Progress Report on the Review of the SNA

1. Progress Report on the Review of the SNA Carol S. Carson Project Manager Working Party on National Accounts OECD, Paris, October 11-14, 2005

2. Plan of the presentation • Big picture • July 2005 (Bangkok) Advisory Expert Group (AEG) meeting • Overview • Selected issues • January 2006 (Frankfurt) AEG meeting • Drafting and Review Phase

3. Big picture • Statistical Commission’s mandate: • No fundamental changes that would impede implementation • Bring the accounts in line with… • New economic environment • Advances in methodological research • Needs of users • Consistent with other macro manuals • 1993 SNA, Rev. 1 ready for endorsement in March 2008

4. Big picture (cont’d) • The Update is on track • Update contained within the bounds set by the 44 agreed issues • Recommendations so far deal with, for example,… • Statistics for an increasingly globalized world • Developments in financial markets • Aspects of the “new economy” • With hard work and focus, expect to deliver Rev. 1 on time

5. Big Picture (cont’d) • Progress Report at the Project website http://unstats.un.org/unsd/nationalaccount/snarev1.aspincludes... • List of the issues, with status as of end September • Calendar of SNA-related events

6. July AEG • Overview: • Intense, but productive meeting • Reports available on the Project website at http://unstats.un.org/unsd/nationalaccount/aeg.htm • Summary conclusions (Spanish translation available; French translation coming) • Report (draft) • Recommendations now open for country comment

7. July AEG (cont’d) • Non-financial assets • Cost of capital services: • Confirmed the importance of including capital services (depreciation and return to capital) in SNA • Emphasized compilation of capital services and stocks in an integrated manner • Strongly supported including estimates of capital services in supplementary tables

8. July AEG (cont’d) • Non-financial assets(cont’d) • Assets used in non-market production: Reaffirmed principle of including a return to capital. To consider further after follow-up on country comments • R & D: Recommendations … • To recognize output of R & D as assets • That although R & D made freely available should not be treated as assets, in practice they might not be excluded • To use Frascati definition of R & D • That patents will no longer be separately identified

9. July AEG (cont’d) • Government/public sector • Previewed a new chapter on general government and public sector • Tax revenues, uncollectible taxes, tax credits: • Recommendations that… • Taxes are to be recorded on an accrual basis • Taxes that are uncollectible and/or unlikely to be collected should not be included • Payable tax credits to be recorded on gross basis • The above plus clarifications of definition and coverage of taxes to be reviewed with draft chapter

10. July AEG (cont’d) • Government/public sector (cont’d) • Guarantees: • Agreed in principle to recommendations based on a three-way split: • Tradable guarantees to be treated as financial derivatives • Standardized guarantees to be treated similar to insurance • One-off guarantees not in the core accounts • Clarifications to be made in a revised paper combining granting and activation for e-discussion

11. July AEG (cont’d) • Government/public sector (cont’d) • Sector delineation: • Broad support for… • Use of decision tree to identify boundaries • Indicators to be used to determine whether government controls • Elaboration of economically significant prices • Clarifications to be made in a revised paper for e-discussion

12. July AEG (cont’d) • Financial instruments: dealt with several issues, mainly on classification (and more to come) • BOP: dealt with a number of issues (to be presented separately)

13. January AEG • Overview • Last of the AEG meetings on separate issues • Issues concentrated in government sector and where several working groups share an interest in the issue • Papers mainly from series of meetings that began in mid-September • As for the July AEG, a combination of e-discussions and face-to-face discussion

14. January AEG (cont’d) • Agenda: issues • Employer pensions schemes • Payments to government by public corporations: super-dividends, etc. • Holding companies, SPEs, trusts • Leases and licenses • Informal economy • And others, such as… • Ancillary units • Financial services

15. January AEG (cont’d) • Agenda: other topics • First look at some problems of consistency across recommendations • Plan for the drafting and review stage • ECB will organize a meeting with data users

16. Drafting and review phase • Key dates • Late 2006: recommendations ready for consideration by Statistical Commission in March 2007 • Late 2007: draft of Rev. 1 ready for consideration by the Statistical Commission in March 2008

17. Drafting and review phase (cont’d) • ISWGNA is fleshing out the work plan • Likely key features: • Editor: edits existing SNA text and drafts new sections, sometimes using others’ drafts • Chapters broken into logical groups for drafting-review process • Review of at least three kinds: • Support for editor, mainly by ISWGNA • AEG • Country • Record of changes made • Progress chart

18. …and this involves you! • Work on issues is winding down, but your continued involvement is needed: • Suggest additional needed clarifications (non-conceptual changes) to the SNA: open through end 2005 • Comment: • Now, on recommendations (for the July AEG meeting’s recommendations, by November 30) • In 2006-2007, on draft text

19. Thank you Contact:: ccarson@imf.org