1. CARICOM TRADE IN SERVICES STATISTICS (CTIS)PROJECT June-December 2016
Regional Training Workshop
November 21 to 25, 2016 by
Lucilla Lewis, Lead Consultant

2. BPM6 BOP Accounts CREDIT DEBIT BALANCE Current Account 100,000,000
150,000,000
(50,000,000)
Goods
Services
Primary Income
Secondary Income
Capital Account
500,000
+500,000
Gross acquisition/disposal of non-produced nonfinancial assets
Capital transfers
Financial Account
200,000,000
+100,000,000
Overall balance
300,500,000
250,000,000
+50,500,000
Changes in Reserves
-50,500,000

3. BPM6
The Formula:
Current account + income account + transfers + capital account + financial account = change in reserves
Any difference is entered as errors and omissions
Basic accounting principle:
To every credit is a debit; so the BOP must balance.

4. BOP CONCEPTUAL FRAMEWORK
Transaction- exchanges or transfers
Valuation
Classification
Resident/nonresident

5. BOP CONCEPTUAL FRAMEWORK
MSITS is based on BPM 6 and is consistent with SNA 2008
BBM6 Concepts and Definitions
Resident Nonresident
One year cut off
Valuation of transactions
Market price
Gross basis

6. BOP CONCEPTUAL FRAMEWORK
Exchange rate at time of recording
Time of recording
Accrual basis
Difference between provision of services and provision of labour

7. BOP CONCEPTUAL FRAMEWORK
Services between related parties- necessary to give full picture of the extent to which gobalisation of services supply is taking place (provides data for compiling statistics on movement of natural persons

8. BOP CONCEPTUAL FRAMEWORK
Statistics by trading partners- to inform bilateral and multilateral trade in services negotiations; mirror statistics and quality checks
Outsourcing- contracting another specialist company to provide services that were previously provided internally. Eg.??

9. BOP CONCEPTUAL FRAMEWORK
Balance of payments trade in goods and services vs. International Merchandise trade statistics – adjustment necessary for compiling FATS variable
adjustment to convert imports to FOP already reflected in the BOP, through service entries against sea transportation and freight insurance

10. BOP CONCEPTUAL FRAMEWORK
BOP Travel vs. IRTS 2008 and TSA RMF 2008
Significantly the breakdown by tourism characteristic products is now required in the BOP
Main differences continue to include:
Medical tourism
Education tourism
Seasonal and border workers

11. BPM6:IIP
The IIP is a statistical statement that shows at a point in time
the value and composition of financial assets of residents of an economy that are claims on nonresidents, and gold bouillon held as reserve assets;
and liabilities of residents of an economy
The net IIP can be positive or negative

12. BPM6:IIP by Functional Category
IIP Beginning of Period
Financial account transactions
Other changes in volumes
Exchange rate changes
Other price changes
End of Period IIP
Assets
Direct Investment
Portfolio investment
Financial derivatives
Other investments
Reserve assets
Liabilities

13. Definition of FDI
According to BPM6: A direct investor is an entity or group of related entities that is able to exercise influence over another entity that is resident of a different economy.
FDI reflects the objective of gaining control or a significant degree of influence by an entity in one economy over the management of an enterprise resident in another economy
FDI is usually a precondition for establishment of commercial presence

14. How are control and significant degree of influence determined
When the direct investor owns equity that entitles it to 10% or more of the voting power in the direct investment enterprise

15. Owns >10% shares, voting power or the equivalent
The FDI Universe
FDI: the direct investor makes an international investment to obtain control and a lasting interest in an enterprise abroad
Country A
Country B
Direct
investor
Direct investment
enterprise
Owns >10% shares, voting power or the equivalent
between 10 and 50%
Associate
Subsidiary
Branch
more than 50%
FATS
wholly or jointly unincorporated enterprise
individuals
enterprises
associated groups of individuals/enterprises
governments...

16. Classification of direct investment enterprises
For both inward and outward FDI the enterprise should be classified by its industrial activity in the host country and by the industrial activity of its direct investor where possible. (Outward FDI flows may be of more interest to some member states than to others)
For both inward and outward FDI compilation by country of origin for the former and country of destination for the latter is extremely critical for especially for assessing movements of capital intra common market members e.g. within CSME, from other trading blocs e.g. EU CARIFORUM members, CARIBCAN, CBI and with other countries

17. TYPES OF DATA REQUIRED FOR FDI STOCKS AND FLOWS include
Direct Investment Income
Interest
Dividends/distributed profits
Direct Investment Transactions (capital flows)
Equity (flows)
Reinvestment of earnings (which is ultimately included in the capital stock)
Direct investment Position (capital stock)
Equity
Reinvested earnings
debt

18. END OF SECTION