Digital Identity For Trade and Development: case studies in South East Asia

Digital Identity For Trade and Development:

case studies in South East Asia

As connectivity within South-East Asia grows, it is critical for governments to put in place frameworks and mechanisms to leverage these developments and increase the use of digital platforms, while ensuring that there is proper governance, trust and authentication measures to support the development of the digital economy.

Often considered the foundation of a digital economy, the creation of a digital identity system is critical to enable every person to fully participate in their society and economy. Without proof of identity, people may be denied access to rights and services – such as the ability to open a bank account, attend school, access health services, collect social benefits, seek legal protection or otherwise engage in modern society.

This report explores in Chapter One a brief history UNCTAD’s 2030 TrainForTrade Development Account Project. Chapter Two gives an overview of some of the national strategies undertaken in South-East Asia in the implementation of a digital identity. Chapter Three presents seven selected case studies prepared by the Project’s participants, covering the relevant legal and policy frameworks and/or current status of Digital ID development in Cambodia, Indonesia, Malaysia, Myanmar and the Philippines. The following selected case studies provide succinct examples of good practices as well as policy recommendations for further development of a National Digital Identity Framework. Chapter Four concludes the publication with a list of recommendations.

UNCTAD’s 2030 TrainForTrade Development Account Project

Arnold Janssen D. Saragena

Trade and Industry Development Specialist, the Philippines Department of Trade and Industry

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"A blockchain-based solution for the Philippine Identification System would meet the wider aspirations of seamless service delivery, greater administrative governance, ease of doing business and reduce corruption."

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Why this topic?

ID plays a critical role for individuals to interact with the government and private organizations. Every individual needs to answer the question “who are you”; whether we are in a coffee shop to buy our favourite cup, in a bank to open an account or in a hospital to get health care services, and it requires proper proof of identification. Identity is defined as “a set of attributes that uniquely describes an individual or entity” and Identification (ID) is the evidence or attestation of one’s identity.

In the Philippines, proving one’s identity usually requires presentation of at least two valid/government-issued IDs. These IDs are typically non-electronic cards; a credential technology (CT) that is affordable, easy to deploy and use. However, using non-electronic cards has disadvantages such as card loss, tampering, and lack of biometric authentication support which is a more reliable form of identification. Amongst government and private agencies, there is confusion on which ID is considered primary, secondary or even “valid.”

In recent years, other kinds of CT were made available to the Philippines such as RFID cards, biometrics, contact and contactless smart cards, among others. Despite having these technologies, individuals and resident aliens still need to present two valid proofs of identification due to the absence of a unified national identification system.

The current identification system is fragmented between different public service agencies and institutions. It is also hindered by its susceptibility to disruptions and hacking attempts. Implementing blockchain-based solutions can simplify public and private transactions and provide a “national identity” to each citizen and resident alien of the Philippines. The decentralised nature of a blockchain-based solution would alleviate vulnerabilities whilst reducing the risk of inoperability. This would meet the wider aspirations of seamless service delivery, greater administrative governance, ease of doing business and reducing corruption.

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Wan Aimi Wahida Mohd Azmi

Business Strategist di Pos Digicert Sdn Bhd

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"A blockchain-based solution for the Philippine Identification System would meet the wider aspirations of seamless service delivery, greater administrative governance, ease of doing business and reduce corruption."

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Why this topic?

A harmonised Digital Identity framework in Malaysia could drive economic growth. The booming of the digital economy draws the immediate need for an authorised or legitimised Digital Identity platform for both individuals and businesses in Malaysia, propelling for a more secure, more transparent and safer online transactions.

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Jose Siraj Ballesteros Murad

Trade Facilitation Consultant, Department of Finance, Republic of the Philippines

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"It is a breakthrough for the Philippines to take the first step and develop a PKI system. It is never too late for the Philippine government to re-evaluate its policies and implementation strategies to optimize the system fully."

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As more and more people rely on the use of online applications over unsecured networks like the Internet, the need to secure files and ensure their information confidentiality and integrity increases, as does the need for a dependable Public Key Infrastructure (PKI). As its name implies, PKI is an infrastructure that secures communications between individuals and government agencies and ensures that the government’s delivery of services to citizens and businesses becomes safer, faster and more efficient.

The successful implementation of an information system requires the development of a holistic governance model, as any system must be fundamentally rooted in both legal and operational base of accountability and trust amongst its various stakeholders.

The Philippine National Public Key Infrastructure (PNPKI) was established subsequent to the launch of the country’s iGovPhil program, wherein providing data security through the PKI is an essential component of the program. Since the launch of the system in 2014, the Department of Information and Communications Technology (DICT) has reported that 4000 registered individuals have been issued Digital Certificates, an electronic imprint that possesses weight as their non-digital ID that would allow users to prove their identity virtually.

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Jovita J. Vence

Assistant Division Chief, Bureau of Trade and Industrial Policy Research, the Philippines Department of Trade and Industry

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"Philippine national ID is also a ticket for the people to be part, to be included in the main economic mainstream of the country."

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Why this topic ?

The Philippines’ ID System (PhilSys) is administered by the Philippines Statistics Authority (PSA) with the aim of promoting seamless service delivery. PhilSys has been rolled out in phases, with priority use given to the Department of Social Welfare and Development. The 5-year program will culminate in 2022 with the mass registration of 105 million Filipinos. Yet, challenges remain such as a lack of accountability, the lack of public trust and a lack of budgetary support.

The successful implementation of an information system requires the development of a holistic governance model, as any system must be fundamentally rooted in both legal and operational base of accountability and trust amongst its various stakeholders.

The Philippine National Public Key Infrastructure (PNPKI) was established subsequent to the launch of the country’s iGovPhil program, wherein providing data security through the PKI is an essential component of the program. Since the launch of the system in 2014, the Department of Information and Communications Technology (DICT) has reported that 4000 registered individuals have been issued Digital Certificates, an electronic imprint that possesses weight as their non-digital ID that would allow users to prove their identity virtually.

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Su Thet Hninn

Assistant Director, Ministry of Commerce in Myanmar

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"We need to have a sound legal background on data protection and privacy to keep up with the emerging e-commerce trends to enjoy the benefits that the digital economy provides."

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Myanmar is one of the fastest economies in the region after opening up the market and returning to the international community engagement. Based on the findings of the Rapid eTrade Readiness Assessment for Myanmar by UNCTAD (hereafter referred to as “eTReady report”), the country has unprecedented opportunities to go for the digital economy preceded by the liberalisation of the telecommunication sector in 2014.

Yet, substantial obstacles are in place for entrepreneurs and start-ups. The eTReady report includes data protection and data privacy as barriers to increase the country’s readiness for e-commerce. The existing regulatory framework can be improved by enabling the World Bank’s approach to managing and minimising potential privacy risk by combining ID Enabling Environment Assessment (“IDEEA”) and Privacy by Design (PbD).

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Nanci Laura Sitinjak

Ministry of Communications and Informatics of Indonesia

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"We need to understand the concept of the right to be forgotten as part of personal data protection and human rights regime in general, and related to the digital economy in particular."

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Why this topic?

Personal data protection is paramount to increase consumers’ trust in digital trade. ASEAN countries and Indonesia in particular, are encouraging the acceleration of regulations relating to data protection and its implementation to provide safeguards and guarantees to digital trade users.

Data protection in electronic systems includes the protection of the acquisition, collection, processing, analysis, storage, display, announcement, transmission, dissemination, erasure of personal data and the right to be forgotten.

In Indonesia, the right to be forgotten has begun to be implemented from 2016. Yet a key question remains as to whether the right to erase “irrelevant” information is the same as the right to be forgotten.

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Keo Buntheng

Deputy Chief of Commercial Law Bureau, Ministry of Commerce the Kingdom of Cambodia.

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"The mergence of e-commerce has brought about many benefits to our economy and individuals; however, it is important to develop legal frameworks and solid regulations for data protection and privacy in Cambodia."

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Why this topic?

Digital marketplaces could drive economic growth across Cambodia, with e-commerce likely to grow to US$537m by 2024.Yet, there are challenges to Cambodia’s digital economy growth. Entrepreneurs battle low consumer trust and face legal and cultural barriers to cross border e-payments, and regulations have not kept pace with the online market developments.

Policies shape the business environment, affecting everything from consumers protection to e-commerce transactions, and how data is treated, collected, processed, stored and governed. They can boost the digital economy by reducing business uncertainty and compliance costs.

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Mariann Kirsipuu

Estonian e-Residency’s Risk and Compliance department, Estonia.

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Luca Castellani

Legal Officer, UNCITRAL.

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Yann Duval

UNESCAP, Digital Identity workshop in Singapore.

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