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I. Introduction
1. The 1993 System of National Accounts (SNA),
recommended by the United Nations Economic and
Social Council [1]
as the international standard for the compilation
of national accounts statistics for the member
countries to consider, was the result of a long
process of deliberation among experts and consultation
with country representatives. The revised framework
was in response to the need to measure economic
transactions which have become significant and
to clarify concepts not fully dealt with in
the 1968 SNA. It has also articulated more clearly
various transactions of the key institutions
in the economy: government, non-financial corporations,
financial corporations, households, and private
non-profit institutions serving households (NPISH).
As a joint effort of various international organizations,
the 1993 SNA has been harmonized with the other
frameworks compiled by the countries such as
the Balance of Payments (BOP), Government Financial
Statistics (GFS), Money and Financial Statistics,
and Agricultural Economic Accounts.
2. While national accounts compilers/statisticians
appreciated the merit of the 1993 SNA, they
recognized the burden of compilation to the
statistical system. Many of the statistical
systems in the countries are not yet in a position
to support the data requirements for full implementation
of the 1993 SNA. Except for the developed countries
of the region, full implementation may not be
expected from the countries of the ESCAP region
within the medium term.
3. To respond to the varying circumstances
of the countries, the Inter-Secretariat Working
Group on National Accounts (ISWGNA) developed
a set of recommendations on the progressive
implementation of the 1993 SNA based on the
complementary data system of the country. These
phases or "milestones" (SNA News, July 1996)
are presented in the table below:
Phases Toward Full
Implementation of the 1993 SNA
| Phases
| General Description
| Detailed Description
| Complementary
Data Requirement
|
| Pre SNA
| Basic Data
| Data on production, trade,
prices
| production output by industry,
export/import employment, prices
|
| Phase 1
| Basic indicators on domestic
product (GDP)
| Final expenditure on GDP,
current and constant prices; GDP by industry,
current and constant prices
| data under pre-SNA phase
plus household & government expenditure,
capital formation
|
| Phase 2
| Gross National Income
(GNI) and other primary indicators
| External account of primary
intumescent current transfers; capital and
financial accounts for the rest of the world
| data of phase 1 plus balance
of payment statistics
|
| Phase 3
| Institutional sector accounts:
first step
| Production accounts for
all institutional sectors; generation of
income, allocation of primary income, secondary
distribution of income, use of income, capital
and financial accounts for general government
| data of phase 2 plus production
by institutional sector, by industry; government
financial statistics: stock and flows
|
| Phase 4
| Institutional sector account:
intermediate step
| Generation of income,
allocation of primary income, secondary
distribution of income, use of income, capital
accounts for all institutional sectors other
than general government institutional sectors
| data of phase 3 plus statistics
by institutional sectors on income generated,
received, final expenditures & capital
formation of households, non financial and
financial corporation and NPISH
|
| Phase 5
| Institutional sector account:
last of the transaction accounts
| Financial accounts for
all institutional sectors other than general
government
| data of phase 4 plus financial
transactions of institutional sectors
|
| Phase 6
| Other flow accounts and
balance sheets
| Other changes in assets
accounts for all institutional sectors;
balance sheets
| data of phase 5 plus balance
sheets of institutions, other volume changes
for all institutional sectors
|
4. These recommendations were designed to
guide countries in formulating statistical programmes
for the generation of complementary data and
compilation of the various accounts of the 1993
SNA. They were not meant to be prescriptive.
ISWGNA suggested that countries compiling SNA
may consider the phases depending on their resources,
capability, and policy and planning requirements.
The countries may choose to continue to the
next phase or may decide to improve estimates
of prior phases. Countries may also find that
their existing system may enable them to proceed
in steps which may not necessarily coincide
with the suggested phases. The introduction
of new concepts, expansion of coverage, and
revision of estimation methodologies in the
implementation of the 1993 SNA at any stage
would invariably result in revision of estimates
of national accounts aggregates traditionally
released.
II. Status of SNA Compilation
in the Countries of the ESCAP Region
5. The countries of the region are heterogenous
in terms of statistical development and SNA
compilation. Based on the status of SNA compilation,
the countries can be grouped as follows:
- small countries with few
statistical personnel; are compiling relevant
tables for the estimation of GDP by economic
activity and/or expenditure at current and/or
constant prices; have compiled basic tables
but discontinued them for various reasons;
or are still planning to start compilation;
b) countries compiling national accounts based
on the 1953 SNA and having incorporated some
concepts and estimation methodology based
on the 1968 SNA;
- c) countries compiling
national accounts based on the 1968 SNA and
considering the implementation of the 1993
SNA;
- d) countries formerly compiling
MPS 1/ The System of Balances of the National
Economy, also known as Material Product System,
formerly used in centrally planned economies./
and now shifting to the 1993 SNA; and
- e) countries compiling
national accounts based on the 1968 SNA and
currently in the process of full implementation
of the 1993 SNA.
/ 6. Countries in group a) have (at most) one
or two persons assigned to national accounts
and related statistics. Because of limited training,
the knowledge and skills of national accounts
compilation are inadequate. Moreover, the demand
for macroeconomic indicators for government
policy and planning in these countries is not
heavy. In general, the interest in SNA compilation
is to have regular estimates of GDP by industry
and by final expenditure at current and constant
prices, and GNI (GNP).
7. The countries in groups b) and c) have
been compiling and continuously improving the
basic data for national accounts compilation.
Because of the availability of domestic or external
financial assistance, these countries have compiled
satellite accounts although not necessarily
on a regular basis. Countries in group b) have
continued compilation based on the 1953 SNA
because the accounts are still found relevant
and because plans to adopt the 1968 version
were overtaken by the release of the 1993 SNA.
8. The countries which were formerly compiling
the MPS, group d), have started to compile SNA
by converting transactions items from the MPS.
Several countries have started compiling selected
accounts of the 1993 SNA but because of the
breakdown of traditional reporting systems in
the transition to the market economy, the pace
has slowed down. New data collection approaches
are being developed to fill the data gaps for
compilation. In some countries where users still
have to be familiarized with the concepts and
terminologies of the SNA, policy makers still
refer to statistics from the MPS.
9. Several countries in groups b), c), d)
and e) have also expanded compilation for subnational
or provincial production and/or expenditure
accounts and quarterly accounts for estimation
of GDP and other national accounts aggregates.
Other satellite accounts such as input-output
tables, flow-of-funds, social accounting matrices
and environmental accounts have been compiled
on regular or ad hoc bases. These countries
have been continuously improving basic data
input and compilation/estimation methods of
national accounts.
10. The last group of countries, group e),
have highly developed statistical systems and
are now in the process of full implementation
of the 1993 SNA. Their experience will be very
useful for the other countries of the region.
11. In compiling the 1993 SNA, the countries
have to redefine some of the existing concepts,
introduce new ones, expand the collection of
basic data, and adapt estimation methodology
and table presentation consistent with the 1993
SNA.
III. General Issues
in Implementing the 1993 SNA
12. Compilation of the 1993 SNA will improve
the data input to policy and planning in the
countries. As an integrated and coherent framework,
it will enable policy makers to better link
real and financial transactions; differentiate
the effect of transactions and non transaction
flows on changes in the economy; and monitor
more effectively the impact of policies on relevant
economic variables and institutional sectors.
It will also make the national accounts statistics
consistent with international standards. Although
the 1993 SNA may still have limitations in capturing
processes in the economy 2/ Revisions are being
proposed to the 1993 SNA as new transactions/instruments
(e.g., financial derivatives) become significant
in the economy or because some concepts have
been found difficult to operationalize./, and
the burden on the statistical system is enormous,
national accounts compilers are eager to adopt
the 1993 SNA. They recognize the value of full
implementation but realize that there are several
issues/problems to be addressed. They need to
have government commitment, sufficient manpower
with adequate technical capability, complementary
data support, and they have to make adequate
preparations so that users will accept the revised
estimates. They also have to make sure that
the concepts underlying the framework are well
understood and properly operationalized.
A. Government Commitment
13. The compilation of national accounts requires
a wide spectrum of data input both from statistical
inquiries and as a by-product of administrative
functions. While the national accounts unit
and the central statistical organization are
generally the major agencies involved in the
implementation of the 1993 SNA, the data inputs
come from many agencies in the country. The
reliability of the estimates from the accounts
are subject to the accuracy of the basic data.
As such, commitment to support SNA implementation
has to be government-wide.
14. Because such commitment entails material
support, government decision makers have to
be convinced that implementing the 1993 SNA
is beneficial to the country. And even when
these officials are convinced, other priorities
compete for the scarce resources of government.
Proposals for financing new statistical activities
needed for national accounts compilation may
not survive such competition. There are always
reasons for supporting the status quo.
But somehow, initial steps have to be taken
towards implementation. These steps have to
emanate from the national accounts compilers
and the major agencies of the statistical system.
The commitment of these agencies is crucial
in initiating the process.
15. Are the countries, particularly the statistical
system, willing to assume such a commitment
not just in words but in deeds? Are they willing
to commit resources for such activities?
B. Manpower Resources
with Technical Capability on National Accounts
Compilation
16. The 1993 SNA framework is complex. Some
of the existing concepts have been revised and
new concepts introduced. These concepts have
to be fully understood before they can be operationalized.
Studies have to be undertaken to determine whether
these concepts could be adapted to the statistical
circumstances of the country. The linkages of
transactions and economic flows also require
full understanding and correct interpretation;
operationalization would be faulty if the technical
personnel assigned to these tasks are incapable.
17. Not all national accounts compilers/statisticians
are conversant with the SNA framework. In most
instances, knowledge and expertise are limited
to the sectoral assignments of the staff. This
situation may be acceptable with the existing
level of compilation but may not be satisfactory
for the compilation of the 1993 SNA. Understanding
the full structure is essential as transactions
are carried over to various accounts. Consequently,
new concepts have to be learned and operationalized,
new transactions have to be measured and estimated,
and new accounts have to be understood and compiled.
National accounts compilers/statisticians have
indeed much to learn about the 1993 SNA.
18. The classification of transactions and
transactors requires revisions in the approaches
to data collection. For example, while establishments
have always been the statistical unit of inquiry
for production and related variables, this will
not be sufficient for compilation of the 1993
SNA. The enterprise, the unit that makes decisions
on the use of resources and which is the legal
entity that enters into contract with other
institutions, has to be considered hand in hand
with the establishments in data collection.
Therefore, statisticians in charge of economic
inquiries also need to be familiarized with
the concepts underlying the compilation of the
1993 SNA. This will ensure correct interpretation
of transactions and appropriate methods of collection.
19. Training will definitely improve the knowledge
of the technical personnel on the 1993 SNA.
However, as manpower is limited, taking away
two or more people from the workforce may hinder
the normal operation of the office. Training
also entails financial costs. Are the countries
willing to take on the implications of these
demands?
C. Complementary Data
Requirements
20. Full implementation requires improvement
of existing data as well as the collection of
new information. Improvement of existing data
is necessary to accommodate the revision of
existing concepts while additional data are
essential to measure transactions newly introduced
in the 1993 SNA. Improvement of existing data
could be in the form of redesigning existing
surveys or reprocessing existing forms. New
data collection could be accomplished by embarking
on new surveys/inquiries or processing existing
administrative by-products into the desired
format. These activities involve organizations
other than the main statistical agencies.
21. As the countries consider implementation
and institutionalization of the accounts, in
a situation of limited resources, decisions
have to be made on which complementary data
should be given priority. Should emphasis be
placed on improvement of existing data sources
or should one embark on new data collections?
To what extent do the national accounts compilers/statisticians
have influence and authority in convincing other
agencies to collaborate in these tasks?
D. Political Implications
of Revisions
22. Countries have experienced resistance
among users in accepting revisions of national
accounts statistics. This resistance is much
stronger in the case of overall revisions which
may have implications for the economic history
of the country. Such resistance can be expected
in the conversion to the 1993 SNA. Although
full implementation of the System can easily
justify the revisions as the transactions would
be internally validated in the accounts, the
same might not be true for progressive implementation.
Nevertheless, acceptance of these changes is
crucial for the implementation and institutionalization
of the 1993 SNA.
23. Will policy-makers and other users of
national accounts in the country be ready to
accept changes that might be contrary to their
perceptions of the economy? To what extent is
the statistical system prepared to meet these
obstacles?
IV. INITIATIVES
Since the release of the 1993 SNA by the United
Nations and partner international agencies,
several activities have been undertaken to support
its implementation. Various training courses
have been offered for countries, meetings and
workshops have been organized, and studies have
been conducted to further operationalize new
concepts introduced in the 1993 SNA.
In the ESCAP region, several developing countries
have started implementation of the 1993 SNA.
It has become a key component in strengthening
statistical capability programmes under various
technical assistance schemes from multilateral
and bilateral agencies (for example the Asian
Development Bank and the Netherlands Government).
At the same time training courses offered by
various international institutions include national
accounts; participants from countries in the
region have been invited to these training offerings.
The Statistics Division of ESCAP has provided
advisory services on national accounts to countries
in need of such services and has taken the lead
in meetings and workshops on the implementation
of the 1993 SNA. For 1998 and 1999 follow-up
subregional workshops are scheduled to provide
forums for countries to share their experience
in national accounts compilation and data requirements,
to further their knowledge on application of
concepts, classifications and transactions in
the 1993 SNA, and develop programmes of implementation.
In addition, a joint OECD-ESCAP meeting has
been scheduled in May 1998 for interested member
countries to discuss selected special topics
and problems encountered in implementing the
1993 SNA.
Footnotes
[1]In
resolution 1993/5 of 12 July 1993, the Council
recommended that member States consider using
the 1993 SNA as an international standard for
compilation of their national accounts statistics,
to promote the integration of economic and related
statistics, as an analytical tool, and in the
international reporting of comparable national
accounting data.
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