Republic of Uzbekistan
Technical Assistance Report-Report on the External Sector Statistics Mission (November 20-December 1, 2017)

At the request of the Republic of Uzbekistan authorities for technical assistance (TA) on external sector statistics (ESS), and with the support of the Middle East and Central Asia Department (MCD) of the International Monetary Fund (IMF), a mission from the IMF Statistics Department (STA) visited Tashkent from November 20 through December 1, 2017. This was the first TA mission on ESS since the Republic of Uzbekistan Presidential Order of September 12, 2017, “On Measures to Ensure the Accessibility and Openness of Economic and Financial Data for the Republic of Uzbekistan” was issued.

Abstract

At the request of the Republic of Uzbekistan authorities for technical assistance (TA) on external sector statistics (ESS), and with the support of the Middle East and Central Asia Department (MCD) of the International Monetary Fund (IMF), a mission from the IMF Statistics Department (STA) visited Tashkent from November 20 through December 1, 2017. This was the first TA mission on ESS since the Republic of Uzbekistan Presidential Order of September 12, 2017, “On Measures to Ensure the Accessibility and Openness of Economic and Financial Data for the Republic of Uzbekistan” was issued.

Summary of Mission Outcomes and Priority Recommendations

1. At the request of the Republic of Uzbekistan authorities for technical assistance (TA) on external sector statistics (ESS), and with the support of the Middle East and Central Asia Department (MCD) of the International Monetary Fund (IMF), a mission from the IMF Statistics Department (STA) visited Tashkent from November 20 through December 1, 2017. This was the first TA mission on ESS since the Republic of Uzbekistan Presidential Order of September 12, 2017, “On Measures to Ensure the Accessibility and Openness of Economic and Financial Data for the Republic of Uzbekistan” was issued.

2. The main objective of the mission was to assist the Central Bank of the Republic of Uzbekistan (CBU) to define scope of work, tasks, and priorities for establishing sound ESS compilation program. The mission’s main tasks were to: (i) assess the legal and institutional environment and discuss the overall cooperation and data sharing between the CBU and other agencies with respect to the production of data; (ii) review source data, statistical techniques, and compilation practices for specific components of the balance of payments (BOP), and provide assistance in preparing advice on the overall design of the BOP compilation program; (iii) assess the legal framework for compiling statistics on cross-border stocks (the international investment position – IIP – and gross external debt – GED); (iv) develop and agree with the CBU management on a strategy for establishing a suitable program for compiling and disseminating ESS that will serve as the basis for an action plan within specified timetable; (v) develop additional data sources and revise the methodology for implementing the requirements of the sixth edition of the Balance of Payments and International Investment Manual (BPM6); (vi) assess the BOP data submitted to MCD; (vii) promote sound data dissemination practices; and (viii) determine the scope and modalities of the necessary TA and training.

3. The authorities have taken a decision, starting in 2018, to declassify basic statistical data, initiate the production of ESS on the basis of BPM6, and start participation in the IMF’s enhanced General Data Dissemination System (e-GDDS). At the same time, the authorities plan to relax the exchange regulation regime and institute a green corridor on the country’s customs borders. To this end, the Presidential Decree No. UP-5276 of December 6, 2017, “On Measures to Further Simplify Procedures for the Import and Export of Cash Foreign Exchange by Individuals” has been adopted.

4. In the area of macroeconomic statistics, the above measures have resulted in the transfer of the BOP compilation function from the Ministry of Economy (MOE) to the CBU. For ensuring the efficiency of the transfer of ESS to the CBU, the mission:

  • a. prepared proposals for ensuring adequate legal basis is in place for ESS compilation, such as specifying responsibilities for the collection, processing, and dissemination of data, and identifying procedures for interagency information sharing;

  • b. developed a comprehensive data collection framework for ESS (identified new data sources, proposed new report forms, and made changes in the existing forms), along with methods for compiling the principal BOP and IIP components;

  • c. developed a new Excel worksheet that can be used for the simultaneous preparation of the BOP, IIP and GED;

  • d. prepared an action plan that incorporates the principal mission recommendations and cleared it with the CBU management.

Table 1.

Priority Recommendations

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5. Additional information on the priority and other recommendations and related actions/milestones is provided in the action plan in the Detailed Technical Assessment and Recommendations.

Improving External Sector Statistics

A. Overview of the Current Legal and Institutional Environment

6. The Republic of Uzbekistan’s Presidential Decree of September 2017 “On Measures to Ensure the Accessibility and Openness of Economic and Financial Data of the Republic of Uzbekistan” sets ambitious objectives for compilers of official statistics. Until September 2017, the ESS in Uzbekistan was produced in the MOE and was limited to the BOP. IIP and GED statistics were not produced. The BOP format was simplified and noticeably different from the standard presentation, and the BOP content was classified and not published.

7. Under the new approach to the compilation and dissemination of statistics, Uzbekistan intends to quickly initiate the production of ESS and start participation in the IMF’s e-GDDS. The CBU has drafted a Cabinet of Ministers resolution allocating the functions of compiling the main ESS datasets among the agencies producing official statistics. According to the resolution, the responsibility for BOP is transferred from the MOE to the CBU.

8. The responsibility for IIP is being assigned jointly to the State Statistics Committee (SSC) and the CBU, but the priority goes to the SSC, which is supposed to compile and publish IIP tables. The mission advised that designating the SSC as the main party responsible for IIP is not optimal given that the responsibility for BOP and GED is assigned to the CBU. The BOP, IIP, and GED are interrelated statistical datasets and therefore require consistent methodological approaches in order to be comparable. If IIP and BOP are produced by different agencies, it would be very difficult to ensure proper coordination and consistency.

9. The mission assessed the legal framework for ESS production. The Law on the Central bank of the Republic of Uzbekistan does not specify neither the production of any sort of statistics by the CBU, nor the CBU’s authority to collect information from ministries, agencies, and other legal entities.

10. At the time the mission began its work, a structural unit responsible for producing ESS had not yet been established, although three employees of the CBU Department of Exchange Regulation and Control (DERC) had already been appointed to be responsible for the production of ESS (BOP, IIP, and GED). The mission is of the view that it would be beneficial to establish a new structural unit in the DERC charged with the responsibility for ESS, considering the fact that that department possesses a broad range of information needed for compiling ESS. The newly established unit should have the authority to obtain from other CBU departments any statistical data required for performing its assigned responsibilities.

11. Transfer of ESS to the CBU would normally imply an establishment of the central bank’s own compilation system via the banking sector, notably the International Transactions Reporting System (ITRS). The mission recommended to assess feasibility of introducing a closed-type ITRS. If a positive conclusion is reached, further TA will be required to design ITRS, prepare a plan for its implementation in the Uzbek banking system, and conduct staff training.

Recommendations:

  • Designate the CBU to be legally responsible for the compilation and dissemination of relevant ESS datasets such as BOP, IIP, GED, international reserve assets (IRAs), and exchange rates;

  • Assign legal authority to the CBU to collect from the ministries, agencies, corporations, and other legal entities any information (including confidential information) necessary for the compilation and dissemination of ESS;

  • Designate the SSC as responsible for the production and dissemination of international merchandise trade statistical data;

  • Establish a new unit in the DERC consisting of at least eight staff to be responsible for ESS;

  • Nominate staff of the newly established unit to attend ESS training organized by the IMF, other international organizations, and other countries’ central banks.

B. Program for the Collection and Compilation of Balance of Payments Statistics

Current Account

12. Based on the analysis of existing data sources and methods of compiling current account components, the mission drew the following conclusions:

  • Goods are measured based on SSC information and adjusted on the basis of State Customs Committee (RUSCC) data. The main adjustments performed by the MOE include goods for processing abroad, goods for processing in Uzbekistan, goods in free circulation from customs warehouses and places of temporary storage, conversion of prices from CIF to FOB, and merchandise trade by individuals (shuttle trade). In mission’s view, data on electricity imports/exports and petroleum products delivered by pipeline do not require further adjustment.

  • Goods received from customs warehouses and places of temporary storage for exports are not included by the RUSCC in either imports or exports; nor are these data included in the BOP. Fueling of aircraft in Uzbekistan’s airports, and goods purchased by airlines in Uzbekistan’s airports are reflected in services, rather than goods (SSC data).

  • There is no information on goods purchased in foreign ports. In converting from CIF to FOB for transport insurance services, 10 percent of the value of a good is taken, and there is no further breakdown by insurance and transport services.

  • Shuttle exports, along with other unrecorded export transactions, are estimated at the level of 20 percent of remittances to Uzbekistan, and this ratio is not based on any survey results.

  • The main data source for services is the SSC. The Foreign Trade Department collects data on external trade for both goods and services, and the breakdown by types of services is fairly detailed. SSC data on trade in services are adjusted by adding imports of transport services obtained from CIF to FOB conversion of merchandize imports. Furthermore, data on the exports of travel services and imports of government services (maintenance of embassies) are added.

13. The mission proposes using the full spectrum of data produced by the SSC on foreign trade and services, while adjusting certain types of services based on alternative sources. In particular, goods acquired in Uzbekistan’s airports are to be excluded from services, imports of transport and insurance services obtained from converting CIF prices to FOB are to be incorporated, with proper attribution to freight and insurance services, respectively. It is also proposed that the exports of insurance services be replaced by direct data from insurance companies.

14. Labor income (compensation of employees, credit) is estimated from money transfers, of which 55 percent is attributed to employee compensation and 25 percent to workers’ remittances. To substantiate and update these shares, the mission proposed to include additional items in the household survey questionnaire.

15. The main source of primary income from foreign direct investment and Uzbek investment abroad is the annual survey of nonfinancial enterprises. The report contains data on both distributed and retained earnings (reinvested income), but these data are not broken down by quarters and are only available after a long delay. This form does not collect data on debt instruments, and the BOP includes estimated data based on payments made (cash method).

16. Income from other investment is also recorded in the BOP using the cash method. The mission recommends that income from debt instruments be calculated using the accrual method, and that the difference between accrued and paid interest be reflected in the same instrument as the BOP transaction. A new report form proposed to the SSC calls for collecting information on interest using the accrual method.

17. Secondary income obtained in kind is estimated based on RUSCC information (humanitarian goods), and income obtained in cash is estimated on the basis of CBU information, to which workers’ remittances are added.

18. The mission met with a representative of the section responsible for coordination of accounting and use of humanitarian assistance and technology resources of the Foreign Exchange Assets and Liabilities Department, Ministry of Finance (MOF). Provision of information on grants received by the government according to a previously agreed form was discussed. In the BOP capital account compiled by the MOE, the migrants’ transfers were presented as capital transfers, while according to BPM6 methodology, they are not BOP transactions. In removing migrants’ capital transfers, some thought needs to be given to adjusting the relevant offsetting items.

Financial Account

19. The measurement of direct and portfolio investments is based mainly on SSC survey data, which is subsequently supplemented with information from enterprises working under production sharing agreements (PSAs), while information on investments in the banking sector and in the nonbank financial corporations’ subsector was not taken into account. The mission proposed a new arrangement for collecting information on direct investment (DI) and portfolio investment (PI), whereby the annual SSC survey would be replaced by a quarterly survey based on a new comprehensive form. As a result of the implementation of that arrangement, nonfinancial corporations (excluding PSA enterprises) and licensing companies would be surveyed. PSA enterprises would report using the current form. Detailed information on insurance companies would be presented by the State Insurance Supervision Inspectorate (SISIMF).

20. For the remaining nonbank financial corporations, data from the Office for Supervision and Regulation of Nonbank Financial Institutions (OSRNFI), the balance sheets of the enterprises themselves, and DERC information should be used. Banking sector investments are to be calculated on the basis of information from the DERC and the Department for Licensing and Regulation of Lending Institutions (DLRLI).

21. The mission also held a meeting at the MOF with representatives from Foreign Exchange Assets and Liabilities Department on the provision of information on government and government-guaranteed loans. A report form and submission dates were agreed on. Information will be provided in the original currency, for principal and accrued interest separately. The mission also prepared for the CBU a file for processing the data obtained. Data on loans from nonfinancial enterprises will be collected by the SSC using a new report form. Data will be tallied with information from the DERC. Information on banking sector loans will be collected by the CBU.

22. At the time of the mission, data on gold and foreign exchange reserves were not yet open. The mission met with the Deputy Director of the Department for Management of International Reserves and discussed the provision of information on IRAs. As a result, two forms were agreed on, one quarterly with balances and flows in accordance with BPM6, and the other, monthly on balances in accordance with the International Reserves and Foreign Currency Liquidity Template Guidelines. During the mission, data on the second and third quarters were compiled and provided by the DERC.

Recommendations:

  • Reflect exports of goods from customs warehouses and temporary storage places in both imports and exports;

  • Adopt the mirror comparison method for estimating unrecognized import/export transactions;

  • Compile DI data following algorithm proposed by the mission;

  • Set up RUSCC data collection using the form proposed by the mission, and use that data for adjusting the “goods” item;

  • Prepare and send a report form for the border service to collect data on state border crossings by individuals, broken down by countries and border entry points;

  • Implement a new report form for nonfinancial corporations (responsibility of SSC);

  • Supplement information collected according to the existing arrangement with new data sources, and compile an experimental BOP using the worksheet proposed by the mission in the fourth quarter of 2017.

C. IIP and GED Statistics

23. One of the main objectives of the mission was to assist Uzbekistan in the compilation and dissemination of IIP and external debt statistics. Until 2017, the duties of the CBU did not include the compilation and dissemination of BOP, IIP, and external debt statistics. The MOE compiled only the BOP, and consequently, the existing data collection system was not designed to support production of quarterly IIP and external debt statistics for the whole economy. The turning point was the Republic of Uzbekistan President’s order that required the CBU to produce and disseminate EES in the context of the e-GDDS and to specify the group of agencies that are supposed to cooperate with the CBU in order to compile these two additional statistical data sets.

24. The mission conducted an analysis of existing data sources in order to determine the possibility of compiling position data on external assets and liabilities for all sectors of the economy on a quarterly basis (stock data at the beginning and end of the reporting period, data on changes resulted from balance of payments transactions, and changes related to exchange rate/price fluctuations and other changes). It was established that most sources do not permit the compilation of data in accordance with the aforementioned requirements. Some data are collected annually rather than quarterly, and others contain data only on BOP transactions, while there are no data on positions.

25. The mission developed a framework for collecting the main necessary data. Data will be collected from nonfinancial corporations and leasing companies with the help of the SSC. For them, a comprehensive report form has been developed that can be used to collect information in the required format for all instruments for both incoming and outgoing investments. The information obtained will be supplemented with data on privatization and data from PSA enterprises.

26. For the banking sector, data of the Department for Licensing and Regulation of Lending Institutions (DLRLI) will be used, based on balance sheets and reports collected in the course of exchange regulation. For nonbank financial corporations, data from the Office for Supervision and Regulation of Nonbank Financial Institutions (OSRNFI) will be used, and for insurance companies—data from the MOF State Insurance Supervision Inspectorate (SISIMF) and from balance sheets and reports collected in the course of foreign exchange regulation. A detailed description of the arrangement for the collection of primary data can be found in the section Detailed Technical Assessment and Recommendations.

27. For individual IIP components, the mission shared an algorithm for calculating balances as of the beginning and end of the reporting period, as well as flows during the reporting period, which will be used for compiling an integrated IIP table based on the form presented below (see Table 2). Moreover, an integrated Excel file relying on the same database was developed for the CBU that makes it possible to generate fully integrated and consistent tables for the BOP, IIP and GED with balances of foreign assets and liabilities (IIP figures along the verticals) classified in accordance with the Annex 9 to BPM6. The file also enables the generation of the BOP, IIP and GED in the standard presentation, including in a format for reporting data via the IMF’s Integrated Collection System (ICS) and in other formats required for internal use.

Table 2.

IIP Format

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Detailed Technical Assessment and Recommendations

D. Action Plan

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Priority scale: PR – Priority recommendation, H – High, M – Medium, O – Other

E. Goods and Services

28. The main sources for calculating the goods component are data from the SSC and RUSCC, which can be supplemented with data from the National Air Company (NAC). Data that the SSC Foreign Trade Department obtains from the RUSCC require a certain adjustment, for both international merchandise trade statistics (IMTS) and BOP goods. Data from the SSC on goods imports/exports require the following adjustments:

For imports:

  • exclude goods in processing regime (processing in Uzbekistan) i.e., imports of goods for processing;

  • exclude goods in processing regime (processing outside the country), i.e., imports of processed goods;

  • exclude flows of goods from the “Temporary Storage” and “Customs Warehouse” regimes to the “Free Circulation” customs regime;

  • exclude estimated data on imports by migrants;

  • perform CIF/FOB price adjustments;

  • add flow of Goods in “Temporary Storage” and “Customs Warehouse” customs regimes;

  • add estimated data on unrecorded import transactions (based on mirror statistics);

  • add data on goods acquired in foreign airports by Uzbekistan air carriers (NAC information);

  • add estimated shuttle trade data.

For exports:

  • exclude goods in processing regime (processing in Uzbekistan), i.e., exports of processed goods;

  • exclude goods in processing regime (processing outside the country), i.e., exports of goods for processing;

  • add reexports of goods from places of temporary storage and customs warehouse;

  • exclude estimated data on exports by migrants;

  • add estimated data on unrecorded export transactions (based on mirror statistics);

  • add data on goods acquired in Uzbekistan’s airports by foreign air carriers (NAC information);

  • add estimated shuttle trade data.

29. The mission held meetings with the RUSCC and discussed the need to provide additional information for adjusting the “goods” item and the details of information provided to the ME. It was noted that, in addition to the movement of goods across Uzbekistan’s borders, the Uzbekistan Customs Service also tracks the movement of individuals and imports/exports of cash. Information about the crossing of individuals is collected for two items—citizenship and purpose of travel, and the latter, in turn, is subdivided into the following categories: official business, study, work, tourist, visiting relatives, medical treatment, permanent residence, and commercial.

30. The possibility of providing detailed data on goods crossing Uzbekistan’s border was also discussed. The meeting resulted in an agreement with the RUSCC to provide monthly data about the movement of goods across Uzbekistan’s border covering the following information: year, month, customs regime, country, commodity code (NS-4), customs value, invoice value, statistical value, weight (net), vehicle at the border, humanitarian cargo, diplomatic cargo, and goods repair (see the forms in Appendices XI, XII, XV, XIV).

31. During the meeting it was noted that since January 2018 information is no longer collected on the movement of individuals, in connection with Uzbekistan’s liberalization and institution of a green corridor. An agreement was reached with the RUSCC on the provision of detailed information for 2017 on the movement of individuals, which can be used to estimate the relevant proportion based on the overall flow of individuals, before the introduction of special sample surveys at border checkpoints (tourism surveys).

32. The mission recommended using a special regular (three times per year) sample survey that would simultaneously cover both tourism and shuttle trade. This is considering that certain number of cross-border travelers are involved in international trade and that in order to promote shuttle trade, the threshold value of cargo was set at the equivalent of USD 1,000.

33. The mission also recommended that, pending the introduction of such a survey, the average volume of shuttle imports and exports per visitor be calculated on the basis of existing BOP data. The data obtained could be adjusted for inflation and other factors affecting the shuttle trade volume.

34. The mission noted that, in addition to IMTS, the SSC Foreign Trade Department also produces international trade in services statistics (ITSS), with a fairly broad breakdown by types of services. The list covers all types of services required for BOP statistics. In the meeting at the SSC, the mission discussed the need for providing information to the CBU on all types of services and received assurances from the SSC that ITSS data would be provided quarterly to the CBU. The need to take such a decision is due to the fact that ITSS (like many other statistics) are compiled on a cumulative basis, and the CBU must produce calculations of quarterly data.

35. It was established that the quality of data for certain types of services, for a variety of reasons, is unsatisfactory for BOP proposes and that the following types of services are to be replaced by the CBU with alternative data/methods:

  • Imports of transport services (cargo shipments) should be estimated as 8–9 percent of imports, except for imports in the following categories: imports from neighboring countries by ground transport and imports by pipeline. Subsequently, the CBU will need to develop methods for assessing imports of cargo shipments taking into account the geography of the imports and types of transport.

  • Imports of transport services (passenger carriage)—estimate on the basis of the number of foreign citizens crossing Uzbekistan’s border.

  • Exports of insurance services—estimate on the basis of information from insurance companies and from SISIMF (the relevant form is presented in Appendix VIII),

  • Travel—estimate travel-related imports based on the number of foreign citizens crossing Uzbekistan’s border. Estimate separately the expenses of those who arrive by air, and all the others (Appendices X, XI). In estimating expenses per visitor, use the results of tourism surveys with geographical breakdown. Estimate travel-related exports on the basis of the number of Uzbekistan citizens leaving Uzbekistan. For estimating travel purposes, use proportions based on RUSCC data for the fourth quarter of 2017;

  • For processing of goods belonging to other parties—at the initial stage estimate on the basis of SSC data (goods for processing within the country and goods for processing abroad); subsequently, define the group of enterprises engaged in processing of goods and organize the collection of information from those enterprises using special forms.

  • For exports of other air transport services—exclude the cost of fuel and other goods provided to foreign air carriers.

  • Financial services (for which an explicit fee is charged)—tally SSC data with bank data and, where necessary, make adjustments.

  • Imports of insurance services (cargo insurance)—estimate at 1–1.5 percent of imports, except imports in the following categories: imports from neighboring countries by ground transport and imports by pipeline. Subsequently, develop methods for estimating imports of insurance services considering the geography of imports and means of delivery.

  • Government goods and services not assigned to other categories—estimate on the basis of information from the MOF and Ministry of Foreign Affairs (MFA) on the costs of maintaining Uzbekistan’s embassies abroad, and information on the number of employees working in foreign embassies in Uzbekistan.

F. Primary and Secondary Income

36. Compensation of employees is estimated as 45–55 percent of money transfers, but that ratio is not substantiated. In the SSC meeting with the personnel conducting surveys of households, it was proposed to include additional items in the questionnaire for those surveys. New questions would enable breaking down the number of labor migrants into temporary (up to one year) and permanent workers. This in turn would enable estimating the share of compensation of employees in the total value of money transfers. Given that compensation of employees constitutes not only transfers to Uzbekistan but all wages due, together with withheld taxes, the mission recommends applying the following methods for more accurate estimates of the compensation of employees credit component:

  • On the basis of household surveys, calculate the share of compensation of employees in total money transfers received by households;

  • Estimate the expenses of temporary employees abroad, including taxes paid or withheld in the host country. Add those expenses to employee compensation, and debit entries for travel and secondary income (e.g., taxes) will be offsetting entries to those amounts;

  • Calculate compensation of Uzbekistan residents employed in foreign states’ embassies and international organizations located in Uzbekistan, and add the results to the compensation of employees component.

37. Cash method is used for accounting of interest on debt. The main sources of information for investment income, debit are the SSC annual survey, MOF information on payment of interest on government and government-guaranteed debt, and CBU information on nonguaranteed private debt.

38. In order to improve data coverage and the quality of statistics produced, the mission undertook the following work: (i) developed a new report form for government and government-guaranteed debt taking accrued interest into account (Appendix I); (ii) developed and proposed a new comprehensive annual and quarterly GSK report forms for nonfinancial enterprises, which also collect information on accrued interest on debt instruments (Appendixes I, II); (iii) developed forms for the financial sector (deposit institutions, microfinance institutions, insurance companies, pawn shops) covering data on dividends and reinvested income (Appendixes XVI, XVII).

39. For calculating accrued interest on private sector nonguaranteed debt, information collected in the course of exchange regulation can be used. For each debt liability, the interest rate and schedule (projection) of future payments of both interest and principal are known. On the basis of that information, it is relatively easy to calculate accrued interest. The mission proposes two alternatives for calculating accrued interest. According to the first alternative, the calculation is based on the average balance for the reporting period, multiplied by the interest rate; according to the second, it is proposed to allocate the annual interest payments in proportion to the average quarterly balance. Income on reserve assets would be provided by the CBU Department for Management of International Reserves (DMIR). The mission also held a meeting with the DMIR Deputy Director and agreed on the format and timing for the provision of information to the BOP unit.

40. At the time of the mission, the substantial amount of the secondary income component consisted of worker remittances and public-sector transfers. Over the past year, the long-term employees’ remittances were estimated at 25 percent of all remittances, and that percentage was not substantiated by actual surveys. The introduction of additional questions in the household survey questionnaire would make it possible to assess the ratio of the remittances for short-term and long-term employees, and then to calculate the percentage for the remittances of all employees.

41. In the meeting with the representative from the section for coordination of accounting and the use of humanitarian assistance and technology resources, Foreign Exchange Assets and Liabilities Department, MOF, the provision of information on government grants was discussed, and a report form was agreed (Appendices III, IV, IX) that contains project grants by projects and by the form of provision (services, goods, and cash). The Balance of Payments Department also has information about humanitarian goods that have passed through customs. In using this information, the mission proposes measures to prevent double-counting. As an additional source for secondary income, the mission recommends using data taken from the mass media after they have been tallied with official data to avoid double-counting.

Recommendations:

  • In breaking down remittances into the compensation of employees and worker remittances, use the shares calculated on the basis of data obtained from the household surveys;

  • Add to the compensation of employees the employee’s living expenses in the host country and estimated data on taxes paid and/or withheld;

  • Collect information from the MFA and MOF on Uzbekistan residents employed in foreign embassies and international organizations in Uzbekistan, and on nonresidents employed in Uzbekistan’s embassies in foreign countries;

  • In compiling secondary income, carefully analyze various data sources to avoid double-counting;

  • Exclude migrants’ transfers from the capital transfers.

G. Direct and Portfolio Investments

42. The main sources for DI are the annual SSC survey and information collected by the CBU in the context of exchange regulation, as well as information from enterprises operating under PSAs. The mission examined the existing data sources, identified new sources, developed a comprehensive form for the SSC, and proposed to the CBU an arrangement for collecting and processing DI information and portfolio investment (PI) information. This arrangement also specifies the area of responsibility of each unit involved in the production of those statistics. Information on DI and PI in the form of corporate equity would be collected for the following components:

  • Nonfinancial corporations other than PSA enterprises and licensing companies—SSC responsibility. Information would be collected on a new comprehensive quarterly form, which has already been included in the 2018 program of state statistical work (Appendix XVIII covers Methods for Processing Data Collected Via the SSC Form on External Economic Activity of Nonfinancial Corporations);

  • Enterprises operating under PSAs—CBU responsibility. Information would be collected on the existing form;

  • Real estate investments—CBU responsibility. Information on the purchase/sale of real estate abroad by Uzbekistan residents and on the purchase of real estate in Uzbekistan by nonresidents would be collected in the context of exchange regulation reports, which are perfectly adequate for recording transactions involving real estate.

  • Deposit-taking corporations, excluding the central bank (DTC)—CBU responsibility. Bank supervision information on joint-stock commercial banks, commercial banks’ balance sheets, and information collected in the context of exchange regulation would be used. It was also proposed that the DLRLI add an additional column to its report form indicating the investor’s country. The mission analyzed data on shareholders and identified 14 direct foreign investors and two portfolio investors. Information collected in the context of exchange regulation contains data on transactions performed by foreign shareholders from the day of enterprises’ founding. That would make it possible to assess the share of each foreign investor’s corporate equity. For determining reinvested income, a special form was developed for banks. Using that form, information would be collected from banks with foreign founders on retained earnings at the beginning and end of a reporting period, and on dividends received during the reporting period.

  • Insurance companies—CBU and MOF responsibility. The mission developed a set of new forms (Appendices VII and VIII). The SISIMF will ensure the collection of data through the new forms and their transmission to the CBU. At present there are four insurance companies with foreign capital, and they are all direct-investment enterprises.

  • Other nonbank financial companies—CBU responsibility. These include microfinance institutions (30 units) and pawnshops (46 units). As source data for these entities the OSRNFI information, the balance sheets of the enterprises themselves, and information of the Department of Exchange Regulation and Control will be used. New forms were also developed for collecting information on retained earnings and dividends declared.

Recommendations:

  • Consider introducing the new quarterly statistical report form approved by the mission (“Report on Nonfinancial Sector Foreign Economic Activity”);

  • Develop and introduce new financial corporation report forms intended for the collection of DI and PI data;

  • Develop report forms for insurance companies for the collection of DI and PI data;

  • SSC to set up data collection for the surveys of private sector foreign economic activity, starting with the report for Q1, 2018, and provide the relevant survey data to the CBU.

H. Other Investment

43. At present the main sources for data on cross-border loans are the bank reports in the context of exchange regulation, MOF reports on “guaranteed” debt, and annual SSC reports. Loans obtained are divided into two categories—government-guaranteed loans (including both loans directly attracted by the general government sector and loans of other sectors under government guarantees) and other loans (nonguaranteed private-sector debt). The mission met at the MOF with personnel of the Foreign Exchange Assets and Liabilities Department and discussed the provision of information about government and government-guaranteed loans.

44. Agreement was reached on the separate provision of information on loans based on an agreed form, whereby “Guaranteed” loans would be broken down into three components:

  • general government sector loans;

  • loans of other sectors under government guarantee and serviced by the government;

  • loans of other sectors under government guarantee and serviced by the borrower.

45. Information will be provided in the original currency, separately for long-term and short-term loans. The form will contain fields for accrued interest (interest accrued over the reporting quarter and balances for accrued and unpaid interest). The mission also prepared and presented to the CBU a worksheet for processing data obtained from the MOF.

46. Information about nonguaranteed loans of DTCs and other nonbank financial corporations will be collected by the CBU in the context of exchange regulation. This entails the collection of data on each loan separately, the collection of general information about the given loan, balances at the end of the reporting period, and actual payments. In the mission’s view, the information collected in this manner will be sufficient for maintaining high-quality statistics on loans received for both positions and transactions.

47. The main source of data on nonfinancial corporations will become a new SSC survey “Data on Foreign Economic Activity.” This survey collects information about individual loans in the original currency. The CBU will use its own data source (data in exchange regulation reports) for cross-checking. In order to improve the effectiveness of the SSC survey, the mission recommends that the CBU assist the SSC in updating the list of surveyed enterprises. The mission also prepared worksheets for compiling temporary data series on the external debt. Those worksheets will provide data for final tables on the BOP, DI, and GED.

48. The main data sources for trade credits and deposits will be SSC surveys for nonfinancial corporations, and for the remaining sectors—information collected by the CBU in the context of foreign exchange regulation. If those instruments are used, it will become possible for the CBU to perform cross checking of data obtained from the SSC.

49. During the mission, information on reserve assets was classified, and thus the mission was unable to work directly with these data. They will become open starting in January 2018, and the CBU will start publishing reserves data in accordance with internationally accepted standards.

50. The mission met with the Deputy Director of DMIR. The provision of information for BOP compilation was discussed. Agreement was reached that all the work on calculating reserve assets in accordance with BPM6 and the International Reserves and Foreign Currency Liquidity Template Guidelines would be performed by the DMIR, and that the BOP unit would receive the completed tables on IRAs.

51. Reserve assets would include exclusively assets in reserve currencies, while assets in other currencies would be presented separately. The monetization and demonetization of gold would be reflected in “other changes.” Information would also be provided on income from reserve assets. The method of calculating income from holdings of Special Drawing Rights (SDRs) was also demonstrated to the BOP staff. The DMIR would provide quarterly data on positions and transactions, as well as monthly data on positions for reports on reserve assets and foreign currency liquidity. Report forms are presented in Appendices V and VI.

Recommendations:

  • Process primary data from the MOF (paragraphs 43–45) according to the methodology proposed by the mission, using the worksheets developed jointly with the mission;

  • Reflect guaranteed debts for which the government has assumed the obligation to pay, in public sector debts, and reflect debts that are serviced by the debtor in the relevant sector, depending on the borrower;

  • Provide the SSC with a list of enterprises that were engaged in external economic operations during the reporting period for inclusion in the list of respondents for the new survey;

  • Compare data obtained from the SSC on other investments with data from banks’ reports. In the event of large discrepancies, try to find out and address the reason with the SSC;

  • Calculate income on SDR holdings and reflect it in the BOP.

I. Other Issues (Legal Aspects, Human Resources and Training)

52. The Law on the Central Bank of the Republic of Uzbekistan does not include the function of preparing macroeconomic statistics. At the mission’s recommendation, a proposal for amendments was prepared. According to the proposed amendments, compiling and disseminating monetary statistics and ESS is added to the CBU functions. The CBU also acquires the power to demand and obtain any information (including confidential) required for accomplishing its objectives.

53. A subdivision of the DERC will be established—a Balance of Payments Statistics Department, which will be responsible for compiling Uzbekistan’s ESS. At present, the BOP staff consists of six employees, but a decision has been taken to increase it to eight. At the time of the mission, only three employees had been hired, including the office director. The CBU is currently in the process of selecting candidates and plans to fill in the remaining vacancies in the near future. The DERC’s name is also changing. After reorganization it will be called the Department of Exchange Regulation and Balance of Payments. As of January 1, 2018, the new employees had not undergone specialized training in ESS. It is envisaged that the CBU employees will attend ESS training conducted by the IMF its headquarters and at the Joint Vienna Institute. The mission also recommends that employees responsible for compiling BOP and IIP statistics be nominated for ESS training organized by other international organizations or other countries’ central banks.

Recommendations:

  • Fill in the BOPSO staff positions as soon as possible, to enable carrying out the ESS compilation functions assigned to the BOPSO;

  • Provide one position for a programmer in the staffing of the UBP;

  • Nominate relevant CBU staff for IMF training courses on ESS.

J. Officials with Whom the Mission Met

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