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The Return of Electronic Russia

The Russian government will soon announce a unified plan to increase the efficiency of government administration via information technologies.

Nov 05, 2003
In two months, the unified project for implementing information technologies at federal agencies will be complete. For many years, Russia's ministries and agencies have computerized in whatever way they saw fit, creating a plethora of similar databases, incompatible systems, and unconnected networks. Not one government agency has complete and reliable information about what is going on in Russia.

By December, the Ministry of Economic Development and the Ministry of Communications will develop a united government policy on IT, defining key data registers to be shared by all agencies and creating a centralized system for purchasing IT-related goods and services. Obviously, the project's success will depend on whether interagency IT projects become high-priority national goals in the coming years. If not, the project may go the way of Electronic Russia, the last federal program dedicated to encouraging IT implementation in state administration. The program and its large-scale goals were widely publicized but given a ridiculously small budget. Expert's sources say that Electronic Russia was badly funded not because there was no money in the federal budget, but because the program from its inception lacked ideas worthy of more funding. It thus makes complete sense that the government charged the Ministry of Economic Development and the Ministry of Communications with rewriting the program.

The agency potpourri

It cannot be denied that Russia's ministries and agencies have become noticeably computerized in the last few years. Leonid Reiman, Minister of Communications, described current conditions at federal agencies to the government, based on a questionnaire filled out by around fifty agencies. 32 agencies reported they already had electronic document circulation systems of various grades. 80% of the agencies had bookkeeping and accounting systems, and the federal treasury and other divisions of the Ministry of Finance use complex systems to manage state finances.

The government could not pursue the task of uniting agency information systems earlier because federal organizations were not particularly concerned with the uniformity of their equipment and software. As a result, Reiman notes in his report, 41 agencies are using more than fifteen different financial management systems that are not connected to the central system at the Ministry of Finance. The division between state agencies is deepened by the lack of a government-wide system for transmitting data that could serve as a secure means for exchanging information between agencies.

Dead souls

However, the main disadvantage of interagency isolation is that the state has no clear, accountable information about citizens, legal entities, or its own property. Agencies have developed a variety of resources with similar content. For instance, the Ministry of Taxation and Duties maintains a state registry of legal entities and individual entrepreneurs, while the State Statistics Committee has a registry of companies and organizations. Some less than friendly observers have noted that these scattered registries are filled with "dead souls" and that a single individual can have many different "lives" according to the records. Moreover, no single existing registry of private individuals (or legal entities for that matter) is complete. Even in the databases related to medical insurance, considered the most complete, there are no records for almost ten million people.

Currently the government also has no complete registry of its property, which means there is no dependable information for calculating property tax and the budget never sees a significant part of potential income. However, creating a unified property register for Russia is first and foremost a political issue, and for this reason, the government has been putting off this potentially profitable project.

The policy's organizers hope to make key information resources shared by all agencies (registries of individuals, legal entities, and property) the basis for creating a government-wide IT system over the next several years. In its initial stages, according to Expert's sources, IT policy will focus on supporting crucial government functions connected to the federal budget: collecting revenues, monitoring spending, and managing various kinds of property. The share of land tax and other property taxes in the budget is small to a significant extent because the government does not know precisely what assets it owns. As a result, the state needs a full list of state property, which will not be possible without the joint efforts of the Ministry of Property, the Ministry of Natural Resources, the Land Committee, the Office of Technical Inspection, and many other agencies. Theoretically earnings from property could become a vital source of state funds, as they are in other countries.

These important and difficult tasks are not the only IT-related issues facing the government. The interagency projects needed to get a more or less complete picture of what is going on in Russia will take years.

Although the general plan for implementing information technology at federal agencies is not yet finished, it is already clear that, in order to make it a reality, the state will have to solve a variety of accompanying legal, organizational, and technical problems. In part, Russia needs a new federal law on state information resources, which would clearly state the types of information and access rights, as well as a law on information security to replace earlier, outdated acts.

As the state plans to centralize its purchasing of IT equipment and services, it needs to make some serious changes to existing procedures and laws. For example, the laws on state purchasing do not include clear criteria for selecting suppliers that would apply to IT companies. Often state agencies are themselves unable to make qualified demands on suppliers.

Yet another important goal is to develop methods for evaluating IT projects. According to the directors of Cognitive Technologies, careful regulation is particularly crucial when evaluating completed tasks. If this kind of regulation does not exist, the entire IT industry could turn into a major arena for money laundering.

Who's at the wheel?

However, the most important issue remains authority and accountability. Many officials are concerned that without a single person or body responsible for the results, nothing useful will come of the interagency IT programs. The Ministry of Communications and the Ministry of Economic Development are currently dividing up the responsibility among various agencies. IT strategy will be implemented by the Interagency Commission led by Economic Development Minster German Gref, Communications Minister Leonid Reiman, and the heads of other ministries. The State Informatics Committee will be responsible for developing unified technical requirements. The Ministry of Communications will remain the main administrator of the revived Electronic Russia program, while individual ministries and agencies will be responsible for their own projects.

The two years of Electronic Russia's existence demonstrated that a compound management structure of this kind is ineffective. The relatively limited money dedicated to the project disappeared in what Ivan Rodionov, Executive Director of AIG Brunswick Capital Management's representation in Russia, called "a quiet carving up of budgetary funds." They were divided up among a multitude of small contracts, and because the tasks were huge and the payment small, the companies who won contracts did very little. There was no single person responsible, which means there is no one to question about it now.

However, a much bigger sum is at stake today than when Electronic Russia began. The pie is much bigger, and so are the numbers of people who like to grab their slice. On the other hand, the government desperately needs ways to improve its management efficiency. It simply has no choice but to computerize. Otherwise, it will continue to have no idea what is actually happening in the country.

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