Juha Sarineen: Building an e-Diaspora

Winter view of Tallinn Old Town, Estonia. Photo / 123rf

If you are a tiny country with a population smaller than Auckland, what could you do to grow bigger and make the world notice? You could set up your country, literally, on the internet and invite everyone to join in.

The Estonians call it e-Residency, and it started two years' ago.

It may seem like a bizarre idea, to ask people from wherever to sign for an e-Residency programme that confers them the right to vote, open bank accounts and companies that can trade in the European Union, pay parking fines and order medical prescriptions online.

Lots more services are available to e-Residents of Estonia, including binding, digital signatures, a smart digital identity card and more.

The e-Residency programme hasn't gone unnoticed in the world. If the official stats are correct, over 15,000 people have applied to become e-Residents, most of them from neighbouring Finland and Russia.

A bunch of New Zealanders have applied to become Estonian e-Residents: according to the stats, 33 Kiwis have asked to join the programme.

To stop the whole thing from becoming a giant surveillance apparatus, a data ombudsman tasked to ensure transparency and privacy for users keeps a watchful eye on e-Residency information access and activities. And, stiff penalties for those who attempt to abuse the e-Residence system.

The e-Residency programme is still small and developing and no, it doesn't offer the benefits traditional, real-world residents of a country enjoy. That is, you don't get Estonian citizenship, or tax residency in the country (the standard income tax rate is 20 per cent and there's no capital gains tax).

In fact, you don't even get the right to enter Estonia (or the European Union) and the e-Residency smart identity card is "not a physical identification or a travel document, and does not display a photo."

The smart ID card has to be collected in person as well from an Estonian foreign representation or a police or border guard station, so the e-Residency programme is still rooted in the real world.

Then there's the issue of IT security: the first thing I thought when I heard of the e-Residency programme a while ago was it's a brave idea, but it'll be hacked sooner rather than later. That hasn't happened (yet) and the Estonians are doing their level best to ensure that people the decentralised systems and distributed ledgers underpinning the e-Residency and other services won't get hacked.

A massive denial of service attack as we've seen this year with badly insecure Internet of Things devices blindly hurling data packets around could conceivably put an e-spanner in the works for the programme though.

Despite such limitations, putting a range of services a country can offer to people online and allowing anyone to use them is a brilliant public relations exercise for Estonia.

Not only do the Eesti get their name out there in the world, they come across as being ahead of the tech game (as long as they don't get hacked or DDoSed at least). Plus, attracting more business to a country by is never wrong. As a country, you can show off how easy and safe it is to do business online, and to deal with bureaucracy.

With an application fee of 100 euro per head, the 15,000 or so wannabe e-Residents have added NZ$2.25 million to Estonian state coffers and there will be other revenue as well from opening businesses, other fees and taxes to pay for the mostly automated and presumably low-cost online programme.

Now that New Zealand will finally have redundant international data cables with lots of capacity on them, it might be an idea to copy the Estonians and truly starting putting our services online, for everyone to use.