Estonia's Digital Revolution Takes Root in Azerbaijan (PHOTO)

Oil, not tech, is the word most outsiders would associate with Azerbaijan, a petro-rich nation of 9.4 million that sits aside the Caspian Sea. But that may be about to change as the country is undergoing a boom in both electronic government services and e-infrastructure, and is even on the verge of slipping ahead of Western Europe in terms of mobile ID.

The changes are happening at a breakneck pace: Thanks to the big input of the Ministry of Communications and High Technologies, the state now has as many as around 450 e-government services registered, most having come online in the past two years. And since the launch this year of Asan Imza (Easy Signature), the secure system that lets users verify their digital identity via their mobile phone, over 1,300,000 digital signatures have been rendered and more than 1,250,000 transactions carried out using mobile ID in Azerbaijan.

If the story of a relatively unknown former Soviet republic making a splash in the world of tech and e-government sounds familiar, it should. For years, the wunderkind of the international tech community has been Estonia, a pioneer of paperless government, a champion of free Wi-Fi and the birthplace of Skype. Though the two countries don't have much else in common, both Azerbaijan and Estonia were once part of the USSR and both recently found themselves having to rebuild their state institutions from scratch.

It's not too surprising then that when the Azerbaijani president began actively pushing for the digitization of state services - part of a drive to cut down on corruption and make life easier for the average citizen - it was Estonian companies that took up the call.

One of them in particular, Best Solutions, has been in on the game from the start. It has been responsible for implementing a number of e-government projects as well as the abovementioned mobile ID. Together with another Estonian company, Cybernetica, and Azerbaijani partners, it also installed the all-important data exchange layer that lets the various government systems work together. An updated version of Estonia's own X-Road, it is as state-of-the-art as they come.

Most crucially, having compatible infrastructure means the two countries can set up cross-border services in the future.

"EU politicians can discuss for years how they will integrate. Estonia and Azerbaijan are already doing it," says Founder of Best Solutions and chairwoman of Azerbaijan-Estonian Chamber of Commerce Jana Krimpe.

As an example, she pointed to Azerbaijan's Certification Authority (CA), the body that verifies the ownership of public keys and is therefore the linchpin of any secure, online ID system. The CA in Azerbaijan, owned and operated by the Ministry of Taxes, uses the same standards as Estonia's, potentially paving the way for Azerbaijani and Estonian business reps to be able to sign each other's contracts online.

But this isn't a story of cut-and-paste development. Whereas Estonia's online ID infrastructure, built over a decade ago, was based mainly on national ID cards, card readers and PCs, Azerbaijan's is very much designed for the mobile age, with mobile ID and app-based government services at its core.

Other key innovations came in by necessity. For example, Estonia's mobile ID service platform is owned by the country's three telecoms, each of which has its own operating parameters. That meant a lot of negotiation had to happen before the system could get up and running, and each subsequent modification still has to be carried out separately by each of the operators.

For better efficiency, not to mention cyber security, the Azerbaijan model uses a centralized mobile ID platform, created within a Public Private Partnership (PPP) project that is then offered as a service to the telecom providers. Now Estonia decided to implement the same kind of setup.

"That shows that when you integrate, you'll end up with something new, thanks to being forced to see it from the outside. That's going to bring more innovation," said Krimpe.

Cashing in... and Saving Trees

The ongoing shift to e-government, or rather m-government, in Azerbaijan has already borne plenty of rewards for the average Joe (you can legally register a company in under five minutes). But it's probably the government itself that has benefited the most since the first ministry went digital.

It was, in fact, the bean counters at the Ministry of Taxes who led the way, opening the first e-service in 2006.

"It was a huge environmental project," jokes Natik Amirov, Deputy Minister of Taxes. "In the first year, we saved 28 hectares of forest. Now, by our calculations, counting all the documents we used to collect from taxpayers in paper format, we've started to save 77 hectares per year."

More than that though, when the ministry went ahead with its then-controversial online VAT system for businesses, it received an unexpected windfall.

"VAT evasion is the most common form of tax evasion in most countries, and so we thought that VAT revenue would rise 5 or 6 percent, maybe 10 percent," recalled Amirov. It didn't rise 10 percent that month, however. Instead, it doubled.

"That was a pretty happy time for us here," Amirov said.

With that positive experience under its belt, the Ministry of Taxes had the confidence to go ahead with other e-reforms, and was Best Solutions' main partner in developing the country's mobile ID system.

Since last year August, the ministry has been requiring that companies use only Asan Imza to register their VAT declarations, and there has been surprisingly little negative feedback from the change, as business owners want the satisfaction of knowing their transactions are secure. Started from July 2014 the Ministry of Labor and Social Protection of the population in cooperation with the Ministry of Taxes announced new over-state e-service using use Asan İmza - mobile digital signature in process of appointment of authorized persons and labor contracts registration.

Amirov also has high hopes for what else the mobile ID system could do for the country's private sector, especially if, via the connection with Estonia, its digital signatures become legal in the EU.

"Our economy has been growing dynamically, strongly and rapidly, especially in the last 10 years, and we have a lot of connections with EU countries. As the economy grows, so do the relationships between companies, and any agreements that need to be concluded need to be legally signed," he said.

Making It Easy With ASAN

Of course, there will always be some state services that can't be rendered by mobile, so the same institution that's responsible for the country's m-government services, the State Agency for Public Service and Social Innovation Under the President of the Republic of Azerbaijan, is filling the gap in another high-tech way.

It's called the Azerbaijani Service and Assessment Network, but most people know it only by its acronym, ASAN, which coincidentally means "easy" in Azeri. The name couldn't be more fitting.

In January 2013, the network inaugurated the ASAN Service Centers, elaborate, one-stop shops where citizens can drop in to receive any of 49 different government services provided by ten ministries.

These centers - there are 10 all around the country to the end of this year - look like a cross between a bank and a comfy hotel foyer.

Visitors are greeted by smiling volunteers who help them register in the right electronic queue (the average wait is seven to 15 minutes, but pre-booking can be done online or via the call center). While waiting, they can do their banking, have a medical check-up, surf the web in an Internet cafe or entertain their kids in the play areas. Private companies operating here offer as many around 30 services, everything from translation to legal consultation. There's even a mothercare room and a free lending library.

Nice as the centers are, the real difference they offer citizens is efficiency and convenience. Here, a driver's license can be renewed in just 10 minutes. It takes only a day to get a passport. The centers are open evenings and weekends, so nobody has to skip work, and for areas of the country where no center is nearby, two (at the end of this year around 10) purpose-built ASAN buses cruise the roads, providing services to further flung towns and villages. There's also a car service that will make document house calls for disabled people.

The centers have been a clear hit, having served as many as 2,240,000 people so far. And in what is perhaps an even more important indicator these days, they've racked up a whopping more than 200,000 fans on their Facebook page.

Inam Karimov, chair of the State Agency, explained how this new way of providing civil service in Azerbaijan is changing the image of the state and the relationship between citizen and bureaucrat.

"Before, there was the impression that the state official was in a privileged position. Here we work on the principle that the customer is always right," he said. "The ASAN Bus, together with the service centers, creates a new brand of Azerbaijani public service delivery, a new Azerbaijani brand. This is something totally new in the world," he said.

Customers? Branding? It may sound rather commercial, but that's nothing compared with how ASAN looks at its relationship with the ministries that work in its centers:

"We call it a 'service mall' concept. It's like a shopping mall, where you have different compartments, but here ministries come and we give them a place from where they offer their services," Karimov said.

ASAN doesn't actually provide the services, but makes sure that the ministry functionaries that work here adhere to its strict guidelines for transparency, comfort, ethical behavior and speed. That's an important distinction, Karimov said, because unlike similar one-stop-shop setups in other countries, the ministries here aren't assessing their own performance.

Scrolling Forward

Sticking to the commercial theme, there is an obvious potential spillover of benefits from Azerbaijan's new, public infrastructure into the private world - a phenomenon already seen in Estonia where everything from banking to parking can be done via smartphone thanks to the data exchange layer and mobile ID system.

The newfound availability of a secure, online ID is exciting to the likes of Farid Ismayilzada, Founder and CEO of GoldenPay. His company runs Azerbaijan's largest e-commerce portal,, and he thinks mobile ID is a game changer.

"It's gonna blow people's minds," he said.

People use to pay electricity and gas bills, and buy insurance policies, and the site plans to offer show tickets in the near future. But the introduction of mobile ID means that it could also integrate services that require a higher level of security than the current username, password, and credit card system, services like online banking or even stock trading.

He cautions, however, that development has to be done with care.

"For me, these kinds of projects are chicken-and-egg projects. You can give mobile ID to everyone in the country, but if you don't have services that use mobile-ID, it's useless. And if you have services that use mobile ID but you don't have enough people who have mobile ID, it's also useless.

So these two directions have to be developed in parallel," he said.

This is why in August a new over-national payment portal Asan Pay (Easy Pay) is coming. Using this portal people can pay using all possible e-channels (banking accounts, credit cards, mobile wallets, etc.) to pay not only commercial payments, but all kind of state fees using your mobile phones. Thanks to this portal all portal users will receive their traffic penalty information or other state notifications directly to their mobile phones and could pay them immediately using the same phone. In cooperation with Estonian company NOW Innovations and Azerbaijani companies Cybernet and Best Solutions all users can pay their parking fees using their mobile phones and this portal.

In the even longer view, there is also the question of how today's emerging mobile generation looks at these innovations and how their expectations are being raised.

Two Baku State University students, Dilawar Khan and Farahim Huseynzadeh, spoke about the rapid changes that are taking place.

"Daily living is easier and we are a lot more comfortable now than before. And in time it will get even easier, "inshallah"," said Kahn.

"I think that in a few years we'll be able to use our mobile phone for doing everything related to social life," Huseynzadeh added.

Both students spoke about wanting their personal ID card, bus card, metro card and ATM card to one day be replaced by a single card, or better still, a mobile phone. They also listed more state services they would like to see available online, from student grant applications to booking times with doctors.

Clearly, the bar for Azerbaijan has been raised, and both the country's public and private sector will have to work hard to keep up with the ever-growing digital demands of the younger generation. But with a lot of persistence, and perhaps a little help from their friends from the north, "inshallah", they'll stay ahead of the curve.

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