2008 SNA Implementation GCC Countries – Way forward High Level Seminar on 2008 SNA Implementation In GCC Countries 27 May 2010, Muscat, Oman Gulab Singh United Nations Statistics Division 1 1

System of National Accounts Introduction 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 18th 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 2

System of National Accounts Introduction 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 3

System of National Accounts Introduction 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 4

System of National Accounts Introduction 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. 5

System of National Accounts What is SNA? 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. Uses of the SNA 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.  6

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 7

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 8

System of National Accounts International Policy International developmental organization - lending development assistance and concessional loans Country contribution to international organizations, lending policy etc. 9

2008 SNA changes affecting GDP 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). Changes in recording of pension entitlements. 10

Implementing 2008 SNA World is moving on ……… Australia first to implement in 2009. 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 Regional Commissions have initiated process for implementation by member states- WGs The Regional Seminar has discussed strategy for 2008 SNA implementation in ESCWA countries 11

2008 SNA implementation - process Vision Where we want to be Political Commitment Assessment Where are we now COUNTRY OWNERSHIP Action Plan How to get there Statistical capacity Implementation How to stay there 12

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 13

Implementing 2008 SNA Implications 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 Promoting use of administrative data MOU with CB, tax authorities and other line ministries 14

Phase General description Detailed description Pre-SNA phase Basic data Data on production, trade, prices, etc. Phase 1 Basic indicators of gross domestic product (GDP) Final expenditures on GDP, current and constant prices; GDP by industry at current and constant prices Phase 2 Gross national income and other primary indicators External account of primary incomes and current transfers; capital and financial accounts for the rest of the world Phase 3 Institutional sector accounts: first steps 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 Phase 4 Institutional sector accounts: intermediate steps Generation of income, allocation of primary income, secondary distribution of income, use of income, capital accounts for all institutional sectors other than general government Phase 5 Institutional sector accounts: last of the transaction accounts Financial accounts for all institutional sectors other than general government Phase 6 Other flow accounts and balance sheets Other changes in asset accounts for all institutional sectors; balance sheets 15

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