1. Introduction
2. Implementation of the 1993 SNA
   1. Milestone Criteria for Monitoring Implementation of  the 1993 SNA
   2. Revised Criteria for Monitoring the Implementation of the 1993 SNA
   3. Status of Implementation as of August 2000
3. Proposed plan of action
   1. Objectives and Targets
   2. Opportunities and Challenges
   3. Strategies and Activities
   4. Monitoring and Evaluation
4. Concluding Remarks

Annex I: Regional Workshops/Seminars on National Accounts and related areas 1994-2001

Annex II: ESCAP in-country training courses

I. INTRODUCTION

1. The implementation of the 1993 System of National Accounts (SNA) has been one of the major thrusts of technical assistance to the countries in the ESCAP Region. The September 1994 workshops on the System of National Accounts held in Canberra, Australia for Pacific countries and in Bangkok for Asian countries set in train various activities on the implementation of the 1993 SNA. The International Monetary Fund (IMF), the Statistical Institute for Asia and the Pacific (SIAP) and other institutions conducted international, regional and in-country training courses on the 1993 SNA. ESCAP, through the advisory services on national accounts, has likewise conducted    in-country training courses on the 1993 SNA independently or in conjunction with the United Nations Statistics Division (UNSD) and the Asian Development Bank (ADB) and has helped the countries to implement the recommendations of the 1993 SNA.  Similarly, seminars and workshops were conducted to provide forums for countries to discuss issues and to share their experiences on the implementation of the 1993 SNA.  Multilateral and bilateral agencies were also active in providing technical assistance on the implementation of the 1993 SNA.

2. The Joint OECD/ESCAP Meeting on National Accounts: The 1993 SNA, Five Years On  - held in Bangkok from 4 to 8 May 1998 - was attended by both OECD and non-OECD member countries of ESCAP, and some OECD member countries outside the ESCAP region. The meeting discussed key conceptual and methodological issues and how the countries, which were in the process of implementing the 1993 SNA, dealt with these issues. The topics included FISIM (financial intermediation services indirectly measured), capital assets, chain volume measures, user education, etc. It was hoped that the experiences of the countries would help other countries in their effort to implement the 1993 SNA.

II. IMPLEMENTATION OF THE 1993 SNA

A. Milestone Criteria for Monitoring Implementation of  the 1993 SNA

3. The First Workshop on the 1993 SNA, sponsored by ESCAP and UNSD in Bangkok from 12 to 23 October 1998, provided the venue to share the experiences of 17 developing member countries of the ESCAP region on the implementation of the 1993 SNA.  Most of the countries were measuring their efforts to implement the 1993 SNA against the milestones recommended by the Intersecretariat Working Group on National Accounts and adopted by the United Nations Statistical Commission in 1997.  The 'milestones' consisted essentially of the compilation of various data sets of national accounts statistics, as reported to UNSD.  The workshop discussed some of the conceptual and methodological recommendations of the 1993 SNA and the issues that the countries encountered in trying to implement them and in compiling the institutional sector accounts.  The key issues and problems raised were:

1. Difficulty in the treatment of new transactions introduced in the 1993 SNA because of data gaps, which could not be filled due to resource constraints in the countries;
2. Difficulty of linking the enterprise with the establishment frame used by the statistical office for surveys of economic activities; this made linking GDP with institutional sector accounts problematic;
3. Difficulties in classification of activities and institutions, especially non- profit institutions which undertook market activities;
4. Low priority given by decision-makers to the 1993 SNA, and inconsistent organizational structure of national accounts units for efficient implementation of the 1993 SNA.

4. The same workshop agreed that:

1. Countries would pursue the implementation of the 1993 SNA based on the milestones;
2. Countries would release estimates based on the 1993 SNA after the  series had been available  for a few years;
3. Existing series would continue to be released in parallel with the estimates using the 1993 SNA;
4. Establishment and enterprise data would be reconciled in the development of business registries;
5. NPISH (non-profit institutions serving households) would remain integrated in the household sector until classification issues were resolved and data were available;
6. Illegal activities would be incorporated in the compilation only in as far as data would allow;
7. FISIM would be estimated based on the recommendations of the 1993 SNA, with some modifications;
8. Valuables and intangible assets would be covered in the implementation; the treatment of cultivated assets and livestock as additions to assets would need further study;
9. Financial derivatives and other value changes still needed further study and chain-based price estimation would be done on a trial basis.

5. The October 1998 workshop recommended several approaches to facilitate the implementation of the 1993 SNA; the key recommendations were:

1. Generate more interest among policy makers, general users, academicians, data producers and other potential users through  advocacy and user education;
2. Train data producers, compilers and users on the 1993 SNA concepts and interpretations;
3. Maximize the use of inexpensive alternative data sources;
4. Foster partnership with other agencies and institutions in the implementation of the 1993 SNA; and
5. Maximize the assistance to be provided by bilateral and multilateral agencies in activities related to 1993 SNA implementation; and
6. Publication of special studies related to the implementation of the 1993 SNA.

6. A regional strategy to implement the 1993 SNA was agreed upon during the workshop.  The major approaches agreed upon were:

1. Conduct special studies by countries on some of the conceptual and methodological recommendations of the 1993 SNA;
2. Conduct regional training and workshops;
3. Formulate a regional implementation manual;
4. Provide technical assistance on the 1993 SNA;
5. Complete quarterly and regional estimates of GDP and flow-of-funds and input-output tables; and
6. Establish information exchange with ESCAP as the focal point, and organize exchange visits of technicians and experts.

7. The recommendations and strategies were adopted to a great extent through the activities of ESCAP and through the country and regional technical assistance programme, in particular by the ADB. ESCAP, UNSD and the Secretariat of the Pacific Community (SPC) collaborated in most of the technical assistance projects implemented by ADB in Bangladesh, Bhutan, Cambodia, Maldives, Federated States of Micronesia, Mongolia, Nepal, Philippines, and Viet Nam.  ESCAP also collaborated with the ADB regional technical assistance projects on rebasing and linking national accounts series at constant prices and on business tendency surveys and leading indicators.  The latter was done in conjunction with OECD.  Agencies such as the Australian Agency for International Assistance (AUSAID), Swedish International Development Agency (SIDA), Canadian International Development Agency (CIDA), the International Monetary Fund (IMF), the World Bank and the Netherlands Government provided technical assistance on national accounts for some Pacific countries, as well as for China, Lao People's Democratic Republic, Malaysia, Mongolia,  Pakistan, Thailand, and Viet Nam.  Starting in the year 2000 UNSD, under the Development Account of the United Nations, has implemented a project entitled Strengthening Regional Capacities for Statistical Development in South-East Asia.  The aim of the project is to improve capacity of the ASEAN countries in statistics, and it places some emphasis on  the compilation of national accounts. 

8. Similarly, the European Union provided a comprehensive statistical assistance programme for the North and Central Asian member countries under the programme of Technical Assistance for the Commonwealth of Independent States and Mongolia (TACIS). One of the major areas of capacity building under the TACIS was the implementation of the 1993 SNA. With the introduction of the 1993 SNA, data collection activities were designed to be consistent with its conceptual recommendations. This facilitated the shift from the Material Product System to the 1993 SNA.

9. The ESCAP region has found difficulty in the implementation of the 1993 SNA for various reasons.  Some countries which have partly implemented the 1968 SNA were faced with difficulty in adopting some of the conceptual and methodological recommendations, particularly if those recommendations required new data collection activity. They also encountered difficulty in compiling the integrated economic accounts of institutional sectors because of resource constraints. In contrast, the countries in transition have implemented most of the conceptual and methodological recommendations and the institutional sector accounts.

10. Other countries, which have started the compilation of GDP either by the production or expenditure approach, have expressed reservations in introducing changes to some of the conceptual and methodological recommendations of the 1993 SNA because of the implications for the resulting change in GDP estimates. Moreover, with the current emphasis on the Special Data Dissemination Standard (SDDS) and the General Data Dissemination System (GDDS) and the quarterly monitoring of the economy by the IMF, countries are more interested in compiling quarterly GDP instead of implementing the conceptual and methodological recommendations and compiling the institutional sector accounts.

B. Revised Criteria for Monitoring the Implementation of the 1993 SNA

11. The 32^nd session of the United Nations Statistical Commission in March 2001 endorsed a revised implementation approach recommended by the Intersecretariat Working Group on National Accounts (ISWGNA) for the assessment of 1993 SNA implementation.  It consists of three dimensions: 1) scope of the accounts, 2) conceptual compliance and 3) quality. On the scope of the accounts, data sets are grouped into: a) minimum requirement, b) recommended, c) desirable, and d) other data sets which would count in assessing the degree of 1993 SNA implementation. The Statistical Commission also recognized that for the time being, the United Nations Statistics Division would give consideration to the first data set.  After 2003, UNSD would conduct an assessment of the second data set.

12. The conceptual recommendations of the 1993 SNA cover the expansion of the production boundary and asset boundary, change in treatment of some transactions, use of chain volume measures, etc. On the scope of the accounts, the following are included in the "minimum requirement" data set: GDP at current and constant prices by production and expenditure approach, value added by industry at current prices, employment by industry, accounts of the total economy, and rest of the world transactions up to net lending. The "recommended data set" includes: quarterly GDP at current and constant prices by production and expenditure, quarterly accounts for the total economy, cross classification of output/value added by industries and sector, supply and use tables, general government consumption expenditure by purpose in current prices, individual consumption expenditure by purpose in current prices, quarterly rest of the world account, financial corporation accounts up to net lending and general government sector account up to net lending. Value added by industry at constant prices and quarterly supply and use tables are the two sets included under the "desirable data set". The remaining data sets recommended in the 1993 SNA are classified under "other data sets which would count in assessing the degree of 1993 SNA implementation".

13. The new sets of recommendations for the implementation of the 1993 SNA were discussed at the Workshop conducted under the UNSD ASEAN project organized jointly by ADB, ESCAP, UNSD and the National Statistical Coordination Board (NSCB) in Tagaytay City, Philippines from 7 to 10 May 2001. In addition to ASEAN countries, there was participation from Australia; Hong Kong, China; Japan; Maldives, and Nepal.  For the Pacific countries ESCAP conducted the Subregional Workshop on the 1993 SNA in collaboration with SPC, ADB, the Pacific Financial Technical Assistance Centre (PFTAC) and SIAP, from 3 to 7 September 2001 in Nadi, Fiji. Ten member countries of the Pacific attended the workshop; Australia and New Zealand provided resource persons.

14. One of the issues raised at the Tagaytay workshop among the countries with long traditions of national accounts compilation was their inability, due to lack of resources, to implement the conceptual and methodological recommendations of the 1993 SNA all at once.  Gradual implementation would be feasible but the implication might be undesirable, as changes in growth rate of GDP would be misrepresented. Moreover, the countries expressed their apprehension on how to deal with users when implementation would result in drastic changes in the levels and structure of the GDP, to the extent of possibly changing the economic history of the country. Other issues and conclusions of the workshop were:

1. Difficulty in implementing the recommended treatment of cultivated assets - the workshop agreed  that for the time being output of cultivated assets would only be recorded at the time of harvest;
2. Inclusion of illegal activity - the workshop recommended that illegal activity will be captured only in as far as the basic data allows;
3. Difficulty in capturing information technology - the workshop suggested that ISIC should be revised to effectively capture information technology in basic data;
4. Difficulty for some countries where military expenditure data are restricted in segregating capital expenditure and current expenditure - the workshop suggested that all efforts should be exerted to implement the change;
5. Difficulty in including consumption of fixed capital (CFC) for public infrastructure such as roads, bridges, piers, installations, etc.;  public infrastructure which was within the jurisdiction of public corporations was included but that by general government was not - the workshop suggested that best practices in estimating CFC could be disseminated to the countries to serve as reference;
6. Adoption of chain volume measures; countries which implemented chain volume measures revealed the usefulness of the series and the positive reactions of users who were adequately informed of the change and the usefulness of the estimates - the workshop suggested that countries shift to chain volume measures or rebase every five years;
7. Change of time series - the workshop suggested that the countries should work backwards to have at least a ten-year series of national accounts statistics based on the 1993 SNA; and 
8. Competing demands for quarterly and regional (subnational) accounts - the workshop suggested that this matter was to be left to each country to determine priorities.

15. Most countries expressed ability to compile the minimum requirement data set although the conceptual and methodological recommendations could be adopted only partially. Guidance would be needed on what conceptual recommendations would be given high priority in the implementation of the 1993 SNA. The workshop likewise suggested that the formation of an association of national accounts compilers in the region would be beneficial in providing opportunities for exchange of ideas and information. It was suggested that the Philippines draft the by-laws and that NSCB and ESCAP serve as the secretariat. 

16. The Fiji workshop highlighted the problem of sustainability in the compilation of GDP estimates where the work was initiated through technical assistance. The GDP estimates compiled by consultants with the assistance of local staff were often discontinued after the completion of the technical cooperation project.  A new set of estimates would be  compiled through another project. Those countries that have continued the compilation have focused only on the compilation of GDP by the production approach; there was no way to validate the estimates with another set of independently derived estimates of GDP by expenditure. The following problems were cited as the reasons for the inability of the countries to sustain the compilation:

1. Lack of financial resources to continue the surveys and other data collection mechanisms established during the technical assistance project;
2. Inadequate  transfer of skills from the technical assistance because of the competing objectives of capacity building and generation of estimates for the duration of the project;
3. Lack of personnel with capacity and confidence to continue the compilation; with a very small base of statistical personnel, turnover of trained staff adversely affected the compilation of the accounts; and
4. Indifferent leadership in statistical services and lack of appreciation of national accounts statistics among government decision makers.

17. The other problems raised in the compilation of the SNA included: lack of resources and capability to conduct surveys; weakness of data from foreign trade and other external transactions; lack of appropriate price indices for constant price estimation; difficulties of measuring government output; and low priority given by government.

18. The recommendations and follow-up actions raised during the Fiji workshop included the following:

1. The classification system proposed for national accounts compilation will be adopted but country needs would be given priority;
2. Illegal transactions will be captured only if they are captured in basic data;
3. Fishing licences, a major source of government item, will be treated as property income;
4. Statisticians should be trained to be multi-skilled and more staff should be trained from statistical and other offices of the country; attachments of technical national accounts staff to relatively more developed countries in the Pacific should be encouraged;
5. The use of administrative-based data for compilation should be maximized,  while GDP by expenditure should continue to be compiled with private consumption expenditure estimated independently;
6. Consultation should be increased among data source agencies, national accounts compilers and users of national accounts;
7. High priority should be given to documentation of data sources and estimation methodology and the formulation of national accounts improvement programmes; and
8. Coordination among donor agencies in providing technical assistance to the Pacific island countries should be ensured.

C. Status of Implementation as of August 2000

19. The survey conducted by ESCAP on the compilation of national accounts statistics and the implementation of  the 1993 SNA as of August 2000 was responded to by 32 out of 57 members and associate members. The breakdown is shown in the table below:

20. The questionnaire asked about available series on GDP estimates, GNI, GDI, value added by industry, private and general government consumption expenditure, capital formation by type of capital asset, national accounts tables compiled, conceptual and methodological recommendations of the 1993 SNA, and the current programme of improvement and compilation of accounts.

21.  The results of the survey indicated that all the countries compiled GDP by economic activity but only 25 compiled GDP by expenditure and only 19 had GDP by income. Eight countries, mostly from North and Central Asia, have adopted chain volume measures, while some other countries were using outdated base years. Out of the 32 countries compiling GDP by the production approach, 26 indicated they also compiled gross value added by economic activity. 15 out of the 32 countries compiled quarterly GDP by economic activity and expenditure.  Among the subregions, North and Central Asia was ahead in the implementation of the conceptual and methodological approaches and in the compilation of institutional sector accounts according to the recommendations of the 1993 SNA. Outside of North and Central Asia, two countries have completed implementation of 1993 SNA with some modifications.

22. All the countries were currently undertaking activities to improve the quality of the estimates and to adopt the recommendations of the 1993 SNA.  Many of the countries are undertaking activities such as improving business registers, conducting special surveys, processing administrative data, undertaking special studies to derive estimation parameters, and improving existing methodology.

23.  Types of technical assistance needed that were cited by the responding countries were: training on compilation based on the 1993 SNA, help in improvement of basic data input, use of software for compilation, and assistance in compiling quarterly national accounts.

III.  PROPOSED PLAN OF ACTION

A.  Objectives and Targets

24. The objective of the proposed action plan is to assist the countries in the compilation and dissemination of timely, accurate, reliable, and internationally comparable national accounts statistics relevant to their needs and consistent with the recommendations of the 1993 SNA. The developing member countries of East and North-East Asia, South-East Asia, South and South-West Asia and the Pacific will receive priority in the Plan of Action.

25. The target is for the countries to meet the implementation criteria endorsed by the Statistical Commission covering the scope of the accounts, conceptual compliance, and quality. Within the period 2002-2005, the following are the expected outcomes:  

B. Opportunities and Challenges

26. There are several opportunities and facilitating factors in the region that could contribute to the achievement of the targets. These are:

1. The demand raised by international agencies and national policy makers for reliable and timely national accounts statistics;
2. The realization that improved national accounts statistics enhance the quality of poverty measurement, purchasing power parities and numerous other policy-relevant data systems;
3. The availability of national accounts and other statistics experts in the region who could provide assistance to the countries on the compilation of national accounts and the generation of basic data;
4. The presence of multilateral and bilateral institutions which actively provide technical assistance in statistics on a regional or country basis; in particular ADB, AUSAID, SIDA, PFTAC, SPC, IMF, World Bank, UNSD, SIAP and ESCAP;
5. The availability of manuals, guidebooks and software that could be used by national accounts compilers; and
6. The strong linkage of the Statistics Division and the Committee on Statistics of ESCAP with multilateral agencies and national statistical offices as well as ESCAP's inherent convening role in the region.

27. On the other hand, there are challenges and constraining factors that could hinder the accomplishment of the targets within the scheduled time frame. The most critical are:

1. Inadequate personnel in national accounts units of the countries to  undertake compilation, and fast turnover of staff with national accounts training;
2. Possible replacement of the post of ESCAP Regional Adviser on National Accounts with a Regional Adviser on Poverty Statistics;
3. Lack of expertise and financial resources in many countries to conduct key periodic surveys and thus collect basic data for national accounts compilation; and
4. Resistance among users to accept changes that will disrupt time series.

C. Strategies and Activities

28. The strategy that the action plan proposes is to maximize the opportunities and to find ways to minimize the constraints in meeting the targeted outcomes. To ensure that there would be convergence and coordination of all the activities of multilateral, bilateral and national activities designed to improve the capacity of the countries on the implementation of national accounts, they would be encouraged to inform the Committee on Statistics through the ESCAP secretariat of their respective activities.  This would be fully in line with the Committee's role as the focus of regional statistical development.

29. To help countries to implement the concepts and methodological recommendations of the 1993 SNA,  a regional project will be conducted. The project will consist of an initial regional workshop to discuss the issues and identify special country studies on specific conceptual and methodological issues. The results of the studies would be reported in a second seminar/workshop aimed at identifying best practices on operationalizing the suggested concepts and methodological approaches given the resources and capacities of countries. ESCAP and UNSD can provide the lead in this activity with the assistance of some countries in the region.

30.  Training would be pursued continuously with emphasis on hands-on experiences in compilation. This could be done by specially designed practical training courses for compilers to understand the concepts and methodology through actual estimation. SIAP, ESCAP and UNSD could develop the materials and undertake in-country training in the target countries.

31.  Another approach would be by attachment with national accounts units in countries with a similar statistical environment but which have established a good system of compilation. ESCAP, PFTAC, and SPC can support and coordinate the attachment and evaluate the outcome. This approach, which has been used by ADB in its various technical assistance projects, can be replicated for other countries.

32. Workshops would be conducted to share the experiences of countries in compilation methods for benchmark and non-benchmark years as well as in the generation of data from alternative sources including administrative-based sources. The same workshops will discuss quality aspects including preparation of metadata and release calendars. ESCAP and UNSD would collaborate in undertaking the activity.

33.  In addition, in-country training for data producers and users on the concepts and interpretation of national accounts statistics and their role in improving the quality and usefulness of national accounts statistics should be pursued. This should be incorporated in country technical assistance projects of ADB and other donor agencies. SIAP, ESCAP and UNSD, with assistance from countries, could develop the instruction materials for this type of training.

34.  A core of experts would be identified who would provide advisory services/technical assistance to the countries on specific areas in national accounts compilation and in data collection activities for compilation.  Building on existing rosters, ESCAP would prepare this list with the assistance of the countries and distribute it to multilateral and bilateral agencies as well as the individual countries. ADB, ESCAP, IMF and other agencies providing technical assistance to the countries would be encouraged to avail of the services of these experts in providing advisory services or technical assistance to the countries.

35.  Regional and country technical assistance projects will be designed. The technical assistance will prioritize countries which have not met the minimum data requirements. It will focus on building the capacities of the countries to enable them to complete the minimum required data sets, and, importantly, to sustain their compilation after the completion of the technical assistance project. The technical assistance, particularly for countries with limited survey capabilities, could emphasize the use of alternative data sources including administrative-based data from government. ADB, ESCAP, and SPC will ensure collaboration among the agencies in the implementation of the assistance projects.

36.  The approach developed by ADB for the regional technical assistance project on rebasing and linking national accounts series at constant prices was found effective and could be replicated in similar regional projects related to national accounts. Following an inception workshop, the countries were given modest funding to undertake follow-up activities, and the results of these were presented in a concluding workshop.

D. Monitoring and Evaluation

37. It is intended that the ESCAP Committee on Statistics will be informed of the status of implementation of the action plan during its scheduled meetings in 2002, 2004 and 2006. The ESCAP secretariat, together with UNSD and in collaboration with selected countries, will design monitoring and evaluation instruments that will provide information on the outcome of the activities of the action plan and the status of implementation of the 1993 SNA in the region.  The countries and all other stakeholders concerned would be enjoined to cooperate.

IV. CONCLUDING REMARKS

38. The successful implementation of the action plan hinges on (a) the determination of the countries to generate national accounts statistics which are timely, internationally comparable, of good quality, and relevant to their needs; and (b) on the full cooperation of multilateral and bilateral institutions providing technical assistance in national accounts to the ESCAP region.

39. The advice of the Working Group of Statistical Experts is requested on the expected outcomes and the strategies of implementation, so that the proposed action plan can be refined. In particular, the Working Group's  responses are sought to the following questions:

1. Are the targets realistically achievable by the region?
2. What other approaches or mechanisms should be considered for the successful implementation of the action plan?
3. While ESCAP is viewed as the regional coordinator of the action plan, should there be subregional coordinators to monitor and evaluate the implementation of their respective subregions?
4. What would be the role of the countries in the regular monitoring of the implementation?
5. Would the countries agree to dissemination of an individual country's status of national accounts compilation?
6. What other recommendations does the Working Group of Statistical Experts wish to incorporate in the action plan?
7. Is the Working Group willing to endorse the Proposed Action Plan on the Implementation of the 1993 SNA in the ESCAP region, with whatever amendments are proposed? and finally,
8. How would the programme be financed?

40. In this latter regard, and as touched on earlier in this paper, there are already existing and pipeline projects with some degree of  consistency with the objective and strategies of the proposed action plan. These include both country-specific assistance and subregional technical assistance projects. Although ESCAP is not a funding agency, modest amounts from the regular programme of technical cooperation (Section 21 of the United Nations regular budget) can be made available to fund some of the activities mentioned in the action plan. Further, especially if additional human resources are available to manage it effectively, the secretariat could prepare and submit a project for possible funding by the Development Account (Section 33 of the United Nations regular budget).  However, to ensure that the target outcome would be achieved within the time frame additional resources would still be needed. It would seem important to engage all multilateral and bilateral donors mentioned earlier, and if possible others with a view to coordinating activities and maximizing impact. The Working Group of Statistical Experts may wish to suggest strategies for the necessary resource mobilization.

Annex I

REGIONAL WORKSHOPS/SEMINARS ON NATIONAL ACCOUNTS AND RELATED AREAS 1994-2001

Annex II

ESCAP IN-COUNTRY TRAINING COURSES