Mapping User Needs: Aligning Economic Policy with Statistical Production

1. Mapping User Needs: Aligning Economic Policy with Statistical Production Statistics South Africa

2. Conceptual Framework for Economic Data Collection • 1) National accounts – as an intermediate user, rather than final user (or GDP side of national accounts) – defines the primary framework for economic data collection. • 2) National accounts, in collaboration with source data, defines the priorities of Economic Statistics primarily though its concern with the quality of GDP. • 3) Identifying broader priorities beyond national accounts considerations, specifically micro economic analysis.

3. Broad Challenges • Change culture of being supply driven to demand driven but also lead ? • Identify the role that econ stats will/can play in informing economic policy making • Clearly identify the role, purpose and function of the variety of mechanisms that exists.

4. Scope of Economic Statistics • Macro Economy with exception of trade in goods and services, and investment capital flows. • Informal Sector • Labour Statistics • Income and Expenditure • Poverty

5. Perennial Concerns of GDP • The extent to which GDP quality will overshadow other important economic indicators depends on peculiar circumstances • Remain important challenges in South Africa • The extent to which demands of users have both a direct and indirect impact on GDP quality

6. State of GDP Are we underestimating size (level) and/or growth ( including real growth)? • Concerns about size ( perhaps informal sector requires scrutiny) • Challenge to convince users that Economic Activity Survey ( which provides the main but not all the components) is unlikely to be under-estimating aggregate GDP. Are we underestimating real GDP growth? • Convince users we are capturing growth accurately. • Challenge is to ensure that we are not under estimating growth owing to incorrect deflators.

7. State of GDP Timeliness • Challenge of tracking turning points better. • Quarterly refreshment of samples

8. State of GDP Allocation of GDP • Large scope for improvement • Absence of services indicators • Absence of activity surveys • Absence of provincial allocation

9. Economic Policy in SA • Finding Alignment between economic policy priorities and statistical production • One key economic policy challenge is to measure changes in the economy • Thrust of Economic Growth central to a governments growth strategy • Basic Economic Challenge – growth and welfare

10. Policy Agenda in SA • Determinants of Growth - Labour, Capital and Productivity Core to our business with challenges • Sources of Growth where in the economy is growth coming from Services?

11. Policy Agenda Constraints to Growth • Crime and uncertainty • The Impact of HIV/Aids • Labour market • Institutional bottlenecks and infrastructural constraints • Absence of a broad based skilled work force • Governance and the role of the state – state inertia seen as a constraint to growth • Lack of competition and mark-ups in the economy • The problem of entrepreneurship • Lack of competitiveness

12. Policy Agenda The Impact of Growth • Inequality • Absolute poverty • The direct link between reform and poverty • Income distribution measures • SMMEs • Land redistribution • Social Transfers

13. Responding to the Policy Agenda Determinants of growth improve our analysis of productivity ( QES) improve our measures of capital formation ( construction) Sources of Growth Introduction of Provincial Data Series Services Sectors ( agenda for improved coverage)

14. Responding to the Policy Agenda Constraints to Growth comprehensive labour market statistics strategy competitiveness ( better tracking of prices/improved LSS) governance and the role of the state ( government accounts/public finance) Growth and Welfare/Poverty ? massive investment in household survey in the post apartheid era Scope for improved links between macro and micro linkages

15. Hybrid of Formal Processes • Regular interface with the Minister of Finance • Meetings with Parliament’s Portfolio Committee on Finance • The Statistician General is part of the Deliberations of Cabinet at least twice year along with other Director Generals • The Deputy Director General of Economic Statistics is part of the Cabinet Economics Cluster that meets every fortnight. • Statistics Council • Advisory Committees • Ad hoc Working Groups with various government departments and agencies. • Annual workshops held organised by Stats SA in all the provinces

16. Engagement with the Minister Very Important vehicle for mapping user needs Average of 2 meetings a month with the entire senior management. Nature of meetings – governance and substantive subject matters Minister brings unique insights about brewing policy concerns Currently works well with high level of democratic accountability and highly respected minister. Risk: Individual dependent.

17. Statistics Council • Full council meetings at least 3 times a year • Key function is to advise minister on work programme • Existence of sub-committees • Broad representation from key users in government, civil society and academia • The role and impact of council depends on skills distribution and who is nominated. • Particularly strong group on poverty

18. Parliament • Two meetings a year • Presentation of three year planning cycle to the portfolio committee on finance • The forward work program puts pressure on StatSA to continously justify its relevance and impact • Presentation on annual report – once again and major achievements for the year • Presentation to Parliament by Minster on behalf of StatsSA,

19. Economics Sub committee User Groups in Progress User Groups Planned (2007) Annual Forum with Economists Biannual Workshops with Reserve Bank Ongoing engagement Average of 3 meetings a year CPI, Agriculture and Government Accounts GDP, Labour Market Statistics Industry Dynamics Joint venture with universities Scheduled User Groups

20. Improvement In User Interface • Major weakness • Threatens our ability to be relevant • Affects credibility • Lack of segmentation in defining the heterogeneity of users • Implementation of clear and well defined mechanisms

21. Improvement in User Interface • Combination of formal and informal mechanisms to enhance user interface • Formal • User advisory committees • Information papers and manual • Informal • Management participation in forums and networking

22. Conclusion • User Groups – requires internal analytical capacity • Need for more systematic review of questionnaire design, etc • Continuous attempts to reconcile demand and supply.