Al-Khawarezmi Committee First Conference

1. Al-Khawarezmi Committee First Conference The Role of the IMF Technical Assistance in Promoting Statistical Development in the GCC Mohammed El Qorchi, IMF Doha, Qatar December 6–8, 2010

2. Regional Cooperation among GCC countries Regional cooperation and in particular, economic integration among the GCC countries is an important factor in economic policies. • A common external customs tariff has already been introduced in 2003, and the GCC authorities have decided to establish a monetary union. • Important progress was made in March 2010 when four GCC countries signed the GCC Monetary Agreement and launched the Monetary Council.

3. Changes in Statistical Systems in the View of the Monetary Union • In view of GCC countries intention to establish a monetary union, the effectiveness of their statistical systems must be upgraded to meet the demands of the monetary union. • Effective operation of a monetary union requires that policy makers have current and reliable information. A coordinated approach to developing statistical systems is essential. • A coordinated approach applied for TA delivery to develop statistical systems seems most efficient.

4. Main Tasks for Regional or Union Statistics • Apply common standards in all countries • Create a regional harmonized statistical system, including monetary statistics system • Compile aggregates for the region and quickly transfer data to regional members or other countries • Create links to a macroeconomic statistical system to evaluate policy effectiveness • Provide a unified message

5. The Role of Statistics in a Monetary Union • A Regional Organizationneeds comparable, current information on monetary, financial, and other conditions in each country and for the region. • A Monetary Unionrequires that policy-makers have reliable, current information about the common policy and policy instruments used to operate the Union. • Statistics provide information for analysis of regional conditions, or the successful operation of the union. • Statistics are the public face of the Region or Union.

6. Principles for compiling Monetary Union Statistics • The statistics of the member countries are added (aggregated) and consolidated to provide a unified picture of economic activity. • Research or policy is carried out regionwide. • Some statistics are constructed as if the region or union were a single country (total money stock, total external debt, etc.) • Individual country data must be additive to the Regional or Union total. • Harmonized national statistics are needed to be able to aggregate. • Consolidation requires information on transactions and positions between members of the Union. • Analysis of contagion or financial stress also requires information on transactions and positions between members countries.

7. Recent Developments in Statistical Systems of GCC Countries • Significant improvements in legal frameworks and institutional setup have taken place in the past several years. • However, these improvements have yet to become fully operational. • Considerable efforts need to consistently focus on ensuring that the upgraded legal frameworks and the new institutional setups are operational in order to support clear coordinating mandates and to strengthen interagency coordination.

8. Recent Developments in Statistical Systems of GCC Countries (concluded) • Some progress has been made in recent years in improving the coverage, periodicity, and other aspects of quality of economic and financial statistics in the GCC. • Nevertheless, major weaknesses still exist primarily in the areas of GFS and external sector statistics in terms of scope, coverage, methodologies used, and dissemination. • Weaknesses also exist in NAs, prices, and MFS.

9. Statistical Development Projects • To address the weaknesses mentioned in the previous slides, technical cooperation between the GCC countries and STA may take the form of statistical development projects in all areas of macroeconomic statistics. • STA could provide TA and advice on the harmonization of these sets of statistics in GCC countries as well as compilation of union-wide statistical data. These topical projects would include seminars for high level policymakers, workshops and other training sessions for technical staff, IMF staff visits to individual GCC countries, etc.

10. Statistical Development Projects (concluded) • STA already prepared a draft project proposal (module) on developing GCC monetary statistics. Monetary statistics arethe core statistics for the operation of a monetary union. • The draft project proposal described the goal, expected results, and other main aspects of the project, as well as provides estimates of the project’s budget. • The draft project was proposed for discussion with the GCC authorities. Based on this example, similar project proposals could be developed for other statistical datasets.

11. SDDS as a Benchmark for Statistical Development in GCC • The IMF’s SDDS could be a useful general benchmark for statistical development in the GCC region supporting also the goal of harmonizing statistical datasets. • For most major data categories of GCC countries, the SDDS coverage, periodicity, and timeliness requirements along with the respective latest international statistical methodology would be developmental benchmarks going forward. • This should not apply to specific cases where major shortcomings exist. In these cases, the GDDS requirements could be targeted first and only when the GDDS recommendations are fully met, the SDDS requirements would be put forward as a next stage.

12. Key Features of the SDDS (1) Four dimensions of data dissemination: • Data coverage, periodicity, and timeliness • The public’s access to the data • The integrity of the disseminated data • The quality of the disseminated data.

13. Key Features of the SDDS (2) • The SDDS prescribes that 22 categories of data be disseminated, each at a specific frequency and with a prescribed timeliness. • These data cover the real, the fiscal, the financial, and the external sectors. • The SDDS requires subscribers to disseminate the data on a timely and regular basis, as set forth in the Standard, on the subscribing country’s national website designated as the “National Summary Data Page.” • The SDDS also calls for subscribers to provide advance release calendars and metadata for various data categories for posting on the IMF’s DSBB. • To provide users ready access to the subscriber’s data, the NSDP is to be hyperlinked to the DSBB.

14. Differences Between the SDDS and the GDDS (1) • The SDDS is a monitored standard. The GDDS is a framework to guide development. • The SDDS prescribes specific practices that must be observed by subscriber; the GDDS provides guidelines on good practices and is less demanding than the SDDS. • SDDS subscribers must meet the requirements at the time of subscription;GDDS does not fix datesfor participants to improve existing practices; GDDS participants set their own priorities and timing for developing their statistical systems.

15. Differences Between the SDDS and the GDDS (2) • The focus of the SDDS is on data dissemination in countries that already meet high data quality standards, whereas the primary goal of the GDDS is to assist countries in developing their statistical systems through setting up plans for improvement and identifying technical assistance needs. • SDDS covers macroeconomic and financial data and one socio-demographic data category (population); GDDS covers several socio-demographic data categories (population, health, education, and poverty), in addition to the macroeconomic and financial data covered under the SDDS, to support statistical needs of developing countries.

16. A Possible Regional Statistical Platform • Following the global credit crisis and the Dubai World debt problems, the region perhaps more receptive to a regional initiative to draw out the lessons learned and to strengthen their capacity to produce data relevant for the analysis of debt-related vulnerabilities and macroeconomic frameworks. • A regional consolidated statistical body could offer a regional statistical platform: an agency to coordinate activities among national statistical agencies, support integration of member countries, and increase the stake in regional initiatives.

17. A Possible Regional Statistical Platform (continued) • In setting up the regional statistical platform, what is the appropriate approachand pace? What form? An independent institution or a network of institutions? A small or large agency? Evolving or final form? • In a regional initiative, countries seek appropriate mutual cooperation, engage in capacity building, and develop and promote national/regional statistical methodologies.

18. A Possible Regional Statistical Platform (continued) • The statistical platform could begin as a smaller body which evolves into a bigger body. Initially, the body could be a forum/secretariats rather than an independent agency to avoid legal issues related to institutionalizing and to speed up implementation. • The statistical platform could start with the GCC countries, since they are more familiar with multilateral surveillance and the need for data dissemination in preparation for the monetary union. The group could be expanded to other countries in the region in the medium to longer run.