Journal Issue

Bosnia and Herzegovina: Report on the Observance of Standards and Codes (ROSC)—Data Module

International Monetary Fund
Published Date:
February 2008
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I. Introduction

1. The following is the response by the authorities to the Report on The Observance of Standards and Codes (ROSC)—Data Module mission from the International Monetary Fund (IMF) of March 13–28, 2007 based on the comments of the statistical institutions of Bosnia and Herzegovina (Bosnia and Herzegovina Agency for Statistics, Federal Institute of Statistics of the Federation of Bosnia and Herzegovina, and Republika Srpska Institute of Statistics) and the Central Bank of Bosnia and Herzegovina.

II. Status of Implementation of Recommendations

2. The institutions of Bosnia and Herzegovina highly appreciate the thorough assessment of the macroeconomic statistics undertaken by the IMF mission that prepared the data module of the Report on the Observance of Standards and Codes (ROSC) for Bosnia and Herzegovina. The assessment has been very useful for the concerned institutions, and they have already implemented some of its recommendations, as noted in the summary below.

Table 1.Cross-cutting Recommendations
RecommendationComments by Institutions
Strengthen the mandate of the BHAS to coordinate a cohesive national statistical role in planning and implementing the work programs of the entity statistical institutes, inclusive of budget preparation processes.
Improve coordination and cooperation among statistical institutions that are responsible for compiling national accounts and price statistics to produce effective country-wide work programs. Establish working groups among major data producing agencies to improve data sharing and validation, thereby enhancing intersectoral consistency.Work on the development of the Master Plan for the national accounts is currently in progress. The main purpose of this document is to define the institutional arrangements and the organization of national accounts work given the fact that national accounts are the main user of data from other statistical departments. Also, it will be used as a tool for defining responsibilities among the institutes responsible for the national accounts data collection at the level of the country, as well as at the level of the entities. There is a number of working groups aiming at enhancing inter-sectoral consistency.
Conduct regular (quarterly or annual) intersectoral data consistency checks and produce reports on the conclusions of these checks.Statistical system of Bosnia and Herzegovina is aware of certain inter-sectoral data inconsistency. Statistical institutes will make additional efforts to check all existing inconsistencies and to gradually eliminate them. Statistical institutes are willing to collaborate in this process with other relevant institutions. CBBH acknowledges certain inter-sectoral data inconsistency. Within the institution, there will be additional efforts to check and describe all existing inconsistencies and to gradually eliminate them. Collaboration on consistency checks with other statistical institutions is also necessary and CBBH is willing to participate in the process.
Provide additional resources to statistical institutions responsible for compiling national accounts, prices, government finance, and balance of payments statistics.Statistical institutes are aware of their limited resources for statistical activities. The number of persons working in the national accounts has already been increased.

Further gradual increase of staff and other resources will be implemented over next years in order to increase coverage and the quality of statistics.

Statistical institutes are preparing the new organizational schemes.

CBBH acknowledges limited resources for statistical activities. Gradual increase of staff and other resources will be implemented over next years in order to increase coverage and quality of the existing statistics and introduce new statistic products.
Enhance the role of the Statistical Council in setting priorities for the country's work program by enlarging its composition to include representatives of the private sector.Statistical Council should play more prominent role in determining future statistical activities. Inclusion of new members and more power to the Council will increase its effectiveness.
Move forward with GDDS participation, so as to provide a framework for statistical improvements, reflecting national priorities. As a first step, appoint a GDDS country coordinator for BiH.The Statistical System in Bosnia and Herzegovina is determined towards participation in GDDS. All activities conducted inside this system are aimed towards improving the overall quality of produced data in compliance with the international standards. CBBH fully supports GDDS participation and will meet all necessary preconditions for fulfilling GDDS criteria in government finance, monetary finance, and balance of payments statistics. Our expectation is Bosnia and Herzegovina may start its participation to the GDDS during 2008.
Prepare and disseminate detailed manuals of sources and methods used for the compilation of the national accounts and price statistics.Regarding the price statistics, the comprehensive manual on data collecting, processing and dissemination, as well as on data sources and used methods is already published and disseminated. Draft Master Plan is predicting to fulfill this task for national accounts by the year 2010, with the help of international experts.
Establish formal procedures to identify user's needs.The statistical institutes will work on improvement of the cooperation with the users of statistical data in order to identify and satisfy their needs. We consider it to be a continuous task of the Statistical Institutes of Bosnia and Herzegovina. CBBH will undertake measures to have more substantive consultation with users in order to identify their needs in line with best practices.
Disseminate all data on the website in a format that is downloadable and user-friendly, such as Excel.BHAS has recently undertaken a redesign of its website in order to improve data access for all users. CBBH has recently undertaken a redesign of its website in order to improve data access for all users. Our future focus will be to use IT advancement for easier data and metadata access.
Table 2.National Accounts
RecommendationComments by institution
Finalize and publish the constant price GDP estimates and the expenditure components of GDP.In July 2007, the expenditure components of GDP estimates in constant and current prices have been finalized and published for the years 2004 and 2005. The same exercise has been completed for the production side of GDP estimates (2004–2006).
Finalize the estimates of the non observed economy and integrate them into the national accounts.The estimates of the non-observed economy in the period 2003-2006 have been finalized and included in the national ccounts.
Advance the work for the construction of a business register making use of all available databases. Once the business register is available, (i) consider introducing regular business surveys and (ii) completing the identification of the institutional sectors countrywide.The activities on creation of the Business Register have been undertaken using all available databases. It is planned to use the Business Register as the frame for sample design and for business surveys implementation.
Request resources to fund additional project to conduct household budget surveys and labor force surveys. Additional resources are also required for producing a country-wide producer price index in order to improve the accuracy and reliability of the GDP estimates.Field work on the Household Budget Survey of 2007 is currently in progress. Its results will be available by mid-2008. The next HBS is planned for 2009. The results of the Labour Force Survey of 2007 were published. The next LFS is planned for 2008. Both surveys are planned to become regular activities conducted in the statistical system of Bosnia and Herzegovina. The work on the software application design for calculating the Industrial Production Index (IPI) at the state and entities level is currently in progress. In the BHAS' Plan of Statistical Activities for 2008 it is stipulated that the experimental calculation of state level IPI should start by the middle of next year.
Undertake regular revision studies and publish the results.The revision procedures will be defined by the Master Plan.
Include commentary on particular data developments in publications to improve assistance to users.The Statistical System of Bosnia and Herzegovina acknowledges the lack of additional comments necessary to improve assistance to users, and it is determent to increase its efforts in order to produce more user-friendly publications.
Table 3.Price Statistics (Consumer Price Index)
RecommendationComments by institution
Give highest priority to completing the compilation and dissemination of a countrywide CPI. When completed, discontinue production of the RPIs.The new methodology for producing the consumer price index (CPI) in accordance with European methodologies and recommendations has been introduced into the statistical system of Bosnia and Herzegovina and is now being published regularly. Weights have been estimated on the basis of final results of HBS of 2004. A new weighting system for CPI will be estimated as soon as the results of HBS 2007 will be available. There are no inconsistencies in the methods of CPI data collecting and publishing. CPI is considered to be of a very high priority inside the Statistical System of Bosnia and Herzegovina.
Improve data validations at all stages to enhance the accuracy and reliability of the final results.Improvement of CPI data quality is a constant task of Price Statistics Department. Commonly used software application is providing the information on extreme discrepancies in prices from month to month in order to make the corrections. Also field work controls are made from time to time but we are determined to introduce regular and more intensive controls in order to maintain the representatives of the basket and collection units.
Post monthly short-and long-term annual data series on the agencies' website in order to improve data accessibility.Monthly CPI from January 2005 onwards have been published in September 2007. Since then, monthly CPI data are published on the 15th day of the following month in paper form and on the website.
Table 4.Government Finance Statistics
RecommendationComments by institution
Expand the institutional coverage of the GFS to include all the road funds.Recommendation is already implemented. The institutional coverage of the GFS has been already extended and now includes all the road funds in the sector of general government.
Expand the data collection programs to include cash flow data (cash statement) and balance sheet data.This recommendation is included in the CBBH plans. Full implementation of the recommendation depends on data sources and, also, available resources.
Apply the same institutional classification for general government in all sectors.The CBBH accepts the recommendation and it will be part of short term plan activities. Reconciliation of different classifications of general government units in general government sector will be analyzed and we expect to resolve the issue between GFS and financial sector and external sector and to discuss it with BHAS as well.
In order to assist with the inter-sectoral data consistency checks, undertake compilation of a financial balance sheet for the general government.Recommendation is already respected by the CBBH and compilation of financial balance sheets for the general government units is initiated.
Continue to explore data source to gain more information on projects directly financed by international donors.Recommendation is acceptable. CBBH continuously cooperate with related government institutions and international donors on the issue, but existing source data are very scarce and unreliable. CBBH will try to explore additional sources and information.
In cooperation with the government institutions, include the GFS classification codes in their charts of accounts to improve the quality of the sources data and to facilitate the processing of the data.This issue depends entirely on government institutions but in a short term CBBH will initiate work on the issue with representatives of respected government units and provide technical assistance in drafting Charts of accounts. ROSC recommendations will play an important role in this work.
Dissemination data on domestic debt as soon as they become available.Domestic debt statistics will be compiled and disseminated as soon as source data on domestic debt are made available by respected authorities.
Table 5.Monetary Statistics
RecommendationComments by institution
Establish formal arrangements for backing up the single staff member working on monetary and financial in each CBBH main unit with a view to ensuring efficient use of existing staff resource.Recommendation is acceptable and CBBH will make arrangements for backing up the single staff member in each CBBH unit during 2008.
Reclassify RS Road Fund from public non-financial corporation to government unit (extra-budgetary fund) based on economic classification instead of legal decision.Recommendation is acceptable and will be implemented very soon. Separate data for RS Road Fund were already collected and it would be easy to reclassify the Fund into government sector.
Show separately all categories of financial instruments in monetary data as recommended by the MFSM.Recommendation will be fulfilled completely very soon when CBBH fully implements new methodology based on MFSM 2000.
Table 6.Balance of Payments Statistics
RecommendationComments by Institution
Develop additional data sources as resources become available, particularly surveys of household to collect data on remittances.Recommendation will be taken into account. In order to achieve better coverage of balance of payments statistics data, CBBH is going to cooperate with other statistical agencies on expanded and more detailed surveys as soon as resources become available.
Work to obtain data on international arrivals and departures data and on surveys of travellers' expenditure patterns to improve travel credits and debits.Recommendation will be taken into account, since existing travel statistics is not sufficient. CBBH is going to work closely with other statistical and government agencies in order to improve data sources.
Reclassify some items currently included in capital transfers to other items so as to be consistent with international definitions.Recommendation is acceptable. CBBH has already been working on reclassification of the items currently included in capital transfers to current transfers. Reclassification will be introduced in balance of payments statistics by end 2007.
Reclassify interest from inter-company loans as income from direct investment instead on income from other investment.Recommendation is acceptable. CBBH has already been working on reclassification of the interest form inter-company loans. Reclassification will be introduced in balance of payments statistics by end 2007.
Continue to revive and improve adjustments based on additional information and studies and replace them with collected data, where possible.Recommendation will be taken into account. In order to achieve better coverage of balance of payments data, CBBH is going to introduce these proposals where possible.

III. Other General Comments

3. It is clear that the ROSC provides a comprehensive evaluation of the quality of the data produced by the statistical institutions, but does not fully take into account the external circumstances, such as the provision of adequate data sources, in particular with regard to the national accounts. This problem has affected both entities for a long period of time. In particular, this is an issue for the Federation of Bosnia and Herzegovina and it can be traced to the lack of administrative data source for enterprises (statistical institutions have just started activities on establishing of SBS and Business registry through Cards Twinning Project). Implementation of international standards and improvements in classifications, collection, processing and dissemination of data of other relevant institutions (ministries of finance, tax administration, Funds etc.), as well as their cooperation and data exchange with statistical institutions would make a significant impact on quality of statistical data.

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