High Level Seminar on 2008 SNA Implementation
In GCC Countries
27 May 2010, Muscat, Oman
Gulab Singh
United Nations Statistics Division
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System of National Accounts
 Like any other discipline, National Accounts has evolved over a period of about last three centuries
 Production boundary has been at the heart of the
National Account – whatever is produced only can be consumption or accumulated.
 Early 18 th Century - Sir William Petty and Boisguillebert first conceived the idea of national income – agriculture as the primary branch of production
 Later extended to include forestry, fishing and mining,
 Manufacturing commodities, clothing, interest on money, servants – sterile expenditure
 Turgot (1766) defined productive domain as the one that included all goods having monetary exchange value
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System of National Accounts
 Condillac (1776) argued that all income earning services, including money lending are part of production
 Adam Smith (1776) dichotomized the economy productive and unproductive labour – labour engaged in production of goods which can be exchanged for money
 Garnier (1802) challenged dichotomy
• so called ‘unproductive’ services helps,
• production occurs both within and beyond market domain
• Not only material goods but services also part of the production
 Services of government, actors etc were outside the production boundary
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System of National Accounts
 Keynes (1936) defined a clear role for government services as non-market goods and services, once and for all breaching the traditional boundary of productive and unproductive labour.
 In 1928 the League of Nations convened the first international economic conference
• Encourage compilation of economic statistics
• Adoption of uniform presentation methods
 1939 League of Nations first published World Economic
Survey - NI estimates of about 26 countries – about half were official estimates and hale were research studies
 1944-45 NA compilers form USA, Canada and UK discussed problems of international comparability – first international agreement
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System of National Accounts
 1945 UN Sub Committee on NI - met in Dec 1945 and discussed a paper by Richard Stone
 1947: Sub Committee Report – Origin of SNA trace back to this report
 In 1952 the UN Secretary General appointed a committee to formulate international standards to help compile national accounts on a comparable basis –
1953 SNA was born.
• 3 sectors (enterprises, hh and NPI, and Gen Govt.)
 Revised in 1968, 1993 and 2008
 Production of all goods and services except services produced by households for own consumption excluding owner occupied housing and domestic and personal services by paid staff.
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System of National Accounts
 The System of National Accounts (SNA) is the internationally agreed standard set of recommendations on how to compile measures of economic activity in accordance with strict accounting conventions based on economic principles.
 The SNA is a multi-purpose system designed for
• Economic analysis,
• decision-taking and
• policy-making,
 whatever the industrial structure or stage of economic development reached by a country.
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System of National Accounts
Monitoring the behaviour of the economy National accounts data provide information covering both different types of economic activities and the different sectors of the economy.
 It is possible to monitor the movements of major economic flows such as
• Production, (GDP and per capita GDP the most widely used indicators of economic growth)
• Household consumption,
• Government consumption,
• Capital formation (capital productivity)
• Exports and imports, (competitiveness, price policy)
• Wages (labour productivity)
• Profits,
• Taxes,
• Lending and borrowing, etc .,
 Structure of economy by economic activities
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System of National Accounts
Macroeconomic analysis
 Causal mechanisms at work within an economy.
 Estimation of the parameters of functional relationships between different economic variables by applying econometric methods to time series of data.
Economic policy-making and decision-taking
 Short-term: on the basis of an assessment of the recent behaviour and current state of the economy and a view, or precise forecast, about likely future developments.
 Formulation of Five yearly national developmental plans
• Input-output table a very useful tool for perspective planning
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System of National Accounts
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2008 SNA changes affecting GDP
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Capitalization of Research and Development.
•
Valuation of output for own final use by households and corporations to include a return to capital.
•
Capitalization of military expenditure.
•
Refined Method for Calculating Financial
Intermediation Services Indirectly measured
(FISIM).
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Changes in recording of pension entitlements.
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Implementing 2008 SNA
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Australia first to implement in 2009 .
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EU plans to have European System of National accounts by 2012 and implementation by its member states by 2015
•
Most of the OECD Countries have plans to implement by about 2015
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Regional Commissions have initiated process for implementation by member states- WGs
•
The Regional Seminar has discussed strategy for
2008 SNA implementation in ESCWA countries
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2008 SNA implementation - process
Vision
Where we want to be
Political
Commitment
Action Plan
How to get there
COUNTRY
OWNERSHIP
Assessment
Where are we now
Statistical capacity
Implementation
How to stay there
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Implementing 2008 SNA
Things to do……..
 Diagnostic analysis using self assessment tool
(questionnaire) – about 3-4 months (Sept 2010);
 Write a report (vision document) based on this diagnostic analysis – about 15-18 months (end 2011);
 Consultation at national level with all main stakeholders – users, producers and providers of statistics to discuss vision document and priorities;
 Revisit statistical agenda and develop link to policy document;
 Identify priority areas – for external technical assistance;
 Write detailed action plan with a timetable and financing plan to put these strategic actions into effect in order to achieve desired results;
 Mechanism to monitor progress, including indicators and reporting to inform the updating and adaptation of the strategy
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Implementing 2008 SNA
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Demand on resources – financial and manpower
•
Extent of resources required would depend on the level of the SNA chosen to be implemented and level of development of statistical system
•
Launching new surveys (rationalizing existing surveys)
•
Modernization of ICT environment
•
Training and capacity building, national training institute
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Promoting use of administrative data
–
MOU with CB, tax authorities and other line ministries
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Phase General description
Pre-SNA phase Basic data
Detailed description
Data on production, trade, prices, etc.
Phase 1
Phase 2
Phase 3
Phase 4
Phase 5
Phase 6
Basic indicators of gross domestic product
(GDP)
Final expenditures on GDP, current and constant prices; GDP by industry at current and constant prices
Gross national income and other primary indicators
Institutional sector accounts: first steps
External account of primary incomes and current transfers; capital and financial accounts for the rest of the world
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
Institutional sector accounts: intermediate steps
Institutional sector accounts: last of the transaction accounts
Other flow accounts and balance sheets
Generation of income, allocation of primary income, secondary distribution of income, use of income, capital accounts for all institutional sectors other than general government
Financial accounts for all institutional sectors other than general government
Other changes in asset accounts for all institutional sectors; balance sheets
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