Back Matter
Author:
International Monetary Fund
Search for other papers by International Monetary Fund in
Current site
Google Scholar Close
Language:
English
Keywords:
BOOK; debit; balance of payments account; current account; investment; transaction
Download PDF (6 MB)

Abstract

The IMF, in cooperation with other concerned organizations, set up a working party to investigate and improve the statistical procedures being used, and to recommend compilation procedures that would make nations' balance of payments statistics more consistent with one another. In addition to detailed explanations of its findings and recommendations, the Report contains extensive statistical appendices and 109 tables.

Statistical Appendices

I The Fund’s Balance of Payments Statistics

The balance of payments statistics that are assembled and published by the Fund’s Bureau of Statistics are the basic data for this appraisal of world payments imbalances and provide the measures of the discrepancies that are the focus of the Working Party. The principal published form of the Fund’s statistics is the Bureau’s Balance of Payments Statistics Yearbook, which becomes available in the second half of each year and contains data for most countries through the preceding calendar year.

The Yearbook has two parts, which are published in separate volumes. Part 1 is a collection of balance of payments statements for individual countries, each stated in the standard categories described in the Fund’s Balance of Payments Manual and expressed in SDRs. Countries included in the 1985 Part 1 consisted of about 125 Fund members and Switzerland. Some Fund members were missing—notably Iran, Iraq, Qatar, and the United Arab Emirates—and there were no statements for Eastern European nonmembers or for Hong Kong, Bermuda, and other economies that do not produce national balance of payments statements. Part 1 also omits international organizations such as the Fund.

Part 2 of the Yearbook is a separate publication that summarizes the information in Part 1 across countries to produce regional and world balance of payments statements. Part 2 contains the world balances that concern the Working Party. Several technical aspects of the construction of this publication need to be mentioned in order to permit readers to understand the nature of the numbers it contains, the relationships among its tables, and the adjustments needed to reach consistency across countries and across types of transaction.

Part 2 begins with a set of “A” tables that organizes the data into a number of subtotals, or “analytic” balances, including the current account, that show country, regional, and world amounts for each type of balance. These tables are followed by a set of “B” tables that give regional balance of payments statements, structured to summarize major types of transactions rather than analytic balances. Finally, there is a set of 46 “C” tables giving country and regional data for each of the main individual categories of current or capital transactions in the Fund’s standard balance of payments presentation.

Part 1 of the Balance of Payments Statistics Yearbook reproduces country data essentially as reported by the countries, though the Fund staff may rearrange the national submissions to fit as closely as possible the Fund’s standard classifications. In constructing the tables for Part 2, however, the Fund staff (including both the area departments and the Bureau of Statistics) provides estimates for reports that have been delayed and for countries that do not regularly report to the Fund. These estimated quantities are not shown separately in the Part 2 tables, but are carried into the regional and global aggregates. One consequence is that the country data shown do not add up to the regional or global totals.

For its assignment the Working Party required both an authentic published measure of the total world current account (whether correct or not) and a consistent set of accounts for individual transactions that added up to that aggregate. The current account as shown in the A tables of Part 2 was the logical candidate, but it was necessary to make an adjustment to eliminate from those current account totals the balances estimated by the Fund staff for certain countries (mainly in Eastern Europe) for which the Fund did not prepare estimates of the transactions components of the current account.

The C tables contain the country data for the individual types of transactions on which the Working Party concentrated (investment income, shipment, other transportation, and unrequited transfers) and were the main focus of the analysis. This set of tables was the basis for Tables 1 and 2 of Chapter I. To facilitate its research, the Working Party had available the full country breakdown of these tables, including the staff estimates for missing items. Moreover, the Working Party was able to obtain these data over extended time periods and in U.S. dollar terms. For its purposes the Working Party prepared estimates, where necessary, for the income and shipping transactions of countries not included in the C tables.

There are other published measures of the world current account balance besides those in the Balance of Payments Statistics Yearbook, all of which show approximately the same levels and changes. Table 80 compares the 1985 Yearbook balance with those published in the Fund’s World Economic Outlook and the OECD’s Economic Outlook. The World Economic Outlook figures, although closely related to Yearbook statistics, are put together in the Fund’s Research Department; they are prepared at a different date and are somewhat independent of Bureau of Statistics figures. The OECD states that its balances are based heavily on information supplied by OECD members, and that same information is used in constructing data for nonmembers. OECD results thus differ more than World Economic Outlook numbers do from the Yearbook numbers, which are derived from national sources and Fund estimates. For 1978 to 1982, the several series are closely parallel. For 1983-85, the differences reflect to a large extent successive revisions, ranging from the inflow of new information to the use of different estimates when current data were incomplete.

Table 80

WORLD BALANCES ON CURRENT ACCOUNT: COMPARISON OF ALTERNATIVE VERSIONS,1 1978–85

(In billions of U.S. dollars)

article image

Each series omits Council for Mutual Economic Assistance (CMEA) countries that were not Fund members, and the OECD total also omits Hungary and Romania The first column is the series adopted by the Working Party.

Adjusted to include official transfers.

II Investment Income Questionnaire

Several chapters of the Report use the results of a special questionnaire designed by the Working Party covering investment income flows and the stocks of cross-border assets and liabilities that generate income flows. The questionnaire was sent by the Working Party to about 60 countries in an effort to learn more about the figures that the countries have sent to the Fund’s Bureau of Statistics: in particular, the sources of the data, recent revisions, and unpublished detail on the types of investment income that were being reported. Replies were received from 46 countries. These replies brought out many questions of consistency and completeness, and served as a basis for discussions with the respondent countries that involved not only the questionnaire replies but also turned up related problems. The principal uses of the questionnaire results appear in Chapters II, IV, and V.

The questionnaire itself is reproduced on pages 140-46. It asks for income flow data for the two years 1979 and 1983, which were, respectively, before and after the sudden growth of income flow discrepancies, and on lines 40 to 69 it asks for stocks of international assets and liabilities for the one year 1983. It asks in particular for cross-border banking information—interest flows and positions of banks vis-à-vis banks and nonbanks. The banking distinction, when available, allows a comparison to be made between balance of payments data reported by countries and the body of International Banking Statistics (IBS) that is compiled and published by the Fund.38 That comparison can reveal inconsistencies across countries in their data or estimates of stocks and related income for this major sector of international claims and liabilities. Lines 30 to 39 asked about data sources in a schematic form, and the results of that survey appear in Chapter II.

Table 81 is a broad summary statement of the results of the questionnaire. The table compares questionnaire income flows with those published in the 1985 Balance of Payments Statistics Yearbook both for the respondent countries and for all countries. Lines 25-27 show that the 46 questionnaire replies came from countries with about 90 percent of the Yearbook totals of investment income. Industrial countries had a heavier weight in the replies than in the Yearbook, and as a result virtually all credits for direct investment income were covered while debits were less well represented. Because of this weighting in direct investment income, the balance in questionnaire countries is a sizable net credit, dominated by the reinvested earnings credit balance, both in the questionnaire (line 2 of Table 81, rightmost column) and in the Yearbook (line 9), whereas for all countries direct investment income had a small net debit (line 23) in 1983. For other income the respondent countries had a larger net debit than the Yearbook totals, mainly because a $25 billion net credit included in the Yearbook for Middle Eastern oil exporters was only thinly represented in questionnaire responses.

Table 81

COMPARISON OF QUESTIONNAIRE REPLIES WITH BOPS1 YEARBOOK, 1979 and 1983

(In billions of U.S. dollars)

article image

Balance of Payments Statistics.

Ratio of 1985 BOPS Yearbook amounts for questionnaire respondents to totals for all countries in the Yearbook.

Differences from the Balance of Payments Statistics Yearbook for the respondent countries, on lines 15 to 21 of Table 81, reflect a combination of new information, reclassifications, and statistical revisions. For reinvested earnings the larger amount in the questionnaire comes principally from data for the Netherlands and the United Kingdom, both debits and credits, that are in the questionnaire but not in the Yearbook. “Other” direct investment income is also larger because of a U.K. change that was in the questionnaire but not in the 1985 Yearbook. For the United Kingdom, these questionnaire revisions resulted mainly from direct investment income of the petroleum industry, which was entirely excluded from direct investment income totals in the 1985 Yearbook and was instead combined with other investment income in both credits and debits. At the world level, this was an asymmetry with other-country recording of these flows. The United Kingdom changed the procedure in 1985 to shift U.K. petroleum industry earnings into direct investment income. The U.K. data in the revised version that appears in the 1986 Yearbook include data for the petroleum industry, including reinvested earnings, in direct investment income beginning with 1984, so that hereafter the U.K. data will be comparable with the data of partner countries. For the questionnaire, U.K. statisticians provided estimates for the petroleum industry on a global basis for 1983 that were comparable with data for 1984 and later years as published in the 1986 Yearbook. However, country detail for the U.K. petroleum industry in 1983 is not available, so that the bilateral comparisons in Chapter IV are based on U.K. data excluding the petroleum industry.

The U.K. shift of petroleum direct investment, included in the questionnaire but not in the 1985 Yearbook, produces an equal and opposite difference in other investment income in Table 81, lines 19 and 21. That shift is obscured, however, by another U.K. change, this one entailing inclusion of income from Eurocurrency positions on a gross basis rather than tile net basis used in Yearbooks up through 1985. These grossing changes had much larger effects on credits and debits separately than the petroleum income shift and are the dominant component of line 21 of Table 81.

The U.K. grossing of Eurocredit income has no effect on net balances in the right-hand columns of Table 81, and the shift of direct investment income has only offsetting effects on the two components on lines 16 and 19. While the net effect of the questionnaire for all countries together was small for 1983 on line 15, questionnaire data raised the 1979 balance by $5 billion, resulting in an even steeper slide into net debit than the Yearbook had shown. Six countries were the source of most of the slide, including the Netherlands (reinvested income) and the United Kingdom (data revisions beyond procedural changes). All of the major statistical revisions in the questionnaire acted to deepen the 1983 net debit on total investment income relative to 1979.

Lines 20 and 21 show a sizable shift from private to official debits within total other income. As mentioned in Chapter V, the division between private and official income is statistically weak and difficult to use on a world basis, and this questionnaire result was therefore not used in Chapter V.

Tables 82 and 83 give for flows and stocks, respectively, the full detail of the questionnaire replies, with the regional division that is used in Chapter V. Components are less than the totals shown in these tables because some replies did not include all detail asked for, but the large gaps are mainly in official income and official assets and liabilities.

Table 82

REGIONAL TOTALS OF INCOME QUESTIONNAIRE: INCOME FLOWS, 1983

(In billions of U.S. dollars)

article image
Table 83

REGIONAL TOTALS OF INCOME QUESTIONNAIRE: STOCKS OF ASSETS AND LIABILITIES, 1983

(In billions of U.S. dollars)

article image

The stock data from the questionnaire, in Table 83, constitute a fairly complete inventory of information currently available from national sources on cross-border financial positions. Position data are not published in nearly as systematic a form as international payments statements, and for stocks there has been no single volume, such as the Balance of Payments Statistics Yearbook, that cataloged the data available. Although the Yearbook had increased its coverage of stock data, there were still in 1985 only a few countries showing position statements. Asset and liability positions are useful in calculating income credits and debits, as Chapter V illustrates, and even sketchy and incomplete estimates can be applied in estimating some part of income flows. However, the discussion in Chapter V illustrates that many of these national estimates of positions are inadequate when compared with data from international sources, and the questionnaire can be seen as suggesting an agenda for further development of data on international investment positions.

The countries included in these results are listed in Table 84 and 85, with total income flows and stocks reported for each country in direct investment and other investment, respectively. Most of the 46 replies to the questionnaire included some stock information, if only reserves and bank positions of the kind published in the Fund’s International Financial Statistics. Beyond the banking sector, 32 countries included private nonbank debt to foreigners, and 25 reported some amounts for nonbank assets abroad.

Table 84

DIRECT INVESTMENT INCOME, 1983: SUMMARY OF QUESTIONNAIRE REPLIES

(In billions of U.S. dollars)

article image
article image

Reported amounts are included in totals but not shown separately.

Table 85

OTHER INVESTMENT INCOME, 1983: SUMMARY OF QUESTIONNAIRE REPLIES

(In billions of U.S. dollars)

article image
article image

Regional ratios omit countries missing income or stocks.

Reported amounts are included in totals but not shown separately.

The direct investment results in Table 84 illustrate the limitations of statistics in this field. Many countries combined direct investment income with other income and cannot show it separately. Several industrial countries, however, give separate debits for direct investment income but no credits, even though they are likely to have direct investment assets. In a few cases asset stocks are given without income credits, suggesting that part of the missing credits in direct investment is connected with these countries. Stock data for direct investments are not systematically related to earnings for several reasons, including the variations in the valuations used (usually, but not necessarily, book values), and variations in earnings experience from year to year or across countries because of changes in economic conditions in different industries. Also, multinational enterprises have considerable freedom to make arbitrary allocations of earnings among their subsidiaries.

Table 85 shows a more complete set of country statistics for other investment income, although in many cases these numbers include direct investment income as well as other income. Most countries supplied stock figures to some extent, as well as income figures. Even when the relationship seems reasonable, however, there is the problem, discussed in Chapter V, that while income and stocks as measured in national statistics may be consistent with one another within a given country, they can be inconsistent with data available from other countries.

Tables 86 and 87 compare questionnaire replies on bank-related positions with corresponding International Banking Statistics (IBS) positions. For banks, in Table 86, the differences are principally in institutional coverage. Industrial country amounts are very close to those that appear in BIS banking statistics, which reflect a more narrow definition of bank than the Fund’s IBS. For offshore centers the questionnaires exclude most of the international banking activity that is also generally excluded from the balance of payments accounts of these areas, but these balances are included in BIS statistics, IBS, and the Chapter V adjustments. The nonbank figures in Table 87 are relatively much less complete and generally much lower than the independently derived estimates based on IBS that are explained in Appendix III. For countries where comparisons are possible, questionnaire reports covered only 60 percent of IBS figures for nonbank liabilities and just 40 percent of the IBS asset totals as reported by nonresident banks.

Table 86

COMPARISON OF QUESTIONNAIRE WITH IBS1 BANK POSITIONS, 1983

(In billions of U.S. dollars)

article image
article image

International Banking Statistics, which appear in the Fund’s monthly publication. International Financial Statistics.

Regional totals include IBS amounts only for countries reporting corresponding questionnaire amounts. IBS data are also shown for replies lacking the item.

Table 87

COMPARISON OF QUESTIONNAIRE WITH IBS1 BANK POSITIONS, 1983

(In billions of U.S. dollars)

article image
article image

International Banking Statistics, which appear in the Fund’s monthly publication. International Financial Statistics.

Regional totals include IBS amounts only for countries reporting corresponding questionnaire amounts. IBS data are also shown for replies lacking the item.

Total debt as reported in the questionnaire can also be compared with the statistics on debt published by OECD for developing countries. (See Appendix IV.) The OECD data are taken mainly from creditor reports rather than from the debtor countries. Table 88 shows the comparative data for the questionnaire respondents that reported debt figures in their replies and, for the same countries, the OECD tabulations.39 The 22 countries shown owed more than half of the OECD total of developing country debt in 1983, even though Brazil, Nigeria, and China are omitted for lack of a comparable questionnaire amount. For the countries listed in Table 88, results indicate that in general the creditor-based amounts tend to be only slightly larger than totals compiled by national authorities. There are a few sizable differences, however, that may be causing difficulties. As Appendix IV mentions, there is no parallel comprehensive independent measure of industrial country debt beyond the bank-related amount in IBS. For cross-border assets only the IBS exists to give some information as an “other party” measure of positions for either industrial or other countries. The special questionnaire attempted to cover the whole spectrum of international investment positions, but its coverage is incomplete. This is an area of international economic relationships deserving of greater attention.

Table 88

TOTAL DEBT REPORTED IN QUESTIONNAIRE COMPARED WITH OECD DATA FOR SELECTED COUNTRIES, 1983

(In billions of U.S. dollars)

article image
Source for OECD Data: Statistics on External Indebtedness: Debt and Other External Liabilities of Developing, CMEA, and Certain Other Countries and Territories At End-December 1983 and End-December 1984 (Paris: OECD, December 1985). Includes use of Fund credit and “other” liabilities.
Table 89

DIRECT INVESTMENT INCOME, 1977–841

(In billions of U.S. dollars)

article image

Published in International Monetary Fund, Balance of Payments Statistics Yearbook, Vol. 36 (Washington, 1985)

Table 90

OTHER INVESTMENT INCOME, 1977–841

(In billions of U.S. dollars)

article image

Published in International Monetary Fund. Balance of Payments Statistics Yearbook, Vol. 36 (Washington. 1986).

SPECIAL QUESTIONNAIRE ON INTERNATIONAL INVESTMENT INCOME ACCOUNTS

Please read the attached instructions and retain one copy of your reply for reference. Please return one copy to:

Working Party on the Statistical Discrepancy

Research Department

International Monetary Fund

Washington, D.C. 20431

Country: ____________________

Please report amounts in millions of U.S. dollars □ (if available) or millions of other currency units □ (specify unit ______________________________)

article image
article image
article image
article image
article image

Identification of person responsible for completing this form:

Name:_______________________________________

Address:_____________________________________

____________________________________________

Phone number:_________________________________

Notes and Instructions for Questionnaire on International Investment Accounts

Purpose

This questionnaire is part of a special effort by the Working Party on the Statistical Discrepancy, established by the IMF, to develop a comprehensive and up-to-date set of relevant data and methodological descriptions for the international investment accounts. The first three parts cover the principal types of international investment income receipts and payments for two years, 1979 and 1983. This will allow us to capture the major changes in this item, in considerable detail, during the period when the global discrepancy in reported investment income became very large. The final part of the questionnaire requests data on the stock of international assets and liabilities at the end of 1983, or the most recent year-end for which such data may be available. The purpose of this part is to provide a basis for judging whether the reported income flows bear a reasonable relationship to the relevant stocks of assets and liabilities.

Most of the data requested are already part of the data collection system of the Bureau of Statistics of the IMF, though the details and specifications may differ in some respects. However, the Working Party believes that by pulling together these data in this more direct and concentrated way it will be possible to bring to light certain gaps or discrepancies that may be overlooked in the ordinary routine of completing the standardized forms. Moreover, it is the intention of the Working Party to pursue the results of this questionnaire through direct contacts between members of the Technical Staff of the Working Party and the national compilers and authorities of a cross-section of member countries.

A further major purpose of the questionnaire is to obtain a comprehensive set of methodological notes on the collection and estimation of data on international investment income by national compilers. Such a set of notes will not only facilitate comparisons of data across countries, but will also provide an opportunity for national compilers and their authorities to provide their own comments on the origins and nature of the massive discrepancy in the global income accounts.

It should be emphasized that this inquiry is in no way a substitute for the material regularly prepared for the IMF’s Bureau of Statistics. For purposes of this questionnaire, the best estimates of the compilers are requested where actual data are not available or are considered to be too imprecise to be reported to the Bureau of Statistics. Such estimates should be identified with an asterisk. Where the data now available are revisions of data supplied earlier to the Bureau of Statistics, please indicate by noting (rev.).

Confidentiality

The Working Party will restrict the use of any reported information to the staff of the Working Party and the IMF wherever such a restriction is requested by the respondent.

Methodological descriptions

A check-list of the types of data sources is provided in Part IV of the questionnaire. However, each national compiler is also requested to provide a description, in considerable but not exhaustive detail, of the origins of each of the income items reported under Parts I, II and III. To some extent descriptions already prepared for other purposes would be acceptable, but for the special purpose of this survey respondents should call attention to statistical problems that are known to exist. In those cases where an income item is calculated by applying an estimated rate of return to an estimate of the relevant stock of assets or liabilities, please supply the relevant rates of return (and method of estimation) and stocks used for 1983.

Respondents should bear in mind that the Working Party is concerned primarily with the shortcomings of the sources of income data and estimating procedures as experienced by different national compilers, and especially with any changes in your methods between 1979 and 1983 that might help to account for the rising discrepancy. Comments on your plans for improving these data would also be very helpful.

Withholding taxes

Please indicate whether your income receipts and payments for 1983 are net of withholding taxes. This question is relevant for items 3, 9, 13, and 17.

Geographical detail

The questionnaire items do not call for any geographic breakdowns of the data requested, but any study of the discrepancy inevitably requires comparisons of data reported by different countries or regions. Of course, there is great variation among countries in the extent and derivation of any such geographic detail. Therefore, rather than prescribe a fixed format for such information the Working Party is requesting each national compiler to provide, along with the questionnaire itself, the most detailed geographic breakdowns that are available for the most recent year, either in published form or as estimated for internal use, for the items listed in the questionnaire, or for similar items, wherever possible.

In supplying geographic data, the respondent should indicate, where relevant, the allocation principle that is being used. For instance, are interest payments allocated to (a) the country to which the payment is transferred, (b) the country of residence of the beneficial owner of the asset (if different), or, (c) the country of the currency denomination of the asset?

Specific instructions

(References are to paragraphs in the IMF Balance of Payments Manual, Fourth Edition, 1977, or to item numbers in the IMF Balance of Payments Report Form or the IMF Report Form on Stocks).

The income and asset categories used in this form are broken down into details that may not correspond to the data available to national compilers. Where necessary, therefore, please indicate where detailed items are combined or are contained only in sub-totals or totals. For items where you have no information and make no estimate please insert a dash in the appropriate line; insert a zero where no transactions exist.

Line Number

  • 1 For definitions of direct investment income, refer to Manual, ¶ 295, 299–306.

  • 2 Corresponds to lines 11 and 12 of Report Form.

  • 3 Included in lines 13 and 14 of Report Form. Please identify any deviations from the Manual, such as the inclusion of fees and royalties, or inclusion of unrealized capital gains or losses.

  • 6 Branch profits should be included whether actually distributed or not. Include the net earnings of branches of foreign banks in your territory, but not the interest received from or paid to nonresidents (including their own offices abroad) by these branches. Such interest items should be reported in Section II of this questionnaire.

  • 8 Other private income excludes transactions of resident official agencies.

  • 9 Include all interest paid or received by resident banks, including resident affiliates of foreign banks, and including interest paid or received vis-à-vis non-resident branches or parent organizations. Include all interest charged or credited to the accounts of nonresidents, whether remitted or not. Credit and debit entries should be entered gross, if possible, even if they are commonly netted out by the banks or the national compilers. Include, and show separately if possible, interest paid or received on liabilities or assets payable in foreign currencies.

  • 14 Include, inter alia, interest paid on credits guaranteed by resident or nonresident official agencies.

  • 19 Indicate whether your international accounts include these non-interest charges by banks, and, if they are included, under what headings they appear in your accounts.

  • 23 Corresponds to lines 15 and 16 of Report Form.

  • 24 Include interest or charges received or paid vis-à-vis international institutions in line 25.

  • 25 Include in this line transactions with international institutions normally included in lines 15 and 16 of the Report Form. If there are other fees or charges vis-à-vis international institutions that are included in other items in the Report Form please attach a note showing the amounts included in your balance of payments accounts for 1983.

    “International institutions” includes regional institutions, i.e., institutions whose members are drawn largely from a single geographic region rather than from the world at large.

  • 28 Enter here that part of your resident official income that represents earnings on official international reserves, as distinct from interest on credits, loans, or advances, to nonresidents.

  • 29 Please include in this line accrued interest that you have entered in your international accounts with respect to credits on which interest was in arrears in excess of 90 days. This is intended to facilitate comparisons with partner country entries.

  • 30 The purpose of this section is to obtain an overview of the basic methodological sources employed in deriving your international income data. Where a mixture of sources is used, please check the main source. It is expected that the descriptions of your methodology that are being requested as part of this questionnaire will contain any necessary elaboration of your sources and methods.

  • 40 The purpose of this section is to establish as far as possible the stocks of international assets and liabilities, insofar as they are known or estimated by national compilers, that correspond in principle to the entries in the income accounts. Please provide a methodological note indicating the basis of valuation of the various items shown (i.e., face value, book value, market value, etc.,).

  • 41 This compilation excludes any gold holdings, official or private.

  • 42 Corresponds to items 101-108 in IMF Report Form for Stocks.

  • 45 Corresponds to items 62–64, 84, and 85 in IMF Report Form for Stocks.

    Do not include private sector claims guaranteed by the official sector in this line, but include them as private sector items.

  • 46 Corresponds to items 45–48 in IMF Report Form for Stocks.

  • 47 Corresponds to items 53 and 56 of IMF Report Form on Stocks.

  • 48 Corresponds to item 59 of IMF Report Form on Stocks.

  • 49 Include foreign assets of resident nonbank enterprises not included elsewhere, such as suppliers’ credits, bank deposits, minority interests in foreign enterprises. Included in items 77–79, 93 and 94 of IMF Report Form on Stocks.

  • 50 Include portfolio holdings of bonds or stocks in lines 47 or 48.

  • 51 and 52 Corresponds to parts of items 69–71 and 89 of IMF Report Form on Stocks.

  • 54 Insert here any data you have on claims of your private residents on nonresident banks. This will facilitate comparison with banking data from other sources.

  • 56 Corresponds to items 54, 55, 65–68, 86–88, and I 10 of IMF Report Form on Stocks.

  • 59 Corresponds to items 49–52 of IMF Report Form on Stocks.

  • 60 Corresponds to items 57 and 58 of IMF Report Form on Stocks.

  • 61 Corresponds to items 60 and 61 of IMF Report Form on Stocks.

  • 62 Corresponds to items 72–76 and 90–92 of IMF Report Form on Stocks.

  • 63 Corresponds to parts of items 74–76 and 92 of IMF Report Form on Stocks.

  • 64 Corresponds to items 72 and 73, parts of items 74–76, items 90 and 91, and pan of item 92 of IMF Report Form on Stocks.

  • 66 Corresponds to parts of items 81–83, 96 and 97 of IMF Report Form on Stocks.

  • 67 Corresponds to item 80, pans of items 81–83, item 95, and parts of items 96 and 97 of IMF Repot Form on Stocks.

  • 68 and 69 Include here assets and liabilities of nonresidents that are held as trusteed or managed funds by residents but are not counted as assets or liabilities of such residents.

III. International Banking Statistics

Chapter V makes extensive use of a body of statistics known as International Banking Statistics (IBS) in assessing income credits and debits for individual countries. The IBS are compiled by the Fund’s Bureau of Statistics and are published each month in International Financial Statistics (IFS) as part of the world tables in the front pages. The IBS are a fundamental source of information on international banking developments at the world level and, in view of the dominant position that banks have maintained in international financial markets, a major statistical source on financial developments. The nature and construction of the numbers affect substantially the ways in which the IBS are used in Chapter V and their many other uses.40

The global picture of cross-border banking assets and liabilities that appears in IBS results from integrating two separate forms of bank information—on the one hand, country totals of bank cross-border positions that are reported to the Fund by national authorities and that appear on the country pages of IFS in the sections on international liquidity and, on the other hand, detailed geographical distributions of bank assets and liabilities that are reported to the Bank for International Settlements (BIS) and to the Fund by industrial countries and offshore financial centers. The BIS collects, compiles, and publishes the geographic detail separately from the Fund’s system of banking statistics,41 and the Fund’s Bureau of Statistics integrates these data with its own banking totals. The resulting information, as it appears in IFS, consists of a set of four tables that show the following for the world, each region, and each country:

  • (1) Total cross-border assets and liabilities of deposit banks,

  • (2) Cross-border interbank claims, as assets and as liabilities,

  • (3) Cross-border claims on nonbanks, as bank assets and nonbank liabilities, and

  • (4) Cross-border liabilities to nonbanks, as bank liabilities and as nonbank assets.

This information appears for 1979, 1983, and 1985 in Table 91 in rearranged form for the major regional groups used in Chapter V. There is no coverage of nonbank claims on nonbanks such as intergovernmental loans and trade credit, and to that extent the totals fall short as measures of total cross-border positions. As Appendix V indicates, however, the banking positions are a large part of the total of all claims and the dominant segment of the world financial system.

Table 91

INTERNATIONAL BANKING STATISTICS FOR 1979, 1983, AND 1985

(In billions of U.S. dollars)

article image
article image
Source: International Monetary Fund, International Financial Statistics (Washington), Vol. 39 (June 1986). Notes: (1) The data in the table are as published in the June 1986 issue of International Financial Statistics (IFS), which is published monthly by the Fund. The tables are identified in the IFS table of contents as “International Banking, page 50.” (2) Regional groups are those used in Chapter V. They conform to IBS groupings except for the Middle Eastern oil exporters—Iran, Iraq, Kuwait, Libya, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—and the residual of other developing countries. (3) Lines 1 through 6 on relations between banks and nonbanks exclude monetary authorities on both sides. Interbank positions on lines 7 through 15 include positions of monetary authorities with deposit banks but not with other monetary authorities. (4) Monetary authorities’ positions are not shown separately in published forms of the IBS. They are derived for Table 91 by adding published IBS amounts for interbank positions and bank positions vis-à-vis nonbanks and then subtracting amounts also in IBS for total external positions of deposit banks—that is, IBS banks that are not monetary authorities. The residual is used in Table 91 as monetary authority positions vis-à-vis deposit banks.

Includes countries that were not members of the Fund and reported neither to the Fund nor the BIS—mainly the U.S.S.R. and some Eastern European countries.

The most important part of the table for Chapter V consists of lines 1 to 3 on nonbank positions vis-à-vis banks. The nature of those numbers is explained below in some detail.

1. NONBANK POSITIONS VIS-Á-VIS FOREIGN BANKS

The contribution of the BIS statistics to the Fund’s International Banking Statistics is in the amounts published for banks in BIS reporting countries as claims on, or liabilities to, the nonbanks of each of a long list of individual countries covered in the BIS survey. Added up across all reporting countries, as they are in the BIS publications, these positions against nonbanks result in “derived” totals of non-bank positions in each country vis-à-vis foreign banks included in the BIS statistics. Such positions are statistically separate from all national estimates in the nonbank countries and are independent measures of nonbank positions. Indeed, for most countries, they are the only measure available on resident nonbank positions with foreign banks, and for many countries, they are the only measure of any type of nonbank foreign positions. It is the IBS form of these externally measured nonbank positions that is used in Subsection 2.b of Chapter V as a base for estimating related income flows. For countries that have comparable national estimates of nonbank positions, the IBS versions are all larger, with the excess usually greater in assets than in liabilities. Furthermore, whether or not country estimates of income flows are based on stock data, the use of IBS-based nonbank positions almost always results in increased net credits in income flows uniformly across countries.42

The Fund’s Bureau of Statistics integrates BIS nonbank information into its International Banking Statistics in several steps that broaden the usefulness of the numbers. There are, first, several countries beyond the BIS reporting group that send the Fund geographical distributions of bank positions that the Fund adds to the BIS totals.43 Second, the Fund makes a major adjustment for Switzerland to eliminate the imbalance in the BIS data associated with Swiss trust accounts. Banks outside Switzerland report liabilities to these trust accounts as owed to Swiss banks, while Swiss reports to the BIS do not include the trust positions in their bank assets.44 In the International Banking Statistics the foreign assets of Swiss trust accounts are added to external assets of Swiss banks to balance these accounts, and they are classed as interbank claims on the basis of evidence that they are predominantly claims on non-Swiss banks. At the same time, Swiss trust account liabilities to foreigners are added in IBS to Swiss bank liabilities to nonbanks and are then distributed geographically using data published by the Swiss National Bank. A smaller adjustment of the same kind brings U.S. custody assets and liabilities into the IBS totals for a similar reason.

Finally, this geographic detail on nonbanks from the 32 reporting countries is fitted together in IBS tables with world totals of bank positions vis-à-vis nonbanks that the Fund takes from its own country reported banking statistics. The Fund totals are some what larger than the totals of derived nonbank geographic data for several reasons, which are discussed below, and the excess enters IBS tables for nonbanks as “unallocated,” which is given—for 1979, 1983, and 1985—in the rightmost group of three columns in Table 91. For 1983, the unallocated amounts were as follows: in nonbank assets, 22 percent of the world total of claims on banks, and in liabilities, 11 percent of bank credit to nonbanks; by 1985, the proportions had risen to 26 percent and 14 percent, respectively. It is the income flows of these unallocated positions that are estimated in Subsection 2.b.(7) of Chapter V.

There are three principal reasons for unallocated nonbank positions. First, the BIS-Fund geographic detail, itself, is not complete, and remaining residuals are carried unallocated into the IBS compilation. Second, the International Banking Statistics include banks in many countries other than the 32 BIS-Fund reporters, and these other banks have positions vis-à-vis foreign nonbanks for which no geographic detail is available. Third, the IBS range of institutions included as banks is broader than in BIS tabulations for most countries that report to the BIS. For some countries only large banks are included in BIS totals, while the IBS use data for all banks of BIS countries. The IBS also include savings banks and specialized financial institutions that are not part of national banking figures in many countries. Thus, even for BIS countries, there are unallocated amounts that are the positions of these other institutions. This third reason explains part of the rise in unallocated nonbank positions in recent years, because IBS coverage of institutions has been broadening substantially during that period (and will probably continue to do so), country by country. Without parallel increases in BIS coverage of geographic detail, the added nonbank positions fall into the unallocated category by default.

Table 91 gives no nonbank positions on lines 1 through 3 for 1979, except in the “World” columns, where bank-reported positions vis-à-vis nonbanks are used to complete the nonbank cells. IBS nonbank data in their current form are based on a reporting system that began with figures for the end of 1983 and that covers a broader range of reporting countries than the previous system. BIS publications show a major break at the end of 1983, with bank positions vis-à-vis nonbanks 30 percent larger on the new basis than on the former one. In IBS tables geographic distributions of nonbank positions are extrapolated backward on the new basis only as far as 1981.

2. EXTERNAL POSITIONS OF BANKS

The IBS tables on claims of banks give external bank assets and liabilities for each country divided between positions vis-à-vis nonbanks and vis-à-vis banks. The positions with nonbanks, given on lines 4–6 of Table 91, provide the all-country totals mentioned above for the nonbank positions, given on lines 1–3, with for example, the world totals on line 1 for nonbanks’ claims on foreign banks being equal to the world totals on line 5 for banks’ liabilities to foreign nonbanks. These data are based almost entirely on national reports to the Fund on bank external positions. The country reports and regional totals appear in the IBS tables on bank positions with nonbanks by residence of bank.

In the tables on interbank cross-border positions, IBS data have the important attribute of including monetary authority positions vis-à-vis foreign deposit banks and deposit bank positions vis-à-vis foreign monetary authorities. This is reflected in Table 91 in lines 7–12. The division in Table 91 between monetary authorities and deposit banks does not appear explicitly in IBS publications, but it can be derived from the other tables in the IBS structure.

Although the coverage includes official accounts, the interbank tables are conceptually symmetric, in that the total of cross-border assets should be identical to the total of cross-border liabilities. In practice the world totals of interbank assets and liabilities are, indeed, very close in recent years even though, unlike nonbank claims, the two sides are compiled separately from, and independently of, each other. As published in International Financial Statistics, however, the world totals of interbank liabilities include BIS liabilities to monetary authorities, even though probably only a very small portion of these claims on the BIS are included on the asset side of the tables.45 Table 91 omits those BIS liabilities from lines 8 and 11, and the resulting close match between assets and liabilities appears in the combined interbank net total on line 15. Positions of banks vis-à-vis nonbanks are combined with interbank positions on lines 16–18 to give total bank external positions. These bank totals do not appear in the published form of IBS.

3. GEOGRAPHIC COVERAGE

The BIS problem mentioned above is one of the questions of geographic coverage that attaches to International Banking Statistics. The basic universe for IBS consists of all Fund members together with other countries that report banking data to the Fund or to the BIS, such as Switzerland, Hong Kong, and the Cayman Islands. This is a group labeled “all countries” that appears on each page of the IBS tables as published in IFS.

Beyond this group are nonmember countries that do not report to either the BIS or the Fund—mainly the U.S.S.R. and those Eastern European countries that were not Fund members—and international organizations, such as the BIS itself and the World Bank, both of which have substantial claims on deposit banks. For nonreporting countries and international institutions, the principal data available are the “derived” positions that emerge from reports of the 32 members of “all countries” that give geographic detail to the BIS and the Fund. The IBS tables can thus include amounts for these two groups in positions vis-à-vis the 32 reporters, including nonbank positions by residence of nonbank, but nothing is available for the positions of banks in these groups against one another or against any group of non-banks.46 Where data for international organizations and Eastern Europe can be included in tabulations, the IBS show a total for the “world” that is broader than for “all countries.” It is this world total that is given in the first three columns of Table 91. IBS “all countries” figures are given in the next four groups of columns, divided into the groups used in chapter V, together with the “unallocated” columns at the far right.

4. COMPARISON OF IBS AND BIS BANKING STATISTICS

Table 92 gives a comparison between the BIS and IFS versions of banking data in a form that shows differences between them, both within countries and across countries. In the totals at the bottom of the table, banks in the 25 countries that report to the BIS have about 80 percent of the world totals in International Banking Statistics for all members and other areas. The BIS geographic allocations thus cover a large part of all of the claims included in IBS. Another 10 percent comes from the broader IBS coverage of claims in the BIS group, mentioned earlier, that includes Swiss trust accounts and institutions of the BIS reporting countries that are omitted from the BIS bank group. Swiss additions to IBS totals account for about half of the total added for industrial countries (as shown in footnote 2 of Table 92), but other countries also have sizable differences. The remaining 10 percent of total IBS coverage comes from the 110 or more Fund members that are not BIS reporters, from Eastern Europe, and from the claims of the BIS itself on deposit banks.

Table 92

COMPARISON OF BIS AND IBS DATA1 ON INTERNATIONAL BANKING POSITIONS, END OF 1983

(In billions of U.S. dollars)

article image

Bank for International Settlements, International Banking and Financial Market Developments (Basle) (May 1986), International Monetary Fund, International Financial Statistics (Washington), Vol. 39 (June 1986).

Differences for industrial countries are as follows:

article image

The differences in Table 92 are, in principle, the source of unallocated nonbank positions in Table 91, but in practice the relation is more complex. The IBS use Swiss data for the geographic distribution of Swiss trust liabilities, and they use U.S. data to distribute U.S. custody accounts. The IBS have a geographic distribution for their own reporters of data, and they use estimating procedures to distribute much of the $40–50 billion of BIS unallocated positions vis-à-vis nonbanks. These reductions are offset, though, by including in deposit banks a broad range of financial institutions that lack geographic information and by adding the Fund members that give no such information. The net result of this long procedure is that after additions and reductions, unallocated amounts are somewhat smaller than the Table 92 differences for positions with nonbanks.

IV Debt Statistics for Developing Countries

Table 37, in Chapter V, uses statistics on total debt of developing countries that are compiled and published by the OECD’s Development Cooperation Directorate.47 The OECD compilation is parallel to and complementary to debt information published by the World Bank,48 and together these two sources constitute primary information on developing country debt amounts, structure, and status. Both sources have had major changes in scope each year since 1982, when developing country debt became prominent as an international problem, and by 1986 both were covering virtually all external debt of developing countries, the OECD using mainly creditor information and the World Bank mainly data from the debtor countries themselves. The OECD statistics are often known loosely as the Creditor Reporting System (CRS), although the CRS is only one creditor source that OECD uses, and the World Bank figures are known as the Debtor Reporting System (DRS), even though the Bank uses sources other than the DRS. Both contain important information for assessing the reasonableness of income flows in the current account and capital flows in the capital account.

OECD debt statistics give information for over 150 countries and other areas, including CMEA49 countries and several colonies, such as Gibraltar and the Cayman Islands. The debtor coverage is essentially all of the world except OECD members and international institutions, and the credit included consists in principle of all external credit claims on each country divided into credit from OECD countries, multilateral credit, and other credit.50 A summary form of the data appears in Table 93. In general the OECD totals include credit to banks as well as to nonbanks in the countries covered, but (as indicated in the second row of the table), for offshore banking centers the international banking positions have been excluded. The $16 billion shown for offshore centers is far below the $570 billion debt that appears in Chapter V, Table 38, and covers only liabilities of resident nonbanks.

Table 93

OECD DEBT DATA, BY REGION AND SOURCE OF CREDIT, 1983

(In billions of U.S. dollars)

article image
article image
Source: Organization for Economic Cooperation and Development, Statistics of External Indebtedness: Debt and Other External Liabilities of Developing, CMEA, and Other Countries and Territories at End-December 1983 and End-December 1984 (Paris, December 1985) Notes: The totals of debt in Table 93 are different from those that appear in OECD publications, mainly because of geographic coverage differences Table 93 gives the OECD totals for countries that are in a Fund list of developing countries that is used in the Balance of Payments Statistics Yearbook, Part 2 The Fund’s list has several differences from the OECD’s, but in regard to debt totals, the most important are that the Fund includes South Africa, Hungary, and Romania while the OECD does not The additions made for these three countries are partly offset by countries that are not members of the Fund, such as Cuba, and thus are excluded from the Fund’s list but included in the OECD’s. and by colonies, such as Gibraltar and Macao, that the Fund excludes and the OECD includes. It should also be noted that in Table 93 the numbers shown are as published by the OECD at the end of 1985 in Statistics of External Indebtedness (cited above under “Source”) The later OECD publication. Financing and External Debt of Developing Countries 1985 Survey, cited at the beginning of this appendix in footnote 47, includes revisions that raised short-term bank credit and credit from non-OECD countries by a total of $8 billion. Chapter V uses the December level of revision to estimate income payments.

Mainly liabilities of resident banks to foreign nonbanks

For credit from OECD countries—presented in the first four columns of Table 93—the OECD uses the following sources.

(1) official development assistance (ODA) lending by members of the OECD’s Development Assistance Committee (DAC) to countries classified by DAC as developing;

(2) export credits, suppliers’s credits, and financial trade credits that are official or officially backed in creditor countries, as reported to OECD by members of the Creditor Reporting System;

(3) BIS-IBS information on bank lending from creditor countries to developing countries, described in Appendix III; and,

(4) for other private claims, data from several sources on bonds, nonguaranteed suppliers’ credits, foreign parent company claims, and other claims.

There is considerable overlap between (2) and (3), and OECD uses its CRS data to eliminate double counting of suppliers’ and trade credits in (2) that are held by banks in (3). Bank credit in OECD’s published tables excludes officially guaranteed claims, which are grouped entirely with category (2). Some of the bonds in (4) are held by banks and included in (3), but the amount is not known, and the resulting overlap remains in the totals. Much of (4) results from a collation of OECD creditor reports with World Bank debtor data that yields, inter alia, claims by OECD countries not guaranteed by OECD governments.

Multilateral credit consists of loans from the World Bank group and several other multinational public lending institutions. Most of the data come from published and unpublished information of the lenders, although some is from the DRS. “Other” countries’ credit is mainly from the CMEA and the Organization of Petroleum Exporting Countries (OPEC) and is based principally on DRS information. “Other liabilities” are, to a large extent, deposits of foreign nonbanks in debtor country banks that are reported in IBS information on bank external liabilities.

The OECD’s 1985 Survey51 is expanded from earlier editions to include estimates of net flows of finance to developing countries, in addition to debt stocks and debt-service payments—interest and amortization of outstanding debt—that were published earlier. The new financial flow figures are, like debt stocks, based mainly on creditor information, and they can be used to create measures of capital inflow that are independent of the debtor country’s own balance of payments calculations and that can be compared with national estimates. This would be similar in the capital account to using IBS information to estimate income flows, although with larger potential for error and uncertainty.

The World Bank’s DRS statistics on external debt are, like the OECD’s figures, based on several sources of information. The core of the Bank data structure is the set of reports that countries send to the Bank on long-term external debt that is either public or publicly guaranteed in the borrower country. This publicly backed debt is itemized loan by loan in the reports to the Bank, and the level of detail available allows the OECD to use the DRS to include credit from lending countries that do not report to the OECD.52 Such detail exists in the DRS only for long-term, publicly backed debt, however, and for a complete measure of country debt, the DRS needs additional information on long-term private debt that is not publicly guaranteed and on all forms of short-term debt. These debt forms are less systematically reported by countries and are reported in much less detail than publicly guaranteed debt. In the 1985-86 edition of World Debt Tables, the Bank has nevertheless markedly expanded its debt statistics for these debt forms for the 107 countries included. Beyond country reports the Bank has used the same data sources as the OECD, such as BIS-IBS banking data and CRS reports on export, suppliers’, and trade credits.

The World Bank result is thus a compilation of debtor information about debt positions supplemented by creditor information where necessary to complete the totals. OECD data, on the other hand, are a compilation of lender information supplemented where necessary by debtor data to complete the totals. It is not possible to compare the grand totals in the two compilations, because the geographic coverages are very different, but Table 94 compares them for a set of large borrowers for which the World Bank includes all debt types. These 21 countries owe about three quarters of all of the developing country debt in both compilations. Table 94 indicates, once again, that other-transactor data—in this case from the OECD—tend to be larger than estimates based on country information, but for debt the differences are small, as was mentioned in Chapter V. The comparisons are variable, however, and one third of the countries have higher debt in World Bank figures than in OECD figures. Some of the differences may have very specific explanations, but very broadly the two estimating methods probably give similar results for the following reasons: (1) debtor countries know well the amounts of publicly guaranteed debt; (2) they have good knowledge of the debt that governments in creditor countries have guaranteed; and (3) a sizable part of short-term and long-term nonguaranteed debt is derived from a single body of international banking statistics.

Table 94

LARGE DEVELOPING COUNTRIES: COMPARISON OF OECD AND WORLD BANK MEASURES OF TOTAL DEBT, 1983

(In billions of U.S. dollars)

article image

From Table 93 total debt plus Fund credit.

Includes Fund credit.

These two survey programs designed to compile data on developing country debt are not matched by any systematic procedures to measure the assets of developing countries, and for industrial countries nothing equivalent exists for either assets or liabilities. The international banking statistics described in Appendix III measure a large part of developing country assets, but banking claims are considerably less than the total. Appendices V and VI suggest from indirect evidence that developing country assets were in the range of $400-500 billion at the end of 1983 (omitting Middle Eastern oil exporters and offshore financial centers), and IBS measures of banking claims and foreign reserves not in banks amount to about three fifths of that total. There has been exploratory work done recently at the Fund and elsewhere in estimating developing country assets, but results so far are not firm enough to use along with IBS in testing balance of payments flows. To provide analytically useful information, the estimates need more specific reporting from financial centers on the types and amounts of assets held for these countries.

For industrial countries there exists beyond the IBS only the estimates of the countries themselves as evidenced in the income questionnaire described in Appendix II. In Chapter V, Tables 29 and 30 show many discrepancies vis-à-vis the IBS in both asset and debt reporting in relation to foreign banks, and estimates of income derived from national data on such positions in industrial countries are likely to be incomplete. For both assets and liabilities, the picture for industrial countries could be much improved by an international reconciliation of information sources along the lines of the OECD and World Bank efforts for developing country debt.

V Summary of World Stocks of Cross-Border Assets and Liabilities

Chapter V makes use of several sets of global statistics on cross-border assets and liabilities to estimate income-generating financial positions of individual countries. These sets of statistics are used separately for particular purposes in different sections of Chapter V, but they can also be fitted together into a unified picture of a major part of world financial relationships. This appendix gives one form of such an integrated statement, using mainly the information that was put together for Chapter V.

Table 95 is a statement showing the results of such an integration of data as of the end of 1983, using the regional divisions that appear in Chapter V. The table includes all forms of cross-border financial claims except positions in equities taken for both direct and portfolio investment, where valuation questions and the scarcity of information raise major problems. It includes all forms of credit in principle, but some forms are not well documented, as described below. Nevertheless, the table gives an indication of the relative size of different types of credit and of the relative importance of different sectors and regions as holders of claims or liabilities.

Table 95

CROSS-BORDER ASSETS AND LIABILITIES, 1983

(In billions of U.S. dollars)

article image
article image

Includes Eastern European countries that were not Fund members.

European Monetary Cooperation Fund.

The data series that are the principal sources of Table 95 are employed as elements in the capital accounts of their balances of payments by many countries, but not by all countries. International consistency could be improved if some agency such as the Fund regularly constructed a table of this type to check on the aggregates of capital flows for regions and the world as a whole and to compare with the sums of individual country statements. An important aspect of the table is that it combines world credit market statistics and national data in a consistent format and is therefore more broadly based than national estimates alone.

Table 95 has several sections, each with a separate source. Sources include the following: the Fund’s International Banking Statistics, U.S. data on ownership of U.S. government securities, Working Party estimates, OECD totals of developing country debt, and Fund data on reserve holdings and use of Fund credit. For each type of claim, the table provides an estimate of the amount that is included in country reports of reserve holdings. In Chapter V, reserves are treated as a separate category of assets, but in a table that matches assets and liabilities of specific types, the reserves must be distributed among those types, along with other assets, in order to facilitate matching. Foreign exchange components of reserves are totaled at the bottom of the table to amounts that can be reconciled with foreign exchange reserve figures published in International Financial Statistics.

The Fund’s International Banking Statistics are used in Table 91 in Appendix III and also appear in lines 1-13 of Table 95, where they are a dominant part of the table. The total of the four IBS items is 75 percent of the $4,300 billion world total of claims in Table 95 on lines 43 and 44. Interbank items on lines 6 and 7 are a large part of IBS positions, but when they are excluded from the IBS and world figures, the remaining IBS claims still account for over 60 percent of the totals for all types of claims. This prominence of banking claims was at a peak in 1982 and decreased somewhat in later years, when banks reduced their international lending because of loan problems that surfaced in 1982 and when new forms of credit tended to bypass banks. As discussed in Chapter VI, international financing shifted toward security markets after 1982. Still, banks’ balance sheets reflect by far the largest sector of international lending. To some extent this dominant position results from the wide scope of banking statistics, which include assets and liabilities of banks in the form of securities, as well as direct loans and deposits.

As mentioned above. Table 95 shows separately those assets designated by countries as official re serves. The total of reserves in the form of foreign exchange (line 46) is the total reported in IFS (US$321 billion) plus amounts for the BIS and Eastern Euro pean countries that were not Fund members included among banks’ liabilities or for holdings of U.S. government securities. The total shown in line 46 is distributed across lines 3, 15, 32, 33, and 34 of the table, indicating the variety of forms in which foreign exchange reserves are maintained. Other official re serves are shown in lines 36 (holdings of SDRs) and 39 (reserve positions in the Fund), and a further amount of liquid official assets is shown in line 4, which is derived as a residual from the total amount reported as commercial bank liabilities to nonresident official accounts.

For securities, lines 14-21 consist mainly of estimated amounts of cross-border bonds shown in Chapter V (Table 44), plus U.S. Treasury data on foreign official holdings of U.S. government securities. The short-term component is entirely U.S. Treasury securities except for a $17 billion liability of developing countries derived as a residual from OECD data. The geographic distribution of holdings of U.S. Treasury securities is from U.S. sources. For other securities, estimates were made for holdings by the BIS and the Middle Eastern oil exporters, and the remainder was allocated to industrial countries as a residual.

Development assistance credit and trade credit are mainly from OECD debt compilations described in Appendix IV. Holdings of development credit are from OECD data supplemented by a special tabulation of World Bank debt data detailed by creditor, rather than debtor, country. The trade credit number is only one component of the total of outstanding trade credit, namely the OECD figure for officially guaranteed nonbank credit extended by OECD member countries to developing countries. Total trade credit is much larger than the $112 billion shown, but there is no systematic information on such credits that can be used at a world level, and they are therefore omitted from Table 95 except for the OECD-reported component.

Most trade credit does not generate income debits and credits and thus does not enter significantly into the Chapter V discussion of investment income. The lack of data on this type of cross-border capital flow, as well as the absence of similar flows among affiliated companies, limits the usefulness of a credit structure such as Table 95 as a basis for the balance of payments accounts.

The lower part of the table—lines 31-40—shows distributions for reserves that are not directly part of credit market activity: claims on the BIS, the European Monetary Cooperation Fund (EMCF), other central banks, and the IMF; use of Fund credit; and SDRs. The amount shown for the EMCF represents the value of claims on the EMCF that are backed by gold at the current market price of gold. EMCF holdings of U.S. securities are consolidated with other European holdings in industrial country assets on lines 15 and 19.

The “unallocated” column of the table represents only amounts not distributed by country in the IBS data. As mentioned earlier, the residual in security holdings is allocated to industrial countries, and for all other credit forms the geographic distribution of assets and liabilities is complete in the data sources used. The world totals of assets and liabilities differ by $3 billion, which is the IBS discrepancy in interbank claims for 1983 that appears in Table 91.

In this form Table 95 develops a position statement for industrial countries that is not available from other sources. The same sources could be used to further subdivide the totals into about five large countries and an “other” industrial group. The principal uncertainty for further industrial country division is in the distribution of security holdings, on lines 14–21, among industrial countries, and the existence of a large unallocated banking position. However, the table does not attempt to cover direct investments, which also involve a major credit element, or forms of government financing other than development assistance. Nevertheless, it illustrates an important aspect of the international economic relationship of these countries. Further information for some major countries, including data on direct investments, is given in Appendix II, based on the special income questionnaire returns.

VI Cross-Border Assets, Recorded and Estimated

The approach used in Chapter V of the Report to estimate individual countries’ missing interest receipts is based largely on geographically allocated cross-border assets derived from the International Banking Statistics (IBS). For many developing countries, these cross-border claims on banks (excluding official claims) are much smaller than the amounts implied by various analyses attempting to measure “capital flight.” That term has no precise definition, but is often applied to all, or nearly all, gross accumulations of foreign assets by residents of certain countries.

The purpose of this appendix is, first, to compare the results of various “capital flight” estimates, or estimates of private external assets derived from certain sets of assumptions, with the data used in Chapter V to calculate portfolio income credits. Second, there is some discussion of the reasons why the “capital flight” estimating procedures do not produce results for individual countries that can provide a satisfactory basis for estimating external assets and related investment income. This discussion is confined to the experience of developing countries,53 especially the major debtors.

1. ESTIMATES OF FOREIGN ASSETS

In connection with the debt crisis of developing countries, various estimates have been made of the capital outflow that may have occurred from certain individual countries. (See Table 96.) Most estimates, including those published by the World Bank and those appearing in a recent paper produced in the Fund’s Research Department,54 use reported balance of payments data as a starting point. Usually capital flight is defined as the implicit outflow of private resident-owned capital, and the total of external claims is calculated as the cumulative amount of private capital outflow, whether reflected in the capital accounts of the balance of payments or not. Since it is assumed that much of the accumulation of foreign private assets is not so recorded, an indirect method of estimating the accumulation is usually employed, as follows:

Table 96

CAPITAL OUTFLOW AND EXTERNAL CLAIMS

(In billions of U.S. dollars)

article image

World Bank, World Development Report 1985 (New York: Oxford University Press, 1985), p. 64. Definition: Gross capital inflows minus current account deficit and official reserves.

Michael P. Dooley. “Country-Specific Risk Premiums, Capital Flight, and Net Investment Income Payments in Selected Developing Countries” (unpublished, International Monetary Fund, March 11, 1986). Appendix E Definition: Difference between capitalized value of (recorded) investment income receipts and the total stock of external claims.

Ibid., Appendix C Definition. Recorded plus nonrecorded external claims, including an initial stock.

Limited to assets that can be allocated to individual countries See Chapter V, Table 36.

(1) Take total foreign borrowing during a given period. Since balance of payments reports often fail to measure this amount accurately, the increase in outstanding liabilities to foreigners, as compiled by external sources, such as the OECD, is used as a substitute measure.

(2) Add the net inflow of direct investment capital, both liabilities and assets.

(3) The sum of the two foregoing items represents the total amount of funds made available from abroad, which can be used in three ways:

(i) to build up official reserves and other official balances abroad; (This buildup can be measured either by cumulating balance of payments data or by taking the difference between outstanding amounts at the beginning and end of the period.)

(ii) to finance current account deficits, as measured in the reported balance of payments statements; and

(iii) to accumulate private assets abroad. (Part of this accumulation is reflected in the balance of payments reports, but for this purpose the total is customarily measured as a residual—that is, by deducting the reserve accumulation (i) and the current account deficit (ii) from total funds available (iii)).

Part of the total thus measured represents “nor mal” capital outflows—that is, trade credits, working balances, natural portfolio diversification, and the attraction of higher interest rates. The term “capital flight” implies a further set of factors, such as the fear of inflation, exchange depreciation, political upheaval, tax avoidance, evasion of exchange control laws, etc., but it is statistically impossible to classify capital movements, especially the unrecorded movements, according to motive. On the other hand, the stocks of private assets used in the Technical Staff’s approach are limited to those that can be identified in available statistics, with only minor estimated elements.

Table 97 shows how the process of estimating “capital flight” works as applied to all developing countries as a group (except major offshore banking centers and Middle Eastern oil exporters).

Table 97

FUNDS SUPPLIED TO, AND USED BY, DEVELOPING COUNTRIES, 1964-83

(In billions of U.S. dollars)

article image
Note: This procedure ignores any changes in the value of assets, including changes in foreign exchange rates and takes no account of SDR allocations or other non-debt-creating inflows

Based on $890 billion of total debt outstanding at the end of 1983, in OECD estimates (See Appendix IV) The amount outstanding at the end of 1963 is not known, but it probably amounted to $30-40 billion.

The aggregate increase in foreign private and official assets derived by this method ($418 billion) may be compared with the amount implicit in the derivation of estimated portfolio income in Chapter V, as shown in Table 98

Table 98

EXTERNAL CLAIMS OF DEVELOPING COUNTRIES1 AS IMPLIED IN CHAPTER V

(In billions of U.S. dollars)

article image

Excluding major offshore banking centers and Middle Eastern oil exporters

Official foreign exchange holdings plus other bank-related assets

Does not include any allowance for trade credits related to exports (which are generally not interest-bearing) or any share of the unallocated world total of $147 billion of bank deposits for which no geographic breakdown can be determined

The Working Party estimates of the foreign assets of individual major debtors are almost always lower than those resulting from the “capital flight” approach, and the total for all developing countries is also lower. However, if some part of the unallocated bank deposits is added to the total used by the Working Party, and allowance is made for a reason able amount of trade credits outstanding, the implicit shortfall of income-earning assets may not be more than, say, 15 percent.

2. ESTIMATION PROBLEMS

The foregoing discussion shows that the magnitudes for aggregate foreign assets of developing countries resulting from estimates of accumulated foreign assets (or “capital flight”) of developing countries and those resulting from the procedure used to derive the foreign asset positions on which the income estimates presented in Chapter V are based are not greatly different. However, it must be noted that estimates of accumulated external assets, especially for individual countries, that depend in part on the data on current account deficits, as reported by those countries, are subject to several major caveats.

In the first place, in a situation encouraging capital flight, current account balances are likely to be distorted by a high propensity to understate exports or overstate imports as a device for accumulating hidden funds abroad. To the extent this happens, current account deficits are overstated, and the implicit accumulation of flight capital is understated. Moreover, the accruing income on these hidden assets would also add to the total not covered in the current account calculations. On the other hand, it is not known to what extent the funds that are measured as “capital flight” are used for unrecorded current consumption (to pay for foreign travel or educational expenses, for instance, or to acquire personal property) rather than being placed in unrecorded income-yielding investments. Sometimes the “outflow” represents the repayment of outstanding but unrecorded trade or other credit lines. Also, there are instances of imports by state agencies and others that are not recorded in countries’ import statistics.

Because of the great range of uncertainty surrounding such estimates, they do not seem to be suitable as a basis for estimating income receipts of particular countries or groups of countries. This consideration becomes especially important when it is recalled that it is necessary, for the purposes of this study, to match the credit and debit sides of the income accounts. The estimates presented in Chapter V reflect the total amount of investment income payments either reported in the balance of payments data of the countries where the funds are invested or added in the adjustments made in Chapter V.

VII Shipping and Transportation Questionnaire

Chapter VII makes use of a special questionnaire on shipping and transportation that the Working Party sent to a number of member countries, concentrating on those with major shipping fleets. The questionnaire was designed to yield several types of information underlying the summary shipment figures in the Balance of Payments Statistics Yearbook that could help in explaining the large excess of debits in the shipment and “other transportation” accounts as reported in the Yearbook. The questionnaire form and instructions appear below, and published totals from Part 2 of the 1985 Yearbook are summarized in Table 99.

Table 99

REGIONAL BALANCES IN SHIPMENT AND OTHER TRANSPORTATION, 1977-841

(In billions of U.S. dollars)

article image

Published in International Monetary Fund, Balance of Payments Statistics Yearbook, Vol. 36 (Washington, 1985).

The questionnaire was sent to 26 countries, and 21 respondents returned usable replies.”55 Questionnaire amounts were almost identical with the Year-book figures for most respondents, and for the group as a whole, revisions suggested by the questionnaire were negligible. The indicated revisions are shown in Table 100, line 3. Because the questionnaire was directed to selected countries with important merchant fleets, the respondents accounted for a large part of total shipment credits—75 percent of the Yearbook totals (line 5 of Table 100)—but covered a much smaller part of shipment debits. The rather small discrepancy for the respondent group on shipment transactions results from this bias rather than from improved information. In “other transportation,” which includes much of the operating costs of ships, the respondent group had a much larger debit balance than the Yearbook (lines 1 and 4), reflecting once again a bias in the coverage toward countries that operate large fleets.

Table 100

SHIPPING AND TRANSPORTATION QUESTIONNAIRE DATA COMPARED WITH 1985 BOPS1 YEARBOOK DATA

(In billions of U.S. dollars)

article image

Balance of Payments Statistics.

A cell-by-cell summary of returns for Form A of the questionnaire appears in Table 101. Chapter VII uses the air and “other” shipment figures from this table directly, as minimum estimates for the world, without making any attempt to add to them. Because the respondent group is tilted strongly toward maritime activity, there is no systematic method for treating the results in Table 101 as a “sample” of the world that could be put to such a use. The questionnaire was nevertheless useful for estimating relationships among world quantities related to shipping.

Table 101

SHIPPING AND TRANSPORTATION QUESTIONNAIRE TOTALS FOR ALL RESPONDENTS, 1983

(In millions of U.S. dollars)

article image

Cross-trades included in the figures in the second row of this table.

Some of the replies gave less than complete details in the form, and for each total in the tables, there is a residual amount not allocated in detail. The memorandum items and lines for cross trades and bunker fuel were also reported incompletely, and the questionnaires had to be used selectively and individually to estimate reasonable values for the ratios used in Chapter VII.

Special Questionnaire on International Shipping and Transportation Accounts

Form A. Details of Shipping and Transportation Entries in Balance of Payments Accounts, 1983

Please return one copy to:

  • Working Party on the Statistical Discrepancy

  • Room 9-310

  • Research Department

  • International Monetary Fund

  • Washington, D.C. 20431

Country:________

Please report amounts in millions of U.S. dollars [ ]

(if available) or millions of other currency units [ ]

(specify unit_________________________)

article image

Special Questionnaire on International Shipping and Transportation Accounts

Form B. Transportation Other Than Sea and Air (Breakdown of Form A, Column 5), 1983

Please return one copy to:

  • Working Party on the Statistical Discrepancy

  • Room 9-310

  • Research Department

  • International Monetary Fund

  • Washington, D.C. 20431

Country:________

Please report amounts in millions of U.S. dollars [ ]

(if available) or millions of other currency units [ ]

(specify unit_________________________)

article image
Note To be completed only if the amounts reported in Form A. column 5. lines 1 + 14. or lines 10 + 21. exceed 20 percent of the corresponding totals in column 6 of Form A

Corresponding line or lines on Form A.

Notes and Instructions for Special Questionnaire on International Transportation Accounts
I. Purpose

This questionnaire is part of the effort by the Working Party on the Statistical Discrepancy to explain the asymmetry in world current account balances, to produce a description of the methodologies in use, and to make recommendations that could lead to more consistent estimating procedures. To this end, we are asking a selected group of countries to provide information on the various components of the entries under the headings of “shipment” and “other transportation” in their balance of payments accounts and certain additional information relevant to international transportation, together with a detailed description of the procedures used in arriving at the estimates.

II. Confidentiality

The Working Party will restrict the use of any information reported to the staff of the Working Party and the IMF wherever such a restriction is requested by the respondent.

III. General Instructions

All countries receiving the questionnaire are requested to complete Form A; Form B should be completed only by those countries that have large international receipts and payments related to transport other than by sea and air. As a rule of thumb, use Form B if either total credits (lines 1 plus 14) or total debits (lines 10 plus 21) in column 5 of Form A exceed 20 percent of the corresponding totals in column 6.

Respondents are asked only to provide data already available in some form, or which can be estimated from available data without recourse to extensive research.

If readily available, please supply geographic detail, by country or area, for those items that are important in your accounts. The revenues on cross-trades should be attributed to the countries of final destination.

IV. Specific Instructions

The following detailed instructions should assist compilers in completing the forms. See also Part V, Notes on Methodology.

Form A

Columns 1-3. Give total only (column 3), if breakdown not readily available.

Line 1. Total “shipment” credits, as reported to IMF, by type of carrier.

Lines 2, 3, 4, 4a. Freight on exports, in-transit and cross-trades earned by domestically operated carriers, with a separation between national and foreign flag vessels. If you have separate figures for freight on cross-trades please enter them on line 4a. The separation by flag of registry is not needed for line 4a.

Lines 5, 6, 7. This memorandum item (not in balance of payments) will help to calculate total revenues of reported fleets and thus, by deduction, to estimate revenues of fleets not covered by IMF data.

Line 8. Insurance on exports, placed with resident insurers. Show total only (column 6).

Line 9. If large, please explain what is included in this item.

Line 10. Total “shipment” debits, as reported to the IMF, by type of carrier.

Line 11. Freight on imports in foreign-operated carriers.

Line 12. Insurance on imports, placed with nonresidents, either directly or indirectly—as would be the case with imports invoiced on a c.i.f. basis. Show total only (column 6).

Line 13. Other shipment debits, if any. Explain if large.

Line 14. Total “other transportation” credits as reported to IMF by type of carrier.

Line 15. Foreign carriers’ expenditures in domestic ports. See Part V below for important questions regarding methodology.

Line 16. Bunker fuel sales included in line 15.

Line 17. This item should reflect only the international portion of passenger revenues received by domestic carriers from nonresidents.

Line 18. This memorandum item will be helpful in analyzing the relationships between receipts and expenditures, especially of air carriers. The sum of lines 17 and 18 should, of course, equal total passenger revenues of domestic lines in their international business.

Line 19. Applicable mainly to sea and air transport.

Line 20. Explain, if entries are more than 20 percent of total credits.

Line 21. Total “other transportation” debits, as reported to IMF.

Line 22. Domestic carriers’ expenditures in foreign ports.

Line 23. Bunker fuel purchases included in line 22.

Line 24. Payments by domestic residents to foreign carriers.

Line 25. Applicable mainly to sea and air transport.

Line 26. Explain, if large.

Lines 27-29. These items are intended to provide an additional perspective on the extent of the gap in the reporting of merchandise transport in the balance of payments accounts. Data on tonnage operated by resident enterprises should refer as nearly as possible to the mid-1983 amount and should relate to the receipts reported in lines 2 and 5. Reasonable estimates would be sufficient.

Form B

The totals (column 6) should agree with Form A, column 5; note that insurance is not included.

V. Notes on Methodology

In order to make the best use of the data supplied, it is important to be able to evaluate the differences in national data sources and methodology. We have prepared a set of questions that should cover the major sources of such differences. If you have a description of your methodology that covers these or other points please send it with the statistical data. In any case, specific replies would be most helpful.

1. In your statistics on shipping and transportation do you encompass all vessels, planes, etc., whether under domestic or foreign registry, that are operated by residents of your country? Yes [ ] No [ ]

If the answer is no, or if there are some special circumstances, please attach a note explaining the coverage of your data.

2. Are your statistics for earnings and expenditures abroad of domestically operated carriers obtained from:

article image

Other (please explain: __________________________)

3. Are your statistics for payments to foreign carriers and their expenditures in your country obtained from:

article image

Other (please explain: __________________________)

4. In cases where statistics are based on exchange records from domestic banks, or where agents or other intermediaries supply information on these accounts, please indicate whether these sources provide the gross credit and debit items required for the balance of payments accounts. If they do not, do you enter only net amounts? If you adjust to a gross basis, please describe the method you use to estimate the gross amounts paid and received.

5. Does your information on freight earnings include earnings of domestic operators on cross-trade abroad? Yes [ ] No [ ]

Explain, if necessary. See instructions for line 4a.

6. If it is necessary for you to convert import data from a c.i.f. to an f.o.b. basis to conform with the requirements of the balance of payments accounts, please describe briefly your estimating procedure. Do you use such estimates as a basis for calculation of shipping debits? Yes [ ] No [ ]

7. Questions related to lines 15 and 22 of Form A: Do these items bear a reasonable relationship to the gross revenues of the carriers, inbound, outbound, and cross-trades combined? Do they include or exclude estimates for the personal expenditures of crews, sea and air? Do they include those hotel and other expenses of air crews that are presumably paid for, or reimbursed, by the carrier? If excluded here, are such expenditures included elsewhere in your balance of payments statement, e.g., under travel?

8. Questions related to lines 17 and 24 of Form A: Are the data based on information provided by the carriers or their agents? Or are they derived from information provided by, or about, individual travelers? Please describe your method of estimating.

9. Questions related to lines 19 and 25 of Form A: What is your source of information—the domestic owners (line 19) or domestic carriers (line 25) themselves? Are the operations of vessels chartered by residents included in lines 2-7 and 22?

VIII Unrequited Transfers Questionnaire

Chapter VIII makes extensive use of a questionnaire that the Working Party sent to 48 countries requesting more detailed information on the transfers data that appear in the Balance of Payments Statistics Yearbook. The questionnaire form and its instructions are reproduced below. As the instructions indicate, the questionnaire was designed for consistency with the Yearbook and with data collected and published by the OECD, and a form was included to help in reconciling the response with the Development Assistance Committee data that OECD produces.

Replies were received from 34 countries,56 and totals of these replies appear in Table 102. This table combines the first two pages of the questionnaire into a single summary, and it reproduces the form of those pages with additional lines and columns for amounts reported in totals but not in full detail. Table 75. of Chapter VIII reproduces the two total columns of this table. Table 102 gives further information by type of foreign transactor. One problem with these categorizations is that they may be reported asymmetrically as between donors and recipients. For example, the close balance on the miscellaneous line reflects sizable imbalances vis-à-vis foreign official and foreign private that happen to offset each other. Negative amounts shown for the “unspecified” totals in the lower right corner of the table reflect replies that give data for the total row and the total column without accompanying detail within the table.

Table 102

QUESTIONNAIRE REPLIES: TOTALS OF TRANSFERS, 1983

(In millions of U.S. dollars)

article image

European Economic Community.

The questionnaire page on geographic distribution of transfers was filled in by a number of countries, in some cases in extensive detail. The results were not in a form, however, that could be compiled into bilateral comparisons and were also too partial to be tabulated into totals.

Unrequited Transfers as Recorded in the Balance of Payments, 1983: Aggregate Data

Please return one copy to:

  • Working Party on the Statistical Discrepancy

  • Room 9-310

  • Research Department

  • International Monetary Fund

  • Washington, D.C. 20431

Country:_____________________

Please report amounts in millions of U.S. dollars [ ] (if available) or millions of other currency units [ ] (specify unit____________)

article image
article image

Unrequited Transfers as Recorded in the Balance of Payments, 1983—Geographic Distribution1

Please return one copy to:

  • Working Party on the Statistical Discrepancy

  • Room 9-310

  • Research Department

  • International Monetary Fund

  • Washington, D.C. 20431

Country:__________

Please report amounts in millions of U.S. dollars [ ] (if available) or millions of other currency units [ ]

(specify unit____________)

article image

Please provide separate data far all geographic areas and multilateral institutions which account for at least 10 percent of total unrequited transfer credits or debits.

Notes and Instructions for Questionnaire on Unrequited Transfers

This questionnaire is part of a special effort by the Working Party on the Statistical Discrepancy, established by the IMF to examine the sources of discrepancy in the global accounts on official unrequited transfers. The data requested cover the year 1983, which is a reference year for examining the global current account asymmetry.

The main data items are consistent with the data collection system of the Bureau of Statistics of the IMF, though the present questionnaire is more detailed. The Working Party believes that by pulling together these data in this more direct and detailed way it will be possible to bring to light certain gaps or discrepancies that may be overlooked in the ordinary routine of completing the standardized forms.

It should be emphasized that this inquiry is in no way a substitute for the material regularly prepared for the IMF’s Bureau of Statistics. For purposes of this questionnaire, the best estimates of the compilers are requested where actual data are not available or are considered to be too imprecise to be reported to the Bureau of Statistics. Such estimates should be identified with an asterisk. Where the data now available are revisions of data supplied earlier to the Bureau of Statistics, please indicate by noting (rev.).

Confidentiality

The Working Party will restrict the use of any reported information to the staff of the Working Party and the IMF wherever such a restriction is requested by the respondent.

Geographic data

As the study of the discrepancy inevitably requires comparisons of data reported by different countries or regions as well as by multilateral institutions, certain limited bilateral information has been requested as an extension of the main set of aggregate data. Of course, there is great variation among countries in the significance of individual partner countries and multilateral institutions as well as in the extent and derivation of any such geographic detail. Therefore, rather than prescribe a fixed list of countries and multilateral institutions for which such information is requested, the Working Party is asking each national compiler to provide data for the most important partner countries and multilateral institutions. As a guideline it is suggested that separate data should be provided for all countries and multilateral institutions which account for 10 percent or more of total debits or credits. If detailed geographic break downs are available, either in published form or as estimated for internal use, for the items listed in the questionnaire, or for similar items, such data could be provided in lieu of the questionnaire on geographic distribution.

Specific instructions

(References are to paragraphs in the IMF Balance of Payments Manual, (Fourth Edition, 1977), or to lines in Table 2 of Balance of Payments Statistics (BOPS)).

The categories used in these form are broken down into details that may not correspond to the data available to national compilers. Where necessary, therefore, please indicate where detailed items are combined or are contained only in sub-totals or totals. For items where you have no information and make no estimate please insert a dash in the appropriate line; insert a zero where no transactions exist. For definitions and coverage of official unrequited transfers, please refer to the Manual, paragraphs 354–359. Private unrequited transfers are covered in paragraphs 347–353.

Aggregate data

Line Number

article image
Geographic distribution

The data by country or multilateral institution should be conceptually consistent with those provided on the aggregate data questionnaire. Data for official transactions include those which are effected by either a resident or nonresident official sector. Private transactions include only those which are effected by both the resident and a nonresident private sector.

When reporting data for multilateral institutions, please note that agencies within one institution can be grouped together, for example, the United Nations would include the FAO, WHO, UNICEF, UNDP, etc.

Official Unrequited Transfers, 1983 Reconciliation with DAC Data

Please return one copy to:

  • Working Party on the Statistical Discrepancy

  • Room 9-310

  • Research Department

  • International Monetary Fund

  • Washington, D.C. 20431

Country: __________

Please report amounts in millions of U.S. dollars [ ] (if available) or millions of other currency units [ ] (specify unit___)

article image

Transactions in this item, and in items I.A, 2 and I.B., 2 of the DAC Form (not shown above) will probably be included In balance of payments items other than the transfer account

Please provide in this space explanations of significant differences.

Table 103

UNREQUITED TRANSFERS, 19831

(In millions of U.S. dollars)

article image

Published in International Monetary Fund, Balance of Payments Statistics Yearbook, Vol 36 (Washington. 1985).

Table 104

UNREQUITED TRANSFERS, 1977-841

(In billions of U.S. dollars)

article image

Published in International Monetary Fund, Balance of Payments Statistics Yearbook. Vol 36 (Washington. 1985).

IX Eurostat Approach to Balance of Payments Asymmetries

The effects of differences in methodologies and the difficulties of overcoming them are illustrated by the work done by the Statistical Office of the European Economic Community (Eurostat) on balance of payments asymmetries. The Eurostat working plan covers descriptions of methodology, quantitative analysis, and bilateral or multilateral contacts between member states and the European Community.

As a first step, Eurostat has published descriptions of the balance of payments methodologies of a number of the member countries of the European Community, following a consistent outline. Methodologies have been published for Belgium-Luxembourg, Denmark, France, the Federal Republic of Germany, the United Kingdom, and Greece.

Eurostat has also commissioned detailed studies on criteria for a geographical breakdown of the balance of payments usable at the Community level, dealing respectively with the current account of EC members,57 the capital account of EC members,58 and the current and capital accounts of EC members and of Australia, Canada, and the United States.59 The studies contain detailed descriptions of sources and methods and consideration of the possibility of constructing an intra-EEC balance of payments in which the algebraic sum of the entries for each item would, in principle, be zero. The study of the current account found pervasive methodological differences among the individual items in the current accounts of member countries and characterized the investment income data as the “most diverse and intractable” of any in the current account.60

The Veil study, which encompassed the practices of selected non-EC countries as well as EC countries, reached a number of conclusions, including the superiority of compiling balance of payments data through the transactions approach and the merits of bench-mark and sample surveys as means of collecting the data.61

The quantitative program of Eurostat in this field includes, as a first step, the establishment of a computerized data base containing the bilateral balances of payments of the EC member states, the United States, and Japan, beginning with data for 1970. This detailed geographical breakdown explores the absolute and relative magnitude of the discrepancies, by item and country, after a considerable time lag. From this work it appears that the sum of reported data of intra EUR 1062(including the Community institutions) is a small net credit, a result that does not change appreciably when the scope is enlarged with EUR 1063 current transactions with the United States and Japan. Eurostat economists believe that the geographical breakdown analysis is a useful tool to indicate asymmetries and their origin. Therefore, Eurostat, in collaboration with its member countries, is examining how the principles of the geographical breakdown could be refined.

Concurrently with the factual analysis and pending completion of the long-term reconciliation of the national interpretations and implementations of the Fund methodology, Eurostat considers it useful to quantify the bilateral discrepancies to point out where harmonization is most urgent.

At this stage, Eurostat has been testing a grossing-up algorithm designed to indicate persistent asymmetries owing to inappropriate net recording. The outcomes of this exercise, together with methodological questions arising from the algorithmic results, are submitted to the member states for examination. At a later stage, on the basis of these results, Eurostat contemplates arranging a cross-checking of figures between member states that is limited to those areas where significant amounts are involved. A future goal is to organize a forum for similar comparisons with the main nonmember countries. Studies are in progress concerning the possibility of completing the grossing-up algorithm for discrepancies stemming from shifts between items, differences in timing, etc.

The data currently published by Eurostat present both unadjusted and adjusted versions of the combined intra-Community balance of payments and extra-Community balance of payments (with the rest of the world). The unadjusted version of the former is the result of a simple totaling of the balance of payments items reported by each member country and shows substantial statistical discrepancies on both current account and capital account items. The discrepancies are attributed to “the different methods still being used by the member countries to establish their balances of payments and to break them down by geographical area; (and) time-lags and inaccuracies which occur in recording transactions.”64

Pending “harmonization of the methods used by the various countries and the gradual narrowing down of deviations,”65 Eurostat has adjusted both the intra-Community and the extra-Community balances of payments to obtain an adjusted intra-Community balance of payments in which the balances are zero and an adjusted extra-Community balance of payments in which the balances correspond to the sum of the appropriate items in each member’s balance of payments with the rest of the world. The adjustment of the intra-Community balance of payments is accomplished by the substitution of the amounts reported as debits by the member countries for the amounts reported as credits, thus bringing all of the intra-Community balances to zero. The amounts by which the credits in the intra-Community balance of payments are adjusted (i.e., the differences between the debits and the unadjusted credits) are then added to the credits reported in the unadjusted extra-Community balance of payments to obtain the adjusted extra-Community payments balance.
1

As published in International Monetary Fund, Balance of Payments Statistics Yearbook, Vol. 37 (Washington, 1986), Part 2.

2

International Monetary Fund, Articles of Agreement (Washington, 1978), p. 32.

3

International Monetary Fund, Balance of Payments Manual (Washington, 1st ed., 1948), p. 1.

4

International Monetary Fund, Balance of Payments Manual (Washington, 3rd ed., 1961), p. iii.

5

In the International Monetary Fund’s Balance of Payments Manual (Washington, 4th ed., 1977), direct investment, is defined as “investment that is made to acquire a lasting interest in an enterprise operating in an economy other than that of the investor, the investor’s purpose being to have an effective voice in the management of the enterprise” (p. 136).

6

In 1982, of total U.S. direct investment abroad (excluding banking) of $198 billion, $185 billion, or 93 percent, was invested in majority-owned affiliates, including both incorporated and unincorporated entities. See U.S. Department of Commerce, Bureau of Economic Analysis, U.S. Direct Investment Abroad: 1982 Benchmark Survey Data (Washington, 1986), pp. 161, 341.

7

A more accurate nomenclature would be “undistributed,” rather than “reinvested,” earnings. Dividends themselves may be “reinvested” if they are merely credited to an intercompany account instead of being remitted across the exchanges. In that case, the increase in accounts payable to the parent would be accounted for as a capital inflow to the host country. This ambiguity is one reason for including all direct investment earnings, whether declared as dividends or not, in the current account. But another reason for doing so is the fairly widely accepted principle that net income on foreign direct investment, whether distributed or not, should be regarded as part of the net income and product of the investing, rather than the host, country. This principle, however, has not been incorporated into the United Nations’ System of National Accounts.

8

Which is in accord with the Fund’s Manual.

9

Countries relying solely on exchange records would presumably record only remitted branch profits.

10

The Australian data were on a fiscal year basis and were not employed in this calculation.

11

The geographic detail available was not sufficient to include debits to countries reporting RE, other than among the four major investing countries themselves.

12

Interest on balances between banks and their foreign branches and affiliates is, in general, treated as “other,” not “direct,” investment income.

13

Switzerland, for the first time in 1983, reported reinvested earnings separately, although remitted earnings on direct investment were still combined with other investment income. Some of the countries concerned made the separation in their questionnaire responses, so they no longer need be included in this adjustment. However, their future reports to the Fund will have to be reviewed to ensure that such separation continues.

14

Geographic data for other investor countries were either nonexistent or negligible.

15

Data for the Federal Republic of Germany and the Netherlands on transactions with these areas were either nonexistent or inconsequential.

16

Only countries with total debits in excess of $500 million were examined.

17

It is recognized that the U.S. authorities publish data regarding transactions with Netherlands Antilles financing affiliates that enable the user to make an approximate adjustment of the data.

18

Excluding major offshore banking centers and Middle Eastern oil exporters.

19

Bank for International Settlements, Recent Innovations in International Banking (Basle, April 1986).

20

But, as will be shown, there is reason to believe that the Fund’s global data significantly understate both debits and credits.

21

Such an overstatement might occur if, for instance, a country used an incorrect factor in converting import statistics reported on a c.i.f. basis in customs returns to an f.o.b. basis for balance of payments reporting.

22

Eastern European countries that were not Fund members.

23

Many Greek shipowners live in other countries. But so far as the Working Party is aware, they are not actually considered residents of those countries for balance of payments purposes, at least so far as the shipping accounts are concerned, unless they are identified as resident operators.

24

See International Monetary Fund, International’ Financial Statistics Yearbook, Vol. 39 (Washington, 1986), pp. 122-25. However, further, and as yet unpublished, revisions to these data are employed in this chapter.

25

While reported “shipment” debits would include payments to nonmaritime as well as maritime transportation facilities operated by Hong Kong, Greece, etc., the amounts involved would presumably be small.

26

Note that international premium payments as reported in balance of payments statistics are all that is being measured here. An estimate of total insurance premiums on world trade will be developed later, for a different purpose. See Subsection 2.b.(1).

27

Direction of Trade Statistics Yearbook, 1986, p. 51.

28

The difference between exports of the rest of the “world” to these countries (f.a.s. or f.o.b.) and their imports from the “world” (c.i.f.) was $5.4 billion, or about 10 percent of their f.o.b. value, according to the Fund’s Direction of Trade Statistics. This is because the “import” data were based on data reported by the exporting countries, to which the Fund adds 10 percent to cover freight and insurance costs. But this ratio seemed high, given the fact that almost two thirds of such exports were from countries where the merchandise could move by rail or truck. We preferred to use the lower ratio of 5 percent, which is based on the (unrevised) figures shown in the International Financial Statistics Yearbook, 1986.

29

The data on ships by flag of registry and type and tonnage of vessel are published regularly in Lloyd’s Register of Shipping: Statistical Tables. A convenient summary is in the OECD annual report, Maritime Transport. The allocation of open-registry fleets by UNCTAD for 1983 appears in a document prepared for the eleventh session of the Committee on Shipping of the United Nations Trade and Development Board: Report of the Working Group on International Shipping Legislation, TD/B/C.4/256, TD/B/C.4/ISL/43 (New York: United Nations, March 16, 1983). In this paper, all vessels other than those of the five countries named in the following paragraph are assigned to the country of registry.

30

Defined as “the person, company or organization responsible for day-to-day husbandry of the ship concerned.”

31

Note that this relationship is not the simple one between revenues and total costs, but rather is that between total revenues and costs incurred in foreign ports only.

32

This figure was calculated by taking actual “other transportation” credits, or 50 percent of “shipment” debits, whichever was larger, for each country included in the Fund’s data and, for countries not so included, 50 percent of shipment debits as estimated in this report. For the Federal Republic of Germany and Austria, the reported figures were used, even though they were less than 50 percent, because much of their ocean-borne imports were landed in other countries.

33

The Middle Eastern countries, mainly oil exporters, showed a rise from 11.1 percent to 13.2 percent from 1973 to 1983, which seems reasonable in light of the growing unrest in the area. The reported ratio for other developing countries declined by 11 percent, from 10.6 percent to 9.4 percent of the f.o.b. value of imports.

34

Part of this amount would presumably have been applicable to imports in national vessels, and therefore not included in “shipment” debits. Moreover, the adjustment would not have affected the current account balance, since if it is assumed that the c.i.f. value of imports was correct, the same amount would have had to be added to imports f.o.b.

35

These may be reflected in the merchandise export statistics; if so, their inclusion in “other transportation” credits would require an offsetting adjustment to merchandise trade.

36

This is the total of $12.2 billion reported as development assistance in Table 75, plus the $1.1 billion of official debits, not allocated to any major category in Table 75, and $4.1 billion representing the difference between the adjusted BOPS Yearbook total official debit of $49.0 billion and the questionnaire survey total of $44.9 billion—that is, the debits for the countries not covered by the questionnaire survey.

37

Joslin Landell-Mills, The Fund’s International Banking Statistics (Washington: International Monetary Fund, 1986).

38

Appendix III describes the Fund’s International Banking Statistics in some detail.

39

The Bahamas, the Cayman Islands, and Hong Kong are omitted because their questionnaires included some or all of the international banking liabilities that are uniformly excluded from OECD totals. The questionnaire amounts for these countries were thus many times the size of OECD totals.

40

A more complete description of IBS appears in Joslin Landell-Mills, The Fund’s International Banking Statistics (Washington: International Monetary Fund, 1986).

41

Bank for International Settlements, International Banking and Financial Market Developments—a quarterly publication.

42

Mexico is an exception to these statements, because it directly uses the IBS-derived nonbank total assets for itself in its international statistics.

43

The following countries report to the BIS:

Austria

The Bahamas

Bahrain

Belgium

Canada

Cayman Islands

Denmark

Finland

France

Germany, Fed. Rep.

Hong Kong

Ireland

Italy

Japan

Luxembourg

Netherlands

Netherlands

Antilles

Norway

Panama (U.S. Branches)

Singapore

Spain

Swede

Switzerland

United Kingdom

United States

The following additional countries report to the Fund:

Israel

Korea

Lebanon

Philippines

Portugal

Saudi Arabia

United Arab Emirates

44

The discrepancy is apparent in the BIS quarterly publication International Banking and Financial Market Developments, in which banks report $151 billion of liabilities to Swiss banks at the end of 1983, while Switzerland reports only $56 billion of bank claims on all foreigners. Trust account positions appear on the Switzerland pages of IFS, in the section on international liquidity.

45

BIS claims on deposit banks, on the other hand, are reported as interbank liabilities by deposit banks and appear in Table 91 in the columns for international organizations, on line 7.

46

In the international group, only the BIS is a bank. The World Bank and other development banks are in the nonbank category.

47

The OECD figures for 1975 and 1980-84 appear in Financing and External Debt of Developing Countries: 1985 Survey (Paris: OECD, 1986), which also includes definitions and explanations of scope and data sources.

48

World Bank, World Debt Tables, 1985-86 Edition (Washington, March 1986) includes the year-end data for eight years including 1970, 1975, 1978, and 1980-84.

49

Council for Mutual Economic Assistance, which has the following members: Bulgaria, Cuba, Czechoslovakia,, the German Democratic Republic, Hungary, Mongolia, Poland, Romania, the U.S.S.R., and Viet Nam. Only Cuba, Mongolia, and Viet Nam are included in the OECD Survey, but the other CMEA countries are given in the OECD publication cited in the notes to Table 93.

50

Three members of OECD—Greece, Portugal, and Turkey—are included among the borrower countries.

51

See footnote 47.

52

The detail also gives much information about publicly backed debt beyond total amounts outstanding: types of lender, commitments for future disbursements, past and future repayments of principal, interest payments, and total projected debt service. These are tabulated and published as part of the country data in World Debt Tables.

53

Excluding Middle Eastern oil exporters and major offshore banking centers.

54

Michael P. Dooley, “Country-Specific Risk Premiums, Capital Flight, and Net Investment Income Payments in Selected Developing Countries” (unpublished. International Monetary Fund, March 11, 1986).

55

Brazil

China

Denmark

Germany, Fed Rep.

Indonesia

Israel

Italy

Japan

Korea

Malaysia

Mexico

Netherlands

Nigeria

Norway

Philippines

Portugal

South Africa

Sweden

Thailand

United Kingdom

United States

56

The following countries returned usable replies to the transfers questionnaire:

Australia

Bangladesh

Belgium-Luxembourg

Botswana

Canada

Cote d’Ivoire

Denmark

Egypt

El Salvador

Ethiopia

France

Germany, Fed. Rep

India

Indonesia

Israel

Italy

Japan

Jordan

Mali

Mexico

Nepal

Netherlands

Pakistan

Panama

Peru

Philippines

Senegal

Somalia

South Africa

Sri Lanka

Switzerland

Thailand

United Kingdom

United States

57

John Alves, Study on Criteria for Geographical Breakdown of the Current Account of the Balance of Payments Statistics Usable at a Communities Level (Brussels: Statistical Office of the European Communities, 1982).

58

Kurt Senff, Criteria for the Geographical Breakdown of Certain Items of the Capital Account of the Balance of Payments Statistics Usable at a Communities Level (Brussels: Statistical Office of the European Communities, 1982).

59

Erwin Veil, Criteria for the Geographical Breakdown of the Current Account and Certain Items of the Capital Account at a Community Level (Paris: Laffitte. 1982).

60

Alves, op. cit., p. 46.

61

Veil, op. cit., pp. 29-32.

62

Includes data on the trade among the first 10 members of the European Economic Community: Belgium. Denmark, France, the Federal Republic of Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, and the United Kingdom. Data for Spain and Portugal have not yet been incorporated.

63

The first 10 members of the European Economic Community, which are listed in footnote 62

64

Statistical Office of the European Communities, Balance of Payments: Geographical Breakdown. 1979-1982 (Brussels, 1985), p. XII.

65

Ibid.

  • Collapse
  • Expand
Cover Report on the World Current Account Discrepancy
Report on the World Current Account Discrepancy
ISBN:
9780939934904
Publication Date:
15 Sep 1987
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9780939934904.071
Pages:
203