Fourteenth General Review of Quotas - Updated Data Set and Quota Calculations
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International Monetary Fund
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Publication Date:
15 Jul 2010
eISBN:
9781498337311
Language:
English
Keywords:
PP; quota share; country; country desk data; data base; data set; net capital; PRGT-eligible country; WEO database; K. GDP; PPP GDP data; underrepresented country
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In March 2009, the Fund established a new Framework Administered Account to administer external financial resources for selected Fund Activities (the “SFA Instrument”). The financing of activities under the terms of the SFA Instrument is implemented through the establishment and operation of a subaccount within the SFA. This paper requests Executive Board approval to establish the United States Subaccount for Selected Fund Activities (the “Subaccount”) under the terms of the SFA instrument.

Abstract

In March 2009, the Fund established a new Framework Administered Account to administer external financial resources for selected Fund Activities (the “SFA Instrument”). The financing of activities under the terms of the SFA Instrument is implemented through the establishment and operation of a subaccount within the SFA. This paper requests Executive Board approval to establish the United States Subaccount for Selected Fund Activities (the “Subaccount”) under the terms of the SFA instrument.

This paper updates the quota data base through 2008 and discusses implications for members’ calculated quota shares. A subsequent staff paper will review key issues related to the realignment of quota shares and present additional illustrative simulations, for discussion by the Committee of the Whole in early July.

I. Introduction 1

1. At its meeting in April 2010, the IMFC called for completing the 14th General Review of quotas before January 2011.2 This further advances the tight timetable established by the IMFC in April 2009.

2. The Committee of the Whole held its first formal discussion on the realignment of quota shares in March.3 Directors emphasized that realigning quota shares is critical to enhancing the Fund’s legitimacy and effectiveness. Directors expressed a range of views on the broad goals of the quota realignment, the size of the quota increase, and the modalities for allocating quota shares, but also stressed that their views were preliminary, in part because they were awaiting the finalization of the quota data base. Many also pointed out that quota realignment is only one element of a broader package of reforms, and work continues in parallel in several areas. In particular, an initial discussion of the Committee of the Whole on the size of the quota increase took place in April,4 and work is proceeding on the Fund’s mandate and broader IMF governance reforms.

3. The objective of this paper is to present the 2008 data set. Section II provides data for all variables included in the quota formula, extending through 2008, and summarizes the data sources. It also details movements in calculated quota shares, at the individual country and regional level, and compares actual quota shares with those calculated using the quota formula. Comparisons are also made with respect to the previous 2007 data set as well as with the WEO-based derived data set for 2008, as presented in the March 2010 paper (Fourteenth General Review of Quotas—Realigning Quota Shares—Initial Considerations 3/5/10). Section III briefly discusses next steps.

4. Comparisons in this paper are made with the quotas agreed under the 2008 quota and voice reforms, but these reforms have yet to be ratified.5 The reforms achieved overwhelming approval from Governors in April 2008. However, as of early June 2010, just 78 countries representing 74.4 percent of the total voting power had notified the Fund of their acceptance of the proposed Amendment on voice and participation. This is well short of the required three-fifths of members (112) having 85 percent of the total voting power, and remaining members are urged to provide their consents as soon as possible.

II. The Data Set and Updated Quota Calculations

A. The Data Set

5. Staff has updated the quota data set through 2008. The implications for calculated quota shares resulting from the data update are broadly in line with those of a derived WEO- based data set, presented in March (Fourteenth General Review of Quotas—Realigning Quota Shares—Initial Considerations, 3/5/10), though there are significant differences for some individual countries.

6. The data sources and methodology remain in line with past practice:6

  • The primary data source is the Fund’s International Financial Statistics (IFS). Missing data were supplemented in the first instance by the World Economic Outlook (WEO) database. Remaining missing data were computed based on staff reports and, in very few instances, country desk data. As is customary, a cutoff date of January 31, 2010 for incorporating new data in the quota database was employed for IFS; consistent with this cutoff, the Fall 2009 publication was used for WEO data.

  • PPP GDP data were taken from the WEO database and were calculated by dividing a country's nominal GDP in its own currency by the PPP price level index.

  • The 2008 data update presented in this paper covers the existing quota variables (Box 1). In light of the need to advance issuance of the data update paper ahead of the normal schedule, it has only been possible to update the data for the existing quota variables. Staff plans to continue work on updating other variables that have been considered in previous papers and will make this data available as soon as this work is completed.7

The Quota Formula

The quota formula includes four quota variables (GDP, openness, variability, and reserves), expressed in shares of global totals, with the variables assigned weights totaling to 1.0. The formula also includes a compression factor that reduces dispersion in calculated quota shares.

The formula is:

CQS= 0 .5*Y+0 .3*O+0 .15*V+0 .05*R k

where:

  • CQS = calculated quota share;

  • Y = a blend of GDP converted at market rates and PPP exchange rates averaged over a three year period. The weights of market-based and PPP GDP are 0.60 and 0.40, respectively;

  • O = the annual average of the sum of current payments and current receipts (goods, services, income, and transfers) for a five year period;

  • V = variability of current receipts and net capital flows (measured as the standard deviation from a centered three-year trend over a thirteen year period);

  • R = twelve month average over one year of official reserves (foreign exchange SDR holdings, reserve position in the Fund, and monetary gold); and

  • k = a compression factor of 0.95. The compression factor is applied to the uncompressed calculated quota shares which are then rescaled to sum to 100.

B. Updated Quota Calculations

8. The 2008 data update results in a further increase in the calculated quota share of EMDCs. Compared with the 2007 data set the aggregate calculated quota share of the EMDCs increases by 2.2 percentage points, up from 1.7 percentage points based on the derived WEO-based estimates presented earlier (Table 1). This reflects increases in EMDC share for all quota variables (Tables 2–3 and Tables A1–A3, A6). All major EMDC sub-regions gain calculated quota share compared to the 2007 data set, with the exception of Africa where the share remains unchanged. The corresponding loss in calculated quota share among advanced economies is largely borne by the major advanced economies.8

Table 1.

Distribution of Quotas and Calculated Quotas

(In percent)

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Source: Finance Department.

Includes Kosovo which became a member on June 29, 2009 and Tuvalu in anticipation of its forthcoming membership. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

Includes ad hoc increases for 54 eligible members that are not yet effective.

Based on the following formula: CQS = (0.50*GDP + 0.30*Openness +0.15*Variability + 0.05*Reserves)^K. GDP blended using 60 percent market and 40 percent PPP exchange rates. K is a compression factor of 0.95.

Based on IFS data through 2008.

Based on IFS data through 2007.

Based on preliminary data through 2008 primarily from the World Economic Outlook, October 2009.

Based on IFS data through 2005. Reflects the impact of adjustments to current receipts and payments for re-exports, international banking interest, and non-monetary gold.

Including Korea and Singapore.

Table 2.

Distribution of Quotas and Updated Quota Variables

(In percent)

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Source: Finance Department.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo which became a member on June 29, 2009 and Tuvalu in anticipation of its forthcoming membership. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

Based on IFS data through 2008.

Based on IFS data through 2007.

Current PPP GDP data was retrieved from the WEO database for 180 countries. For 7 countries with no WEO data PPP GDP was estimated. PPP GDP data reflect parity rates published by the International Comparison Program in December 2007.

Variability of current receipts plus net capital flows.

Including Korea and Singapore.

Table 3.

Contributions to Changes in Calculated Quota Shares (CQS)2/

(I(In percentage points)

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Source: Finance Department.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo which became a member on June 29, 2009 and Tuvalu in anticipation of its forthcoming membership. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

The difference between the current dataset through 2008 and the previous dataset through 2007, multiplied by the variable weight in the quota formula.

Difference between current calculated quota share through 2008 and previous calculated quota share through 2007. The CQS reflects also the impact of the compression factor, see Box 1.

Including Korea and Singapore.

Table A1.

Distribution of Quotas and Calculated Quotas -- by Member

(In percent)

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Source: Finance Department.

Includes Kosovo which became a member on June 29, 2009 and Tuvalu in anticipation of its forthcoming membership. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

Includes ad hoc increases for 54 eligible members that are not yet effective.

Based on the following formula: CQS = (0.50*GDP + 0.30*Openness +0.15*Variability + 0.05*Reserves)^K. GDP blended using 60 percent market and 40 percent PPP exchange rates. K is a compression factor of 0.95.

Based on IFS data through 2008.

Based on IFS data through 2007.

Based on preliminary data through 2008 primarily from the World Economic Outlook, October 2009.

Includes China, P.R., Hong Kong SAR, and Macao SAR.

Table A3.

Updated GDP Blend Variable -- by Member

(In percent)

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Source: Finance Department.

Includes ad hoc increases for 54 eligible members that are not yet effective. Includes Kosovo which became a member on June 29, 2009 and Tuvalu in anticipation of its forthcoming membership. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

Based on IFS data through 2008.

Based on IFS data through 2007.

Current PPP-GDP data were retrieved from the WEO database for 180 countries. For seven countries with no WEO data PPP-GDP was estimated. PPP-GDP data reflect new parity rates published by the International Comparison Program in December 2007.

GDP blended using 60 percent market and 40 percent PPP exchange rates.

Includes China, P.R., Hong Kong SAR, and Macao SAR.

Table A6.

Distribution of Quotas and Updated Quota Variables—by Member

(In SDR millions)

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Source: Finance Department.

Includes ad hoc increases for 54 eligible members that are not yet effective. Includes Kosovo which became a member on June 29, 2009 and Tuvalu in anticipation of its forthcoming membership. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

Based on IFS data through 2008.

Based on IFS data through 2007.

Current PPP-GDP data were retrieved from the WEO database for 180 countries. For seven countries with no WEO data PPP-GDP was estimated. PPP-GDP data reflect new parity rates published by the International Comparison Program in December 2007.

Variability of current receipts plus net capital flows.

Includes China, P.R., Hong Kong SAR, and Macao SAR.

9. The changes in calculated quota shares reflected a combination of factors. First, growth trends continued to diverge, with EMDCs on average recording stronger growth, accounting for almost half of the increase in calculated quota share (Table 3). Second, a number of EMDCs faced large swings in net capital flows, which peaked in 2007 and fell sharply in 2008, contributing to an increase in their share of the variability measure. Third, commodity exporters benefitted from the strong run-up in commodity prices, typically peaking in 2008. And fourth, there were a few instances of significant data revisions as noted below.

10. At the individual country level, the largest gainers in calculated quota shares are mostly EMDCs (Tables 4 and A4):

  • Russia benefitted from stronger GDP growth and a sharp swing in net capital flows, which more than offset the impact of higher commodity prices on current receipts and contributed to an increase in variability.

  • Saudi Arabia recorded a sharp increase in the share of both variability and reserves as a result of a data revision to bring its reporting into line with BPM5.9

  • China, and to a lesser extent, India and Brazil, continued to benefit from relatively stronger GDP growth.

  • Large swings in net capital flows also contributed to increases in calculated quota shares for India, UAE, and Brazil through the variability measure.

  • The United Kingdom also gained in terms of variability as a result of a large swing in both current receipts and net capital flows.

11. The largest declines in calculated quota share are recorded by major advanced economies:

  • For the United States and Japan, a declining share in global GDP accounted for about half their reduction in calculated quota share. The GDP share of each major advanced economy declines in the 2008 data update relative to the data base through 2007.

  • In France and, to a lesser extent, in Germany, revisions to historical capital flow data contributed to a decline in their shares of variability.

12. As a result of the data update, EMDCs as a group become moderately under- represented (Table 5). EMDCs, whose calculated quota share was broadly aligned with their actual quota share in the 2007 data set, are under-represented by 2.2 percentage points in the 2008 data set. This reflects foremost the substantial under-representation of Asian EMDCs; but transition economies have also become under-represented with the 2008 data update. At the same time, other sub-regions of EMDCs continue to be over-represented. The over- representation of advanced countries as a group (of 2.2 percent) mirrors the under- representation of all EMDCs, and over-represented advanced countries account for 4.1 percentage points of the 10.7 percent over-representation of all countries.

13. Significant discrepancies between calculated quota shares and post second round quota shares remain at the individual country level (Table A5). A total of 60 members are under-represented based on the updated calculated quotas, compared with 64 using the data set through 2007. Of these, 11 countries are out-of-line by more than 60 percent and 22 countries are out-of-line by more than 40 percent (compared to 10 and 18 countries, respectively, based on data through 2007). The average ratio of calculated quota share to post second round quota share in the first group has increased slightly from 2.0 to 2.1 as a result of the data update, while that for the second group is unchanged at 1.8.

III. Next Steps

14. In the context of the 14th Review, an intensive work program is underway in several areas. Building on earlier guidance by the IMFC and Executive Directors, staff will review several outstanding issues related to the realignment of quota shares and present additional illustrative simulations for a July discussion by the Committee of the Whole.10 This will lay the groundwork for follow-up work, including on the size of Fund.

Table 4.

Top 10 Positive and Negative Changes in Calculated Quota Shares

(In percentage points)

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Source: Finance Department.

Current calculations are based on IFS data through 2008 using the existing formula.

Previous calculations are based on IFS data through 2007 using the existing formula.

Includes China, P.R., Hong Kong SAR, and Macao SAR.

Table 5.

Under- and Overrepresented Countries by Major Country Groups 1/

(In percentage points)

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Source: Finance Department.

Under- and over-represented countries for the three datasets, respectively.

Difference between calculated quota shares and post-second round actual quota shares.

Based on IFS data through 2008.

Based on IFS data through 2007.

Based on preliminary data through 2008 primarily from the World Economic Outlook, October 2009.

Table A2.

Distribution of Quotas and Updated Quota Variables—by Member

(In percent)

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Source: Finance Department.

Includes ad hoc increases for 54 eligible members that are not yet effective. Includes Kosovo which became a member on June 29, 2009 and Tuvalu in anticipation of its forthcoming membership. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

Based on IFS data through 2008.

Based on IFS data through 2007.

Current PPP-GDP data were retrieved from the WEO database for 180 countries. For seven countries with no WEO data PPP-GDP was estimated. PPP-GDP data reflect new parity rates published by the International Comparison Program in December 2007.

Variability of current receipts plus net capital flows.

Includes China, P.R., Hong Kong SAR, and Macao SAR.

Table A4.

Contributions to Changes in Calculated Quota Shares (CQS) for Members with the 10 Largest Positive and Negative Changes in CQS (In percentage points)

(In percentage points)

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Source: Finance Department.

Current calculations are based on IFS data through 2008 using the existing formula.

Previous calculations are based on IFS data through 2007 using the existing formula.

Includes ad hoc increases for 54 eligible members that are not yet effective. Includes Kosovo which became a member on June 29, 2009 and Tuvalu in anticipation of its forthcoming membership. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

The difference between the current dataset through 2008 and the previous dataset through 2007, multiplied by the variable weight in the quota formula.

Difference between current calculated quota share through 2008 and previous calculated quota share through 2007. The CQS reflects also the impact of the compression factor, see Box 1.

Includes China, P.R., Hong Kong SAR, and Macao SAR.

Table A5.

Out-of-Lineness—by Member 1/

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Source: Finance Department.

Out-of-lineness is measured as the calculated quota share based on the quota formula divided by the post second round quota share under the 2008 Quota and Voice Reform which has not yet been implemented; also includes Kosovo which became a member on June 29, 2009 and Tuvalu in anticipation of its forthcoming membership.

Based on IFS data through 2008.

Based on IFS data through 2007.

Appendix I. Selection of the Database, Derivation of Quota Variables, and Other Issues 11

15. This appendix discusses the required data, the selection of the database, and the derivation of the data series used for the quota calculations.

Required Data

16. The quantification of existing and new quota variables used in this paper requires the following data for 18712 member countries (converted into SDRs as the common denominator):13

  • GDP at market prices for three years (2006–08).

  • PPP GDP (GDP at purchasing power parity) for three years (2006–08). PPP GDP for a given economy is the volume of goods and services produced for final uses by that economy relative to other economies. It is calculated by deflating GDP at market prices by the PPP price level index, allowing comparisons across countries for a given period.

  • Current receipts (goods, services, income, and transfers14) for 13 years (1996–2008). Current receipts are defined as the credit component of all economic transactions between resident and nonresident entities other than those relating to financial transactions and reserves.

  • Current payments (goods, services, income, and transfers15) for five years (2004– 08). Current payments are defined as the debit component of all economic transactions between resident and nonresident entities other than those relating to financial account transactions and reserves.

  • Net capital flows for 13 years (1996–2008). Net capital flows relate to cross-border transactions of the financial account in all external financial assets and liabilities except reserve assets, Fund credit and loans, and exceptional financing. This measures net financial flows.16

  • Official reserves (average over the 12 months of 2008), defined as the sum of foreign exchange, SDR holdings, reserve position in the Fund, and monetary gold valued at SDR 35 per fine troy ounce.

17. Errors and omissions have not been included in the measure of variability of current receipts and net capital flows. Errors and omissions are, by definition, a residual item, which reflects recording errors that cannot be ascribed to any particular balance of payments category. Consistent with past practice, these recording errors are not incorporated into the variables of the quota data base.

18. Fund credit and loans, and exceptional financing have been excluded from the variability measure for the same reason that reserve asset changes have been excluded. Such transactions, including Fund borrowing, payment arrears, and debt forgiveness or rescheduling, represent exceptional measures undertaken to finance balance of payments needs. Exceptional financing flows are normally shown “below the line” because they are not autonomous balance of payments transactions. For these reasons, and consistent with past practice, these transactions are not included in the variability measure.

19. Along the same lines, transactions in both reserve assets and reserve-related liabilities should, in principle, be excluded from net financial flows (referred to as “net capital flows”) so that only autonomous, and not financing, flows are captured. Data on transactions in reserve assets are available for most members in IFS and have been excluded from net capital flows. However, because of the continuing lack of data on reserve-related liabilities for many members (reserve-related liabilities are not a standard component in BPM5), changes in reserve-related liabilities have not been excluded from the measure of net capital flows in this data base.

Selection of the Database

20. The database containing the variables used in the quota calculations would ideally have the following attributes: it should be comprehensive; i.e., contain all required data—compiled in line with internationally accepted concepts and definitions—for all members; the data would be from official sources (central banks and national statistical agencies); and the data would be comparable (consistent and coherent) across time and countries. This would ensure similar treatment for all countries’ data and facilitate the comparability of results in a transparent manner. It would also be helpful if the database could be updated without major additional use of staff resources.

21. As in past quota updates, the main source of data used in the quota calculations was the Fund’s central macroeconomic database of country, regional, and global statistics. STA manages this database (also collectively known as the Data Management for Excel DMXplus) for international statistical cooperation and publication purposes, and to support the Fund’s surveillance and use of Fund resources functions. 17 The database, which encompasses a number of component databases, embodies, to the extent possible, the application of international statistical methodologies for the compilation of economic and financial data. These international guidelines promote international comparability and methodological continuity in the database over time. The database is used to compile the Fund’s IFS publication.

22. The IFS data are reported to STA by central banks and national statistical agencies, and are mostly based on internationally consistent definitions, such as the BPM5 and the 1993 System of National Accounts (1993 SNA). STA makes an effort to compile these data into long time series that are consistent across time and countries. However, data gaps exist. For instance, there are some missing data for GDP and current account transactions for recent years and, as in the past, current receipts and current payments data of some former transition countries are not available.

23. Missing observations were largely supplemented using the WEO database. Although WEO data should reflect a presentation of the balance of payments that is consistent with the BPM5, the definition of balance of payments variables does not necessarily conform to BPM5 unless (a) national compilers have updated the respective country’s balance of payments accounts according to BPM5 or (b) the staff report for the country reflects the BPM5 definitions.

24. At the outset of the development of the database for the quota calculations, STA was aware that for some member countries there were large differences between the IFS and the WEO data sets. As noted above, some of these differences are related to the use of different classification systems, i.e., use of a national presentation in WEO while the standardized BPM5 presentation was reported to STA. These data discrepancies between the two data sources may also have been influenced by the varying institutional, legal, and accounting contexts of data compilation across member countries (Box A1).

Methodological Issues

With regard to GDP data, the 1993 SNA extended the scope of GDP slightly, adding production of goods for own final use to output and mineral exploration, computer software, and artistic originals to capital formation. This has resulted in an increase in reported GDP levels of up to 5 percent. Most IMF members have adopted the 1993 SNA for reporting GDP data to the IFS with some of them having revised historical data. By now, the size of data inconsistencies across countries due to the revisions related to the 1993 SNA is likely to be smaller than other differences related to known measurement problems with GDP (e.g., under-coverage of surveys or differing adjustment methods for the size of the non-observed economic activity).

The BPM5 introduced changes in the conceptual presentation of balance of payments accounts. It introduced a distinction between current and capital transfers, with current transfers remaining in the “current account” and capital transfers reclassified in the “capital account.” The capital account also includes acquisitions/disposals of non-produced non-financial assets but excludes financial account transactions, which were reclassified in a newly named “financial account.” Data are taken as reported by member countries and the changes in methodology may have contributed to slight breaks in some series.

With regard to quota calculations, the current receipts and payments cover goods, services, income, current transfers, and BPM5’s capital account. While BPM5 has been widely adopted by members, helping to ensure comparability with previous quota calculations, both current and capital transfers—excluding exceptional financing—are included here in current transactions.

With regard to financial account transactions, the accuracy of financial account data in many countries, including those in the IFS database, is uneven and the data are generally less comprehensive than the other data used for the quota formulas. This reflects classification and practical difficulties encountered by countries in compiling the data. Financial account data, particularly on the private nonbank sector, are generally difficult and resource intensive to compile. The switch from data collection systems based predominantly on government and balance sheet records to systems (particularly surveys) incorporating large nonbank private sector transactions has been slow. Many countries are still in the midst of adapting their collection and recording systems to take account of changes in the composition and magnitude of financial transactions, including new instruments such as financial derivatives. Institutional and accounting requirements for data compilation may differ across countries and data availability on the private nonbank sector varies. In the IFS, in some instances, only aggregates and not component series are reported.

With regard to official reserves, the Data Template on International Reserves and Foreign Currency Liquidity has been approved as the benchmark for the reporting of data to the Fund on official reserves. The Operational Guidelines for the Data Template, issued in 2001, clarify existing concepts on international reserves and provide guidelines for reporting the data on a consistent basis across countries.

Data Availability and Adjustments

25. The bulk of Fund members that report balance of payments statistics to STA do so on the basis of the BPM5. Data were prepared for current receipts and payments and net capital flows (as defined above). Where members reported balance of payments statistics to STA, the data stored in the IFS database were used as reported. Of the 187 members, the number reporting data to IFS for at least some of the years are as follows: 167 for the period 1996–2008; and 160 for the period 2004–08. When data were not available for some members for the timeframe required for the quota calculations, estimates were made, largely on the basis of the WEO.18 For members where neither IFS nor WEO data were available, FIN obtained data from staff reports, country desks and, in one case (see below), Eleventh Review data.

26. The data source breakdown for the period 1996–2008 is as follows: of the 167 members reporting data for IFS—122 are derived entirely from IFS reported data, 40 are derived from a combination of IFS and WEO estimates, 4 are derived from IFS and WEO but have missing data for some years, and 1 is derived from IFS but no WEO estimates are available for missing years data; for the 20 members not reporting any data to IFS—11 are derived entirely from WEO estimates, 2 are derived from WEO estimates but have missing data for some years, and 7 have neither IFS nor WEO data available.

27. The data source breakdown for the period 2004–08 is as follows: of the 160 members reporting data for IFS—133 are derived entirely from IFS reported data, 26 are obtained from a combination of IFS and WEO estimates, and 1 is derived from IFS and WEO but has missing data for some years; for the 27 members not reporting any data for IFS—20 are derived entirely from WEO estimates, and 7 have neither IFS nor WEO data available.

28. The following sections describe for each of the data categories the general procedures employed by STA to construct the required database for the quota calculations.

Goods and services transactions

29. Data reported by members and maintained in IFS were used for each country. Where there were data gaps after the latest year of reporting to STA, estimates were made by applying the growth rates derived from the WEO for the missing year(s) to the latest reported annual data (credits and debits). When the data gaps were in respect of years prior to the latest reported data to STA, the WEO data were inserted for those years to complete the series. For countries where no data were reported to STA, available WEO data were used. For China, P.R., Hong Kong, SAR, and Macao, SAR, goods data were adjusted for trade among the mainland, Hong Kong, SAR, and Macau, SAR based on the Direction of Trade database.

Income, transfers, and the capital account

30. Data reported on income and current transfers by members and maintained in IFS were used for each country. Where there were data gaps, estimates were derived using WEO data series. The adjustment procedure consisted of the followings: (1) if the gap was in the leading year of the series (1996), then WEO data were inserted for all years where data were missing, either as credits if WEO showed a net credit balance or as debits if a net debit balance was shown in WEO; (2) if the gap was after a reported observation, then the change in the balance on transactions from the WEO data was added to the STA data of the previous year—generally, credits if WEO showed a net credit balance or debits if a net debit balance was shown in WEO.

31. The primary source for data on the capital account as per BPM5 is the IFS data provided by member countries. In a few cases, countries reported only “net” capital account data and STA derived credit and debit values. When no data are reported for IFS, the WEO net capital account value, depending on its sign, was used to derive an estimate. The paucity of IFS “capital account” data may reflect the inclusion of capital transfers in current transfers by some members.

Net capital flows19

32. The primary source for data on net capital flows is the IFS financial account data provided by member countries to STA. When no data are reported for IFS, a WEO value was used to fill the gaps, to the extent possible.

Official reserves

33. The stock data on official reserves—comprising monetary gold, SDR holdings, reserve position in the Fund, and foreign exchange holdings—were obtained from IFS.20 Monetary gold was valued at SDR 35 per fine troy ounce. In deriving annual average holdings of official reserves for 2008, the data for the 12 months of 2008 were summed and then divided by 12 (or by the number of months for which data were available). If a country did not report its foreign exchange and/or monetary gold holdings data to STA for publication in IFS, staff reports are used to gap fill this information (please see Missing data series, below).

GDP

34. The IFS and WEO databases provided GDP data for 180 members. The IFS database is the source of data for 103 members, WEO data were used for 14 members, and WEO growth rates were applied to the latest IFS data to estimate missing data for 6321 members. GDP data for 11 members that are compiled and reported on a fiscal year basis were first adjusted to calendar year basis by recalculating the annual GDP based on quarterly GDP figures.

PPP GDP

35. The PPP-based GDP data were downloaded from the WEO database for 180 countries. The WEO PPP-based GDP is calculated by dividing a country’s nominal GDP in its own currency by its PPP price index relative to the United States22 and then converting it into SDR units, using the SDR-USD exchange rate. The WEO PPP price indexes are based on the data from the International Comparison Program (ICP) for 2003–05 that were published in December 2007. These data were then extended in the WEO data base by using the growth in relative GDP deflators (the deflator of a country divided by the deflator of the United States). The data for the remaining countries were estimated using their share in global PPP GDP in 2005 based on the ICP data published in December 2007.

Conversion to SDRs

36. The balance of payments and the GDP data series in U.S. dollars were converted to SDRs using period-average exchange rates.

Missing data series

37. Data that were missing from IFS and WEO were obtained almost entirely from recent staff reports. The only country for which no data for recent years were available was Somalia. In this case, data for the various series were assumed unchanged from the Eleventh Review. Countries for which data for all variables were derived from recent staff reports were Marshall Islands, Palau, and Tuvalu.

38. Countries for which only official reserves data were derived from staff reports include Afghanistan, Bahrain, Fiji, Ghana, Guinea, Iran, Kiribati, Lesotho, Myanmar, Nepal, Sao Tome and Principe, Syrian Arab Republic, Tajikistan, Turkmenistan, Uzbekistan, and Zimbabwe. For Kosovo, Micronesia, and San Marino, all variables except official reserves were derived from staff reports.

39. Gaps in data for current receipts for the following countries were filled using staff reports: Bosnia-Herzegovina (1996–97), Iraq (1996–2004), Liberia (1996–99), Montenegro (1996–2002), and Timor-Leste (1996–99). Gaps in data regarding current payments were filled using staff report data in the case of Iraq (2004).
1

Prepared by a staff team led by Sheila Bassett and comprising Carlos Janada, Hannah Lin, Claudio Visconti, Lukas Kohler, Sergio Rodriguez, Helga Treichel, August Dabney, and Barbara Wennerholm. Susan Prowse and Thomas Krueger (all FIN) also contributed.

2

Communiqué of the International Monetary and Financial Committee of the Board of Governors of the International Monetary Fund (April 24, 2010).

3

See Fourteenth General Review of Quotas—Realigning Quota Shares—Initial Considerations (3/5/10); and The Chairman’s Concluding Remarks (3/25/10).

4

See Fourteenth General Review of Quotas—The Size of the Fund—Initial Considerations (3/15/10).

5

The second round increases under the 2008 reform only come into effect after the proposed Amendment of the Articles on voice and participation has entered into effect and the relevant members have consented to and paid for their quota increases.

6

For details, see Appendix I.

7

The data would include trade openness, international investment position (IIP), investment income, and financial account flows.

8

These results largely confirm those based on the derived 2008 WEO-based data set, see Fourteenth General Review of Quotas—Realigning Quota Shares—Initial Considerations (3/5/10). A few of the more substantive changes reflect data revisions by the authorities of a few countries, as described below.

9

Saudi Arabia has begun reporting its balance of payments data to IFS on the basis of BPM5, starting with data in 2005. This resulted in significant changes in net capital flows and reserves (Table A1). To insure consistency with the revised IFS data, net capital flow data were back-filled by staff for the relevant years prior to 2005 with BPM5-consistent data, which were provided by the authorities for this purpose.

10

See Statement by the Managing Director on the Work Program of the Executive Board, Executive Board Meeting (5/24/10).

11

GDP and balance of payments data for the updated quota calculations were compiled by STA in coordination with FIN. The STA team comprised René Piché, Colleen Cardillo, Silvia Matei, Nataliya Ivanyk, Maria Arce, Selin Vurusaner, Mbaye Gueye, and Dwayne Raiford.

12

In anticipation of its forthcoming membership, Tuvalu has been included in the quota data set. Thus, the data set comprises information for 187 countries.

13

The cutoff date for both IFS and WEO data was January 31, 2010; in the case of the latter, the cutoff date implied the use of the Fall 2009 WEO database.

14

The balance of payments data are based on the Balance of Payments Manual, fifth edition (BPM5), which includes current transfers in the current account and capital transfers in the capital account, unlike the earlier fourth edition (BPM4), which included all transfers in the current account. Accordingly, to help ensure comparability with previous quota calculations, both current and capital transfers—excluding exceptional financing, to the extent possible—are included here in current receipts. In December 2009, the final version of the Balance of Payments and International Investment Position Manual, sixth edition (BPM6) was released in hard copy. In 2012 STA plans to start the dissemination of BPM6-based balance of payments data for 2011.

15

Ibid; there are only exceptional financing transactions on the credit side of the current and capital accounts.

16

The variable is referred to as “net capital flows” to maintain continuity with the term used in previous quota calculations.

17

In this paper, the data drawn from the DMXplus are referred to as the IFS database, following the practice in past quota review papers.

18

The methods used to fill gaps were, in principle, largely similar to those used for the purpose of publishing world and regional summary tables in the Balance of Payments Statistics Yearbook (BOPSY), Part 2, and were used in External Review of Quota Formulas—Quantification (4/12/2001) http://www.imf.org/external/np/tre/quota/2001/eng/erqfq.htm.

19

The term “net capital flows” refers to transactions in the financial account.

20

Consistent with the treatment of reserves for the 2001 ad hoc quota increase for China, P.R., the reserves of Hong Kong, SAR and Macau, SAR are not included for quota calculations.

21

This includes countries which do not have IFS data for the three years but for earlier years. For comparison, WEO growth rates were applied in the case of 61 countries in the data base extending through 2007 (versus 63 in the current data base).

22

Choice of numeraire country is arbitrary and does not affect the calculations, since PPP price indexes are adjusted to be transitive across countries.

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Cover Policy Papers
Fourteenth General Review of Quotas - Updated Data Set and Quota Calculations
Author:
International Monetary Fund
Volume/Issue:
Volume 2010: Issue 061
Publisher:
International Monetary Fund
ISBN:
9781498337311
ISSN:
2663-3493
Pages:
52
DOI:
https://doi.org/10.5089/9781498337311.007