Globalization, Localization and Statistics Mustafa Dinc, PhD Prepared for the session “Measuring globalization - do we have the right numbers?” of the Fifth Astana Economic Forum May 23-24, 2012 Astana, Kazakhstan

Globalization and localization Globalization is a reality and we are living in globalized world The debate on the benefits or the cost of globalization is not over, yet Local and regional economies emerged as the building blocks of the new world economic landscape Understanding and measuring globalization is important ◦ Having the right numbers ◦ Getting the numbers right

International Trade

FDI Stock (Inward)

FDI Flow (inward)

The KOF Index of Globalization Introduced in 2002 (Dreher, published in 2006) and is updated and described in detail in Dreher, Gaston and Martens (2008) It defines globalization as the process of creating connections among actors at multi-continental distances through a variety of flows including people, information and ideas, capital and goods that integrates national economies, cultures, technologies and governance The overall index covers the economic, social and political dimensions of globalization

KOF Globalization Index

Economic Globalization

Social Globalization

Statistical System and Data Quality Statistical systems are under great pressure and underperforming They are caught in a vicious cycle, (inadequate resources, poor quality of statistics, that leads to low demand, and hence fewer resources) In most countries, sub-national statistics are not even collected due to lack of resources and inadequate capacity

The Statistical Capacity Indicator Composite index of 25 indicators organized along 3 dimensions: Statistical methodology: National Accounts, BoP, external debt reporting, CPI, PPI etc Source data: Registration systems, regular census and surveys Periodicity and timeliness: Reporting periodicity of key indicators

Statistical Capacity Indicators

Methodological soundness vs data availability

Kazakhstan and KAZSTAT

Kazakhstan FDI

KOF Index for Kazakhstan

Kazakhstan and Statistics Transition from a centrally planned to a market economy has brought rapid changes in all areas Kazakhstan is now a member of the global economy The social and economic reforms of recent years have changed the environment for the ARKS The national statistical system of Kazakhstan has made significant progress in the past several years towards meeting the needs of the country Although probably the best national statistical system in the region, there is considerable room for improvement for the statistical system to serve Kazakhstan effectively and efficiently

Kazakhstan: A Good Example Government and ARKS Management: Understood the fundamentals of a well- structured statistical system Assessed the current statistical system Developed the Statistical Master Plan Prepared the KAZSTAT project to implement the SMP Will monitor and evaluate the implementation.

KAZSTAT project As identified in the SMP the long-term vision of the ASRK is to produce and disseminate data that meets user needs and informs decision-making within the government and community The main objective of the project is to implement the SMP and to upgrade the conceptual, methodological and analytical skills of the ASRK and other data producer and user agencies of the country

KAZSTAT project components Improvement of the institutional framework and operations of the statistical system Improvement of information and communication systems and physical infrastructure Improvement of human resources Improvement of statistical infrastructure, standards and methodology Improvement of user-provider and statistical agency relations Improvement of individual subject matter programs and methodologies

KAZSTAT entails: Strong ownership by the government and close coordination between all stakeholders Twinning arrangement with well developed statistical offices An interagency Coordination Working Group A Project Implementation Team (PIT) consisting of relevant ARKS staff supported by two local consultants Active involvement and dialogue between data users and producers New demand for high-quality data, stimulated by training, producer-user dialogue, and improved data dissemination, will provide an additional impetus for sustainability