Globalization in the Updated SNA Carol S. Carson Project Manager, SNA Update Session on Globalization and the Effect on National Accounts Joint National Accounts Meeting April 25-28, 2006, Geneva
Background • December 2004 AEG • Expressed interest in including a discussion of the statistical challenges of multinational enterprises within the context of globalization in the updated SNA • Work to be carried forward by a subgroup • Group on Globalization met in in July 2005, aiming toward a modest amount of new text drawing on evolving literature
Toward an outline • The outline attached to the paper is the current state of thinking • The outline will evolve: • Comments by AEG in January-February 2006 • Some specific suggestions • Noted potential implications of globalization for updated SNA • This one-day session • Ongoing work on the Benchmark Definition of Foreign Direct Investment
Draft outline • Definition and characterization of globalization, with key role of multinational enterprises • Challenge of globalization to NAs: • Accounting: complexity of recording a variety of stocks and flows and relating them to units, using examples such as goods for processing, merchanting, SPEs, non-permanent workers • Source data issues: for example, transfer pricing, multinationals, free zones, with general concern about consistency of the several sets of data
Draft outline (2) • Challenges of globalization to NAs: Conceptual issues: examples • Globalization points to the analytical usefulness of ownership- or control-based statistics to supplement traditional statistics on cross-border transactions and positions. • R&D: accounting is complex in a closed economy, but the complexity is multiplied in an international context
Some points for discussion • Does the draft outline capture the main topics for a modest amount of new text in Rev. 1 about globalization in general and multinational enterprises in particular? What is missing? • If two, perhaps three, issues dealt with in the SNA Update were to be described briefly to illustrate the accounting challenges stemming from globalization (see section II.A), which should they be? • Given that the SNA is not meant to be a compilation guide, how much attention should be given to practical considerations? • What additional sources should be consulted?
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