The challenge
How to make a small country run efficiently and give citizens control of what their government knows about them
The approach
Digitise everything, with proper checks and balances
The result
The world’s first digital government

The Estonian cabinet takes this digital government thing seriously. As government ministers take their seats, the prime minister, Andrus Ansip, calls the meeting to order and opens his iPad. He types in his digital identification number and the agenda flashes up on the screen. His ministers, all of whom have their own laptop or tablet, all do the same.

The tiny ex-Soviet state of 1.3 million people, which only regained its independence in 1991, has become the world’s leading proponent of digital government. Health records, tax returns, even voting are all done online.

Unlike other countries where concerns over the safety of digital data and poor IT infrastructure have hampered attempts to introduce e-government, Estonia has gone further than anyone else. It is also something that has support across the political spectrum. The day after monocle leaves Tallinn, the prime minister announces his resignation. Regardless of which party wins the next election in 2015, the e-government will be expanded. Estonia’s history has played a large part. In the 1990s, in the years following the collapse of the Soviet Union, the old guard were gradually thrown out. “Sometimes it is easier to start from zero,” says Ansip, perched on a chair in the small press room where he has just given an hour-long press conference. Juhan Parts, the economic affairs minister, is more blunt: “The general attitude was ‘all this Soviet shit should be destroyed’.”

Estonia’s re-emergence coincided with the rise of the internet, something which the banks cottoned onto before the government. “Our commercial banks didn’t have any memory of traditional banking,” says Ansip. “Chequebooks, these things,” he says with a dismissive wave of the hand. They began internet banking far earlier than most other countries. Now 99.8 per cent of bank transactions are performed online. “This is why our elderly people are so familiar with computers these days,” says Ansip.

The other advantage of starting from scratch is that there are no civil service veterans arguing for the status quo. Relative youngsters such as 31-year-old Siim Sikkut, the prime minister’s digital policy adviser, are able to rise to positions of power. “That’s the beauty of Estonia,” he says. “Even if you’re young, you can do stuff. We’re a merit-based country.”

Taavi Kotka, another relative youngster at just 35, is the man responsible for making sure the ict programme works. A former tech entrepreneur who is not backward about coming forward (he lists his CV and awards within a minute of sitting down), he has, as he puts it, “earned enough money to afford to work for government”.

Part of the reason for Estonia’s success, Kotka argues, is its willingness to accept failure. They have taken an entrepreneurial attitude to technology, understanding that not everything will work first time around. “Let’s be clear,” Kotka says, “we have failed. Lots of services have failed. But we’ve rebuilt.”

One of those failures – and this is where Barack Obama’s ears may prick up – was healthcare. The e-prescription service crashed because elderly people tended to buy lots of medicine at the start of the month just after their pension was paid. The servers couldn’t cope. “It took six months to make it work,” says Kotka. A minister had to resign.

It works now, though. And not just the e-prescriptions. X-rays are digitised, notes are online – if you break your leg on a trip to Tallinn, a doctor at your home in Tartu will be able to access all your records.

At the ict Demo Center, Anna Piplana shows us her medical records. “Don’t worry, I won’t show you anything private,” she says as she taps away at her laptop. A list of dates pops up, each showing the name of a doctor or nurse and an explanation. “This is when I had to renew a prescription,” she says, “and this was a check-up.” What’s important here is not just that her doctors have access to all her records but that she can see who has looked at them. “If anyone has looked at them without my permission, they will lose their job,” she says. Ask yourself: do you know if anyone has looked at your medical records recently?

Big government IT projects have a habit of costing a lot of money. The UK government planned to spend £6bn on digitising patients’ records. The cost ballooned to £10bn before it was finally abandoned.

Estonia has managed to do it relatively cheaply. The government has built one main system that all new projects have to plug into. Kotka snorts derisively when he considers the amount of money the UK and US have spent on their failing digital health programmes. “All this cost €15m – that’s building it and running it for five years. The same cost in Britain how many billions? What the hell? Their hospitals are not more complicated than ours.”

There is no shortage of visitors to see Piplana and her team at the ict Demo Center. Several European governments have been here to see how it works, while Estonian companies are now working with governments across the Gulf. Turning that interest into business can be difficult, though. “You cannot just copy the Estonian way,” says Kotka. “The way society acts is different in every country.” Parts, the economic affairs minister, is also cautious about the possibilities. Developing countries don’t have the infrastructure, while in developed nations “their big challenge is how to change 100 years of how to do public things”. The small size of the country helps too. “It is easier to have a common vision,” says Parts.

Estonia’s small population also explains why e-government is necessary, the minister argues. “We have a big demographic challenge. Birth rates are decreasing, there is free movement of labour so people are leaving for Finland and the UK. A lot of things can be done automatically without humans. E-government is not just a toy – it’s about efficiency. To remain competitive in the world our strength is to be more efficient, more creative, more innovative.”

One of the innovations the Estonians are most excited about is the digital signature. Each citizen with an ID card has their own personal digital signature that can be used to sign any legal document. Nothing has to be put in the post or printed out, signed and scanned. A government study estimated that one whole working week could be saved: the equivalent, claims the prime minister, to 2 per cent of the country’s overall GDP. “We are investing 2 per cent on defence,” Ansip points out. “This is really big money.”

The next step is opening the system up to foreigners working in Estonia. “We would like to have a system where everyone who wants Estonian ID can have it,” says Parts. Kotka is similarly excited about the potential, though he is aware that it needs a bigger country than Estonia to take it on before it spreads much further. “If Japan follows our lead, everyone else will follow rapidly.” It can, he believes, change the way business is done all over the world.

The phrase “Big Brother” comes up in almost every interview, mostly mentioned with a smile and a shake of the head. As Piplana explains, while in some countries these sorts of systems are seen as ways for government to know what you’re doing, Estonians see it as a way to know what the government is doing. “They are not my Big Brother; I am their Big Brother.”

The challenge
Reform a corrupt, inefficient bureaucracy and groom young talent dedicated to serving the public
The approach
Improve living standards for the poor, crack down on bribes, expand parks, invest in public transport, restore clogged waterways
The result
Less economic disparity, less flooding and fewer traffic jams; more space for recreation, cleaner air

Pluit Reservoir was the kind of place officials at Jakarta’s City Hall once avoided taking about. Over decades the reservoir in northern Jakarta went from being a flood basin to a stagnant pool ringed by a slum. To many it was a symbol of a city that was growing too fast for its own good.

But on a wet January morning, Jakarta governor Joko Widodo shows monocle a different side to Pluit. From the backseat of a black suv, he points out an area where the shacks have been cleared to make way for a park of palm trees and grass. Nearly 2,000 of the 7,000 squatters who lived here have been moved to low-rent housing recently built by the city. “Now we can use this for recreation, jogging, human interaction,” says Widodo, a pole-thin 52-year-old who is popularly known as Jokowi.

The motorcade drives on. Within a few minutes the landscaped grass has given way to mud. Shacks cling to the far bank. Widodo opens his window and a rotten stench wafts in. “The problem is, there had been no maintenance for 25 years,” he says. “We need three years to finish. My job is to try to clean this up.” Since taking office in October 2012, Widodo has set out to transform the Indonesian capital at a speed that has surprised even his critics. So far he only has half-finished projects to show for his efforts. Yet it is hoped his initiatives, from parks to public transport, will eventually improve the quality of life for Jakarta’s more than 10 million residents. “He has created an expectation that he’ll be able to make a difference,” says Dave McRae, a visiting fellow at the Australian National University who specialises in Indonesian politics.

Widodo was a relative latecomer to politics. A former furniture business owner who grew up poor, he became mayor of Surakarta, a city of 550,000 people on the island of Java, in 2005. Under his watch, Surakarta was cleaner and safer and its bureaucracy less crooked, and tourism flourished. He left that job midway through his second term to run for governor of Jakarta, beating the incumbent and becoming only the second elected governor since the country’s independence at the end of the Second World War.

In Jakarta Widodo inherited a city, once known as the Queen of the East, that was struggling with rampant development. Reforms in the late 1990s at the end of Suharto’s dictatorship have smoothed the transition to democracy. Foreign investors are now keeping the building boom going. But growth hasn’t done wonders for Jakarta’s architecture. Nondescript office towers and supersized malls with names such as St Moritz and Kota Kasablanka continue to spring up; by year end the city will have 81 malls.

That has stretched the city’s rickety infrastructure to the limit. Streets are chronically congested, clean water is still a luxury, rubbish floats in the rivers, slums crowd the riverbanks, and during the rainy season flooding in low-lying areas forces many residents to evacuate to emergency shelters. “We are the biggest problem,” says vice governor Basuki Tjahaja Purnama, a 47-year-old Chinese-Indonesian. “In the past 30 years Jakarta hasn’t solved its problems – not because we don’t know what the problems are. We just weren’t interested in solving them.”

If locals find this frustrating they do a good job of hiding it. “It’s just part of our norm,” says a restauranteur in her 40s with a shrug. Indonesia is ranked 120 out of 189 economies by the World Bank for ease of doing business – one of the lowest in Southeast Asia.

Jean-Louis Guillou, country head for US agribusiness conglomerate Cargill, runs through a quick calculation of the effect on his operation. Of his 11,000 employees, 150 work in Jakarta; each has an average commute of three-and-a-half hours a day. Factor in another few weeks for flooding and demonstrations when he has to send people home early or order them not to show up. “We would consider moving to another city but access to talent is a major hurdle if you’re not in Jakarta,” he says. Widodo has spent nearly every day of the past year and a half visiting hospitals, slums and markets. They are part fact-finding mission, part outreach. At an emergency shelter for flood victims on the city’s west side, Widodo wades through a crowd. He is dressed as usual in a white button-down shirt, black slacks and black sneakers instead of a city official’s khaki military-like uniform. “When I use the formal uniform, people feel there’s a distance. But with this they feel that we are very close,” he says.

Many shout his name. A few people grasp his hand and raise it to their foreheads in a show of respect. He asks whether there’s enough food to go around, then passes out bags of rice and notebooks. “I go out to the people because the problems aren’t in my office,” he says later.

But sometimes they are. On some days a queue of petitioners forms outside the historic wing built by Dutch colonial rulers that’s now the governor’s office. As Widodo leaves the building to head home a middle-aged woman blocks his path. Near tears, she says she has tried for months to get her son into public housing where she lives but has been told City Hall has to decide. She hands Widodo a folder. “Come back tomorrow and I’ll sign the papers for you,” he tells her.

As bad as Jakarta’s problems may be, Widodo doesn’t think the city is beyond repair. His approach is to see them as interconnected: deal with poverty and you can start making the city more flood-resistant and less congested. The first step, he says, is to clear the waterways of illegal shantytowns. Having grown up in one, Widodo knows what will persuade these residents to relocate: newly built, low-rent apartments (€19 a month) with a TV, bed, dining table and new schools and markets nearby. Many of them qualify for his programmes targeting the poor such as free healthcare and money to buy books and school uniforms. “If you offer a solution they will move. You have to create a good environment for the children,” he says.

By relocating slum residents, City Hall can start cleaning up the 13 rivers and hundreds of canals that are Jakarta’s first line of defence against floods. Widodo is also in favour of a 60km sea wall and 17 man-made islands as protection from rising sea levels and has set a city-wide goal of tripling park space by 2017.

But unsnarling traffic isn’t as straightforward. It’s not enough to just keep building roads. The more sustainable path is to get commuters to ditch their vehicles and take public transport. At the moment there aren’t many options; there are too few TransJakarta buses and no subways or trains in the city centre. That will change as new buses are put on the road this year, and a new monorail and Jakarta Mass Rapid Transit train system start running in the next few years.

Since January Widodo has required all 71,000 city employees to commute by public bus or bicycle once a month. The governor himself has been cycling every Friday since November with a local group called Bike to Work. It’s one of those days, just past 08.00, and Widodo is in tracksuit trousers and a T-shirt that reads “Bobrokisasi Borokisme” – the title of a song by Indonesian band Slank that translates as “rotten bureaucracy”. He peddles through the city centre at the height of rush hour, flanked by motorcycle road-racing champion Jorge Lorenzo, the Danish and Norwegian ambassadors and dozens of others. With a police escort in the lead and TV cameramen on motorbike taxis recording every moment, the cyclists whoop and fan out as a drizzle turns into a downpour. Drivers honk but it’s impossible to tell if they are cheering on the group or want them to get out of the way.

Fifteen minutes later at City Hall, Toto Sugito, the founder of Bike to Work who pitched the idea to Widodo, is soaked but beaming. “Whatever Jokowi does is national news and because he’s done this consistently people realise that he is committed,” says Sugito.

It’s hard to find locals who aren’t rooting for Widodo to succeed. Many have only ever had low expectations for politicians. “As a Jakartan I can’t imagine someone doing something about the mess here,” says Teddy Soeriaatmadja, a film director. “When someone like Jokowi comes along it makes you think, is he for real?” He sits in a sushi restaurant at a mall picking at appetisers. Disillusionment has made Widodo a popular figure. “Everyone in my family supports him, people I work with support him,” Soeriaatmadja says.

If there is criticism of Widodo it’s that he’s fighting too many battles alone. Last year he took steps to eliminate corruption, posting the city’s budget online and requiring all money transfers to be done electronically. He also shook up the bureaucracy, using an open-recruitment process to pick new managers. “He’s one of our good leaders but one public figure fighting corruption isn’t enough,” says Febri Hendri from the public service monitoring division of Indonesia Corruption Watch.

Polls show that Widodo is the favourite to win Indonesia’s presidential elections in July – even though he hasn’t entered the race. His supporters say the central government could use the business-like discipline he has brought to Jakarta; critics contend that his effectiveness would be blunted by the military and other entrenched interests resistant to change.

Widodo hasn’t said whether he will run. The decision isn’t entirely his to make; he needs the blessing of Megawati Sukarnoputri, leader of the Indonesian Democratic Party of Struggle, which backed his candidacy in Jakarta, and that’s not likely to happen until after parliamentary elections in April. When monocle asks about his plans, Widodo chuckles. “I’m not thinking about that. Right now I’m concentrating on running Jakarta,” he says.

The challenge
Reviving a city while balancing the budget
The approach
Not being a normal politician – and appointing a team of non-partisan experts The result
Too soon to say but Porto is shining brighter than other Portuguese cities

“The mayor likes Communists,” his attaché whispers during a noisy public meeting in Porto’s city hall. “They at least do their homework.” In a grand tapestry-draped room, a Porto resident is shouting at one of Portugal’s newest and most intriguing politicians. Rui Moreira is listening patiently. Around his table, members from across the Portuguese political spectrum – including communists and the centre-right psd – all form part of the mayor’s handpicked team. Moreira himself, however, still refuses to join any political party.

Moreira, who made his fortune at the age of 35, was never really destined for government. Born in Porto and a member of its small but significant bourgeoisie, he has spent his adult life as a media commentator, competition yachtsman and shipping broker. But his decision to stand for election paid off: his surprise win in last September’s mayoral election against a long-established candidate who had never lost, marked a turning point in Portugal. Everyone from taxi drivers to telecommunications managers were cheering him on, in spite of – or rather, because of – his lack of political experience. On the surface Moreira’s win could be put down to populist protest voting, taking place in a disaffected region of a crisis-hit country. Deep down, though, it appears that the son of one of Porto’s richest families was able to become a man of the people by, simply, meeting the people.

“He did not make a single campaign pledge,” says Filipe Araujo, a young engineer turned city councillor for innovation and the environment. “We were walking around everywhere with no security guards, sometimes in the poorest neighbourhoods. And Rui Moreira, this man in a suit wearing a Rolex, was talking to everybody, making no promises, but taking it all in.”

Moreira’s priorities now are to bring business and residential life back into a battered inner-city, which has seen half its population leave in the past 40 years. His lack of initial promises were criticised by some who believe that his quiet pragmatism was more self-protective than prophetic. Yet his few policies so far show that he does have the long-term health of the city in mind, from the reinstatement of a highly active cultural team to investing in new technologies to streamline public services.

“I don’t believe in five-minute speeches then running away after a handshake,” the mayor says as he sits down to meet monocle in his office, which has been stripped of the flags, statues and paintings of his predecessor. “You have been warned – I like to take my time.”

In a region that has long been disillusioned with its leaders – particularly after crippling austerity measures were enforced to comply with the terms of Portugal’s €78bn bailout – it is easy to see why an independent (especially one who owns a cheap season ticket to FC Porto) becomes its new champion. “Cities need to self-organise and claim themselves from centralised power – that is what I am discussing with the mayors of other cities in the north like Braga and Guimaraes,” he says. “Portugal almost went bankrupt because politicians in Lisbon became poor middle-managers. And basically they started to act not for the public good, to use Churchill’s terms, but because they started seeing it as a source of power that would, actually, keep themselves in power.”

Moreira is just as much at ease talking about “shady bankers” and “unelected European bureaucrats” as he is about the Roman history of Porto and the cultural virtues of cities he aspires to, such as Bologna or Hamburg. Markedly cosmopolitan, he speaks in the language of an investor who has long known his city’s potential. “Instead of letting German companies poach engineers from the faculty at the University of Porto, I convince them to move their projects here,” he says. “Instead of leaving a 45-year-old electric cable manufacturer jobless, we train him as an electrician so he can work in the tourism or service industry.”

His decision to stop an abandoned riverfront building becoming a hotel says much about his caution when it comes to balancing city income and regeneration: both are needed in Porto. “We suddenly realised we had to be careful, that we had to make sure the building could be given back to the people who have lived in the neighbourhood for so long. When a ship is sinking, the first thing you have to do is to find the hole and patch it up. That is what we are doing now.”