Jargal DeFacto has an all-round talk with Estonia’s Prime Minister



Below is the transcript of the interview by Jargal DeFacto, where Prime Minister Rõivas elaborates on his country’s affairs, technological advancement, e-governance, and Mongolia-Estonia relation.Prime Minister of Estonia and the Leader of the Reform Party Taavi Rõivas was interviewed by independent economist and TV personality D.Jargalsaikhan, commonly known as Jargal DeFacto, during ASEM11, hosted in Ulaanbaatar on July 14 and 15.

Welcome to Mongolia!

Thank you very much.

 The media says you are the youngest prime minister and the youngest leader of a country not only in the European Union, but also here in ASEM too.

Thank you. As a fact, it is correct. In fact, I talked to the President of Mongolia and he said that when he first became prime minister, he was about the same age as I was.

 I remember that time, Mongolia had a lot of young leaders. Now, they are becoming mature just as the democracy is, I hope. I have a few questions about your country because of the similarity [between our two countries] and the location of your country is very much appealing to Mongolians. I have visited [Estonia] several times and I really understood the similarities, in particular the stamina that you have that we can use and we can learn from you in Mongolia. Please tell us what makes [your] economy boom and about the fast economic growth in Estonia.

Well, the great thing is that both of our countries became democracies without any bloodshed – without any need for revolution. That’s a very positive thing. This is the cornerstone of economic development as well.  It certainly has been, again, re-independent for 25 years now. During that time, we have had very good economic progress. I think the biggest secret behind that is that we wanted to get as far as possible from the planned economy that was there in the Soviet Union. So, we introduced three forms that created this free market economy environment in Estonia. I might say that the Estonian economy is much freer than most European countries. So, that has also been the cornerstone of our economic success.

 But there is something that made Estonia different from your neighboring countries, other Baltic Sea countries. What are these differences? I understand that you have embraced digital economy before others. You made this “e” [electronic] signature. What was the cornerstone of this whole change? Was it the digital platform or the will of the people?

We’ll take it back a little. Back in 2000, which is 16 years ago, the state and government introduced sort of a digital identity, which technologically can be handled in different ways. The main essence is that every citizen of Estonia has a mandatory document, not a passport. Passport is optional but the mandatory ID card can be used digitally with a chip and a pin code. Once you have your own digital ID, which is secure for all citizens, you can be sure that, on the other side of the internet, the citizen [you are connected to] is really the person he claims to be. With this, you can provide all kinds of services digitally.

 [It is called] confirmation of identity, right?

Exactly. So, actually in Estonia, most of the services are handled this way. Not only public services, but also private services as well are handled this way so that a citizen doesn’t have to go anywhere like the state office or even bank office. You do everything online. This, of course, saves us a lot of time and money.

 Including your cabinet meeting?

For cabinet meetings, we still meet but for signatures, for example yesterday, as the international relation right now is quite difficult, our foreign minister decided to postpone her vacation. I signed this order right here in Mongolia using my digital signature by connecting via the internet. So, this can be done and it saves me a huge amount of time because I would have travel back in two days. The application would have to wait for days before getting a signature, but in Estonia, it’s possible to sign it as soon as possible digitally so I can do it from here.

 I was so astonished with the way you have organized all this e-signature and confirmation. Do you have your ID with you?

Yes, I have my ID card but actually, we now use a small, modern version, which is a global ID. Everybody has a sim card in their mobile phones. In Estonia, the sim cards have an additional feature that is slightly more than only for calling. This is the cryptographic key to your signature and in your head, you have your pin codes so this is combined into quite a long cryptographic key, which can be your signature.

 So, in a way, your cellphone number is part of your identity?

Not cellphone number but the sim card. In addition to my phone data, the sim cards we produce have a little addition of a digital key.

 The sim card comes along with a phone number from the provider, but you have to go to the police department to have this particular number.

Exactly. This is because we want the state to authorize the identity. You show your document once, they make sure this is you, and afterwards, you are free to use it as a digital ID.

 You have been organizing elections and voting without information about how and when it happened.

As we have a digital a log in, which is much more secure than passwords, you can also use it in elections and this means that people in Estonia log in to the webpage of electoral authority with their computer, they identify themselves using their mobile phone or by using their ID card, and they can automatically vote for candidates that appear [on screen]. So imagine what this can do in Mongolia where the distances are very big. I know that you are also using some kind of digital solutions and I think that this is the way to go. Also in Estonia, we have some people who live tens of kilometers from the central region and it’s so much easier for them to vote this way.

 You certainly made e-society and e-governance [successful]. Because of that efficiency, you are now an exemplary case in the EU. I have seen it and I’m very proud of you and what you have done. I also saw your e-medical data. Authorized agencies can get information about you. What was very interesting to me was that you can backtrack who is looking at your data. I think that this is very important.

Yes. There is a reason for that. In Estonia, we have 19 hospitals. You don’t usually take your medical file or paper with you. If you, as a patient, regularly go to one hospital, and then for some reason have to go to another hospital in another part of Estonia, then the hospital you usually don’t go and now have to go to will not know anything about you, not even your diagnosis. That’s a big problem because they need to do all the diagnosis all over again. In Estonia, we have introduced this kind of system that all hospitals enter the information about a patient to a central database and you, as a patient, is in charge of that information. You decide the information other doctors aren’t allowed to see and only the doctor who entered it is allowed to see the information. Chronic diseases that have some importance or emergency, my blood type, or this kind of innocent data is information that I make available for everybody – not everybody, but doctors that need to see. If doctors look at your data, then they must have a reason. In theory, any doctor can check your data but if they do it without any reason, you, as a citizen, can claim charges.

 That’s the digital way of protecting your rights and privacy, right?

It is.

 I think that’s an amazing solution. I have more questions. Your population is less than half of Mongolia’s. However, you have a 25,000 USD GDP per capita, which is quite impressive. What are the top economic challenges you face as prime minister today?

Estonia has, since medieval times, been very much into trading. As a small country and as a small economy, we understand that the only way to become richer is to have trade with other countries. This is one secret, and the other secret is that those countries that have centuries of continuous democracy have “old money” that they can inherit from their parents and grandparents. They’ve built factories for 200 years so they hanged onto it by passing it from one generation to another. This, unfortunately, hasn’t been possible for Estonia. In order to catch up, we need to invest in sectors where the progress is very fast. Digital has been one of those sectors because you can go global if your solution is very good. You can go global with digital solutions much faster than let’s say steel solutions. That’s why Estonia has several startups that have become very successful. The first Estonian startup that became a hit is Skype.

Which we use every day.

Exactly. It was founded in Estonia by four people and this company was sold to Microsoft for 8.5 billion USD. So you can imagine how much people believed in this [solution]. It was created in Estonia and we can do it. The next unicorns (any tech startup company that reaches one billion USD market value as determined by private or public investment) have already emerged.  One is TransferWise, an Estonian company founded just a few years ago. With that, you can transfer MNT from here [Mongolia] to let’s say GBP in London with much less transfer fees than banks. It’s 10 times cheaper. This type of technical solution created by an Estonian company is worth a lot of money. Coming from zero to one billion is not possible with a traditional industry in such a short time.

 I was impressed and I think I understand logically why you are always working towards the future of the world economy. You have a fantastic education system. How important is education and higher education in your transformation?

I fully agree that education is the basis for development and if you want an economy that is very much economy-based, the education level has to be good. This is something that used to be good already in Estonia tens of years ago. It is a continuous development but we have continuously invested in education and according to the Peace App, which compares all the countries in the world, they say that Estonia is ranking in top 11. We have almost 200 countries in the world and Estonia, as a small country, being ranked in top 11 is something we’re very proud of. This is secondary education mainly and in terms of universities, again, Estonia tends to be strong in technical fields, medicine, and, of course, ICT. If you continuously invest in those things, it starts to pay off. Of course education is an investment that takes time to get returns from but on the other hand, it’s the best place you can put your money in. I have spoken to some Mongolian people who introduced me to their children and said they have an ambition to send them to the best university they can afford. I said to them that I think this is a very wise thing for a parent to do. If you have the possibility to provide your children with good education, this is something you should do.

 You graduated from one of the oldest universities in Europe, the University of Tartu. You have a professional economics and marketing background. How do you see the role of the government in the free market economy?

The government is the provider of the rules in a market. The government, in my opinion, should not be an actor itself, like buying or selling in a market. But just create a market place so that all the companies can come, everybody’s conditions are equal, and let the competition take care of the situation. That’s the best way to do it. Our ambition is to have good rules, not too much bureaucracy, very affordable and attractive tax system, and if this is in place, the companies can do operate by themselves.

 You were the youngest minister of your country when you were the Minister of Social Affairs two years ago. When we talk about the role of the government being not a major player but a regulatory organization, then the issues that come in every country arises. The issue of social health care and all these issues. How do you consider this aspect?

In Europe, we usually tend to have rather strong social system so that even though we don’t want to have high taxes, we want to provide good conditions for those who for some reason cannot work. Investing in social affairs has been something that, in Europe in general, has been thought to be important.

 What is the GDP percentage rate [allocated] for education and social care?

Social care is definitely higher. For education, I would say about less than 10 percent [of GDP]. For social care, if you count pension fees and everything, it is much higher.

 So a major cost is social health care?

Yes, that’s true but on the other hand, in Estonia, people make contributions to themselves through the social system during their working life.They pay for it and then when they are retired, they can get their money back.

 Do you allow private pension systems?

Yes, a part of the Estonian pension system is private. Everybody has a solitary pension system – every month you invest two percent [of your salary] and the state puts four percent of your salary extra to this contribution. If you are a citizen who wants to, let’s say, put 10 percent of your income every month and later on use it as private pension, this is possible also.

 Let me ask a few questions about ASEM. How do you see the role of Mongolia in ASEM?

ASEM is a wonderful ground for countries to do bilateral talks. ASEM is all about the forum, Asia and Europe becoming closer and understanding each other better, and discussing issues. ASEM is very important also for Estonia for getting bilateral contacts with countries like Mongolia, Singapore, and China and so on. In Europe, leaders meet every month. We have the EU council. We meet there but to meet Asian leaders once a year or once in two years, this is a very good opportunity.

 Are Estonians happy about the EU, in particular after the Brexit and all the things that are happening?

After Brexit, in most European countries, the popularity of the EU went up. Also in Asian economic news, they are talking about negative impacts of Brexit and now, everybody understands that inside the EU is actually more favorable for most European countries. But in Estonia, we have enjoyed very high support from the EU for quite some time. We are one of the bigger supporters so 80 percent of Estonian people support the EU.

 With regard to immigration issues, I think I remember that last year, there was a small group protesting about refugees. What is the situation now? How is the mood?

I think that in all of Europe, we were quite afraid last year of what was going to happen if millions and millions of people continued to come from war zones, whether we could take care of it properly, and what kind of tensions will rise in the society. Today, first of all, we have proved that we have been able to take care of the situation by offering people running away from war and terror shelter and education. Secondly, the pressure has calmed down and a big part of it is because of the agreement with Turkey.

 Speaking of Turkey, European security and the issue of NATO, Russia is not happy about NATO coming closer to Russia and the others are unhappy about Ukraine. What’s your opinion on this issue?

I think that NATO is and will be a collective union, which will defend each and every member when necessary. Also, if NATO wants to be president of all of its territories, I think that this is logical. NATO does not have the ambition to be outside of its territory – it’s always inside its own territory. Nobody should be upset about it.

Now on to Ukraine, it’s clear that every country in Europe or Asia has the right to be a sovereign country and so does Ukraine. In my opinion, Russia has clearly intervened in their sovereignty. Us, the EU, and the USA has introduced sanctions to send a clear message that Russia should pull back and let the Ukrainians be a sovereign country again.

 Can you give a few words about Estonia-Mongolia relations, where we can do better, and be more fruitful for both sides?

I’m very glad that this ASEM has been wonderfully organized by Mongolia. I’m really impressed that this has provided me opportunities to meet Mongolian leaders such as the president and newly elected prime minister. We have discussed bilateral issues on ICT, on oil shale, where you have remarkable reserves, and Estonia has the most modern technology in the world to exploit that side. Even though I’m a little bit sad about some events – very tragic events in Nice and Turkey – ASEM has taken some attention away from our summer tier. It has been a remarkable opportunity for us to get together as European and Asian leaders, and also get to know Mongolia. It’s a very interesting country that has a lifestyle, which for me as a European, is very exotic and very interesting.

 So in Mongolia, there will be more ICT, e-governance, e-voting, and there’s so many things to learn. I keep writing all of this down and I’m so happy to have you here. Onto my last question, you are the political star of Estonia. Your wife is a popular star and a pop singer. How do these two stars work together? Is it easy?

Well, it is a lot of attention for sure but it makes it easier to understand each other. Before we met, she didn’t know who I was. I was still a Member of Parliament and she was just in her first steps in becoming popular. We are growing together and we understand each other and what it is like to always be in the spotlight. When we are together, as my daughter says, at home I’m no prime minister, I’m daddy. This is something we need to keep in mind. Offices come and go, but as a person, you need to stay human and be a good person.