Thank you for the opportunity to host this dinner and discussion at the 2018 Brussels Forum. I am honored to be here with this esteemed and experienced group of leaders in promoting long-standing transatlantic goals and values. I want to thank the German Marshall Fund and Jonathan Katz in particular for their superb organization, tremendous support for this event.
This evening, I’m looking forward to hearing your thoughts on how we can develop ideas and recommendations for strengthening the role of the digital revolution in Western integration by countries of the former Soviet Union.
My name is Anatoly Motkin, and I am the founder and president of a new U.S. non-profit organization called StrategEast. StrategEast is a strategic center for developing innovative policies, diplomatic solutions and concrete programs to guide and assist former Soviet states into closer ties and working relationships with the United States and the European Union.
We focus on the 14 former states outside of Russia who gained or restored their independence after the fall of the Soviet Union. This post-Soviet, non-Russia region – or, the PSNR – spans the Baltics, Caucasus, Eastern Europe, and Central Asia.
StrategEast adopted this mission and focus because we believe nations from the former Soviet Union share a heritage that has resulted in common obstacles to the formation of stable, efficient, market-oriented democracies. Our goal is to help political and business leaders in post-Soviet countries and the West better understand one another, communicate across borders, and collaborate to support real change.
I am pleased to announce that StrategEast has just released our inaugural research index measuring the degree to which the countries of the PSNR have adopted Western standards in their transition since independence. This research has helped to inform our vision and strategy.
StrategEast’s research index supports an important finding that I hope will form the basis of our discussion this evening. Of the 5 sectors measured, the index shows PSNR countries are overall more successful in pursuing economic transition over other Western-style reforms. The level of economic Westernization averaged 57% across the region, while political and cultural Westernization averaged 50%, and legal Westernization – which includes rule of law, judicial independence, and human rights protections – averaged only 42%. This suggests that economic reform is a ripe point of engagement around Western transitions, and can eventually become a catalyst for greater collaboration in sectors dealing with legal and political transition.
Tonight we are here to talk in particular about the nature and scope of the digital revolution in the PSNR, and how countries in the region are creating and can create transformational change through the tech sector.
I have my own experience with this directly – international IT companies, that I’m invested in, have a development centers in Belarus and I should tell you, that those guys, who work with us have a completely different mindset from their peers involved in other sectors of Belarusian economy. As a result of their communication with their colleagues in US and EU they adopted Western cultural codes and corporate culture.
Thanks to tech sector policy reforms, Belarus’s Hi-Tech Park now employs nearly 30,000 people and exports $1 billion in products. This progress is continuing with Belarus’s new law, which took effect on March 1, which creates a regulatory framework for blockchain technology, legalizes cryptocurrencies, and allows initial coin offerings.
Belarus is not the only country in the region to see the potential of tech. Estonia has paved the way with the invention of Skype and the adoption of e-voting and e-residence. Ukraine holds Europe’s largest software development industry. Uzbekistan is forming a national innovation system to boost its tech sector.
These reforms help improve economies, but they do more than that. They help improve societies.
Right now, too many promising young people in the PSNR have grown up in societies where economic opportunity comes from industries that are often corrupt or stagnant. Mining, oil and gas, and heavy industry are industries that often driven by rent-seeking and state capture. Many of the companies in these industries in the region are suffering from lack of capital investment and innovation.
The digital economy and the tech industry offering promising dynamic pathways to the future economies in this region.
Social media and the internet offers a future in which young people can create for themselves, take more ownership of their lives, and reform their relationships to the state. The tech sector can help the region move from consumption to creation – a necessary transition in a digital world.
These sectors can become catalysts for a more dynamic regional transformation. They can create a new generation of intellectual leaders. They can also move workers into a formal economy from the large, cash-based shadow economies that currently dominate. Young people will gain access to legal money and online payment systems, reaffirming confidence in local economies and enabling new growth and investment.
At the same time, there are also obvious challenges to the growth of the digital economy in the PSNR. First, the growing young populations see few paths to prosperity beyond the problematic sectors. They are not educated and trained to embrace the tech sector with confidence.
Second, the legal and regulatory environment requires major reforms to induce transparency, predictability and enforceability – particularly around the protection of intellectual property.
Third, the political leadership of many countries of the PSNR must be engaged at the highest levels – including by Western leaders – to resist the temptation to interfere with and to make more room for the growth of the digital economy.
Thank you all for your time.
