Global Status Report

1. Global Status Report Beirut, Lebanon (December 2005) Yonas Biru ICP Global Office

2. Summary • Status Of The Ongoing Consumption Surveys In Five Regions • Report On Regional Coordinators Meeting To Review Regional Data From The First Two Quarters • Preparation For Construction, Equipment, General Government, And Ring Surveys • Technical Advisory Group Recommendations • Progress In Poverty PPP Research And Implementation • Work Plan For The Balance Of The Program • ICP Executive Board Recommendations and Decisions • Data Access And Confidentiality Issues • The Future Of ICP

3. Status of Consumption Surveys • ICP Asia-Pacific: Twenty three countries in the region are participating. Twenty two started data collection in the first quarter of 2005. One started in April 2005. • ICP Africa: Forty one countries are taking part. Three countries started data collection in January 2005. Some of the countries conducted pre-survey in Q2. All 41 countries have been collecting data since July 2005. • ICP CIS: Eleven countries are participating. Price surveys for 2005 began in January 2005. • ICP Latin America: Ten countries are participating. All have been collecting data since January 2005. • ICP Western Asia: Eleven countries are taking part. Data collection took place during the first quarter in nine countries. Two started in Q2 • Eurostat/OECD: OECD/Eurostat countries conducts their own comparison program independent from the ICP and there are 43 countries taking part

4. Regional Data Review in Washington • Regional coordinators met in Washington in September to review data from the first and second quarters • The data review workshop was organized to ensure consistency in data collection and validation across regions and, therefore, to establish global credibility • The workshop allowed participants to identify areas where each region needed to make adjustments • One more workshop is planned for February 2006 to review data from the second and third quarter data collection cycles • For the first workshop three of the five ICP regions submitted data to the Global Office, one brought electronic files for illustration, and the fifth region brought paper copies showing limited information • This raised many issues regarding data submission and data access policies and confidentiality concerns

5. TAG Recommendations • The ICP Technical Advisory Group (TAG) members met in Washington in October to discuss pending methodological and procedural issues • Discussion focused on construction, equipment goods, PPP aggregation methods, preserving ‘fixity’ of regional results, and Poverty PPPs • TAG members reinforced the idea that when linking regional PPP to generate global PPPs, regional ‘fixity’ for PPPs and volume indices at all levels of aggregation should be preserved • Members discussed a number of aggregation methods, including EKS and GK methods that have been used widely in the past. After extensive discussions TAG recommended to use EKS • Meanwhile TAG acknowledged the importance of an alternative additive index and recommended to commission a paper on an alternative additive index • A new poverty PPP estimation procedure was presented by Professor Angus Deaton and endorsed by the TAG

6. Preparation for non-consumption items • Data collection for construction, equipment goods, general government and Ring surveys is scheduled for the first two quarters of 2006 • Specifications for non-consumption items have been prepared and disseminated • Data collection forms and survey guidelines are being finalized at the Global Office and will be ready for dissemination by December 20 • A global list containing 950 consumption specifications was prepared as a result of sustained cooperation between the GO, RO, and ring countries • A ring catalogue including specifications and the corresponding images is being printed • For construction and government services a global list will be used • For equipment goods global SPD/PS templates were prepared and sent to regions. Asia has made some adjustments to adopt the templates to its market situations

7. Progress in Poverty PPP work • The current ICP aims to improve the quality of poverty PPPs that are used widely for measuring poverty incidences and monitoring progress towards meeting the MDGs • A Poverty Advisory Group (PAG) has been established • New procedure has been proposed by the PAG and endorsed by the TAG • Research conducted independently by three PAG members in Asia, Latin America & Africa resulted in a new poverty PPP calculation method • Effort is underway at to establish correspondence between expenditure estimates from household surveys and the standard 90 plus household consumption classifications of the ICP • The plan is to calculate poverty PPPs utilizing price data from the ICP in conjunction with expenditure weights from household survey sources • This project is funded exclusively by the World Bank and managed separately to avoid creating additional burden on the ICP

8. Overview of ICP Work plan

9. ICP Executive Board Recommendations and Decisions

10. ICP Executive Board • The Executive Board is the decision-making and strategic body of ICP • It is responsible for ensuring that the Program is completed on time, within budget and that it provides high quality PPP data • The Board consists of 16 members • Dennis Trewin, Chair (ABS) • Ifzal Ali (ADB) • Prem Singh Rana (India) • Huang Langui (China) • Paul Cheung (UNSD) • Rob Edwards (IMF) • Shaida Badiee (WB) • Enrico Giovannini (OECD) • Henok Kifle (AfDB) • Ben Kiregyera (Uganda) • Koffi Ngussan (ENSEA) • Luis Machinea (ECLAC) • Jacob Ryten (Canada) • Valdimir Sokolin (Russia) • Mervat Tallawy(ESCWA) • David Fenwick (Gr.Briton)

11. ICP Executive Board Decisions • The Executive Board met in Washington on October 26 to review the status of the program and discussed policy related issues • The Board endorsed a set of basic requirements established by the Global Office and regional coordinators regarding quality assurance procedures that countries must meet to be included in the calculation of 2005 PPPs • Issues related to data access and data confidentiality were discussed and the GO was instructed to form a special Data Access Working Group • The Woking Group will be charged to prepare recommendations for the Board’s review and approval • The Board also discussed and approved the plan to publish PPPs in stages beginning with total household consumption followed by the full GDP. • The Board recommended that the World Bank serve as custodian of the global database

12. ICP Board Decisions (cont’d) • The Board expressed broad agreement that minimum requirements should be met for inclusion in the publication of the results. The requirements include: • National annual prices and diagnostic parameters based on at least two data collections cycles are required except where a single collection (e.g. housing) is suitable • Collection can be limited to major cities if data are available to extrapolate prices to national levels • Average prices should reflect purchases across all types of outlets to provide representative national prices to the extent possible • National level expenditure weights are required for the 155 basic headings • Countries need to be engaged in the regional data review process

13. Data Access and Confidentiality • It is requested that all participating countries provide access to their quarterly average price data to the Global Office • This is the same data that they provide to their regional coordinators for regional data validation exercise • While acknowledging that this was not anticipated when the original memorandum of understanding was drawn, the Board stressed that participating countries should show flexibility in the interest of establishing global credibility to the program and allow access to their quarterly data • The Board stressed that the quarterly data should be used strictly for data review purposes • The GO will ensure that only GO experts will have access to the data and once data validation is done the data will be purged

14. Data Access and Confidentiality • The other issue regarding data access to the global office involves providing the GO with final national annual average price estimates and the required diagnostic parameters, including coefficient of variation, number of observation, and representativity • This is critical to calculate global PPPs using different aggregation methodologies • The data will be part of the global data base • The third issue regarding data availability and confidentiality relates to at what level data should be published and what part of the unpublished data should be made available to the research community upon request • This is an issue that the proposed Data Access and Confidentiality Working Group will consider and provide recommendation for the consideration of the Executive Board

15. The Future of ICP

16. The Future of ICP • Many countries have expressed strong interest in participating in future rounds and have recommended that the next round should be organized without long delay • There is a general consensus that the next round would benefit from the experienced gained in this round and all efforts must be made to build on the momentum established • The Executive Board recommended that an independent evaluation should be conducted before the next round is launched • It is important that all the quality assurance procedures are fully implemented in this round to establish the credibility and the continuity of the program • The future of ICP depends on the support and the commitment of regional implementation agencies and participating countries