Estonia’s D5 Presidency

Estonia hosted the second annual Digital 5 Summit in November 2015. Established in 2014 by the UK, the Digital 5 is a network of the world’s most digitally advanced nations that meets to share ideas on how to improve digital government services and strengthen the digital economy. Estonia embraced the concept of digital governance over a decade ago, and has since become a world leader in the use of technology.

The UK handed over the D5 presidency to Estonia during a bilateral meeting between Prime Ministers Taavi Rõivas and David Cameron. They discussed how the two governments could work together in the future to advance e-government. The D5 is a major development because it acknowledges the importance of e-government as a method for delivering public services. Additionally, it addresses the need for the international community to establish common standards and procedures to deal with issues affecting digital government.

Each D5 member is a world leader in digital public services. The members—the UK, Estonia, South Korea, New Zealand, and Israel—share a commitment to “harness the potential global power of digital technology and help each participant to become an even better digital government faster and more efficiently through sharing and learning from each other.” The UK, for example, combined 1,700 websites into one-Gov.UK, which has led to more people accessing government information than ever before. South Korea introduced Government 3.0, an entirely new model for providing public services, with the hope of removing barriers between government agencies for better collaboration. New Zealand’s Government ICT Strategy and Action Plan to 2017 is comprised of a set of initiatives aimed at delivering better, trusted public services through the use of technology. And the government of Israel was won an international award for improved online services by the UN General Assembly in 2012 for its commitment to three fundamental principles: transparency, public participation, and accountability.

The Estonian government declared internet access as a human right in 2000, and became the first country to offer online voting in elections in 2005. Currently, “E-Estonia” offers 600 e-services to its citizens and 2,400 to businesses. Estonia’s approach makes life simple and efficient: using an electronic identity card embedded with a microchip, citizens can cast their ballots online, view their medical records, file taxes, and monitor their kids’ progress in school. Estonia’s schools are even teaching coding and computer programming to children as young as seven.

Through its most recent development, e-Residency, Estonia introduced the idea of a country without borders: anyone from outside of the country can apply for an Estonian e-resident ID card, or become an “e-Estonian.” This service allows foreign citizens to gain access to all of the efficient services that have been available to Estonian citizens–including the option to start companies without ever having to physically visit the country.  So far, over 7,600 people from 121 different countries have signed up for the program. Among the new e-Estonians is Japanese Minister of Finance Akira Amari who visited the country in December to learn more about e-services and discuss closer economic ties between the two countries. After becoming an e-Resident, Amari announced Japan’s plans to follow Estonia’s example and launch electronic ID cards in 2016.

The 2015 Digital 5 summit hosted a Financial Technology Conference, attended by more than 100 participants from the UK and Estonia, including representatives of major banks, innovators, and tech experts. The three-day summit concluded with the official launch of the UK Estonia Techlink, a new platform for building partnerships between the two countries in areas of technology, innovation and science.

The UK-Estonia Techlink is designed to support partnerships between the two countries, focusing on areas such as cyber security, digital government, and education. This program plans to bring together entrepreneurs, projects, and businesses from both countries and give them the opportunity to learn from each other’s digital markets. It builds upon the UK-Israel Tech Hub, launched in 2011, which partners British companies with Israeli innovators and contributes to the growth of both economies. Estonian Prime Minister Rõivas expressed his hope that the D5 will become a platform for joint initiatives in the coming years, saying, “We could be jointly crafting the digital government of tomorrow, showing the way for rest of the world to follow.” The UK and New Zealand governments also announced plans for greater collaboration at the Summit.

Earlier in the year, Estonian President Toomas Ilves spoke at Tallinn University of Technology on the topic of people’s increasing dependence on technology, and warned that if countries do not adapt to the digital world, they will fall behind. He stated: “As the digital world increasingly becomes the real world or, more accurately, as the real world becomes digital, it is inevitable that everyone will have to acquire some level of digital literacy.” Along with the D5 members, many other countries such as Singapore, India, Australia, as well as the U.S are following Estonia’s lead in embracing digital government. If these countries maintain a level of improvement, they will be better positioned to emerge as strong digital economies.


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Baltic Nations and the Continuing EU Refugee Crisis

More than a million migrants and refugees escaped to Europe in 2015, creating divisions between the European Union member states over how to best deal with the crisis. The European Commission designed a quota system to distribute refugees among the member states, using criteria such as the size of the population, GDP, unemployment rates, and the number of asylum applications received in the past. The mandatory quota proposal has strained relations between western, eastern and central European member states because some countries have faced a disproportionate burden. While western European states such as Germany have accepted a large number of refugees, eastern European states are reluctant to share the burden.

The  mandatory quota strategy continues to be met with much resistance in the Baltics. Estonia, Latvia and Lithuania remain among the most vocal opponents of quotas for accepting refugees.

Estonia has agreed to accept up to 550 asylum seekers over the next two years as part of the EU effort. Estonian citizens have expressed concern over accepting a large number of refugees, given Estonia’s considerably smaller population of 1.3 million people, approximately 30 percent of whom are Russian speaking. Estonia witnessed several anti-immigrant rallies over the summer, followed by a 24-hour rally in October outside of the Riigikogu, Estonia’s parliament. The rally, organized by a number of Estonia’s right-wing parties, including the European National Front, the Conservative People’s Party, and the People’s Party of Unity, called for stricter EU border controls and a national referendum on whether Estonia should accept the EU quota of refugees. The Estonian government proposed that in light of the country’s relatively small population, instead of accepting the required number of refugees the EC suggested, they would accept people on a voluntary basis.

The mandatory quota proposal also sparked demonstrations in Latvia’s capital, Riga, where the divided communities of Latvians and ethnic Russians united in opposition to allowing more refugees to enter the country. Latvian political parties are divided on the issue. The nationalist-conservative National Alliance and the centrist Union of Greens and Farmers do not support the decision to admit additional refugees. On the other hand, the leading party of the coalition, the center-right Unity, warned that refusing to admit refugees could have negative consequences for Latvia’s economy and security in the future. The Latvian government has adopted a tentative action plan to admit up to 776 refugees, which would place them in a center until their status is determined. Only afterward would they be permitted to integrate into Latvian society. At the European Council meeting in Brussels on October 16, former Latvian Prime Minister Straujuma announced that Latvia supports strengthening the EU’s external border and the development of a repatriation policy for persons who are not judged to be refugees.

Lithuania has agreed to accept 1,105 refugees from the Middle East and Africa over the next two years.  Lithuanian officials are open to discussing the acceptance of more refugees, but only on a voluntary basis.  President Grybauskaite first spoke out against Brussels’ proposal for Lithuania to take in 780 people, calling the plan “unjust” and an “inappropriate way of solving the problem of refugees.” Initially, she announced that in taking the country’s population and GDP into consideration, Lithuania would be able to accept up to 250 people. In late November, the Lithuanian parliament passed legislation that defines regulations of refugee resettlement in the country. According to the regulation, the Government will make decisions on resettling refugees in Lithuania, and the Migration Department will be tasked with processing individual applications.

Not all political leaders in the Baltics are opposed to taking more refugees. Estonia’s President Toomas Ilves criticized the widespread anti-immigrant sentiment in Europe and praised German chancellor Angela Merkel’s open-door refugee policy. Nonetheless, Germany is accepting record numbers of migrants, while its European neighbors are fighting to keep them out. If the Baltic countries don’t do their fair share to help Germany address its refugee challenges, they run the risk that Germans and others in Europe will conclude that they are ‘free riders’—happy to enjoy the benefits of a united Europe, but unwilling to pay their share of the costs.

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On the execution of Saudi Shi’ite cleric Nimr al-Nimr

Map of Middle East

In the Arab world as well as the West, the discussion of yesterday’s execution of Saudi Shi’ite cleric Nimr al-Nimr has been strident: Sunni Gulf states applaud the action as a step forward in the struggle against terrorism, Iran and Arab Shi’ites condemn it as part of a war on their sect, and in the West, Nimr has mostly been cast as a nonviolent opposition leader, unjustly imprisoned and wrongfully killed.

For clarity’s sake, here is some information from Saudi sources whom I regard as reliable, including one who maintained a personal friendship with Sheikh Nimr for over a decade, which speaks to the context in which the decision to execute him was made.

In the 1980s and early ‘90s, Nimr al-Nimr was a leadership figure in “Hezbollah al-Hejaz,” an avowedly Khomeinist armed group established in Saudi Arabia’s Eastern Province and active in Saudi Arabia, Kuwait, and Bahrain. In sermons and other public statements, Nimr declared the three Sunni ruling dynasties to be illegitimate, and called for taking up arms against their governments. It was a period of lethal confrontation between the movement’s activists and Saudi security forces, a predictably asymmetric conflict claiming lives on both sides. Many of the group’s fighters, and Nimr himself, fled to Iran.

In 1992, Riyadh established a truce with Hezbollah al-Hejaz, on the basis of amnesty for members who renounced the movement, forswore ties to Iran, and declared their loyalty to the Saudi state. Among the many returnees from Iran was Nimr al-Nimr: He rejected the terms of amnesty, but temporarily toned down his rhetoric.

By 2009, however, he had returned to openly advocating for “the military option,” calling in a sermon for secession from the government in Riyadh. The remarks followed a confrontation between Shi’ite protestors and Saudi police at a cemetery containing the graves of venerated Shi’ites in the holy city of Mecca. After delivering the sermon, Nimr went into hiding.

He resurfaced in 2011 in the Eastern Province during the period of the Arab spring demonstrations. At a time when some of the area’s Shi’ite leaders counseled peaceful protest and others called for taking up arms, Nimr joined the latter camp, and was seen publicly with youth who threw molotov cocktails and fired at security forces. In the final incident which came to the public’s attention, in the course of a further armed confrontation, he was seen in a car with armed youth as they fired at Saudi police.

The Saudi government contends that throughout his years as an activist, in addition to inciting violence, he played a role in organizing it, though it has not made evidence available to the public. From the standpoint of the interior ministry, Nimr is simply the Shi’ite equivalent of Sunni members of ISIS and Al-Qaeda whom they believe to have blood on their hands, a number of whom were also executed yesterday. Whatever the case might be, the interior ministry did apply the same policy toward Nimr’s family which it accords the relatives of Sunni jihadists — by tending to their most urgent needs during the period of his imprisonment: His wife, stricken with cancer, was flown to a New York hospital for care, where she stayed for nine months at the government’s expense. Within the context of Saudi political culture, this measure can be understood as part of an effort to stem a cycle of vengeance, reassure the prisoner that no ill will is harbored toward his loved ones, and ultimately “reacquire” the family as loyal subjects. Nimr’s sons declined to visit their father in prison during his incarceration.

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China’s “One Belt, One Road” to Where?

During visits to Central and Southeast Asia in 2013, Chinese President Xi Jinping unveiled Beijing’s aspiration to create what it called the Silk Road Economic Belt and the 21st-Century Maritime Silk Road.  Both would entail the construction of new infrastructure to better connect the present-day countries along what was once the ancient Silk Road between China and Europe.  The former would do so over land with roads, railways, and airports; the latter across the ocean with seaports.  China’s two-part aspiration is now commonly referred to as its “One Belt, One Road” initiative.

China One Belt, One Road Initiative

At the time of Xi’s unveiling, China was near the zenith of its economic power.  Not even the 2008 global financial crisis seemed able to derail China’s economic ascent.  Some saw the “One Belt, One Road” initiative as a way for China to extend not only its economic, but also its political reach across Eurasia.  India had begun to worry about what it considered to be China’s “string of pearls,” a series of Chinese-built seaports across the Indian Ocean.  Others viewed the initiative even more broadly as an ambitious effort to reorient global commerce towards China.

But since then the air of invincibility surrounding China’s economy has dissipated.  China’s engines of growth—export manufacturing and infrastructure construction—have sputtered, as the debt that fueled them and the overcapacity that they created have ballooned.  Over the last year and half, Chinese leaders have been forced to repeatedly “fine tune” their economy to keep it growing.  They boosted China’s government spending, devalued its currency, cut its interest rates six times, lowered its bank reserve ratio seven times, and even directly intervened in its stock market.  Still, China’s economy continues to slow.

That slowdown has spurred Chinese leaders to seriously begin to shift their export and infrastructure-led economy to one that is driven by consumers.  How successful that transition will be is uncertain.  But one thing is clear, the “social stability” so prized by the Chinese Communist Party has begun to fray.  Popular unrest is on the rise.  The number of labor protests in China has soared from about 100 in 2010 to almost 2,500 in 2015.[1]

Thus, Beijing has every incentive to keep its giant manufacturing and infrastructure-construction state-owned enterprises (SOE) humming, as its economy makes the transition.  Seen in that light, China’s “One Belt, One Road” initiative looks less like a well-planned strategy and more like a scramble to keep the order books of its SOEs full.  New infrastructure contracts abroad would help do that; and once built that new infrastructure might help Chinese manufacturers export at a lower cost.

One can see China’s push to build more infrastructure projects from Indonesia to Pakistan.  In September, a Chinese-led consortium won approval from Indonesia to build a $5.5-billion high-speed railway in Jakarta.  But the consortium won only after it agreed that the Indonesian government would not have to guarantee the Chinese loans needed to finance the railway’s construction.  While that concession may have secured the approval, it also increased the potential financial losses that the consortium would have to bear if anything goes wrong.  With such large and complex construction projects, it is hard to ensure that will not happen.

Surely, China expected a different outcome after its construction companies built a port at Gwadar for Pakistan in 2007.  Despite a total investment of over $1 billion, the port has remained virtually idle.  Now China is doubling down on the Gwadar project.  It has promised $45.7 billion in fresh financing to build the China-Pakistan Economic Corridor, a series of energy, road, railway, and pipeline projects that will more closely tie Gwadar to China.

Of course, China can still benefit from such infrastructure projects even if they turn out to be unprofitable.  The new road, rail, and pipeline routes through Pakistan will enable China to import strategic resources, like oil, natural gas, and minerals, from the Middle East without being reliant on sea routes through the Indian Ocean.  The projects could also deepen China’s “all-weather” friendship with Pakistan by creating new constituencies within Pakistan that benefit from the economic activity that the trade routes to China could foster.

Other land-based links to China could do the same. The Kunming-to-Bangkok railway is another example.  The portion of it in China is already finished; the portion in Laos broke ground in December; and the final portion in Thailand is slated to begin construction in May 2016.  Given the massive scale of Chinese trade, even if a small portion of it is redirected over the railway, it could reshape the economic interests of a small country like Laos.  Indeed, China may hope to use the railway to pry Laos away from its traditional ally, Vietnam, and gain another friend in ASEAN.  On the other hand, China would not benefit to the same degree from Chinese-built seaports and airports that are not directly connected to it.  While they may boost trade in the host country, the course of that trade could be redirected elsewhere, if trade with China does not evolve as expected.

That is now a real possibility.  If the Chinese economy continues to soften, it means that China will need to import fewer raw materials and export fewer finished goods.  In the second half of 2015 China’s monthly imports fell 10 to 20 percent from a year earlier; and its exports slipped too.  Unless global demand revives or Chinese consumers pick up the slack, Beijing might well expect its “One Belt, One Road” initiative to yield more long-lasting political than economic benefits.

[1] “Number of strikes and worker protests in China hits record high in November,” China Labour Bulletin, Dec. 3, 2015.

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Latvia Is Changing the Wheel on Its Bike—Not Buying a New One

On December 7, Laimdota Straujuma, the Prime Minister of Latvia, resigned. Although her resignation came into effect immediately, she will continue to lead the three-party coalition in a caretaker capacity until a new one is found.


The now ex-Prime Minister left during a time of dissension within the Latvian government. Though Straujuma cited the need for “new ideas and new input” as her immediate reason for resigning, her exit comes after a tortuous political period following Latvia’s successful presidency of the Council of the European Union.

Straujuma’s departure was preceded by myriad internal struggles. Significant tension among her colleagues surfaced as Straujuma confronted the Minister of Transport, alleging incompetence and asking for his resignation. Inter-personal conflicts were exacerbated by tumultuous political negotiations within the ruling coalition government, the most polarizing of which concerned next year’s budget and the acceptance of refugees. On top of the political dissonance common to coalitions, was a government formed on the unsteady grounds bequeathed by the economic crisis. The ex-Prime Minister herself admitted that there was no guarantee the government could survive until the next political term.

The roots of the government schisms can be found in the current composition of parliament, which has a total of 100 seats. Since the 2014 elections, the ‘Concord’ party holds the most seats, at 24. The breakdown of the rest of the seats in the parliament, held by other parties is as follows: ‘Unity’ (23), ‘Union of Greens and Farmers’ (21), ‘National Alliance’ (17), ‘Latvian Regional Alliance’ (8), and ‘For Latvia from the Heart’ (7). Because any decisions require at least a majority vote to pass, a coalition is needed. The current coalition consists of Unity, Union of Greens and Farmers, and National Alliance. Together they hold a total of 61 seats – and thus form a majority force in parliament.

The minister positions, elected by parliament, are therefore held solely by members of the coalition, divided amongst themselves. A mutual dependency between the three parties guarantees their representatives in executive government and promotes cooperation. Their fundamental ideological differences, however, remain intact. Most recently, this manifested itself in the clashes over allowing additional refugees into Latvia on a quota regime. While the National Alliance party stood staunchly against the quota, the Unity party supported it. An eventual compromise was reached, but the situation served to highlight how loss of support from any member of the coalition severely reduces the government’s ability to efficiently conduct its functions. This division of influence becomes a catalyst for power plays, and is one of the primary reasons for why the coalition dynamic sustains political intrigue to the extent that a Prime Minister may be pressured to resign.

With this background, the primary domestic consequence for the nation from the resignation of the Prime Minister is that parties will undergo a hectic process of vying for the position. Tensions over issues within coalition parties may, in the most extreme case, lead to a party joining or leaving the coalition. However, the coalition itself is bound to remain intact.

As for potential Prime Ministers, the most frequently discussed candidate is Solvita Āboltiņa, head of the leading coalition party – Unity. Yet, party support for candidates is still broadly fluctuating and her prospect at ascension remains opaque. Regardless of the incoming incumbent, Latvia’s foreign policy is unlikely to change. A new leader will take the place of Laimdota Straujuma, but it will certainly be a candidate from the ruling coalition, who will accordingly be bound to follow the current policy course. With a new Prime Minister, Latvia is changing the wheel on its bike—not buying a new bike.

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