SUPPORT to the STATISTICS SECTOR of BOSNIA and HERZEGOVINA (BiH) – Phase III BA05-IB-ST-01

1. SUPPORT to the STATISTICS SECTOR of BOSNIA and HERZEGOVINA (BiH) – Phase IIIBA05-IB-ST-01 Michelle Jouvenal, ISTAT, proposed Project Leader Ronald Delemont, ISTAT, proposed Resident Twinning Advisor Sarajevo, 4 October 2005

2. BENEFICIARY COUNTRY (BC) • The BC is Bosnia and Herzegovina • The direct beneficiaries of the Twinning project are the relevant statistical authorities, having the task of supporting the development and sustainability of the National Statistical System of BiH (NSS) • The relevant statistical authorities of BiH are: - BHAS, the Bosnia and Herzegovina Agency of Statistics - FIS, the Institute of Statistics of the Federation of BiH - RSIS, the Institute of Statistics of the Republika Srpska - CBBH, the Central Bank of Bosnia and Herzegovina

3. MEMBER STATE (MS) • The MS is Italy, through ISTAT, its National Institute of Statistics • A partnership among MS public administration Institutions: - ISTAT, the Italian National Institute of Statistics - DST, Statistics Denmark - HCSO, the Hungarian Central Statistical Office - SORS, the Statistical Office of the Republic of Slovenia • Complementarity of backgrounds and approach

4. TWINNING PRINCIPLES • Administrative co-operation in the field of statistics • Committment to achieve mandatory results through the transfer of hands-on public sector experience and expertise • Yield concrete operational results, in terms of the beneficiary institutions of BiH meeting the mandatory results in connection with the EU acquis communautaire in statistics • A common project, covering a process in which all partners take on overall and specific responsibilities • Joint drafting of a detailed work plan, before starting the work

5. STEPS TOWARDS THE WORK PLAN • Identification of the Resident Twinning Advisor, Institutional Strengthening Expert and long-term Project Assistant • Identification of the most suitable institutional partners to meet mandatory results by component • Submission of the Twinning proposal • If selected, progressive joint work between the beneficiary and the Twinning partners, aimed at the design of a detailed Work plan • The Work plan will include detailed activities by component, the indication of corresponding experts, timeframe, expected outputs and measurable indicators of achievement • The Budget annexed to the Work plan will link every activity to its costs

6. TWINNING MANDATORY OBJECTIVES and RESULTS The overall objective of the intervention is to support the needs of the relevant statistical authorities of BiH by : • strengthening the capacity of providing timely, reliable and harmonised statistical data for the country • supporting the participation of Bosnia and Herzegovina in the Stabilisation and Association Process

7. TWINNING MANDATORY OBJECTIVES and RESULTS The specific objectives of the Twinning project are : • improving data collection and harmonisation of methods and information between BHAS, FIS and RSIS, in line with European standards • improving the efficiency of the BiH statistical system through technical assistance and training • increasing confidence in official statistics and raising the public profile of the Statistical Institutes • setting the basis for the further establishment of a network connection between the three Statistical Institutes

8. TWINNING MANDATORY OBJECTIVES and RESULTS Seven distinguished Twinning components: • National Accounts • Business Register • Business Statistics - structural business surveys - producer price indices for wholesale trade and industry - production indices in construction, industry and trade • External Trade Statistics • Strengthening the institutional infrastructure of the BiH Statistical Institutes • Agricultural Statistics - agriculture price indices - economic accounts for agriculture • Financial Sector Statistics

9. EXISTING SITUATION UPDATE andCO-ORDINATION NEEDS • EUROSTAT & UN-ECE 2003: “Global Assessment of the Statistical System of BiH” • Phase I and Phase II of EC Technical Assistance projects • 2001 CARDS Regional programme, and its three pilot projects (PPP, External Trade and DOSME), training, study visits and participation to international meetings • 2003 CARDS Regional programme, with activities similar to the previoys programme and four pilot projects (PPP, External Trade, Migration Statistics, Labour Market statistics) • IMF long-term resident statistical advisor, for advise, technical assistance and on-the-job training • OECD and SORS on PPP and NOE

10. EXISTING SITUATION UPDATE andCO-ORDINATION NEEDS • World Bank, the Italian Government, UNDP and DFID (UK): “Support for the Design, Implementation and Analysis of Household Surveys” - World Bank and DFID, LSMS and 3 waves of panel surveys - Italian Government and ISTAT, the Household Budget Survey (HBS) and consumer price indices - UNDP, the Labour Force Survey (LFS) • World Bank: LSMS, advice and training in various areas, especially System of National Accounts (SNA) methodology, and a Master Plan for the development of BiH statistics, and National Accounts • DFID, LSMS and waves of panel surveys • Economic Policy Planning Unit (EPPU) • Statistics Sweden and SIDA regional projects in the Balkans

11. 1. NATIONAL ACCOUNTS • National accounts in BiH have serious shortcomings, namely regarding the coverage of non-observed economy and the absence of expenditure-side GDP estimates • A first output will be the assessment of existing data sources, methodology used, user needs requirements and recommendations for improvements • Second output is the setting up of a Master plan for the development of National Accounts • Identification of immediate measures to be taken in order to promptly improve key NA indicators (quick fixes) • Structural improvement to GDP estimates on the production side and preliminary GDP estimate on the expenditure side

12. 2. BUSINESS REGISTERS • Existing Business Registers do not allow proper macro-economic analysis as their coverage and updating are not satisfactory. • A plan will have to be developed to include activities, timing and resources needed • Design of a logical and physical structure of the BR and development of the related IT tools • Feasibility study on the ways to fill in the business register with preliminary data • Technical assistance will be provided for the design and implementation of survey if required

13. 3. BUSINESS STATISTICS • Poor business statistics is due to the absence of a developed business register and to the uneven application of methodologies in the production of short-term indicators among which industrial production indices. • Outputs will be the design and the implementation of a survey on large and medium sized enterprises and a pilot survey on a selection of small enterprises. • An other output will be the design and implementation of surveys necessary to calculate producer price indices for wholesale trade and industry • Additional output covers the design and implementation of surveys to collect data needed for the calculation of indices for the monthly volume of production in construction, industry and trade.

14. 4. EXTERNAL TRADE STATISTICS • Improvements need to be achieved in the quality of external trade data and in the details of breakdowns and indices to be produced. • The introduction of ASYCUDA software in 2005 should facilitate the data transmission in terms of quality and timeliness. • One output will be updated classifications and availability of additional indices with greater details • Improved data quality and streamlined transmission of data.

15. 5. STRENGTHENING THE INSTITUTIONAL CAPACITY FOR BiH STATISTICS • Problems addressed are lack of coordination between the 3 institutes, insufficient experience of the staff in the use of harmonised methods and low profile of statistics. • One output will be an ICT development plan including a list of priorities for short-term ICT acquisition • Better trained staff in all components of the programme through workshops, hands-on training and study visits • An other output will be a higher profile of statistics in BiH to be achieved through advice for publication and dissemination of statistics.

16. 6. AGRICULTURAL STATISTICS • Agriculture is an important economic sector in BiH, its contribution to the GDP should be better estimated. • As outputs, BiH should benefit from transfer of know-how and experience in agricultural prices and economic accounts for agriculture. • An other output will be the progressive setting-up of economic accounts for agriculture.

17. 7. FINANCIAL SECTOR STATISTICS • Some components of financial sector are not covered by statistics. • The first output will be the assessment of available data sources • In coordination with other producers of statistics in this area (CBBH), an output will be the design and implementation of pilot surveys if relevant in order to compile at least three missing components of the financial sector. • Recommendations will be made on how to improve this sector.

18. INPUTS • The fiche gives an indication of the minimum expected human resources input required to reach the mandatory results equivalent to:-1,290 experts/days for the long-term advisors- 531 experts/days of medium and short-term experts • Additional human resources input will be required for backstopping, administration and financial management, as well as for the appropriate coordination with the EC and all the other related projects and institutions • The eventual joint analysis of the activities to be undertaken to reach the mandatory results, at the base of the drafting of the Work plan, will bring a detailed and precise identification of activities needed and timeframe.

19. PARTNERS’ EXPERTISE • ISTAT: provision of TA to BiH since 1996, thorough knowledge of the BiH statistical system, experience in cooperation in other countries of the region (twinning in Albania and Romania, grant to Serbia and Montenegro). • Statistics Denmark: 2001 and 2003 CARDS twinning programmes in Croatia with similar components • SORS: group leader of the OECD/Eurostat project on purchasing power parities (PPPs) • HCSO – leader for agriculture in ISTAT’ twinning in Albania • All proposed partners have experience of working together • Short-term expertise within each component will be provided from the project’s partners as needed • Technical coordination of each component has been assigned to one project partner

20. IMPLEMENTATION PROCEDURES • If we are asked to proceed, ISTAT will sign a contract with the EC, and will be responsible to the EC also for the other partners • In turn, ISTAT will sign a Partnership Agreement with every partner, establishing Twinning implementation rules, administrative and financial procedures, communication and reporting principles • Activities allocated to each partner are derived directly from the Work plan and corresponding financial resources from the budget • On the basis of the Partnership agreement, as soon as ISTAT receives the advance, the amount corresponding to each partner share is immediately transferred • Proven mechanism

21. SUSTAINABILITY • Policy support, beyond direct results by component • Implementation of the Statistical law, steps towards SAA requirements and BiH MIP 2005-2006 • Core values: relevance of statistics produced (interaction with users), application of sound statistical principles (EU methods and standards), high professional standards, trust of providers (data confidentiality, minimum respondents’ burden) • Good governance: involvement of the Statistical Council, progressive independence of statistical institutions, good management of the three Statistical Institutes through the establishment of a sound planning system and effective resource management

22. PROJECT LEADER • In charge within ISTAT of the design, implementation and management of technical co-operation activities (with a project portfolio over 10 MEuro) • Thorough project management and implementation skills • In-depth knowledge of the BiH statistical system • Experience in EU rules and procedures, service contracts, twinning and grants • Political awareness and communication skills

23. RESIDENT TWINNING ADVISOR • Thorough experience in official statistics at senior level, both within a national statistical institute and in Eurostat • Good knowledge of the particularities of a decentralised statistical system • Broad experience in organising training courses and programmes in statistics • Good knowledge of the European Statistical System • Experience in the management of statistical cooperation projects • Involved since 1997 in statistical cooperation with BiH • Good interpersonal skills and ability to work under pressure • On ISTAT’s payroll

24. INSTITUTIONAL STRENGTHENING EXPERT • Head of Office for International relations and EU affairs within SORS, and presently Chief Advisor • Very good knowledge of EU procedures and statistical acquis communautaire • Developed analytical skills • In-depth experience in coordination issues with governmental institutions, EU and other international organisations, NSIs • Sound drafting capacities, knowledge of the local language • Acquainted with the statistical system of BiH

25. PROJECT ASSISTANT • In depth knowledge of the BiH statistical institutions • Excellent cooperation and relationships with the beneficiary institutions • Thorough knowledge of EU procedures and requirements • Very good command of English language and drafting skills • Experience as local programme manager for EU Statistical Project Phase I and ISTAT programme for the implementation of HBS and price statistics

26. MEDIUM/SHORT TERM EXPERTS • Component coordinators already identified • CVs of many other short term experts already collected • Complete list of short term experts to be included in the Work plan for approval • Any change or substitution subject to approval by the EC Delegation • Experts’ evaluation

27. MANAGEMENT TOOLS • Steering Committee • Reports as required • Monthly newsletter to ensure thorough continuous information sharing • Visibility actions (media, internet, publications) • Web space for documentation