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Starting Now on Digital Transformation for Ukraine Reconstruction

By Troy Etulain on September 15, 2022

ukraine digital transformation

When the war in Ukraine comes to an end (hopefully with Ukraine having recovered all of its territory, including Crimea), Western countries are likely to provide a massive aid package to help rebuild Ukrainian infrastructure, buildings and lives. This moment in history will offer an opportunity for Ukraine to engage in rapid digital transformation.

We should already begin deploying digital tools that will help Ukraine as it continues to fight bravely against the invaders, with the intention of seeing the country emerge from war on the right foot for a quick recovery.

As President Volodymyr Zelenskyy himself said the post-war reconstruction should use the moment to build “a new foundation for our lives: safe, modern, comfortable, accessible”. “colossal investments, billions, new technologies, best practices, new institutions and, of course, reforms.”

Дія Platform

One prominent digital tool that is improving Ukraine’s digital governance is the Diia (Дія) platform, which the Ministry of Digital Transformation formally launched in 2020. The name is formed by combining derzhava, the Ukrainian word for state, and ya, the word for me, to mean “the state and me”.

The platform now includes dozens of automated government services and storage for officially recognized digital versions of several key personal documents like drivers licenses, national identity cards, passports, car registrations and covid vaccine certificates. If you get stopped by the police, you can show them the documents on your phone, without any need for the physical version. It also includes job listings; grants for gardens, a national test for digital literacy, an application platform for cash assistance for citizens fleeing the war; online courses and more.

The popularity of Diia is exploding. In 2021 there were 12 million Diia users. By August 2022, the number had grown to 18 million, with 50,000-70,000 users joining daily. Vice Prime Minister and Minister of Digital Transformation (and friend of Zelensky) Mykhailo Fedorov has many remaining ambitions for Diia, his signature achievement. He had actually unveiled it in September 2019, just three weeks after the ministry itself was formed!

Diia is quickly expanding its services. In August, Diia launched a service for people to register property damaged or lost due to Russian aggression in Ukraine, including as far back as 2014, when Russian began occupying Crimea. While citizens can apply now, the Diia a commission will be formed at a later date to assess damage claims. Soon the government will use it to make pension payments.

Minister Fedorov has the noble ambition of tackling petty corruption by moving small official transactions, such as applying for a building permit or obtaining any kind of license, to Diia as well. And in August, he announced integration of Diia with Poland’s myObywatel digital governance platform.

Given the threat a democratic, Western-oriented Ukraine poses to Putin’s desire to bring it back under his authoritarian control, it was perhaps not surprising that Russians tried to hack Diia just ten days before the war started. It spoke well of Ukraine’s cybersecurity that the attack failed and users didn’t even notice it was happening.

Contrasting Diia to a predecessor

Diia is very close to the preexisting concept promoted by none other than father of the internet Sir Tim-Berners Lee, who has long been dissatisfied with the extent of personal information held by companies and platforms like Google and Facebook.

He envisioned personal online databases (PODs) as an antidote to the dominant role these platforms play in our personal lives. They would serve as a virtual place, maintained on- or offline, where a person’s documents and credentials are stored. They would enable individuals to have a digital self-sovereign identity (SSI) that would promise to alleviate the need for logging into sites with a username and password.

While it is similar, since Diia is purely state run and focused on official processes, it doesn’t fulfill the dream of an SSI, that is controlled by individuals and interoperable with commercial platforms. Yet, PODs haven’t really taken off yet globally and SSI hasn’t yet gone mainstream. While in 2020 the city of Flanders, Belgium purchased PODs for all its citizens, there don’t appear to have been much uptake elsewhere.

Six Digital Transformation Tools for Ukraine

Building on the Ukrainian government’s readiness to improve digital governance, here are some digitalization ideas it (and we) could get started developing now:

1. Establish a National Digital Hryvnia Currency

As compared to decentralized digital currency like Bitcoin, a digital hryvnia would be issued and controlled by the National Bank of Ukraine. (Thankfully, though, it would not run on a blockchain.) Each digital hryvnia would have its own unique identification number, just as each physical US dollar has a unique serial number and can be tracked along its journey through transaction after transaction. This would help tremendously with tracking how reconstruction funds were spent. And with increased international trust will come increased support.

The idea of a national digital currency (also called a central bank digital currency, or CBDC) is not new. The US Federal Reserve is considering a digital dollar. And in 2021 Ukraine’s friends across the Black Sea in Georgia launched their own digital currency, in large part to stem corruption (and to allow enable instant payments and, eventually, smart contracts). And in 2020 the National Bank of Ukraine considered the idea.

Obviously digitizing payments across the entire reconstruction value chain will make things more efficient, particularly if integrated with a digital hryvnia. And, in addition to digital currencies’ promise to lower the cost of capital (printing money, stocking ATMs, transporting it in bulletproof vehicles), just imagine the challenging, expensive logistics of providing cash in areas with decimated infrastructure. But the aim here is also behavior change all the way down to the most remote village, to lay a foundation that over the long-term moves the society and economy towards the benefits of a cashless economy.

2. Create Advanced Geospatial Analysis of Land Use

Ukraine’s military is benefiting from rich daily feed of satellite imagery for battlefield awareness, paid for the US government, and has honed its analytical capabilities.

Post-war, while they won’t be getting as much imagery, the analytical skills they have developed and the relationships they have built could be used to develop macro-level status assessments (including on an automated basis), to plan out agricultural or infrastructural projects and to monitor reconstruction overall.

The Ukrainian government should make the imagery and the assessments open to establish a common understanding of that status of reconstruction and to enable third parties (such as investors) to develop their own economic analyses.

3. Roll out Universal and Safe Internet Access

The sooner internet connections can be restored to liberated areas, the faster residents and relief organizations can start using digital tools for the reconstruction. While MNOs have done a heroic job keeping mobile voice and internet services running during the war, we should think beyond simply restoring services. Let’s instead use the reconstruction to push for universal broadband in the east, including by using build-once approaches.

One additional idea would be to repurpose the Starlink receivers to provide internet access to remote areas: One Starlink receiver can receive up to 350 Gbps of bandwidth, which is enough to redistribute terrestrially. USAID has already paid for 5,000 Starlink terminals. Starlink says its bandwidth can be up to 350 Mbps and to connect 20 users. With some coordination, these terminals could be used to quickly connect affected locations.

In addition to expanding access, we should be mindful of security. Russian forces forcefully taken over control of ISPs in occupied areas, routing all traffic via Russia and blocking social media sites. While rerouting traffic towards Kyiv is technically simple, the equipment should be replaced, because it is possible the Russians installed spyware on the servers or other equipment in order to monitor the communications and activities of Ukrainian citizens—even after they left. The devices of the people who used the internet in occupied areas may also have been targeted with malware.

The US government and private sector have been providing cybersecurity technical assistance to the Ukrainian government during the war (and since the 2014 occupation of Crimea). This should continue during reconstruction.

4. Unified Reconstruction Coordination System

Reconstruction will be chaotic, with millions of people on the move, returning to the country and returning home. Several international donors will move ahead with their priority projects and, if previous experiences are any indication, may fail to coordinate effectively. Meanwhile each of Ukraine’s 17 ministries will have a role to play in the country’s reconstruction and the potential to use digital tools.

An obvious question is, who should be in charge of coordinating all the various ministries’ digital transformations and roles in Ukraine’s reconstruction? The Ukraine Ministry of Digital Transformation is an obvious potential choice. Though, it might be better for the government to set up a higher-level organization to coordinate all these activities—a reconstruction coordination office that would be empowered and placed directly underneath the Cabinet of Ministers, with seconded ministerial representatives.

This coordinating office could set up a singular, unifying website that would be interoperable with Diia and include the following information and functionalities:

  • Geolocated reconstruction budgets and allocations: The transparency should also enable easy international observation of reconstruction efforts, so that the taxpayers of donor countries can track their progress online.
  • Financial assistance application system: I’m guessing that, as a part of the post-war reconstruction process, the government will set up some sort of temporary bureaucracy to manage the reconstruction process, and that that agency will set up a process for individuals and organizations/businesses to apply for funding. You can imagine a requirement for people to upload photos of progress on works, enabling crowdsourced monitoring of reconstructions activities funded by the government.
  • Tracking of official assets: Post-war, the Ukrainian government will undoubtedly deploy as many assets and resources to its population as possible. The location and status of government assets can help identify corruption.
  • Damages and Claims: A virtual place where people can report what they’ve lost, including anything from possessions (if, for example, Russian soldiers looted their home) to lost revenue (if their small business is no longer viable due to the destruction of their town).
  • Health Care: A system tracking supply and demand of services and medicines; referral services, but also to monitor the physical and mental health of its citizens.

5. Establish Secure Peer-to-Peer Transactions

When the country starts rebuilding, there will be immense potential for Ukrainians to help Ukrainians, both in-person and online. Potential services could include psychosocial support, babysitters, pooled childcare, ad hoc transportation needs, and more. One can see several competing platforms popping up to connect supply with demand.

The Ukrainian government should anticipate this and its potential safety issues. Since the high vulnerability of the displaced, the orphaned, the hungry and others could be exploited by criminals or corrupt officials, the government should establish a digital registration and verification system that could help protect these groups by allowing people first to check whether a service provider is legitimate.

This system could build on Diia since it already contains a digital registration and verification system. This would also be helpful for international organizations who are going to need to deploy rapidly.

6. Communications Strategy for Digital Transformation

Rolling out one or more of these digital systems will require a massive communications and awareness-raising effort—which we can also start planning now. For both technical deployment and its communication efforts, collaboration of the KyivStar and Vodacom country’s main MNOs will be essential—even as security questions linger over KyivStar’s majority Russian ownership.

As services are launched it will be important to remember that many people would be experiencing digital interfaces for the first time. For them, the medium would be the message (as they say), meaning that using the fact they were using digital tools to access services symbolizes progress with digitalization across Ukrainian society.

The war will indeed leave Ukraine permanently changed. Strategic preparatory action would help ensure many of these changes are positive and sustainable.

Troy Etulain is an international digital development expert who previously served as an advisor to the Ukrainian Minister of Infrastructure on open data and international cooperation, and worked with state asset procurement platform Prozorro.sale to design an approach for placing transaction records on a distributed ledger to make them immutable and reviewable.

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Troy Etulain is an international digital development expert. Previously, Troy worked with the ITU, FHI 360, UNHCR and USAID. He is passionate about connectivity, digital identities, and data for development.
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