The six member states of the Gulf Cooperation Council (GCC)—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates—have laid out a path to a common market by 2007 and monetary union by 2010. To monitor this convergence process and support economic and monetary policy, the member countries must be able to provide comparable economic data. What is the most efficient way to produce these data? A new IMF Working Paper surveys the statistical institutions in the GCC countries and presents the case for creating “Gulfstat”—a regional statistical agency. Such an agency could draw valuable lessons from regional statistical organizations in Africa and the European Union (EU).
The GCC’s overall aim is to bring about the economic integration of its member states. Progress toward this end can be measured against a set of convergence criteria in areas such as macroeconomic indicators, trade patterns, and social trends. Member states have agreed on criteria similar to those adopted by the EU under the 1992 Maastricht Treaty: inflation, interest rates, foreign exchange reserves, fiscal deficit, and debt relative to GDP.
Creation of a regional statistical agency could aid the GCC countries as they move toward a common market and monetary union. With GCC national statistical offices still evolving, it is critically important that the six countries develop a common methodology for collecting and processing certain data and agree on a program of data dissemination. Special consideration should be given to the potential role that Gulfstat could play as compiler of statistics. In her opening address at the 15th GCC Ministerial Planning and Development Committees meeting in Abu Dhabi in June, Shaikha Lubna al Qassimi emphasized the importance of establishing GulfStat in light of the 2010 GCC census and other statistical activities.
These six states have, for some time, been coordinating statistical activity to achieve cross-country comparability. The heads of the national statistical offices meet regularly and, in May 2004, adopted a set of measures to consolidate and further develop joint statistical work that would unify statistics laws, adopt a common methodology in building a data warehouse, conduct regionally coordinated demographic surveys to fill gaps in population statistics, coordinate efforts to develop data on foreign direct investment, and implement the International Comparison Program—a global statistical program that produces internationally comparable price levels, expenditure values, and purchasing power parity estimates. It also coordinates gender statistics, which would, among other purposes, monitor implementation of the Millennium Development Goals.
One important step in fostering collaboration across GCC statistical agencies would be to assign clear responsibilities for producing official statistics at the national level, which is not currently done in all countries. For monetary and balance of payments statistics, central banks have the lead responsibility in all GCC countries except one, making coordination in these areas relatively straightforward. For all other statistics, however, the institutional framework is far more complex. Legal action may be required to allow the agencies to enter into an agreement with one another and with the proposed future regional agency, Gulfstat. A clear legal mandate is especially needed in cases where the national statistical agency is housed in a ministry.
It would also be essential to clarify legal responsibility for compiling and disseminating government finance statistics—a key element in monitoring convergence toward monetary union. In many industrial countries, ministries of finance produce many of the source data for government finance statistics, but national statistical agencies are generally responsible for compiling and disseminating these data. A similar approach might be considered for the GCC countries.
To be effective and to produce credible data, Gulfstat should be endowed with a strong governance structure. It should be an independent agency with the necessary legal foundation to support professionalism and engender public trust and confidence in the statistics it publishes.
Learning from Afristat and Eurostat
To achieve these goals, Gulfstat could look to two models—Afristat and Eurostat. Afristat is a regional statistical agency open to all sub-Saharan African countries. Created in 1996 in response to a decline of national statistical systems in the 1980s, it focuses on building capacity in compiling consistent, comparable, and reliable economic and social data.
Eurostat was established in 1953 to meet the requirements of the European Coal and Steel Community. Its task broadened with the creation of the European Community in 1957. It now supplies the Economic Commission and other European institutions with data that allow them to define, implement, and analyze Community policies. Since the start of European Economic and Monetary Union, the European Central Bank has also been an important user of statistics produced by Eurostat.
Both Afristat and Eurostat coordinate activities of national statistical agencies, promote harmonization of statistical processes and methodologies, and, more generally, encourage dialogue among the statistical agencies. These are basic features that Gulfstat could use while tailoring the agency to the unique environment of GCC regional statistical integration.
Among Gulfstat’s likely top priorities would be to intensify the collaboration among statistical agencies, develop common work programs, and coordinate data collection procedures. Eurostat collaborates with member countries through active advisory groups within the European System of Statistics (ESS). These advisory groups play a crucial role in bringing member countries’ statistical practices closer together. Firm agreements among ESS members about dissemination requirements support Eurostat’s work. Such contractual relationships contain useful lessons for the GCC countries.
Among Gulfstat’s likely top priorities would be to intensify the collaboration among statistical agencies, develop common work programs, and coordinate data collection procedures.
Afristat provides technical assistance to its member institutions. Eurostat does not have such a function within the ESS, but many of its staff members are experts seconded from member statistical agencies, providing valuable opportunities for statisticians to learn from other countries. Gulfstat may want to employ a mix of these arrangements—combining some international experts and some staff members from regional statistical agencies while also organizing training courses for the national statistical agencies and acting as a focal point for collaboration with international agencies.
Promoting integration and comparability
The heads of national statistical agencies in the GCC countries have already agreed on a coordinated household survey and a population census, and Gulfstat could provide the institutional setting for these activities. In the EU, data collection is in the hands of national statistical agencies, but, in practice, Eurostat is an active partner in this process. Gulfstat could, similarly, play an active role in compiling regional data.
Afristat’s and Eurostat’s constituencies are broad economic areas including, but not limited to, monetary unions. This may offer another lesson—namely, that Gulfstat would have its own merits in supporting the development of statistics in the region and thus fostering economic integration of the six Middle Eastern states. It would also suggest that a regional statistical agency could proceed at a different pace from the common market and monetary union agendas.
Under the common statistical work that the GCC Secretariat envisages for Gulfstat, consistency, timeliness, and comparability would be high priorities. Work is under way to adopt a common methodology for preparing national accounts estimates. In this regard, the GCC’s Statistical Committee is currently preparing a detailed time frame to implement the 1993 System of National Accounts. Efforts are also under way to finalize unification of statistical definitions, concepts, and classifications. Moreover, a methodology for compiling intra-GCC trade statistics is under review, with close coordination between statistical offices and customs departments.
Eurostat’s work implicitly benefits from the fact that most of its constituency already subscribes to the IMF’s Special Data Dissemination Standard (SDDS)—a set of standards for countries having, or seeking, access to international capital markets that entails commitment to timely data dissemination in line with international standards. Similarly, Afristat’s work benefits from its members’ participation in the General Data Dissemination System (GDDS)—a set of recommended standards coupled with a strategic action plan to build up the national statistical system. Universal participation of GCC countries in the GDDS, with a view to moving toward SDDS subscription over time, would lend support to the effectiveness of regional statistics and a regional statistical agency.
If Gulfstat is to aid regional integration, what kind of resources would it require? Ultimately, that decision would have to be made in line with the new central agency’s functions. The experiences of Afristat and Eurostat, though both serve much larger constituencies, can provide guidance. Afristat grew out of the need to pool members’ scarce financial resources. The GCC countries do not face such constraints, but Afristat exemplifies how a lean organization—staffed with only 12 professionals—can serve the diverse needs of its members. Afristat’s role in supporting the development of national statistical agencies is also comparable to the situation of the GCC states.
Eurostat evolved during a time when national statistical agencies in the region were already well developed. In this environment, its main role as coordinator of statistical activity was a natural outgrowth. Gulfstat’s environment would be different. The GCC national statistical agencies are still developing, which would afford Gulfstat an important role in leading this process.
Abdulrahman K.L. Al-Mansouri, Middle East Technical Assistance Center
Claudia Dziobek, IMF Statistics Department
This article is based on IMF Working Paper No. 06/38, “Providing Official Statistics for the Common Market and Monetary Union in the Gulf Cooperation Council (GCC) Countries—A Case for Gulfstat.” See page 208 for ordering details. The full text is also available on the IMF’s website (www.imf.org).