India’s ID project empowers poor

People who grew up in Britain in the 1960s will remember a television program that built a cult following: “The Prisoner.” It was about an oddly luxurious detention camp - a kind of Guantanamo Bay by Four Seasons, spa services and brainwashing included. Even if you wanted to, trying to escape was pointless. A big balloon would chase you and bring you back. The residents didn’t have names, just numbers. The show’s tagline was: “I am not a number. I am a free man.”

The phrase came to mind while I listened this week to Nandan Nilekani, co-founder of Infosys (INFY) and one of the world’s most successful information-technology entrepreneurs. Speaking at the Center for Global Development in Washington, he was describing India’s remarkable Unique Identification (UID) project, also called Aadhaar, which he is leading.

Nilekani explained that since the program began in 2010, more than 300 million Indians have acquired a unique ID number associated with 12 biometric markers - 10 fingerprints and two iris scans. (Collecting that much data for each enrollee minimizes errors.) At today’s stunning rate of progress, reaching the goal of covering India’s population of 1.2 billion will take less than five years. The audience listened admiringly, and asked not a single hostile question.

That’s because it was an audience of development specialists, and the benefits of universal ID in poor countries are potentially huge. In advanced economies, proposals to gather biometric data and associate them with universal ID numbers immediately raise civil-liberties concerns. Not long ago the U.K. abandoned plans for a national ID card, partly on grounds of cost and partly because the idea was unpopular. This contrast in attitudes is worth pondering.

In recent years many developing countries have embarked on biometric ID programs. The Center for Global Development’s Alan Gelb and Julia Clark have surveyed 160 such projects and written an indispensable guide: “Identification for Development: The Biometrics Revolution.” As they and Nilekani point out, India’s project is unusual for its scale and scope, and because its aim was to create a system of identification independent of the uses to which it might be put - a platform that can support many uses, rather than one specific application (such as checking eligibility for poverty relief).

India’s UID project isn’t just popular with the experts. Take-up has been astonishingly quick not because participation is compulsory (it isn’t - yet) or because pressure (such as denial of services) is brought to bear, but because so many Indians appear to want an officially recognized identity. ID cards are sometimes framed and hung on the wall.

People in rich countries take their possession of an official identity so much for granted that they’re often unaware they have one. Many of the world’s poorest people have no documents to say who they are. In their dealings with employers and the state, you could say, they don’t fully exist. For them, a universal ID is an affirmation of personhood, a condition for civil liberty rather than a threat to it.

In practical terms, the potential benefits are exciting. Fighting corruption heads the list. Leakage of payments and services intended for the poor is notoriously high in many developing countries. Biometric IDs help to eliminate “duplicates, ghosts and the deceased,” as Gelb and Clark put it. In Nigeria, biometric audits reduced the number of pensioners by almost 40 percent. India’s UID program already seems to be saving far more than its cost of $3 or less an enrollee. A recent study for India’s National Institute for Public Finance and Policy found an internal rate of return of more than 50 percent.

One less-obvious benefit emphasized by Nilekani is the empowerment of people through increased competition - not least within the public sector. Without IDs, many Indians must deal with specific local offices where they are known or with particular officials who’ve dealt with them before. This puts them at the officials’ mercy. With IDs and fast online authentication, a central aspect of the project, people can go elsewhere and push back against inefficiency or demands for bribes.

Things can certainly go wrong, as Gelb and Clark make clear. A lot of programs have been bungled in the implementation. Some, like one in Malawi, have been too small for savings to cover the setup costs. Others are too fragmented, as in Nigeria, where multiple systems have operated alongside one another. India’s application-independent, standards-first approach avoids duplicating ID infrastructure and lets competition among suppliers of hardware and software push down costs.

To those concerned above all about civil liberties, of course, greater efficiency isn’t a good thing; it only makes the technology more sinister. Having an easily verifiable official identity is an enormous asset - try living without one - but a tyrannical government would no doubt find a project like Aadhaar much to its liking. This is a powerful technology like many others: It can’t be uninvented, and it can be deployed for good or evil.

The crucial questions are what else gets bundled in the file that carries your ID number and biometrics, and who has access to it. Developing countries moving toward national ID databases often lack laws to secure data and protect privacy. In India, laws for Aadhaar - whether they’re needed and what they should say - are still being debated, and despite its popularity the program has critics. At this week’s lecture, Nilekani was asked to share the secrets of his success with other ID-system pioneers. He said, work quickly and quietly, before opposition can crystallize. “Quickly and quietly” might get you the system, and for a country like India the benefits look irresistible. But it won’t get you the laws you need to operate the system safely.

For many reasons, therefore, India’s universal ID project deserves to be followed closely. In the U.S. and other rich countries, concerns about government misuse of ID information will hold things back. In all likelihood, therefore, Nilekani’s Aadhaar will lead the world. Exactly where it will lead, we’ll find out.

*The author is a Bloomberg View columnist.

by Clive Crook