Presentation to the Committee for Establishment of a Business Register Islamabad October 2007 Presentation to the Committee for Establishment of a Business Register Bernd Struck, GTZ

Situation Analysis (1) Problems in collection of data illiteracy cultural constraints low accounting standards low propensity to deliver information Deregulation since 80s (especially in industrial location policy) led to faulty and outdated administrative frames no follow up of units dying out no update of start-ups In economic statistics censuses but no regular surveys with monthly, quarterly or annual periodicity Bernd Struck, GTZ

Situation analysis (2) Overlapping directories, Formal economy of “listed” or “registered” or “surveyed” enterprises / establishments Overlapping directories, no uniform classification, no overall identification key Associations Corporations Chambers Tax authority Informal or “non-observed” economy of “unlisted” or “unregistered” units Bernd Struck, GTZ

Outcome of present situation for statistics Overlapping, partly outdated directories with different classifications (if any, at all) have to be adjusted and reconciled. This is cumbersome and costly. It is also time-consuming and hampering timely provision of results. Despite all efforts of reconciliation gaps are remaining. The full and redundancy-free coverage of a survey cannot be ensured. There are no a-priori data like employment or sales figures to enable stratified sampling. Bernd Struck, GTZ

Business register in PK is planned. It should … be accessible to official statistics, be up-to-date, cover all relevant private and public economic activity, classify the economic activities and the other main quality features (legal status, form of organisation etc.) and comprise some main economic quantities like number of employees or capacity or annual sales (for direct analysis and for stratified sampling). Bernd Struck, GTZ

A business register in PK would … support updates of the frames of surveys, timely implement start-ups, enable stratified sampling and thus improve quality of results and coincidentally reduce response burden, support technical preparation and conduction of surveys (printing questionnaires, checking response, sending reminders), classify units (enterprises and establishments) in a uniform way enabling aggregation of the results of different surveys improve coverage and timeliness of the surveys, provide useful information even without any survey. Bernd Struck, GTZ

Business register: impact on quality Accuracy Timeliness Periodicity Quality of statistics Scope of items Coverage depth of breakdown (regions, subjects) Bernd Struck, GTZ

BR for Pk: decisions to be taken Which authority should install and run it? Centralized or decentralized model? Sources, scope, thresholds, variables? Classification and types of units? Online-basis or batch? Which identification key? Access to non-confidential variables? Do we need a special law? Bernd Struck, GTZ

Three Sub-Committees Technical and Statistical Aspects Legal Aspects Workflow and Data Processing Bernd Struck, GTZ

Centralized or decentralized? Which authority? The Statistics Division should be made responsible to promote, install and run the BR. Centralized or decentralized? The BR should be run in a centralized model. Bernd Struck, GTZ

Recommended sources Authority of supervision of corporation Tax authority Energy providers Directorates of Provincial Labour & Industries Departments Other organizations may be added later as per requirement. Bernd Struck, GTZ

Scope of the register Initially the content of the register should be limited to manufacturing, based on data of supervision of corporation to begin with. Data from other sources may be added subsequently with the strengthening of Business Register. The scope should be extended to other parts of the economy later on. Bernd Struck, GTZ

Threshold of units to be registered Threshold must be simple, useful, convenient, readily available and flexible to use. Different thresholds may be used for different sectors. For manufacturing, multiple thresholds are recommended: 10 and above workers Rs 5 Million sales/turnover 40 KW and above electricity consumption Bernd Struck, GTZ

What variables should be collected? Name Address Kind of activity Legal Status Type of ownership Product range Employment size Electricity Consumption relating to establishments as well as enterprises: Additional items like “sales” for manufacturing industries sector and “suitable balance sheet items” for banking and insurance sector should also be added as per requirement. Bernd Struck, GTZ

Classification and units Standard Industrial Classification (ISIC Rev 3.1) should be used. In Pakistan this is so-called PSIC 2007 Both establishments and enterprises should be covered. Bernd Struck, GTZ

Online-basis or batch? Updating process would be carried out on real time basis through LAN system. Batch processing is more suitable for this type of applications. The source agencies will be required to supply soft copies of data files on annual basis. An online-access to the sources (read-only) could be useful. This could be enriched by allowing FBS to update selected statistic-specific data like the industrial classification (PSIC) Bernd Struck, GTZ

Sources and keys: example (1) 1 2 3 4 Sources CBR SECP WAPDA other “foreign “ keys: Key 1 Key 2 Key 3 Key 4 Data sets containing Key FBS along with Key 1 ,Key 2, Key 3, Key 4 Business Register Data sets containing Key 1, Key FBS, variables of source 1 CBR SECP WAPDA other Sub-register files containing relevant variables of source Bernd Struck, GTZ

Sources and keys: example (2) “Lahore Cement Corp.” may have SECP-key 111, CBR-key 222 and WAPDA-key 333. In the Business Register it gets key 789. In the main register there is a data set under “789” containing the non-confidential variables (address etc) and the keys for SECP, CBR and WAPDA. In the Sub-register of SECP the variables provided by SECP are stored under key 111. In Sub-register of CBR the CBR-variables come under 222. In Sub-register of WAPDA these variables come under 333. Bernd Struck, GTZ

Access to non-confidential variables Access should be free and available on Website. Establishments and enterprises may request FBS for clarification or updating of information in the BR. Website will be updated after every three months. Bernd Struck, GTZ

An explicit legal basis is required The sources should have a justification to deliver their data. The sources should be mandated by law to provide their data. Official Statistics shall have the power of law to get the information needed for clarification of individual cases. Bernd Struck, GTZ

BR in PK as a Public-Private Partnership Private sector Delivers data to the source benefits from information in BR Private Sector Business Register Sources FBS Gets data for free Manages, classifies, matches, updates information Public sector Bernd Struck, GTZ