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I.
Introduction
The East Asian countries during the last three
decades have enjoyed uninterrupted rapid growth.
Similarly the newly emerging market economies
of China and Vietnam have experienced high economic
growth during the current decade.
Suddenly in the middle of 1997 Thailand started
to suffer a currency and financial crisis which
quickly spread to other neighbouring countries
like Indonesia, Malaysia, Philippine and then
Republic of Korea. Recently even Japan, China
(and Hong Kong), Singapore, and other countries
in the region also decelerated sharply and are
almost at the brink of recession.
Even though originally the crisis was only
in the monetary sector, significant contraction
in the real sectors followed. The decline in
production of goods and services has brought
about reductions in income, while prices have
gone up as a result of the fall in currency
values. All these phenomena have seriously affected
the welfare of low income families and consequently
the incidence of poverty is increasing.
The challenges to the statistical services
as an impact of the financial crisis is introduced
in this paper. The effect of the crisis on the
supply of statistical services is described.
On the other hand, to implement rescue programmes,
the government and other concerned bodies require
more detailed and highly specialized statistical
data to enable the programmes to focus on the
appropriate target groups. Although statistical
budgets are declining due to the crisis, the
demand for statistical information is getting
higher. In other words, National Statistical
Offices (NSO) should produce more with fewer
resources. This issue was discussed in ADB,
Manila from 1-2 October, 1998 among the Heads
of Statistics Offices of Asian Countries in
Crisis. The second issue to be discussed in
this paper is the statistical challenges at
the turn of the century. On one hand we hear
that statistical information is very important,
however on the other statistical offices feel
that they don't get sufficient attention to
enable them to produce better statistics. Statistical
offices complain that they don't have enough
resources in terms of qualified staff, budget
allocation and equipment as well as other supporting
infrastructure. On top of that the society,
both as respondents and users of statistical
information, to a certain extent are also not
quite supportive of NSO activities, in some
countries they even tend to undermine the role
of the statistical offices.
This is a perfect time to make a more comprehensive
attempt to increase the role of the statistical
offices to produce more accurate and timely
data and to convince data users that the statistical
information available is really credible.
II.
Statistical Services in Countries affected by
Crisis
1.
Statistics and the Crisis
Some people say that had the statistics been
adequate, the crisis could have been predicted
or even avoided; the data gaps and lack of transparency,
timeliness and relevance in the output of the
statistical system have contributed to the crisis.
This may be true to a certain extent, but it
is unfair to generalize. If the source of the
crisis has something to do with the statistical
system, it does not mean that if the statistical
system were really sound, crises will never
affect the economy. There were cases where even
the industrialized countries also suffered from
a serious economic recession (e.g. during oil
crisis).
Especially in developing countries the availability
of statistical information does not guarantee
that the data will be utilized for policy decisions.
Even to solve economic problems, sometimes political
considerations dominate the decision rather
than sound economic indicators. In any case
the use of the available statistical information
by policy makers in the decision making process
is one important consideration to judge the
contribution of the output of statistical system
to the crisis.
For policy decisions and to evaluate the performance
of economic and social development, the macro
economic and social indicators should be derived
from the results of regular surveys. The role
of current surveys is very important to establish
a long time series of data on the economic and
social condition of the people. This regular
compilation of statistical data through surveys
or administrative records should be regarded
as the priority activities of the statistical
programme in any country. In all countries affected
by economic crisis, the statistical systems
are relatively well established. All of them
regularly publish a series of economic and social
indicators on a timely basis. Most of the series
however, pertain to the real sector. The monetary
sector, especially on banking, usually is not
compiled and presented directly by the statistical
office but by the Central Banks of the respective
countries. The statistical offices usually obtain
the banking statistics as secondary data from
the monetary authority.
Even for statistics in the real sector, there
are cases where a number of government agencies
are involved in the compilation of the data.
This is especially true in countries where the
statistical system is very decentralized. The
economic crisis should be regarded as the right
moment for all countries to review the coordinating
mechanism in the statistical system, so that
gaps and duplication of the availability of
statistical information can be avoided.
As a consequence of the economic crisis and
subsequent budget cuts, statistical offices
should re-consider their statistical programmes.
The priorities should be focused on the statistical
activities which could facilitate the monitoring
of the economic and social development before
and after the crisis, to enable the government
and the private sector to identify the sources
and the direction of the crisis. Other priority
activities are statistical data collection to
help overcome the crisis in the short and medium
term, with ad-hoc and quick surveys with limited
samples to back up rescue programmes, to solve
and avoid food shortages, school drop-out, deteriorated
health conditions, lay-offs and the explosion
of the incidence of poverty.
2. The
Supply Side of Statistical Information
As stated above, undoubtedly, the financial/economic
crisis has brought about a decline in governments'
ability to finance all sectors of development,
including statistical activities. Logically,
in a crisis country like Indonesia, new priorities
should be set and understandably as has always
been the case in the past, funds for research
and statistical undertakings are also cut. For
Indonesia, the budget cut was about 21 percent
for the fiscal year 1998/1999, while for the
fiscal year 1997/1998 the budget cut was negligible.
The main activity that will suffer most from
this drop in the allocated budget is the preparation
of the population census in the year 2000 (Suwito,
1998). In the Philippines, the government in
December 1997, has issued an order to impose
a 25 percent reduction of total expenditures
for non-personal services items for the year
1998. This has led to readjustment of the regularly
conducted surveys of NSO, for example, by limiting
or reducing the sample coverage and reducing
frequency of data collection (Africa, 1998).
In addition, since the onset of the crisis
the statistical environment has changed. Companies,
for instance, are now facing difficulties with
many problems and tend to be more reluctant
to answer statistical inquires. In Korea, for
instance, the introduction of evaluation criteria
at current market value for banks securities
holding, failure of many ailing firms, as well
as frequent changes in enterprises accounting
systems have created more difficulty in collecting
the data (Chung, 1998).
Thus, there are at least two aspects of the
supply side that could lead to a reduction in
the capacity of NSOs to provide timely and reliable/accurate
statistical information to the government and
the public. The first relates to internal factor
of the NSOs, while the other is related to the
external factor.
3. The
Demand Side
Unlike the supply side, in the face of financial
and economic crisis, the demand for statistics
that would help reflect the economic situation
of the country has increased significantly.
The increasing demand covers four aspects :
(i) demand for new types of statistical information,
(ii) demand for more timely and more reliable/accurate
statistics, (iii) demand for redefinition of
some standard definitions and concepts, and
(iv) demand for improving information transparency.
Demand for new types of statistical information
derives from the initial need for monitoring
financial and banking sectors. The demand comes
primarily from both the individual country and
the international community, in particular donor
agencies (such as IMF, World Bank and ADB).
The demand will involve new types of financial/banking
and monetary statistics (alien to the "standard
practice" of statistical activities), followed
by a "new" key set of economic indicators needed
for close monitoring of financial and economic
crisis, and statistics required for analyzing
and mitigating the impact of the crisis, in
particular social impact. In addition, as the
crisis has been interwoven with political reform,
attention from the mass media to the statistical
information, which was previously at a low level,
has increased substantially and they demand
more speedy dissemination. Thus the demand for
these statistics includes, not only for more
accurate, timely and diversified data, but also
for more frequent releases.
The financial and economic crisis leads to
the understanding that there are some sectors
of economic activities, especially financial
markets, which in the past, were not sufficiently
well understood and monitored, at least by the
national statistical offices. The crisis which
triggered a massive pull-out of foreign funds
and adversely affected financial markets in
the Asian region shifted the focus to the financial
system. This led to an increasing and urgent
need for financial markets information which
are not usually collected by the NSO. As aptly
put by Manalac (1998), "one of the lessons learned
from the Asian crisis was the necessity for
a more comprehensive set of information than
what is presently reported and considered as
the minimum requirement of policy and planning
exercise".
Data on international reserves and (short-term)
external debt for instance, have become one
of the important new areas of statistics that
need to be developed, in terms of the coverage
and data details to ensure that a more realistic
picture of international capital flows is adequately
reflected. National statistical offices, in
general, are well familiar with the "real sector",
the production side of the economy, but not
with the financial/monetary sector which is
"traditionally" handled by the Central Bank
or Ministry of Finance. However, this economic
crisis has provided a signal to the NSOs that
they have to play a much greater role in helping
produce such financial/monetary statistics if
their role in the overall statistical system
should be recognized.
The importance to timeliness of the statistical
information is another aspect of the challenges
faced by the NSO. Thailand, for instance, aims
at reducing the time-lag for manufacturing production
index from 2 months to 6 weeks (Chalermpong,
1998) and Malaysia has been able to shorten
compilation of external trade from 8 weeks to
5 weeks, consumer price index from 3 to 2 weeks
and industrial production index from 8 weeks
to 6 weeks (Ali, 1998).
The need for redefinition of concepts and compilation
procedures is another challenge for statistical
development. Manalac (1998), for example, provides
an example that in compiling the real estate
loan exposures of the banking system, Philippines
banks are now required to submit a schedule
on their outstanding real estate loans which
were previously lumped under financial institutions,
real estate and business services loan account.
The fourth aspect, a result of the crisis, is
the need for transparency. Manalac (1998), for
instance, states that in the past public access
to some valuable information used by Bangko
Central Ng Philippines in carrying out its supervisory
and regulatory activities was somehow limited.
This is due to the fact that the information
was published only annually. For Thailand, prior
to the crisis the information on net forward
position of the Bank of Thailand (BOT), NPL
of financial institutions and external debt
roll-over were not publicly released or disclosed
(Chalermpong, 1998). After the crisis, this
information is now widely available to the public.
Even the net forward position of the BOT is
released weekly.
4. How
can NSOs meet the demand for statistics with
fewer resources ?
As the NSOs have to do more with less, it is
inevitable that NSOs have to make significant
adjustments in their statistical undertakings.
This could be achieved through a number of approaches
as follows :
Postponing less urgent
statistical activities
The NSOs have to set up priorities with regard
to the importance and urgency of various statistical
information. They have to sort out the surveys
to be carried out not only in terms of area
coverage, but also in terms of the coverage
of the contents, and in terms of new and different
concepts and definitions. Accordingly, they
have to plan the most appropriate data collection
mechanisms which are cost-effective without
reducing the data quality but which also meet
the new demand for statistics. BPS of Indonesia,
for instance, plans to postpone some ad-hoc
surveys, in-depth studies, research to improve
survey methodology and other small-scale activities
in order to continue the conduct of the current
and regular surveys which produce long-term
social and economic indicators (Suwito, 1998).
The statistical priorities will include new
financial, monetary and economic statistics
required for monitoring economic progress and
assisting policy making decisions. In addition,
new surveys on the social impact of the crisis
should also be designed to help the government
understand and mitigate its social impacts.
Indonesia, for instance, has conducted the so-called
"Survey of 100 Villages" funded by UNICEF and
"The Economic Crisis Impact Survey at Sub-District
Level" financed by Ford Foundation (Suwito 1998).
Streamlining survey design and other supporting
activities
Another adjustment to cope with the budget
reduction is to integrate the various sample
surveys into one integrated survey. For instance
in Indonesia, from the result of the 1996 Economic
Census, an attempt is being carried out to integrate
the small scale establishment survey covering
various sectors of the economy. This reduces
the overall cost of the enumeration by consolidating
interviewing in selected enumeration areas and
by reducing the administrative costs of conducting
separate individual surveys.
Use of existing administrative
data
There is a great deal of information currently
existing in government administrative offices.
For example, Indonesia's NSO is researching
the use of corporate income tax records to prepare
a directory of large companies for possible
use as a sampling frame for economic surveys.
NSOs should review their programs and determine
the extent to which administrative data could
support their statistical activities. This is
also useful in the current climate where respondents
are becoming more and more reluctant to participate
in surveys.
Streamlining other supporting
activities
The budget cut has also compelled the NSO to
integrate training activities and to reduce
supervisory activities to reduce cost. Another
approach to reduce the current budget is to
decentralize data processing to the district
offices. In the long run the decentralized processing
will reduce the current expenditure for processing,
however it will require the purchase of computer
equipments for the district offices.
Linking the budget for
statistical activities to the rehabilitation
package
Another possible avenue is by linking the statistical
activities with other activities designed to
cope with the financial and economic crisis.
Thailand, for example, under the ADB's Social
Sector Program Loan in 1998 has conducted a
study on the impact of Thailand's economic crisis
on the social sector. ADB is also supporting
a longer-term project to produce a series of
development indicators.
In the Philippines, the NSO with technical
assistance from the World Bank is conducting
a Survey of Philippine Industry and the Asian
Financial Crisis. In addition, the World Bank
and UNDP are helping the NSO expand poverty
monitoring in the Philippines through an Annual
Poverty Indicators Survey.
However, some of these activities are usually
designed by the Ministry of Finance and Planning
Agency in each individual country. Hence, the
NSO should try to maximize its cooperation with
these relevant agencies to enable it to play
greater role.
Enhancing the cooperation
with multi and bilateral donor agencies
The NSOs have to further develop the existing
cooperation with the multilateral and bilateral
agencies in terms of additional funds and expertise.
The time has come for some NSOs to have their
voice heard that they have indeed the capability
to supply more timely, reliable and accurate
statistics/indicators to the international community.
However, it should be realized that the need
for better statistics would undoubtedly require
more resources, in particular financial resources
as the countries in crisis cannot sustain some
of the important survey undertakings. The NSOs
should be more proactive in establishing better
links with the multilateral and bilateral donor
agencies.
Strengthening cooperation
among NSOs of countries in crisis
A great deal of statistical expertise already
exists in NSOs. With each NSO having its own
comparative advantage in some statistical skills.
This expertise can be exploited throughout the
region by providing technical assistance services
to other NSOs which can be done through exchanges
of technical personnel. This requires the willingness
of the NSOs to sit together, list their strengths
and weaknesses and discuss ways to have staff-exchange
programs to strengthen their offices in certain
statistical fields. This exchange program could
entail minimal cost.
III.
The Coming Challenges on Statistical Services
Despite the spreading financial crisis in this
region, at the turn of the century all NSOs
are facing a challenge to increase their role
and abilities to meet greater demands for statistical
information. NSOs should not nesessarily wait
for others to request data; instead they should
be more pro-active to anticipate and to meet
the coming and future requirements of data users.
To improve their ability to provide quality
statistical data, NSOs should not only wait
for policy makers and the general data users
to increase their support. Instead, efforts
should be made to come to a more solid and stronger
internal NSO condition by developing greater
professionalism, independence, objectivity and
transparency.
In many developing countries there is a general
impression among policy makers and data users
that the outputs of the statistical offices
are inferior compared to the statistical data
produced by the banking or planning institutions.
This does not mean that the outputs of statistical
offices are actually inferior in term of quality
and timeliness, however there is a perception
that the outputs are less appreciated. In many
instances NSOs have difficulties getting additional
resources, and do not get sufficient attention
from the government to obtain better infrastructure.
Frequently they are accused of producing inadequate
data. Even though this varies among countries,
if these conditions prevail it can affect the
development of statistical services in general.
On the other hand the environment at the end
of this century is actually very supportive
to the development of statistics, at least in
2 areas. First is that this era is known as
the era of information; the demand for more
statistical information is increasing very rapidly.
The momentum is very favourable for statistical
offices to embark on concrete steps to enhance
their service to data users. If NSOs do not
take advantage of this favourable environment
to improve their products and services, other
agencies may attempt to take over NSO responsibilities
and authority.
The other favorable condition is the rapid
development in information technology. The era
of computers and telecommunications has changed
the way NSOs work. Things are getting easier
and faster because of the assistance of computer
technology, not only with technical work but
also with the administrative burden. With the
support of the Management Information System
(MIS) in the area of personnel planning and
development, inventory control, finance, audit,
budgeting and other related administrative work,
the management and administrative burden is
greatly reduced.
With the help of computer technology the planning,
designing, sampling, field operation, data processing
and data dissemination has made significant
progress. Sample selection from existing frames
can be very efficiently done using desktop computers.
Similarly questionnaire design, data validation,
data communication via net work, despatching
of survey results through e-mail, and data dissemination
through the internet are all new aspects of
computerization and telecommunication.
Although right now there are favourable conditions
for the improvement of statistical work, some
of the NSOs are having classic problems of their
own. If there is no significant attempt to make
statistical improvements, more competitors will
spring up, either from other government agencies
or from the banking sector as well as from research
institutes of the private sector. Then there
may be available an overabundance of statistics
for the same characteristics, each with separate
and different concepts which will create confusion
among the users. The confusion will be lower,
as soon as there is a data producer to be recognized
by majority of users as the most reliable source
of statistics. If this reliable data producer
happens to not be the NSO, it will be even more
difficult for the NSO to act as the coordinator
of statistical activities in the country.
In fact, at the turn of the century, there
is a great opportunity for NSOs to increase
their role and credibility, if they can take
advantage of the favorable environment mentioned
earlier. The demand for statistical information
is exploding and there is also a demand for
different types of statistical data. Although
other government agencies also produce statistics
(usually as part of their administrative activities)
the role of NSOs in the coordinating mechanism
of statistical activities should be quite dominant
and clear. In a centralized statistical system
where most of the official statistics come from
the NSO, statistical coordination can be more
easily enforced.
There are a number of indicators to judge the
credibility of the statistical service, some
of the weakness are usually pertaining to the
availability of a number statistics (statistical
estimates) for the same phenomena, people get
confused which data to rely on, and at worst
they do not trust any statistical information
available because the quality of data is regarded
as inadequate. This situation could easily develop
if there is no clear coordinating machinery,
or the coordinating agency not powerful enough
statistically and recognized professionally
by other statistical agencies.
There are a number of possible alternative
approaches to gradually increase the role of
NSO and to produce credible statistical information.
From a number of experiences the approach may
consist of:
Improve the Statistical
Act to give clearer mechanism for statistical
coordination.
In a centralized system of statistics it is
easier to create coordinating machinery. Even
in a decentralized system of statistics, statistical
coordination should be working well. A coordinating
agency is not merely administrative in nature,
but it should have professional and technical
recognition from the other agencies which it
is coordinating. The Statistics Act also should
stipulate the distribution of responsibility
between the NSO, the other statistical units
in the government ministries and the private
sector.
Increase the objectivity,
independence and transparency of statistics
produced.
Even though the NSOs are government agencies,
the statistics produced should be independent
from government interest, otherwise the users
outside the government and the international
users will either adjust the data to meet their
standard or ignore the data altogether. This
will reduce the credibility of the NSO. The
most ideal that will increase the credibility
of the NSO is that if there is one dependable
estimate, for most users, and the statistics
should be consistent, objective and free from
any influence.
Obtain better recognition
from users through the mass-media.
Since it is difficult for the NSO to explain
the reliability of statistics to individual
users, the best way to increase user understanding
is through mass-media. A pre-requisite to get
the cooperation of the mass-media is to show
them that the statistics produced are compiled
professionally using sophisticated statistical
techniques, through an objective, independent
and transparent approach. They should be able
to see for themselves the way data is produced
and they should understand the procedure to
obtain the data. In other words, NSOs should
educate the media about the methods and techniques
used to collect and process statistics. Being
free and open with the media is very important
to obtain their cooperation.
Increase the capability
of staff to cope with increasing demand at the
turn of the century.
One possible solution to develop qualified
personnel is to create in-house statistical
training. As an example in Indonesia the Statistical
Office (BPS) established the Academy of Statistics
in 1958. Recently in 1998 the training institution
was enhanced and split into two units, (1),
i.e. the Graduate School of Statistics, a formal
statistical education with 4 years duration
after high school, and (2) the Statistics and
Computer Training Center, to give short term
training in applied statistics and computer
training to catch up with rapid development
in information technology.
The output oriented strategy.
The NSO should be pro-active and always ready
to help and provide statistical information
requested by any Minister. The long-term strategy
is actually to make all the Ministers dependent
on the statistical services of the NSO. The
more active the NSO, the more people will depend
on its data and the more credible the NSO becomes.
And, of course, the more challenging and difficult
the NSO task becomes. Since each country's economic
and social structure is different, there may
be other and better approaches. Administrative
practices and the political situation will also
influence the type of approach selected. However,
once the credibility of the NSO is recognized,
it will be easier to gain access to the decision
makers which will lead to a larger share of
the government budget and better statistical
infrastructure.
IV.
Closing remarks
In conclusion, the financial and economic crisis
has led to a new era of statistical information.
There is a new environment for statistical activities,
including more limited funds, possibly more
reluctance from respondents (especially business
firms) and increased needs from various data
users. This creates new challenges for the NSOs.
However, these challenges should be perceived
not simply as problems but as a stimulus to
move ahead and play a greater role in serving
the users.
Even though statistical development in
the ESCAP region is relatively quite progressive,
the demand for new, improved, and more reliable
statistics is increasing very fast as we reach
the turn of the century. While coping with the
impact of the financial crisis, the NSOs should
also make an attempt to breakthrough budgetary,
technical, bureaucratic, and political barriers
to increase their role and credibility. The
NSOs management has to utilize its "ingenuity"
to work within the existing system to produce
better statistical information for the data
users.
Reference
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*This paper was prepared
by Sugito Suwito, the Central Bureau of Statistics,
Indonesia, at the invitation of the secretariat.
It has been issued as submitted except that
typographical errors have been corrected.
Names of countries may have been changed to
conform with United Nations usage. |
