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Exclusive Insight: Interview with Mykhailo Fedorov, Vice Prime Minister and Minister of Digital Transformation

Ukraine’s wunderkind IT supremo – Vice Prime Minister at 31 and Minister responsible for Ukraine’s modernization through digital transformation – Mykhailo Fedorov, speaks to Kyiv Post’s Chief Editor B

Jun. 16, 2022

Ukraine’s wunderkind IT supremo – Vice Prime Minister at 31 and Minister responsible for Ukraine’s modernization through digital transformation – Mykhailo Fedorov, speaks to Kyiv Post’s Chief Editor Bohdan Nahaylo in an exclusive interview. What have been the main challenges, what’s been achieved and how are we responding to Russia’s war against Ukraine. All this and more in this Exclusive Insight interview.

Bohdan Nahaylo (BN): Mr. Vice Premier, let me thank you for the time you’re kindly giving to Kyiv Post. I think you know that you’re talked about as a legend – the youngest member of the Ukrainian government, a person who has been working with the President to make Ukraine a truly modern, democratic state. You are the one who developed the “state on smartphone” concept. The Diia App is your great achievement. Next in line is “Ukraine Wartime Defense”. To be honest, was it difficult for you to start all of this up when your ministry wasn’t even in place yet?

Mykhailo Fedorov (MF): Well, it was not too difficult, because we were not integrating it with the system that was already in operation, but created our own from scratch. Actually, we made it as we saw it, as we knew how it should work, and it was a rare mission. We aim to build the most convenient state in terms of the provision of public services. Our pursuit is one of the concrete objectives. Every single one of my deputies is responsible for each objective with relevant projects. Alongside the existing system, we have built our own, smaller system. We created a new product, using components of the old system and we showed millions of Ukrainians and officials how it can work.

BN: Was there resistance from conservative thinkers at first?

I will say this, we immediately built a team that knows how to work with bureaucrats. And, of course, I remember right here in this office my first meeting with the head of the State Migration Service. He told me it would be impossible to make digital passports. He stood up and walked out and was very nervous. He said, “It’s impossible!” And I remember how he first made public the news of the launch of e-passports and then traveled around the world presenting it as the government’s achievement. Yes, there was bureaucratic resistance, but we benefited from starting out with a mass product: millions began to use Diia the very first day we launched it. And then we were able to go on. My point is this: trust and the great number of users overcame that resistance. This is the formula.

BN: Are you satisfied with the progress made in a relatively short time?

MF: Well, of course, we wanted to make more progress. You know, we think 24/7 about how to make it faster and more efficient. We have the ability to see where we have moved too slowly, where the management was ineffective, and which decision proved to be wrong, and it helps us a lot. We were able to work on a project for three months and enlist many people, and then we saw that it wasn’t really worth doing and we had to halt the project. This way we find faster solutions for our development. We wanted to do more, but what we have done has, I think, proved to be good. If we put it in percentage points then, to be honest, what we have done is three percent of what really needs to be done, so the most interesting is still ahead.

BN: So, the most important achievement to date is Diia, isn’t it?

MF: Each project is important. Diia caused a revolution in digital services. Another project is Diia City. It involves almost 20,000 people and it’s one of the world’s best tax administration systems for technological companies. There were 250 companies already connected to it just two weeks before the war. It’s an entirely new philosophy for the tax system, of the legal system. It’s also very important for Ukraine’s development as an economy with efficient taxation, with elements of venture investment. You can see the results of our work on Internet coverage: the war is going on, but the Internet is available across the country and is restored very quickly.

BN: How come? I’d like to grasp something here. When the [Russian] invaders were almost right at the gates of Kyiv, why didn’t they strike at this very infrastructure? Why didn’t they shut down our internal telecommunications? Why didn’t they target the Internet?

MF: Because we are a market economy and the entire web is built on thousands of providers, which makes it very difficult to disable this system. One would have to uproot the entire highway network, providers, and all. That’s not so easy to do. And that’s why it doesn’t take long to restore this or that service even in a warzone because there are very many small providers and they set and repair their last-mile lines very quickly.  

BN: Our thanks to you for being the first to get in touch with Elon Musk regarding his Starlink system to prevent the Internet from being blocked. Was it difficult to persuade him to help Ukraine in such hard times?

MF: It was instant, but there had been two years of work earlier. We’d been in touch with SpaceX for two years. For a year or so, they didn’t respond to our letters, they didn’t respond to calls from the embassy. Finally, after about 18 months they began to reply and we began to communicate. Two days before the war, we had a video conference with the European management of SpaceX. We agreed to launch a company here in Ukraine in the coming weeks that would install and turn on Starlink. When the war began, the contacts were still warm. I sent a tweet and Musk responded in no time, and the ball started rolling.

BN: As far as I understand, Ukraine’s just received the  the official license to use them, right?

MF: Yes. And we and SpaceX showed how important it is to act quickly in a critical situation. It’s the main thing. It’s only now, in month four of the war, that bureaucracy has caught up with us. Three months of war have passed. We acted quickly, not bureaucratically, and achieved good results. At present, more than 12,000 Starlinks are being actively used by citizens throughout the country.  

BN: What are the biggest challenges for a minister in wartime?

MF: Well, of course, it’s database security. On the second or third day of the war, a missile struck the data center that stored copies of registers, but we had made backups using clouds provided by the world’s best brands, so all Ukrainian data is safe today and you can see that everything is operational: the government, the Customs Service, the Tax Service, Diia, the Treasury – they are all operational. And we are not afraid that something might happen, because we continue to work on protecting data. We continue to fight on this frontline.

BN: You are backed up by a large army of IT workers. Tell us a little about the way they help.      

MF: Right from the very first hours of the war, our IT companies, and individual cyber-volunteers got in contact with us and offered their help. They said, “Let us help you. Just tell us what to do.” We never attacked anyone. We are a peaceful country and we never thought of fighting in cyberspace. We were always on the defensive. You know, cyberattacks on us were so frequent that they kind of became part of our comfort zone. Every day since we began to build our digital state, we came under cyberattacks, so we didn’t even imagine it could be otherwise. And when [Russian] tanks crossed into this country we responded immediately. We systematized all the proposals that we received from our people. We assorted them in target-specific clusters and set assignments – public and confidential. We combined assignments. For example, those concerning damage to IT infrastructure, with communication assignments, I mean we carried out more or less integrated campaigns. And it started working. Now we have tens of thousands of specialists and hundreds of companies cooperating with us to this very day.

BN: We know that because of the tragic events and dictatorship in Belarus many IT specialists left for Poland, Ukraine or elsewhere. And only recently many Russians who disagree with Putin’s policy have left their country. Do they help Ukraine in any way, or are they just concerned about their own survival rather than being interested in helping Ukraine? How do you co-opt them?

MF: Many top-class Belarusian companies helped us during those dramatic political events in Belarus and relocated after Lukashenka proclaimed himself president. They really helped us and continue to help us, and we helped them too in our day. There are some top guys there. We don’t communicate with Russians at all. There are no Russian companies in Ukraine. They don’t move to Ukraine. But I think more than 100,000 IT specialists left Russia for Europe and other countries. That’s what my data suggests. Our task is a different one. We are not interested in their help. We want them to leave Russia and for it to be left without a future as a digital state because the future definitely belongs to the digital economy. Look, [Russian energy giant] Gazprom is valued $100 billion and Tesla is worth $700 billion. Hi-tech companies need to be created. Hi-tech industries create higher added value. Who creates technological companies? Young engineers who have energy and motivation, and are proficient in technology. They see the future through different eyes and they won’t live under a dictatorship. They won’t live in a country without even Photoshop, without Mastercard, Visa, or PayPal to be able to pay, and so they leave their country. By leaving Russia they throw it back 20 years, and that is a goal for us.

BN: We have a colossal problem: millions of people were forced to leave their homes, their homeland. How has this brain drain affected the IT sector and cyber security that you represent?

MF: A lot of companies that used to work in the east of Ukraine have relocated to the central and western regions. We do our best to help them – from providing quality Internet connection to temporary accommodation. We did whatever we could, even beyond our remit, just using the connections we have with people who understood the need to preserve our IT sector. I sent letters to companies that are major customers of our IT companies and asked them to accept the situation with understanding and not terminate contracts. We did lots of things. In the first quarter of this year, the IT sector even earned higher profits than last year. It did grow, even though it lost some of its potential profit. We could have done more. During the first quarter, we trained up to 10,000 people who have now started working in IT. We had a training program for so-called switchers – those who change their profession – in order to integrate them into the IT sector. Our challenge now is to stabilize the situation and do everything possible for this sector to develop. According to our estimates, up to 93 percent of our IT companies have returned their operations to pre-war levels. The Covid pandemic taught us to work remotely, without depending on logistics. Now our people are experienced and able to adapt. Besides, we have managed to secure reservations from mobilization for thousands of IT specialists that we need for maintaining and developing our infrastructure. About 10,000 people. So they are not being mobilized to fight. We are doing a lot to keep this sector operational, because the world doesn’t stand pat, but is developing simultaneously.

BN: Which countries help you most of all, or are the closest partners in this sphere?

MF: I have the answer. I keep in touch with all the ministers of digital transformation. In Europe, our best friend is Poland, along with Slovakia and Slovenia. These are the countries that we can rely on. The data centers there host our data and that really saved us. They have spent tens of millions of dollars to help us store our data there. Besides Poland, Slovenia and Slovakia, we keep in touch with other countries, such as France, and Britain.

BN: The centers are in Lviv and Kyiv now, right?

MF: IT centers? Yes, of course, and also in other western regions, Volyn, Lviv, and Transcarpathian Regions. As you can see, life is being renewed in Kyiv. There are now up to three million people in Kyiv, according to my data. I have a dashboard where we track the data of depersonalized operators. I constantly monitor the migration of digital users from region to region in order to see the situation. It’s important for digital services.

BN: It would have been good to have talked for longer. Now, winding up our conversation, let’s take a look into the future. Next month, you are going to represent Ukraine’s IT sector at an important conference in Lugano. Is it called “Ukraine Recovery”?

MF: Yes, and it’s the key platform for presenting Ukrainian reforms.

BN: What are the goals, tasks, and expectations?

MF: We invited the most technological companies to the European team of digital transformation ministers. We invited the biggest technology companies. We are going to present our short-term restoration plan. It would be, to date, incorrect to use the word “development” in relation to the digital sector. How we are going to present our plans for building Ukraine’s digital government 2.0, which will be more innovative than any of the governments in the world. We are going to present our vision and, most importantly, we are going to show the path for each IT company to become part of this success – so it will be a total win-win. We are going to present opportunities for other companies and how we can become a platform for joint efforts.

BN: This 2.0 is surely a lot more important than a 2.0 win over Wales.

MF: (laughing): That’s right!

BN: Thank you very much, Mr. Minister, for your time and for sharing this information!

MF: Thank you!

BN: Thank you!