VIII. Official Data Sources Not Included Elsewhere
- International Monetary Fund
- Published Date:
- March 1995
328. Data sources available from the official sector (the general government sector and the monetary authorities) are examined in chapter 8. The chapter covers sources of data on own-account transactions and stocks of external financial assets and liabilities of the general government sector and the monetary authorities.56 These transactions can have a significant impact on the BOP; therefore, their measurement requires careful attention. The chapter also examines data (which may be relevant to the BOP) gathered by official sector institutions as a by-product of carrying out their various functions. Examples are data from applications to invest, to acquire foreign exchange, and to export, and data from taxation, education, and health authorities.
329. Data sources described in this chapter may be the sole sources for various BOP items. These sources may be used to supplement sources such as an ITRS or ES, or the sources may be used to validate data collected elsewhere.
330. It is useful to consider alternative sources of data on the official sector. Data on BOP activities of the central bank may be obtained directly from the bank or from an ITRS—if the central bank is included. While many agencies of general government may be involved in international transactions, payments or receipts associated with most transactions would be recorded, in the government ledger, by the central accounting unit of the government. These transactions are often settled through the central bank, which acts as banker to the government. Government debt management functions are likely to be organized separately in a debt control or management office, and the central bank is likely to be the banker. Therefore, to collect data on international transactions of general government, the compiler may approach either the central accounting office and the debt office (through a specific collection) of the government or the central bank (through an ITRS).
331. It may be necessary to approach other units of government to obtain complete information on some general government transactions. Tax authorities may be an appropriate source of data on withholding taxes and other taxes payable by nonresidents. Port and transport authorities may be good sources of various transport fees payable to the government. Certain government entities that take delivery of goods and services from abroad may have the responsibility for making payments, and it may be necessary to approach these entities directly to acquire information required for BOP purposes. These entities may include the ministry of defense, the ministry of external relations, the ministry of public works (particularly if the ministry is responsible for organizing projects funded from foreign aid), the foreign aid office, and the ministry of education. It may also be necessary to approach government agencies providing technical staff or employing staff on secondment from abroad in respect of these activities.
332. Furthermore, in addition to the national government, there may be other levels of government, such as state and local, that are involved in BOP transactions. If so, the compiler may have to approach the appropriate institution(s) within each level of government in order to measure particular types of BOP transactions. For example, each Australian state government maintains a central authority responsible for borrowings. Australian BOP compilers approach these authorities to obtain information on the external debt of state governments.
333. While many government-owned companies may be involved in international transactions, these corporations are considered enterprises and, as such, are not considered as part of the general government sector.
Data on the Official Sector
334. The compiler should develop a good understanding of expenditure, revenue, and finance patterns of the general government and monetary authorities. It is especially important, as well, for the compiler to understand how data are recorded in government accounts at different (national, regional, and local) levels. Official institutions that have a significant impact on the BOP should be accorded high priority for the purpose of data collection.
335. For the national government, there is often a central accounting unit—typically within the ministry of finance—that is responsible for most, if not all, receipts and expenditures. While there may be some delegation of authority to make payments, the central accounting unit should have reliable accounting data on the majority of BOP transactions undertaken by national government. Therefore, it should be possible to use these central accounts—often called “the ledger”—to extract the BOP data required. In some countries, all government payments made abroad are identified and extracted each month from the central government ledger for the purpose of compiling BOP items relating to government transactions. As the government accounting system is often computerized, required data are often available a day or two after the end of the month.
336. However, as these centralized accounting units are usually concerned with receipts and expenditures, they may not be a good source for all data items. For example, to measure trade credit on imports, it is necessary to establish actual change of ownership (delivery) dates for goods and services, as well as dates when payments are made. For information on delivery dates, a government accounting unit at a lower level may be a more satisfactory source of information because central government accounting units often rely on lower levels of government to organize contractual arrangements and to ensure that goods have been delivered, etc. Similarly, for data on foreign military and development assistance, government authorities directly concerned with these activities may be the most appropriate source as many of the transactions may not involve cash payments. It may even be desirable and necessary to collect such data on a project by project basis.
337. Once appropriate source(s) of data have been identified, the compiler should negotiate with relevant authorities to achieve any modifications required to extract required data and classifications from the government accounting system and to arrange a suitable and timely reporting mechanism. It is desirable for the BOP compiler to coordinate requirements with the compiler of government finance statistics.
Embassy and Defense Transactions
338. Direct expenditures made abroad for goods and services used by embassies, consulates, military installations, aid missions, information agencies, and other government institutions located abroad are included in government services n.i.e. in the BOP. Wages and salaries payable to host country residents who work for embassies, etc. should also be measured and included in the BOP as compensation of employees. Wages and salaries payable to nationals who are posted to these institutions do not represent BOP transactions. However, the compiler may assume that all or a certain percentage of amounts paid abroad to such personnel will be spent abroad and, as such, included in government services n.i.e.57 Expenditures associated with provision of joint military arrangements and peace-keeping forces should also be included in this item.
339. Information on transactions related to embassies, defense, and other government installations located abroad will typically be available from the government ledger or from agencies such as the ministries of external affairs and defense. For BOP purposes, the times at which these transactions are recorded (usually on a cash basis) in government records are normally considered to provide reasonable approximations of changes of ownership. However, if significant discrepancies arise between provision of a service and payment for it, a timing adjustment should be made.
340. While classification of embassy, defense service, and similar transactions into income (compensation of employees) and service components and classification by partner country are all that is required for BOP purposes, it may be advantageous if the compiler examines the various cost factors involved. Subdividing payments into rents, office services, entertainment, salaries, and other components and comparing these with the number of staff employed by country may be useful for BOP extrapolation purposes and for estimating foreign government expenditure in the home economy. This topic is discussed further in chapter 12, paragraphs 572-575.
Other Current Expenditure and Revenue of the Official Sector
341. Other current expenditure of the official sector includes payments for government imports, travel abroad by government employees, other services acquired by government, and pensions paid to former nonresident employees and to former residents who have emigrated abroad. These data should be available from government accounts and be appropriately classified for BOP compilation purposes. On the revenue side, data should be available on various fees, taxes, and charges payable to government. These may include:
withholding and income taxes collected from nonresidents;
airport departure tax collected from nonresidents;58
offshore fishing and other license fees collected from nonresidents;
transportation fees and service payments, such as airport landing fees and stevedoring charges, collected by government authorities.
Official External Debt
342. A country’s debt management office may be responsible for official debt (other than central bank liabilities), for official asset management (other than reserves) and, sometimes, for publicly guaranteed debt. This office could be approached to measure the external liabilities and assets (other than reserves) of the official sector and—to the extent that the debt management office manages or monitors non-official debt—the non-official sector. Government-guaranteed debt should not be included in official debt unless actually acquired by the official sector.
343. Table 8.1 sets out the type of data the compiler may wish to collect from the official sector in respect of external financial assets and liabilities. The table is presented in the form of a reconciliation statement, which is described in chapter 1, paragraph 30. Details for monetary authorities and general government sectors should be compiled separately. If the debt management office has data on other sectors—for example, government-owned enterprises or government-guaranteed debt of other enterprises—these data may also be collected but should be compiled separately.
|Change in position|
|Opening Position||Increase||Decrease||Price Changes||Exchange Rate Adjustments||Other Adjustments||Closing Position||Investment Income|
|1. Equity securities|
|2. Bonds and notes|
|3. Money market instruments|
|4. Long-term loans|
|5. Short-term loans|
|6. Currency and deposits|
|7. Other assets|
|8. Bonds and notes|
|9. Money market instruments|
|10. Use of Fund credit and loans from the Fund|
|11. Trade credits|
|12. Long-term loans|
|13. Short-term loans|
|15. Other liabilities|
344. In item 8 of table 8.1, four sub-categories are included to identify various types of exceptional financing and LCFAR. These sub-categories are included for illustrative purposes (the full list of categories may be found in table 10.5), and it is not necessary to collect such data if the information is not applicable. These sub-categories may be applicable to any of the other liability items. While debt forgiveness transactions are not shown, the compiler should also identify these and, possibly, the other adjustment components in more detail. Close consultation between the compiler and the debt management office should guarantee that the compiler gathers all the required data.
345. The information shown in table 8.1 should be classified by country of creditor or debtor. In the country classification, a separate category should be shown for international institutions. It may also be desirable to classify data by sector of nonresident party. That is, each cell in table 8.1 would be further subdivided into international institutions, foreign general government, foreign monetary authorities, nonresident banks, and other nonresident sectors.
346. The compiler should also obtain details on fees payable for financial services and withholding taxes relating to investment income on the official sector’s external financial assets and liabilities.
347. Data could also be collected on the currency composition of external assets and liabilities. This data would be particularly important if less than complete data are available to the compiler to measure financial and income flows. (The use of currency data to estimate transactions from stocks data is discussed in chapter 16, paragraphs 778-783.)
348. Securities issued in the domestic market and purchased by nonresidents can pose special collection problems, and these are discussed in chapter 6. For securities issued abroad, the government or central bank should have the required data or may be able to obtain data from security brokers located abroad.
349. Stock positions should be valued at market values, and conversion rates for instruments denominated in foreign currencies should be based upon midpoint rates applicable to reference dates. Transactions denominated in foreign currencies should be converted at midpoint rates prevailing on dates transactions were made. The time of recording of transactions should not pose problems. However, the compiler should ensure that the time of recording is consistent with that used in other data sources, and timing adjustments should be made if necessary.
350. Data on reserve assets should be available from the relevant department of the central bank. Ideally, the data set out in table 8.2 on page 61 will be available.
|Change in position|
|Opening Position||Increase||Decrease||Price Changes||Exchange Rate Adjustments||Other Adjustments||Closing Position||Investment Income|
|Special drawing rights|
|Reserve position in Fund|
|Currency and deposits|
|With monetary authorities|
|Bonds and notes|
|Money market instruments and financial derivatives|
|Currency and deposits|
351. Table 8.2 emphasizes that transactions (the increases and decreases) should be measured separately from the stock position to obtain reliable data on reserve transactions. Monetization and demonetization of gold and allocation and cancellation of special drawing rights should be identified separately under other adjustments. It is important to obtain, if possible, the complete instrument breakdown shown in the table. Each instrument, at least for stocks and transactions, should be classified by country of the nonresident party. Data should be converted to the domestic currency or unit of account by use of midpoint rates applicable at reference dates (for stocks) or on dates that transactions were made (for transactions).
352. Sometimes the compiler may only have access to the stock of reserve assets. The method for converting such data to a transactions basis is outlined in chapter 16, paragraphs 778-783. To apply this methodology properly, the compiler must know the currency composition of reserves.
Measurement of Development Assistance in Donor Countries
353. The development assistance agency in donor countries is an obvious source for measuring development assistance because this agency is usually responsible for disbursement of the major part of development assistance grants and loans and for overseeing and monitoring the foreign development assistance program. While development assistance is not a standard component item in the BOP, the compiler may wish to compile the item separately for analytic reasons. The components of development assistance will generally be reflected in several items in the BOP.
354. The Development Assistance Committee (DAC) of the Organisation for Economic Cooperation and Development (OECD) is responsible for collecting internationally comparable data on development assistance. This collection is referred to hereafter as the DAC Reporting System. The DAC has worked closely with other international agencies, including the International Monetary Fund’s Statistics Department and member countries of the OECD, to develop reporting directives, which are generally consistent with those of the BPM, on uniform reporting of development assistance flows. The compiler should be familiar with the reporting directives and work closely with the development assistance agency to ensure proper treatment of development assistance flows for the purpose of compiling the BOP and reporting to the DAC. It would be desirable to quantify any difference in treatment advocated by the reporting directives and the BPM. Some donors, who are not DAC members, also report to the DAC.
355. Data in the DAC Reporting System should, in practice, be compiled on a basis that closely parallels the concepts of timing and valuation advocated by the BPM and SNA. Transfers of military equipment or services and transfers to or from individuals should not be included in statistics of development assistance, although such transfers would be included in transfers in the BOP. The reporting directives comment specifically on:
allocating flows through non-operational subsidiaries to principal parties involved in the transaction (The BPM advocates a different treatment.)59
excluding technical assistance by commercial enterprises (The BPM advocates the same treatment.)
including imputed costs of educating nonresident students when fees do not cover the costs of education (The BPM advocates this treatment.)
treating interest subsidies paid to residents to provide “soft” financing as part of development assistance (The BPM does not advocate this treatment.)
including, in development assistance, costs associated with technical cooperation, administration, education, and research incurred in the donor country. (The BPM advocates this treatment.)
356. Major aggregates, such as official development assistance, in reporting forms submitted to the DAC should be classified by country. Obviously, transactions with international institutions are not classified by country. Certain transactions, such as administrative expenditures in the donor country, are not—according to the reporting directives—allocated by country but shown unallocated. However, for the purpose of compiling partner country BOP statistics, which are described in chapter 17, costs incurred in the donor country should be classified by country. If it is not possible to allocate specific costs to specific countries, one option would be to prorate costs across recipient countries by using aid flows that can be allocated by partner country.
357. Reporting forms submitted to the DAC provide information on both commitments and disbursements of development assistance. The latter basis is relevant in compiling the BOP.
358. In developing, for BOP purposes, statistics on development assistance, the compiler should distinguish clearly between grants (which are recorded as transfers) and loans (which are recorded in the financial account). For grants, it is necessary that offsets (such as exports of goods, provision of education services, other technical assistance, and provision of cash) be identified and included appropriately in the BOP. Chapters 14 and 15 provide further information on recording grants in the BOP.
Measurement of Development Assistance in Recipient Countries
359. Data on international development assistance in recipient countries is often poorly measured and, as a result, the value of foreign assistance is understated. Because of this understatement, the impact of such assistance on other major economic variables is difficult to measure. Measurement problems in recipient countries have also led to BOP global asymmetries for data on transfers. The following paragraphs provide possible sources that the compiler could use to measure the receipt of development assistance.
360. Most compilers in recipient countries can easily identify cash grants or payments received in development assistance because the information is often readily available from government records on revenue.
361. Many countries have established various administrative units to administer program or project aid. Complete accounts are often established to analyze costs, monitor progress, make reports to donors, and prepare invoices to claim cash payments from donors. These project accounts should include the value of materials and services supplied by donors. The compiler should encourage good record-keeping practices in this area. In addition, administrators of such aid projects should (if they are not already doing so) be encouraged to obtain, from donors with whom they maintain contact, data on the valuation of assistance received in kind.
362. It is necessary that offset entries to the aid be recorded in BOP accounts. To ensure proper recording, the compiler could, for example, undertake audit checks to verify that goods received under project aid are recorded in ITS at correct valuations. If project accounts are the only source of data for certain noncash items in the BOP, the compiler would use information from such accounts to record corresponding items in the BOP. For example, if a foreign technical assistance expert stationed in the host economy for less than one year and funded under an official aid program is employed by a local project, income earned by the expert should be included in the BOP as a compensation of employees debit and a transfer credit. The BOP treatment of technical assistance and other forms of project aid is further discussed in chapters 14 and 15.
363. Many countries receiving food aid have a centralized government agency responsible for distributing the food, and such agencies are generally a good source of information on this type of aid. When approaching distribution agencies for information, the compiler should ensure that both food imports and offsetting transfer entries are measured in accordance with BOP principles. Chapter 14, paragraph 648 should be consulted for a discussion of the BOP treatment of food aid.
364. In countries where residents receive educational assistance from foreign governments, there may be a government agency responsible for administering the program on behalf of nonresident donors. This agency could be a useful source of data for the BOP. The value of educational assistance should be measured at the cost to the donor. If such details are not readily available, BOP estimates could be based on the number of students studying abroad and classified by various types of educational institutions and length of stay. These data could then be used—in conjunction with per capita data (either actual or estimated) of the value of tuition fees, accommodation, passenger fares, and other expenses paid by donor countries for each category of student—to estimate the transfer credit item. Having compiled these estimates, the compiler should ensure that relevant offsets are included in the current account. Typically, offsets (other than those for passenger fares) will be shown in the travel item as debits.
Administrative By-product Data
365. While conducting various functions, official institutions frequently obtain data useful for compiling the BOP. Often these functions require applicants, or persons who must pay fees or taxes, to complete forms that could be relevant to the BOP. The compiler might be able to influence the design of collection forms or administrative procedures to maximize, from a BOP viewpoint, the usefulness of the data. ITS, ITRS data, and migration statistics are examples of information collected as a by-product of administrative functions and essential to BOP statistics. These particular collections are discussed in other chapters. This chapter examines lesser known by-product collections.
366. Administrative by-product data may be available at different levels of processing, including individual collection forms, semi-processed data (which may consist of records of individual collection forms, special tables, or reports), or statistical aggregates. The appropriate level, from the compiler’s viewpoint, will depend upon a number of factors. If sufficient details and cross-classifications are available, statistical aggregates may be sufficient for the compiler’s purpose. Nevertheless, it is often desirable for the compiler to have access to completed collection forms or records of collection forms. Even data that cannot be used directly by the compiler may still may be useful for BOP purposes. Subsequent paragraphs note some examples.
Foreign Investment Approvals
367. Many countries have foreign investment boards or similar institutions that promote, place conditions on, or monitor various forms of foreign investment. To make certain types of investments or to expand existing investments, investors may be required to submit application forms to the investment board, which assists investors in establishing enterprises and ensures that investments comply with government guidelines. These application forms may contain useful information and, in a number of countries, detailed statistics are published on foreign investment approvals. These statistics are generally not directly usable for BOP compilation purposes as they relate to approvals rather than transactions, although they may be useful for some BOP projection purposes. More importantly, individual application forms may serve as a very useful data source for compiling population lists of direct investment enterprises or direct investors. In some countries, application forms have proved particularly useful for identifying nonresidents who invest in real estate.
Applications to Obtain Foreign Exchange or to Borrow from Abroad
368. It is a requirement in some countries for residents to obtain approval to purchase foreign exchange or to borrow from abroad. These approval applications should not be confused with actual foreign exchange transactions measured in an ITRS. Paragraphs 98-99 of chapter 3 describe cases in which residents borrow or lend abroad, but no corresponding cash transaction appears in the ITRS until a repayment or interest payment is made. To identify these drawings, foreign borrowing applications could be monitored and followed up with the borrower or the lender. Once the drawing is made, details of the transaction should be recorded and included in the BOP. Data on foreign borrowing approvals could also be used to establish a list for conducting a survey of residents with external borrowings.
369. In some countries, direct investment enterprises are required to obtain approval before remitting, in the form of foreign exchange, dividends or profits abroad. As part of the application process, companies submit details of their profit and loss statements. These details could be used by the compiler to measure reinvested earnings as well as remittances of dividends and profits.
Applications to Export
370. Residents of some countries are required to complete applications to export. Sometimes, these applications are used as a data source to compile goods items in the BOP. Alternatively, applications may provide a starting point for obtaining a list of exporters to improve coverage of ITS or applications may serve as a coverage source for an exploratory survey designed to identify enterprises engaged in certain BOP activities, such as trade credit.
Immigrant Application Records
371. Some countries encourage business immigrants to supply investment capital in return for being allowed to migrate to the host country. Immigrant applications or supplementary inquiries may be a useful source of information on immigrants’ transfers if monitoring of actual amounts transferred is undertaken. Alternatively, these records could be used as the basis of a survey of migrants after they have arrived in the compiling country.
372. Tax data can be used in a number of ways. Data, which is obtained from tax authorities, on dividend and interest withholding taxes payable by nonresidents may be used to compile part of government transfer credits. Lists of companies paying withholding taxes on behalf of nonresident investors may be a useful source for identifying enterprises with external borrowings or nonresident shareholders.
373. Tax records of direct investment enterprises could provide data on intercompany services and remitted and retained profits when other sources are not readily available. Lists obtained from tax files of enterpriseswith direct investment transactions could also be used as a source of coverage for ES of direct investment. Taxrecords often identify income from foreign sources separately from income earned from domestic operations. These records can be useful, for conducting surveys or for checking information obtained from other sources,60 to identify enterprises and individuals with investments abroad.
374. Tax authorities may conduct surveillance of certain transactions, particularly those associated with tax havens, to ensure that certain taxes are not avoided. Forms filed with tax authorities in respect of certain classes of foreign exchange remittances could provide a coverage source for listing the population for ES.
Education and Health Data
375. Governments may maintain data on education and health services provided to or by nonresidents.61 For education, data may be available on the number of students, costs of tuition and other services provided by educational institutions (e.g., accommodation for students living on campuses or boarding at school), and other expenses of nonresident students studying in the host country or resident students studying abroad. It is also important to know what proportion of these costs is funded by development assistance grants. Fewer data may be available on health care, but the compiler should seek out data that may be available on health care services and expenditures of patients who cross international frontiers to seek health care. In countries that have universal health care systems funded or administered by the government, nonresident patients can often be identified separately because such patients will typically be responsible for the full cost of their health care.