Why public servants have 2.5 quintillion reasons to make better use of data

By on 08/10/2023 | Updated on 08/10/2023
Ahmed Reda Chami, President, Economic, Social and Environmental Council of Morocco, speaking at the Global Government Finance Summit
Ahmed Reda Chami, President, Economic, Social and Environmental Council of Morocco, speaking at the Global Government Finance Summit

The amount of data generated is increasing exponentially. At the Global Government Finance Summit, finance leaders from around the world explored its huge potential to improve their efficiency and effectiveness – from reverse means-testing to globally-portable IDs

“In 2021, 2.5 quintillion bytes of data were produced worldwide every day,” said Ahmed Reda Chami. “A quintillion is 10 to the power 18 – so it’s a huge amount of data!”

Chami, president of the Economic, Social and Environmental Council of Morocco, was speaking at the 2023 Global Government Finance Summit, which had attracted finance department leaders from around the world to the Moroccan capital, Rabat. This fast-growing sea of data has massive potential value for public finance and economics departments, he told the group.

“Governments can have better insights into population dynamics, economic trends, stakeholders’ voices,” said Chami. “They can make decisions based on evidence rather than intuition or conjecture. They can use data to decide how to invest in different programmes or regions.”

The private sector can help here by providing governments with anonymised, aggregated data, said Selim Ergoz, a global lead for strategy and planning in the public sector unit at event knowledge partner Mastercard. The payment network’s data – drawing on the transactions of three billion cardholders and 50,000 banks in 200 countries – provides “a lot of data that we harness for the benefit of the public sector, providing insights” to help deliver services and shape policies.

Mastercard provides “a lot of data that we harness for the benefit of the public sector, providing insights.” Selim Ergoz, global lead for strategy and planning, Public Sector Unit, Mastercard.

The pandemic dramatically accelerated progress on governments’ use of data, said Nazim Gasimzade, director of the State Treasury Agency of Azerbaijan. Previously, there was a “lack of leadership; it wasn’t a top priority,” he recalled – but in the face of COVID-19, governments desperately needed the capabilities that data could provide. “The pandemic didn’t care about leadership or priorities; it just crushed everything that stood in its way,” he commented. “It made sure that we’re progressing at a much faster pace.” After salaries, IT has now become the second biggest cost in administrative budgets, he added.

Tarmacking the information superhighway

To harvest the potential of data, said Chami, governments must first build the necessary infrastructure and develop their “data architecture” – agreeing common data standards so that information can be moved and compared between departments. Introducing a universal system of digital ID is important here, commented Kevin Cunnington, a former head of the UK’s Government Digital Service. “Governments have a huge amount of legacy data, but most of it is incorrect,” he said: creating an authorised digital ID system ensures that there’s a core of trustworthy information, providing a solid foundation for work to link up datasets and public services.

Ahmed Reda Chami, President, Economic, Social and Environmental Council of Morocco, speaking at the Global Government Finance Summit

Governments can take various routes to this capability, Cunnington explained. Trailblazers such as Estonia and Singapore built their own digital IDs around existing universal national ID systems. “We’re now seeing an emerging trend where countries which didn’t have national identity are creating it,” he added. “India was the first: they photographed and fingerprinted all 1.3bn citizens, and created ID cards. We’ve seen that replicated now by countries like Saudi Arabia, Bangladesh, Romania. It’s a real trend.”

Other countries have created frameworks permitting banks to verify people’s identities and issue digital IDs, Cunnington continued. Now nations operating both kinds of system are expanding the range of organisations able to connect into their digital IDs, allowing private companies to provide services. “The reason why this is really important is that government accounts for only 3% of our citizens’ usage of identity: the vast majority of use cases are things like social media, e-commerce and banking,” he said. If citizens can use their national digital ID to access private services, they’re far more likely to use it for government services too – driving public sector efficiencies, and reducing friction in transactions across the economy.

The next step in digital ID, said Cunnington, will be to make them interoperable – allowing tourists, students and expats to use their national IDs while abroad. “The group with the most incentive to solve this interoperability problem is the EU, because it’s absolutely enshrined in EU regulations that goods, people, capital and services can move between countries – and right now people can’t, because their identities can’t,” he commented. Even now, though, many major countries – including the UK, USA, Japan and Canada – don’t have digital ID systems. “We found it quite hard to create and deploy them,” Cunnington said. “We tried, but we failed and went back to the drawing board.”

Bridging the gaps

Meanwhile, those nations with digital IDs have been forging ahead. Ever since 2012, explained Gasimzade, Azerbaijan’s Asan agency has provided a single entry point for a wide range of public services. More recently, Asan Login took this access online – but information was not shared between provider agencies until “the pandemic knocked on the door, and to effectively fight it we needed to share information. So a new system was created: Asan Bridge.”

Every agency was required to provide all their data to other public bodies via this network, he said, and “anything that the Ministry of Finance needed, we could extract the data from Asan Bridge, which made our analysis and data-based decisions so much easier.” Before designing rural social programmes, for example, civil servants were able to access detailed demographic data showing how need varied across the country.

Public services can also actively generate data to inform policymaking, pointed out Driss Aquachar, a director with Mastercard’s Public Sector Unit. “In Morocco, we’re working with the public universities to provide their students with cards that are not only an ID, but also a method of payment,” he said. “They can use it on the tram, to go to the library, to buy discounted goods at retailers – and you can see their behaviour, to provide them with a better experience.” Similarly, Mastercard partnered with the UK government to hand out prepaid cards in Northern Ireland during the pandemic, feeding money into local businesses whilst learning about the spenders’ interests and behaviours. All the data is anonymised before analysis, he added, ensuring that individuals’ privacy is protected.

To demonstrate the value of this kind of data, Aquachar cited Mastercard’s work on tourism with the Moroccan government: analysis of aggregated data on overseas visitors’ spending helps shape the country’s tourism strategy. His colleague Cagri Aydogan, a regional vice president with Mastercard Advisors, noted that the company is working with North American local authorities to understand how parking charges affect local retailers’ trade: by altering the charges and monitoring the impact on financial transactions in nearby businesses, they can find the best possible balance between parking fees revenue and retailers’ takings.

A radical approach to means-testing

Meanwhile, Morocco is developing its own data-based services, said Chami. These include a digital ID, a unified electronic medical record, and a national civil registry covering data such as births and deaths. Perhaps its most ambitious project is a benefits scheme: to skirt the challenge of assessing people’s incomes in a largely cash-based, informal economy, this will assess eligibility on the basis of people’s spending, rather than their incomes. “When someone registers, the system will ask several databases about their consumption,” he explained. “The utility company, the phone company, the banks. Then we can give people a score, and if they reach a certain level they’ll receive money or other benefits.”

The design of this programme hints at some of the problems of developing data-based services in the developing world. “You have rapid population growth; an informal contribution to the economy that might be as high as 30%; limited financial and human resources,” said Chami. Governments can also be reluctant to release data, he added, and the country constantly loses skilled staff to better-paid jobs overseas. “We’ve been doing a great job training all these engineers, but when they graduate the Europeans come and take them away,” he commented. “There’s a big brain drain. How do we keep them here? We have to improve the environment.”

“The pandemic didn’t care about leadership or priorities; it just crushed everything that stood in its way.” Nazim Gasimzade, Director, State Treasury Agency, Azerbaijan

“Last but not least, we need to promote data use and engagement – and this can only be done through trust,” he continued. “How do you protect data? How do you make sure it’s used ethically?” This is of course a major challenge around the world, commented Gasimzade. “If you have bad actors, they can twist data to tell any story they want,” he said. “We have to preserve the integrity of data interpretation” – being transparent about how data is being used, and applying high-quality research and data management techniques.

The new abundance of data presents huge opportunities for finance departments, concluded Gasimzade; to realise its benefits, civil servants must quickly build up the required skills and systems – racing to keep up with the pace of change. He ended with a quote from Lewis Carroll’s Alice in Wonderland: “‘Here we must run as fast as we can, just to stay in place. And if you wish to go anywhere, you must run twice as fast as that’,” he said. “We firmly believe that not running away from these challenges but embracing them makes this whole ride worthwhile, bringing fulfilment and meaning to this deal called life.”

This is the third report on the Global Government Finance Summit held in Rabat, Morocco in June 2023, covering the session on data-based decision-making. The first report covered Irish finance department Chief Economist John McCarthy’s analysis of his country’s economic strengths and weaknesses, and the second how finance departments can support the drive for net zero. Further reports will be published here soon. To ensure that participants feel able to speak freely at the Summit, we give all those quoted the right to anonymise, edit or delete their comments before publication.

About Richard Johnstone

Richard Johnstone is the executive editor of Global Government Forum, where he helps to produce editorial analysis and insight for the title’s audience of public servants around the world. Before joining GGF, he spent nearly five years at UK-based title Civil Service World, latterly as acting editor, and has worked in public policy journalism throughout his career.

Leave a Reply

Your email address will not be published. Required fields are marked *