Address by the President of the Republic of Estonia H.E. Mr. Toomas Hendrik Ilves at the High-level panel discussion on Strengthening the Rule of Law: the Fight against Corruption and its Impact on Sustainable Economic Growth

24.09.2012

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Excellences,

Distinguished representatives of governments and international organizations,

Partners from civil society and private sector,

Ladies and Gentlemen,

In the declaration we adopted at the General Assembly a few hours ago, we recognized the link between corruption, rule of law and economic growth. Where you see no rule of law, you see corruption. Where you see poor rule of law, you see corruption. Where you see genuine rule of law, you see less corruption. We agreed on the importance of the rule of law for generating inclusive, sustainable and equitable development, economic growth, that is to say, generating employment, investment and facilitating entrepreneurship. We also rightly declared that corruption obstructs economic growth and development, erodes public confidence, legitimacy and hinders the making of fair and effective laws, which is all very good, but the point remains that declarations must be followed by action. We know of too many declarations that have been agreed to, but have led nowhere.

Only a society based on the rule of law has the necessary means to prevent corruption and cure the ills that result. In fact, as I said, if you don’t have rule of law, then you’re absolutely bound to see corruption. Economists, similarly have repeatedly found that the better the rule of law, the better off the nation.

Corruption breeds more corruption and facilitates other crimes, impedes economic and social development, and diminishes democracy. Corruption is finer grained issue than we often admit. Lest we think here that corruption is an issue that doesn’t affect the developed world and is a problem elsewhere, then it is instructive to peruse the Transparency International list and to compare it to the countries in the Eurozone with fiscal problems today. Or to take another example from the EU, CAP or the Common Agricultural Policy. Estonia together with other countries in Northern Europe were all pleased a few years ago when it was agreed that all CAP funds, agricultural policy funds, which account for 40 % of the entire EU budget, would be public, that  we know where they go. We  operate on the principle money is public,  the public should know where it goes. There should be no secrecy in such matters. This was accepted by the Commission, it became EU policy, and for several years we knew who got what money. Yet a number of member states challenged this in the courts, and won.  European transparency lost, and today, once again we do not know who gets 40 % of the EU budget, unless the country itself publically declares it, as we do for example. Governments must lead by example, they must not just think that corruption is the problem of other people. So we hope that even our colleagues in the European Union take this to heart and take transparency more seriously,  people need to know what is going on, they need to know what is wrong, what is right, and they also need to know and feel that they are empowered to speak about it.

Ladies and Gentlemen:

I was proud to represent Estonia when I signed up to the Open Government Partnership, along with 42 other countries. This multilateral initiative aims to take concrete steps to institute a new model of governance, to maximize the potential of new technologies and to tackle corruption.

The information revolution that we experience these days has assisted my country to successfully and rapidly transform ourselves, into a rule-based and rather uncorrupt society.

Absence of transparency, as I noted, breeds corruption. We in Estonia, on the other hand have tried to put as much of governance as possible online through innovations such as E-tenders, publication of all expenses by government officials, public sector incomes online, all to open up the governing process to public inspection. These are fairly elemental steps. Less obvious but no less important is that E-governance allows us to eliminate nodes of opaque discretionary and arbitrary decision-making. Which in plainer language means that administrative decisions that in reality are non-discretionary, that is say there is no need to reach a deliberated  decision; if you meet criteria, if you check off the necessary boxes, you are legally entitled to a public good, be it a business licence or school enrolment. All such processes can be done online, no official or bureaucrat need have a say in the matter, More bluntly, you can’t bribe a computer. In fact the best argument for use of ICT in government and the public sector more broadly is the cleansing effect that the openness provided by ICT.

Estonians all depend on electronic-services today, whether we speak about the E-Tax Board, E-school, E-medical prescriptions, E-mobile parking or Internet banking. Estonia was the first country where people could cast their vote also online in parliamentary and municipal elections, and in the last general election, 2011 over more than a quarter of the votes were cast online Just a few months ago we conducted our census for the first time largely online, about 62 % of the census declarations were done by a computer, and over ninety percent of taxpayers filed their annual income tax return on the Internet.

Today, to a large extent thanks to the extensive use of IT services, I can boast of a country that is more free from corruption and with a public administration more transparent than most of the countries who shared our fate in Europe during the Cold War, not to mention a number of countries who in the Cold War were free and democratic. .

In other words the technological enthusiasm of governments can have tremendous and rapid effects on the development of society.

As I mentioned, governments cannot achieve it all on their own. Entrepreneurs expand the range of global knowledge networks by introducing new innovative products and services. We need to use them. They are the key partners in fighting poverty and creating a more transparent economy. Entrepreneurs can also make an outsized difference in their communities and the world; people like Karim Khoja, who led the creation of the first mobile phone company in Afghanistan; Leila Janah, who started a non-profit computer-based microwork creating outsourcing jobs in the poorest parts of the world; and Victoria Hale, whose non-profit pharmaceutical company turned an unused drug into a cure for black fever. These all illustrate the power of private initiative and importance of partnerships between governments and the private sector Government, must provide secure and fruitful soil for these sorts of ideas to emerge and prosper.  

The IT transformation, that I talked about, will create massive opportunities all over the world. We must, however, avoid a digital divide that would stymie this historic chance to accelerate the development in all parts of the world, and in particular on the issue of transparency.

We know well from our experience in the 90s that even in modest circumstances, it is possible to implement IT solutions and to re-establish or increase the trust of citizens towards the state.  This becomes especially essential in post-conflict societies, where the lack of trust and participation provides fertile ground for the recurrence of conflicts. Therefore Estonia wishes to share its E-governance skills and experiences and to continue to facilitate exchanges with partners worldwide.

Finally, this special event seeks to spotlight the negative effects of corruption and lack of transparency on sustainable development and economic growth. Let us use the opportunity to exchange views on innovative approaches and partnerships in combating these challenges. I wish you a fruitful discussion and thank you in advance for your comments and statements.