.D. at Teachers College in maths education, decided to experiment if you could teach kids to program. So she rented a teletype machine — a big telephone modem teletype with a purple tape — and the modem was connected to a mainframe 50km away. She taught us to program in BASIC. Which is sort of baby Fortran. So I learned to program in 1969 as a 15-year-old. The first result is I’ve never been intimidated by tech or programming, and later on in college in fact I worked as a programmer in a lab.

I went to Columbia, as an undergraduate I studied experimental psychology — I actually published a paper last month that was a light adaptation. I went to the University of Pennsylvania to do a Ph.D. program and decided I didn’t want to do that, and had my years in the wilderness. But eventually I started writing about things going on in Estonia and Soviet nationality politics, and writing essays on Estonian literature.

I worked for Radio Free Europe as an analyst in Munich, then they kicked me upstairs to run the Estonian service. I was, by 20 years, the youngest service director. I guess I was 34. I completely redid the service. I was the first person to go to the Soviet Union officially, legally, which was quite a wild thing.

Then [Estonia] became independent. And because I’d been assisting various people for years, at the first democratic elections in 1992, the president asked me to become the ambassador to Washington. I took like a 95 per cent cut in pay and they didn’t pay us all the time — because Estonia at the time was flat broke, absolutely broke. I drove myself to the embassy, we had a 10-year-old Mercedes ambassadorial limo. Sometimes I’d go to receptions and the valet would say “Where’s the ambassador?” and I’d say “I am the ambassador!”

Then there was a breakdown in the government. Then I was in the parliament, and then European Parliament, [where] I was the vice chairman of the Foreign Affairs Committee.

In 2006 the conservatives, liberals, and the social democrats came to me and said “We’d 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 has sufficient popularity to stand up to the incumbent in some kind of credible way.” And then I ended up being elected. I did that for five years, I didn’t really want to continue, but the new opponent was someone who was so... well, would have been such an unfortunate choice, [that] I ran again. I won again, I was president until 2016.

Then I was invited to come to Stanford and that’s where I am right now.

Photo: Courtesy of Toomas Hendrik Ilves

What was the situation when you began your term as president?

When Estonia became independent and I was the ambassador in Washington, Estonia was extremely poor, extremely backward. Fifty years of Soviet rule had left us way behind. In 1938 — the last full year before World War II — Estonia and its northern neighbour [Finland] had identical GDP per capita. In 1992, the first full year after independence, the GDP of Finland was around 23,000 U.S. dollars per capita. The per capita GDP for Estonia was twenty eight hundred dollars. An eightfold difference.

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

I said “Well, this is one place where we are on a level playing field.” Whereas in everything else we had fifty years of backwardness to overcome. All the roads and bridges that weren’t built, all the schools that were falling apart. It was like Zeno’s Paradox; Achilles runs after the tortoise but he never catches up. But this is one place where we were starting at the same place. I said we should put computers in all Estonian schools and connect them all.

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

Meanwhile the banks saw this as a great opportunity. They’re always looking to cut costs. And in Estonia we have lots and lots of little villages, and each one had at least two if not three brick-and-mortar banks that were visited very rarely. It was a huge cost. So we we launched a program with the banks where we went around the country and taught older people, mainly in the rural areas, how to use a computer. Part of the project was to put computers in all municipal centres, town halls, and administrative centres.

People didn’t own computers yet because they were expensive and people were poor. So you could go there and do all your stuff for free. We had all these little signs all over the place, [like] the standard direction signs that you have in Europe, except we had a little @ symbol, with an arrow saying something like “Internet access point two hundred meters to the right.”

We realised in the late ‘90s, we’re rapidly digitising, we are already one of the more digital countries, but we didn’t have any real services, except maybe one of the first but nonetheless rickety [digital] tax systems. We realised we had to do this thing correctly and establish a digital identity for everyone that is secure, and then have encryption, two-factor authentication, and with legal efficacy, meaning you can sign contracts. Then we realised, OK, we have to create architecture for this that guarantees security and privacy.

By this time we had broad support, [though] not a majority yet, for digitalisation. I mean, we always had Finland there, which had Nokia. By the early 2000s we had digitised almost all citizen-government interactions. Plus 99 per cent of bank transactions were done on the secure internet. In 2008, 2007 we put all key data on the blockchain. The main issue was data integrity. If someone publishes your bank account, you might feel annoyed. If someone changes the record of your blood type it can be fatal.

What was the major opposition to digitisation?

Oh, they said this would destroy Estonian culture, would anglicise Estonian culture, people wouldn’t learn to read. All the Luddite arguments.

Now Estonia has, per capita, the highest number of Wikipedia pages. There’s a crazy Wikipedia that keeps churning stuff out. Estonia has adopted this as a good thing, with high popular support. And the high level of service is something people appreciate when they go abroad, and see how backward it is — including Silicon Valley, where I am now.

Where I sit, in a twelve-mile radius are the headquarters of Tesla, Apple, Google, Facebook, Palantir... [but] public services are in the 1960s. The disconnect the disparity between the level of public services, which are abysmal, and the amazing products constantly designed here is quite startling.

And that’s an obstacle to the kind of civic digitisation you’re talking about, right?

In the United States, hey, look, you really gotta get going on this if you want to have any kind of services. And that’s a hard one politically. You can’t do this without a strong digital identity. People [in the U.S.] say “Oh, we’ll never have a national identity.” You don’t need a national identity, it’s a federated system.

Most things citizens run up against on an everyday basis are state regulated: driver’s licenses, social welfare programs, banking, they’re all regulated at the state level. And you already have an I.D. in every state for anyone over 16 or 17, which is your driver’s licence. All you’ve got to do is put a chip on that. That’s the technical basis for secure communication. It’s a federated system but you can connect these up.

But most of the people interested in what [Estonia] did are not in the United States or in Europe either. Mostly it’s elsewhere, in countries that are hungry to move ahead. I’m astounded by the degree of complacency in much of Europe. Same thing here [in the U.S.] “We’re the most advanced country technologically because we have Apple.” People do not realise that it’s an utter joke for people who — there are a bunch of other Estonians in Silicon Valley. We get together every couple weeks and [discuss it].

In order to register my daughter to go to school here, I had to bring a photocopy of my electricity bill. To prove I live here. What!?

All right, I did that. [I needed to give] permission for her to go to the regular [non-ESL] class. They said OK, sign these two papers, drop one off at the school office, drive the other one down to the school headquarters. I get there, and there’s a line of fifteen people. I said “Oh, I just have to hand in a piece of paper.” And then the last person in line turned around said “We all just have to hand in a piece of paper.”

I said “What’s the problem?” “Well, they have to make a photocopy of them.” This was the first indication that it was not strictly the 1950s. Because in the 1960s the U.S. school system began to acquire Xerox machines. And everyone thought this was completely normal!

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

I go all over the world describing what we did and how to do it, because so many countries are interested.

The problem is that [a lot of countries] want to buy a lot of stuff. They think they can just buy it. And of course that’s completely wrong. If you want to digitise the first thing you need is political will, to undertake all kinds of decisions that are not so easy. Then you have to get a bunch of smart people together to make the policy on what you’re going to do. Then out of that, figure out what laws you need, then present them to the parliament and you hope that what comes out of the parliament is sensible. Then you have to create the regulatory framework.

And how much of the time are you travelling?

It goes up and down. But I’d say maybe three or four days a month depending on who’s inviting me. I go when I’m invited, if it’s interesting to me and I don’t have to fly any place more than 320km away in coach — because at my age I don’t want to sit in coach for twelve hours.

Which countries are looking into digitisation?

The Nordic countries. Netherlands — Singapore, it’s a very different system but they are digitised.

The people talking to me are the ones who don’t have anything. Latin America, the Gulf States are very keen on it.

What are their challenges?

A lot of countries simply have to deal with the connectivity issues. That’s a set of problems that we had solved already. We’d digitised all telephony. These days you don’t have to build landlines. You need the broadband to [deliver] the wifi.

The point is, a lot of countries can’t handle digitisation for strictly infrastructural reasons. Once you go beyond that, it comes down to political will, policies, laws, and regulation.

Tell me about Estonia’s e-residency program. Who is this for?

It’s part of a broader context of rethinking things that are enabled by digitisation. The most fundamental aspect of digitisation of society is, how governance is turned upside-down. Bureaucracy has always been a sequential process. Digitisation allows parallel processing.

So if you want to set up a business in the EU, first you have to get a bank account. Then you need to file for the business. You submit your board of directors and that goes through all kinds of ministries to see if it’s OK to start a business. Has everyone on the board paid taxes, their speeding tickets, their alimony?

All these things go to different agencies, and it’s a serial process — it goes to one place, some bureaucrat pulls out a file, looks through, says OK, there’s nothing there, stamps it, it goes to the next agency. At least in one country, it took a year and a half to establish a business. Now everyone who is applying has a digital identity, and all databases can be queried in parallel, and we can check [everything] immediately — I mean, the machines can. So you can speed things up.

So in a parallel processing world, a lot of things become possible in governance. The first and most notable is a “once only” regulation. It means that the government may never ask you for any information it has once already obtained. You just ID yourself, and you don’t have to put where you live.

When I filed my taxes, I remember one year I was like, “Wait, I have three children, only two are listed.” Then I realised, “Oh, my son is no longer a dependent because he turned 18.” All that is done [automatically].

You get in this mindset, once you get out of the 5,000-year history of a bureaucracy. In a digital world, [identity] is not necessarily tied to geographical location. If we know who you are, and we have all the data that’s required of a resident of Estonia to establish a bank, why can’t you [do it if you’re] not a resident? We take your fingerprints — which we don’t do to Estonians — we do our due diligence. You don’t have any criminal records as far as we can tell. Why can’t you open a bank account and start a company?

Now who would bother to do that? It’s not a problem in the EU. People in the EU don’t really get anything [not already available to them] out of [Estonian] e-residency. However, if you are a Ukrainian software company, and you are designing software for the Western world, PayPal, as of recently, did not operate in Ukraine. So you establish e-residency. Estonia’s in the European Union, Paypal works there, you can get paid there.

Say you’re in the UK! As of November 1, you’re no longer in the EU. If you’re a big company like Jaguar, you already have a brick and mortar skyscraper in Frankfurt or Paris or Brussels. But if you’re web-based, selling, say, handcrafted purses — I know someone making a million pounds a year doing that — what the hell are you going to do? You’re going to be faced with tariffs. So you want to be established inside the EU, without moving there, without building a building there and establishing residency. You just open a bank account in Estonia and register in Estonia, and there you are, you’re an EU company.

It’s not e-citizenship. You do not have political rights, nor social rights, no welfare or unemployment. You do however pay taxes for your company in Estonia. That’s the benefit for Estonia.

Has there been any international pushback? Countries feeling like you’re stealing their taxes?

Lithuania’s copying it! I haven’t seen any pushback on [taxes.] The only real problems have been that the West banking authorities don’t always get it. Which is kind of bizarre, because this is a country that allows anonymous shell companies to buy property. You can be the consigliere of the biggest mafioso, and you can buy an apartment through an anonymous shell company in Trump Tower.

Whereas we really do our K.Y.C. — Know Your Customer. We even have their fingerprints. It’s pretty hard to launder money when you know who exactly is doing things. We don’t give you anonymity.

And other countries are trying to do the same?

Countries like Estonia and Lithuania are more eager, perhaps because they’re more nimble, but certainly hungrier, than the old established countries. Getting some of these big countries in Europe to move is hard, because there’s not enough political will.

Photo: Courtesy of Toomas Hendrik Ilves

What were your other duties and initiatives as president?

I had this longstanding belief that we really developed society must have a strong civil society, and that was a subtext in virtually everything I ever said. And various studies have shown us as one of the strongest civil societies of the post Communist world. Up at the same level as Western Europeans.

And what do you credit for that?

I don’t know that it has much to do with me, but it was something that I pushed at the time: I wasn’t just pushing digitisation, but digital literacy, and the need for everyone to have some understanding of STEM.

Nothing to do with me, but Estonia does rank every year as [one of the top] non-Asian countries in maths and science education at the secondary level, according to the PISA ranking. It’s a competition between us and the Finns. I don’t know if it has to do with the educational systems, or that we have such a weird language.

The United States, for example, is fairly dismal in that study. Basically [the score] overlaps with high-income countries. And you’d be surprised how badly countries like the United States and UK do with that.

[Estonia has] a non-executive presidency, so you’re more of a moral soundboard than anything else. The worst situation I faced was in 2007, when we had a massive cyberattack from Russia. And riots. I had to go and calm people down.

And there were issues that the government didn’t want to touch because they lacked the political will. One is the Greek bailout, where I understand the government. we were supposed to ratify the EU agreement to help bailout Greece. The problem with that, publicly, was that the Estonian average wage at the time was lower than the Greek minimum wage. The Greek retirement age was like 50, and ours was 63 or 64. And the average Greek pension was very high compared to what we got. Obviously this was not an easy sell.

Parliament had to vote on it, but the government said, “Well, why don’t you talk about it?” So I did! I gave this speech to Parliament telling them that this is something we need to do, and basically they bought it. But it was not popular, and I was lambasted for that. Same thing happened with the partnership law, civil partnerships for everybody — to allow gay people to form civil partnerships in lieu of marriage.

I pushed that — talked about why this was necessary and a good thing to do. To this day I’m vilified for that. Now we have a strange government that’s way out there, and I’m a bête noire for them.

Is that something that you still engage with? That some of these ideas still don’t the appreciation that a lot of your other work did?

None of it gets any appreciation! Only abroad, not in Estonia! Domestically, it’s a real shock to them that I’m going all over the place getting paid a nice amount to talk about stuff that they can’t [believe I did]. It’s the Bible: no prophet is accepted in his hometown.

Do you think the country will eventually come around and appreciate your work?

No idea if they ever will. Of course, success always has a million fathers. You just have to accept that.

What was the day-to-day of the presidency like? Where are things taking place?

It’s kind of a functional office building, two stories, built in 1938, called the Palace. Eighty-five per cent of it is office space, and there’s this little apartment in there. Everyone goes “Oh, he lives in a palace!” It’s like a hundred square meters.

I had a big room for my office — turned into an office, because pre-war, the president did have a palace. My apartment was the apartment of the adjutant.

[The president] had this big office, but it’s all under historical preservation, so nothing can be touched. I couldn’t even put a cable in there for a computer. I couldn’t use wifi for security reasons. It was strictly ceremonial, where I would greet a guest, sit down with them.

There was another room that had a big table for sitting around for business meetings, a couple other rooms for official negotiations. Obama comes and visits and he sits on one side of the table, I sit on the other side, the stuff you always see pictures of.

But my office was just a room with my computer. Wherever my computer is and I am, that’s my office.

Who was on your staff?

I had advisors, two foreign policy advisors, one focusing on the EU, one on the other stuff. A security policy advisor for NATO stuff. A press department consisting of three people: a spokesman, a general sort of journalist, and a record keeper.

I had a counsel who looked through all laws. One of the prerogatives and duties of the presidency is to promulgate or veto laws. I can veto laws not politically, but because they violate the constitution one way or another. So you need to have very smart counsel.

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

For a while I had the former CEO of Skype as my digital advisor. And then he moved to the United States. So [then] I met regularly with the CIO for the country.

Was that the official title?

No, but functionally. Bureaucratically he was, “undersecretary” or something, in the Ministry of Economics, but his functional role was much greater than that. We collaborated on all kinds of things, because this digitisation process was not always self-evident to the government.

So we’ve talked about these changes you made in general, in government policy —

I didn’t really change it, I just nudged it. I didn’t have executive authority, but I had a bully pulpit.

Were there internal changes and digitisations in your own office?

I did ask to use digital signatures for promulgating laws. In the U.S. the president signs a law, gives the pen — the pens — to people [who supported it]. We have the same thing. But I said, our thing is the digital signature. Why don’t I promulgate or reject the laws with a digital signature?

Is that more than a ceremonial change?

No, that was actually real change! To sign something digitally takes a little bit longer than signing something physically, but every other step in the process is much slower with paper. Digital signature takes a minute, but from that moment on it exists — you don’t have to send it anywhere.

The extreme example is that two years ago I found myself in Asunción, Paraguay. I got this email from my bank, I had forgotten to sign a contract. Like “If you don’t sign it in the next 24 hours, forget it.” I find wifi, I pull out my ID, my token, signed it, and I was saved. In the paper world, theres no way it would have gotten there in time. I would have had to FedEx it, at best.

You talked about “calming people down” around an unpopular initiative. What does that look like, from a point of view of encouraging civil engagement? 

We had one case in 2011, in retrospect minor, but all kinds of people got very upset with the government, the executive branch. I had this kind of crazy idea, I applied Fishkin’s deliberative democracy technique. You get a lot of people together to discuss issues. First all together and then in small groups. You end up moving toward the centre, toward more rational decisions.

Using the ID system, we asked people to submit their proposals for reforming governance. We got lots of [opinions], and at that time we couldn’t [analyse] them with machine learning yet, so we had these university professors sift through all of them and categorise them. You can only do this if [everyone] identifies themselves, to keep out trolling. Fishkin has done this around the world. You bring in a representative group, around a thousand people in our case.

We brought them in, following the demographic profile of the country, [urban and rural], different parts of the country, different ages, different ethnic groups, all that. And then they discussed all these issues. And came up with — in terms of opinion polls — some counterintuitive results. These were turned into legislative proposals. And I presented them to the parliament.

Parliament voted on them. Most of them they voted down of course, but some of them they [passed], including one on the minimum size to create a political party. Which of course backfired on everyone with a liberal cast of mind, because it allowed the registration of a hard right party that now is in government.

A familiar story. Speaking of unintended consequences, you talked about security measures for citizen data. Was the Russian cyberattack targeting that data?

Well, they never got in. They never hacked into anything. [It was just] a DDOS attack.

They were just trying to shut things down. Forevermore, if you write a history of cyberwar, the war part would start with Estonia. If you take the Clausewitzian definition of war — the continuation of policy by other means — this is the first time that a nation state obviously did something like that. There were all kinds of things done before that, all kinds of primitive hacking going on in the ‘80s, more sophisticated in the ‘90s and early 2000s, but it was always surreptitious, sub rosa. This was overt.

Would you say the result showed the strength of the system, or were any weaknesses revealed?

Overall it was a positive, it was a complete own goal. We already, for years before that, [told] NATO allies, you have to deal with cyber[security] issues. We were pooh-poohed by just about everybody. After this happened it quickly became obvious to NATO members that they had to deal with these issues. So NATO ended up setting up its Cyber Defence Centre of Excellence in Estonia. I mean, that’s kind of funny!

Do you have concerns that this data, which is so useful in the hands of a responsible government, becomes a liability under an irresponsible government?

Well, as long as you follow the rule of law, it’s not a problem. All of it is highly regulated as to who can access what. And no government with any responsibility would go that far, because the system is based on trust. And if there is any break in that trust the system falls apart. Estonia just becomes another former East European country that that is not digitised. Unless people use it, it’s not digitised.

And of course we do have these built-in constraints. We have two kinds of data, private data and public data. My property records are public, everyone’s property records are public, so anyone can query what I own — but I also get to see who’s querying. Once a month the newspapers in my country would say “Wow, what does he own?” and you could see it listed there.

There is the equivalent of a visa court where a judge can allow surveillance of [data] without [informing]. But as long as we have a high level of rule of law — which we do, an international body looking at rule of law rates us as 11th in the world, number six in Europe. The U.S. is behind us. So I’m not that worried.

Tell me more about your current work at Stanford.

My main interest is how democracy survives in the digital era. What comes with the ubiquity of connectivity, the cheap smartphone giving internet access, by now, to four or five billion people. And Facebook deciding to go [mobile first], which means there are about two billion people who think Facebook is the internet.

I put out news [about] these matters on a Medium page: what is Facebook doing, who’s been hacked, what is legislation on privacy. The question is what you do about it, how we’re going to have elections with all this manipulation, be it at the digital level, or the manipulation of information.

What are the next steps for national and international digitisation?

In the United States there’s a lot more to do, but in Europe, for example, eight years ago I proposed to the Finnish president that since they’ve adopted our model in Finland, and we have digital prescriptions and they had digital prescriptions, that the obvious thing was to make it interoperable.

We get eight million visits from Finns every year — and there are only five million Finns. (We get a lot of return visits.) [Already] your prescription [is digitised] in Estonia. The doctor puts in the prescription and you can go to any pharmacy in Estonia, digitally ID yourself, and get your medicine. So why don’t we [make it] interoperable?

It took almost eight years for this to work. This goes back to my main point about digitisation is it’s not about digitisation.

In order to avoid arbitrage, you shouldn’t be able to buy anything cheaper because you’re buying it abroad. So OK, we subsidise certain medicines in Estonia for certain age groups for a certain amount, and they [subsidise] different age groups for different amounts. Finns come to Estonia to buy alcohol cheaper, you can’t have that with medicine.

The technical side [of becoming interoperable] would have taken a week, two weeks, three weeks maybe. But it took eight years because of the other problems. It’s all political and regulatory.

Taking that as an example, the next task is for the European Union to digitise to the level of Estonia, and then make those services interoperable. So if I go to Spain and I’ve lost my cholesterol reduction medicine, I can just email my doctor, he puts it in the system, and I go to a pharmacy in Spain and take it out. Or if I get sick in Greece, I go to a doctor, authorise the doctor to access my digital medical record, and he gets it all in Greek — because there’s no expectation for him to know Estonian.

That would be a big step forward. The most popular thing Europe has ever done for its citizenry is the Schengen Area, which allows you to cross seamlessly from country to country without having ID. That would be the next tier for me as a European.


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