Welcoming the digital residents

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Welcoming the Digital Residents

When Estonia decided to register e-Residents, it was very good for ‘stateless’ people – people without an official country.


Kushtrim Xhlaki is from a country that does not officially exist. He comes from Kosovo. Over 100 countries, including the United States, call Kosovo ‘independent’, but other countries still say it is part of Serbia. So it cannot be a member of the United Nations and is not on the International Organization for Standardization (ISO), which is the official list of countries.

For people in Kosovo it is often impossible to use the internet for some things, for example to buy something, because Kosovo is not on the ISO and so it is not on the list of countries you must choose from on the drop-down menu.

But Xhlaki did not want to buy some clothes from Amazon, he wanted to start a tech company. He could not do this because of the ISO problem. He did not want to start his company in another country, for example Macedonia, Lithuania or Albania, because it would be a lot of money, time and travel and he did not know the country and its political problems. But he did want to earn some money.

And then the small Baltic country of Estonia started testing a programme that would change the problem of doing business online from a country that doesn’t officially exist.

No Borders

In 2014, Estonia wanted to make its economy bigger. Its population of approximately 1.2 million people was getting smaller and so the government had an idea. Why not grow the population digitally?

Kaspar Akorjus, Managing Director of the Estonian government’s e-Residency programme, says that when you have a digital society that is successful, you don’t need borders on the internet. He says they can offer to foreigners the same product they offer to Estonians.

The Estonian government did not know exactly how the programme would work, but it started a page for something it called ‘e-Residency’. In the first 20 hours, 4,000 people had registered.

Then they knew it could be very big.

First someone applies and visits an Estonian embassy, then e-Residents get a digital ID. With this ID, they can open bank accounts, start Estonian companies and digitally sign documents over the internet.

The programme gives Estonia new customers for local industries that help people start new businesses. It also gives Estonia good publicity because it shows that it is helping people to start businesses. Estonia doesn’t tax e-residents – they pay their business taxes in the country where they live.

This service changed everything for Kosovans like Xhlaki. Before it was difficult to do easy things online, for example use PayPal. Now, with e-Residency, Xhlaki says he can participate in the digital euro market and he does not need to use different currencies or travel to other countries. He can receive money from customers easily now.

The e-Residency programme also has good results outside Europe. Abed Bukhari is from Nablus, Palestine. His country does not officially exist and it has very big financial and import / export restrictions.

Bukhari wanted to start selling a device which changed information on a screen into braille to help blind people. He and his friends made it after they saw a blind student have difficulty to study at university because there wasn’t very much information in braille. Bukhari knew that he would need to be in another country if he wanted to start this business.

Bukhari said that there was no possibility to do this online. He said he always had problems because customs did not allow the devices to travel to another country.

Bukhari heard about the Estonian programme. He then knew it would allow him to start a company in the European Union and manage it online from the country which manufactured the product. The problem for him was to make an application. He had to visit an Estonian embassy to apply.

‘Visas were always my problem,’ he says.

After about 6 months, he finished his application and got his ID card. He now manages the business from China. He is also working on his next product, which is a device to help blind people identify liquids.

He says he wouldn’t be able to do anything if his business was in Palestine.

Estonia is still trying to make the programme better, but it has made big changes by taking away borders from business.

If borders become less important to economic life, it could also become less important to political life. Toby Stone started a programme called identit.ee. He runs events around the world, which look at the possibilities of e-Residency and e-identity.

He says if e-Residency is successful, there might be 3 million e-Residents and 2 million Estonians and the 3 million e-Residents might say, ‘We want to vote in the next election.’

The Estonian government is for now okay with this.

Korjus says they started the programme, but didn’t really know why they were doing it or who they were doing it for.

Now the Estonian government understands better who is using the programme and what these e-Residents want, but it is still learning and changing things when it is necessary. This is normal for a business which is starting. E-Residency has already shown that it is possible to completely change the old political and economic ways.

Korjus thinks that if a government is clever digitally, it can serve everybody, not only the people from its own country, and so the country can get richer. ’That changes the role of the nation-state,’ he says.

by Haley Joelle Ott, an independent journalist in London

NOW READ THE ORIGINAL: http://www.newint.org/features/2016/09/01/welcoming-the-digital-residents/ (This article has been simplified so the words, text structure and quotes may have changed).