## _020911

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---

### Executive overview
- Evaluation covers technical assistance (TA) and training in statistics to Albania and Georgia during roughly the period 2005–2010.
- TA and training covered all topical areas on which the IMF’s Statistics Department (STA) focuses: national accounts, price statistics, and monetary, balance of payments and government finance statistics, with differing emphases between the two countries.
- Funding: part of the assistance was funded directly from the IMF’s budget; other elements (in particular the peripatetic advisors) were financed externally, in these cases by the Japanese government.
- Benchmarking: the Data ROSC conducted for each country (Georgia in 2002; Albania in 2006) provided a snapshot and recommendations used to guide TA.
- Evaluation methodology: based on responses to questionnaires, desk reviews of available data, and in-country discussions with national authorities, data users, donors, and officials who had participated in IMF courses in statistics.

### Major findings: absorption and progress
- Both Georgia and Albania were initially slow in absorbing TA due to legacy institutional and legal issues and severe resource constraints, particularly for the statistics agencies.
- Important successes in statistical enhancement achieved more recently in both countries:
  - Georgia subscribed to the IMF’s Special Data Dissemination Standard (SDDS) on May 17, 2010.
  - Albania has begun dissemination of quarterly national accounts.
- Institutional changes:
  - Georgia: Department of Statistics re-established as GEOSTAT, an autonomous agency responsible directly to the President (January 2010).
  - Albania: INSTAT placed directly under the office of the Prime Minister; in 2010 the government increased INSTAT’s staff resources significantly.

### TA focus and modalities
- Post-Data ROSC emphases:
  - Georgia: lead focus on external sector statistics.
  - Albania: lead focus on national accounts.
- Modes of TA delivery:
  - Short-term staff missions (usually two-week).
  - Regional or peripatetic advisors (six peripatetic two-week missions to Georgia between November 2006 and November 2008; a series of three-week peripatetic expert visits for Albania’s national accounts during 2008).
- Recipient institutions:
  - Georgia: National Bank of Georgia (NBG), Ministry of Finance (MoF), National Statistics Office / GEOSTAT.
  - Albania: Bank of Albania (BoA), Ministry of Finance (MoF), Institute of Statistics (INSTAT).

### Training and capacity building
- Universal acclaim for IMF training, particularly that delivered at IMF headquarters.
- Training participation (2005–2009):
  - Georgia: 30 places were granted to compilers from Georgia in various STA training courses over 2005–2009.
  - Albania: 19 INSTAT, BoA, and MoF staff members attended STA training courses over 2005–2009.
- Preferences and concerns:
  - Participants preferred long (more than two-week) course format for specific datasets (e.g., NA, Prices) supplemented by short-term (up to two-week) special-topic courses (e.g., FSI, CDIS).
  - Concern in Georgia that shifting Fund priorities might reduce access to future training.
  - Peripatetic advisors were particularly useful; Georgia appeared more readily able to absorb lessons, possibly because the Central Bank faced fewer constraints than a national statistics agency.

### Institutional and legal reforms (selected items)
- Albania:
  - Enhancement to INSTAT’s human resources by hiring 47 new staff (June 2010).
  - NA unit upgraded into NA Directorate with elaborated structure and salary adjustments (2008).
  - Creation of the Statistics Board (2005).
  - Program of Official Statistics for 2006-2011 approved by Parliament (January 31, 2008).
  - Law 9723 On the National Registration Centre established the National Registration Centre (May 3, 2007).
  - Memoranda of Understanding signed between INSTAT and BoA, Ministry of Agriculture, the Tax Authorities, and the High Inspectorate of Declaration and Audit of Assets.
  - SDDS metadata drafted, SDDS data gaps defined (June 2010).
- Georgia:
  - Creation of independent GEOSTAT in January 2010.
  - Improved interagency cooperation with MoF and NBG on GEOSTAT Board membership.
  - BOP compilation function transferred to the NBG (2007).
  - Decree (101) issued by the MoF on February 10, 2006 committing to accounting reform strategy.
  - Amendments to the Law on the NBG ratified by Parliament on March 14, 2008 refining legal framework for external sector statistics.
  - Subscription to the SDDS on May 17, 2010.

### Key statistical achievements — Albania (by dataset)
- National accounts:
  - Description of sources and methods for GNI prepared within IPA 2007 Multi-beneficiary Statistical Cooperation Program (November 2009).
  - Quarterly GDP series for 2002-2008 by production approach developed and disseminated in 2008.
  - Revised Annual Structural Business Survey (2009).
  - Government nonmarket activities data available since Q1, 2008.
- Price statistics:
  - Annual national-level HBS conducted (2008-2009).
  - CPI market basket items renewed.
- Government finance statistics:
  - Dissemination of quarterly general government operations data.
  - New government accounting system AMoFTS partially operational (2008).
  - GFSM 2001 functional and economic classifications being applied.
- Monetary and financial statistics:
  - Implementation of Monetary and Financial Statistics Manual, 2000 for stock data and sectoral balance sheet of depository corporations.
  - SRFs introduced for MFS (2006) and historical revision back to December 2002.
  - Compilation of non-bank financial corporations monetary survey starting from 2007 (not yet published).
  - Banks portfolio securities recorded mark to market as required by MFSM, 2000.
- External sector statistics:
  - Quarterly remittances survey implemented in 2005 (used for analytical purposes due to inferior quality).
  - Following 2006 FDI survey, annual IIP data compiled with limited coverage; in May 2010 annual data for 2003-2008 published in time-series format for the first time.
  - Quarterly gross external debt statistics compiled from end of 2003; from 2009 data reported regularly to QEDS.
  - Reserve Template compiled in draft NSDP since 2008.
  - From March 2009, BoA Annual Report includes statistical appendix with BoP, IIP, gross external debt and merchandise trade data.

### Key statistical achievements — Georgia (by dataset)
- National accounts:
  - New annual national accounts publication issued in 2004.
  - More detailed supply-and-use tables.
  - Website with detailed annual and quarterly national account time series, including analysis of revisions.
  - Estimates for consumption of fixed capital with historical time series back to 1996.
  - GDP revised to incorporate results of business survey (2009).
- Price statistics:
  - Development of agricultural price indices.
- Government finance statistics:
  - COFOG (GFSM 2001 version) introduced for central Government in January 2008 and from 2010 for Local government.
  - Single treasury account established; cash planning and cash management introduced (2006).
  - GFSM 2001 classifications applied to modified-accrual data.
- Monetary and financial statistics:
  - Implementation of Monetary and Financial Statistics Manual, 2000 and Integrated Monetary Database (IMD) for IFS publication.
  - SRFs introduced for MFS (2006) and historical revision back to December 2001.
  - Revised chart of accounts for other financial corporations implemented from 2010.
- External sector statistics:
  - Implementation of ITRS (January 2009).
  - Compilation of quarterly IIP published in BOPSY and IFS starting from November 2007.
  - Participation in CPIS and CDIS.
  - Improvements in BOP methodological soundness and source data.
  - Gross external debt compilation program and QEDS reporting established.
  - New publication of external statistics launched end of 2007.
  - Reserve Template compiled and disseminated (May 2010).

### SDDS initiatives and readiness — Albania
- Continued progress towards SDDS subscription, but road blocks remain; the country has been overtaken by others.
- Constraints: weak institutional framework, lack of adequate resources, limited public awareness of SDDS.
- Observance of SDDS requirements varies:
  - BoA and MoF data largely in line with SDDS requirements (exception: IIP statistics).
  - Several INSTAT data categories lack sufficient frequency, timeliness and/or coverage.
- Recent improvements:
  - Developing SDDS metadata for all categories.
  - Updating NSDP and developing ARC.
  - Disseminating quarterly general government operations data and adopting a policy on data revisions.
- Remaining gaps to meet SDDS:
  - Current-price quarterly GDP data expressed in national currency remain to be disseminated.
  - FDI survey coverage, accuracy, and timeliness need improvement for IIP requirements.
  - IPI needs monthly frequency and dissemination within six weeks (currently quarterly and issued within 75 days).
  - PPI to be disseminated monthly within one month of the reference period.
  - Quarterly labor market statistics coverage needs improvement; labor force survey to be conducted starting from 2011.
  - Enhance role of SDDS correspondents in INSTAT and MoF and improve coordination with SDDS country coordinator.
  - All three institutions require training in techniques of data dissemination.
- TA on data dissemination (consultation mission 2006 and SDDS assessment mission 2010) received well; request for TA to develop a specific prioritized action plan with a timetable to facilitate SDDS subscription.

### INSTAT — institutional capacity, TA modalities, and outcomes
- NA Directorate reorganized in 2008 into three sections: annual accounts, quarterly accounts, and NA development; NAD had 11 employees in 2008.
- Government provided resources in June 2010 for hiring of 47 new staff, among them 30 experts, nine of whom will join the NA Directorate; staff salaries adjusted accordingly.
- Statistical Board operational end of 2005.
- TA modalities (2005 to mid-2010):
  - NA peripatetic advisor delivered 4 three-week missions in 2008 and one two-week mission in 2009, preceded by a three-day staff assessment visit in 2005.
  - Price statistics one-week mission in 2007.
  - TA delivered predominantly by an expert due to shortage of STA staff and need for intensive delivery.
- Complementary EU-financed TA:
  - Twinning Project Albanian Statistics toward EU.
  - IPA 2007 Multi-beneficiary Statistical Cooperation Program started April 2010.
  - SIDA project from 2008 with 2–3 one-week price statistics missions each year.
- Feedback and outcomes:
  - INSTAT satisfied with TA mix; strong appreciation for long-term STA expert in NA and hands-on training.
  - Improvements: labour force survey, country-wide HBS, quarterly GDP series for 2002-2008 published since December 2008, methodological improvements in annual national accounts, revision of ASBS (2009), government nonmarket activities data from Q1, 2008.
  - Some strategic-plan items postponed pending start of NA component of IPA 2007 (censuses of agriculture and nonagriculture enterprises).
- Training attended:
  - NA training at INS (2006), quarterly NA at JVI (two staff, 2008), price statistics at INS (2005) and JVI (2006).
  - Four missions of 2008 NA project included significant training; 2009 NA mission provided on-the-job training for quarterly GDP concepts.

### Bank of Albania (BoA) — responsibilities, staffing, TA outcomes, and needs
- Responsibilities:
  - BoA compiles MFS, BOP and IIP and reports to STA; submits data to QEDS; coordinates Albania’s SDDS preparations.
  - BoA has not yet compiled FSIs; agreed to participate in CDIS but yet to submit data for year 2009.
- Staffing:
  - 2007: new IIP unit added.
  - 2009: three expert positions added, total staff 26, of whom 12 assigned to external sector statistics.
  - Major resource concern: lack of IT experts (two attempts to hire in last three years unsuccessful).
- TA outcomes (external sector):
  - 2006 Data ROSC identified weak source data; STA missions in 2006 and 2007 addressed these issues.
  - Quarterly remittances survey started Q1 2006.
  - Following 2006 FDI survey, annual IIP started to be compiled with limited coverage.
  - Improved annual IIP and EDS published in April 2010 for 2008 data in time-series format.
- Constraints:
  - Commercial agreement between BoA and INSTAT (INSTAT conducts surveys at BoA expense) limits source development; cost increases cause delays.
  - IT infrastructure inadequate: BOP generated through interlinked excel files; manual data entry and verification; limited IT support; electronic reporting system project at initial stage; banking reporting system needs improvement.
- Training (2005–2009):
  - Six IMF training courses in external statistics (BOP and EDS courses at INS and JVI).
  - Two regional seminars in Ljubljana on CDIS (2008) and Remittances (two participants, 2009).
- TA needs and EU twinning support:
  - Under EU twinning with Bank of Italy and Bank of France, envisaged coverage includes development plans for BOP/IIP and MFS, TA on stocks and flows in FDI and portfolio investment, staff training on EU/ESCB requirements (BPM6), on-the-job training in data collection and IT solutions, and development of transaction accounts for the banking system.
  - Implementation of an electronic reporting system started with assistance from Bank of Italy; expected completion between the end of 2011 and the middle of 2012.

### Ministry of Finance (Albania) — responsibilities, TA outcomes, and needs
- Responsibilities:
  - MoF compiles and disseminates GFS (modified cash basis); separate section under General Treasury Directorate compiles Fiscal Budget Consolidated Indicators (monthly/annual), GFS (annual) and IFS (monthly).
  - Reporting of GFS statistics to STA using ICS has not yet started.
- TA outcomes:
  - 2006 Data ROSC noted progress toward accrual-compatible database infrastructure and migration path to GFSM 2001.
  - One-week STA expert mission February 2008; MoF rates STA TA highly.
  - AMoFTS partially operational since 2008 using Oracle E-Business Suite, online with 36 Treasury District Offices and has electronic payments with BoA.
  - Remaining issues: generating balance-sheet transactions including special funds and debt transactions dependent on banking system and Tax/Customs systems; AMoFTS cannot generate modified accrual debt data; donor-financed project reports not checked against donors’ agreements.
- Training:
  - 2005-2009: five MoF staff attended GFS courses at INS and JVI; one person attended External Debt course at JVI.
- TA needs ahead:
  - Assist MoF move to modified accrual basis accounting by designing reports for GFS compilation from AMoFTS.
  - Adopt accrual basis for government debt recording.
  - Coordinate STA GFS TA with IPA 2007 program (online connection of general government units by 2015, staff capacity increases, equipment modernization).
  - High-level demand for STA GFS and external debt training; feasibility of regional training discussed.

### Georgia — institutional engagement, TA delivery, and outcomes
- STA engagement:
  - STA mission visited Tbilisi July 16–18, 2010 to evaluate TA; met with NBG, GEOSTAT, and MoF senior officials.
  - Georgia subscribed to the SDDS on May 17, 2010; STA SDDS TA (2006 and 2010 missions) assisted institutional issues, action plans, interagency coordination, and populating NSDPs.
- National Bank of Georgia (NBG):
  - Responsible for MFS, BOP and IIP; reports timely via ICS and participates in CPIS and CDIS; does not compile FSIs.
  - TA (2005–mid-2010): two TA missions in external sector (2005, 2006), one mission in MFS (2009), and RSA support with six peripatetic missions (Nov 2006–Nov 2008).
  - Training: NBG staff attended 12 training activities including INS and JVI courses and regional seminars (FSI, CDIS, Remittances, ITRS, International Trade in Services).
  - MFS developments: SRF-based monetary data published in IFS Supplement since September 2006; historical revision back to December 2001; expanded coverage to microfinance and insurance; chart of accounts revised from 2010.
  - External sector developments: BOP function transferred to NBG in 2006; ITRS implemented January 2009; quarterly IIP launched (published from November 2007); Reserve Template disseminated May 2010.
  - Systems and source-data sustainability require improved computer resources.
- GEOSTAT:
  - Established January 2010 as independent agency reporting directly to the President.
  - Management prioritizes building trust and credibility; operational independence exists but financial resources cut by a cumulative 50 percent in recent years.
  - Constraints: wage rates below public sector average, difficulties in recruitment/retention, requirement to generate revenue by charging for products, negative public perception.
  - TA delivered (2005–mid-2010): one NA mission (2005) and three price missions (2005–2007).
  - Real sector progress: quarterly and annual GDP estimates produced under 1993 SNA; consumption of fixed capital series back to 1996; SUTs more detailed since 1998; household consumption broken down by COICOP.
  - Remaining weaknesses: voluntary reporting under Statistics Law with no sanctions; lack of IT resources; no GDP by expenditure constant prices due to absent export/import price indexes and deflation problems.
- Ministry of Finance (Georgia):
  - MoF compiles GFS and reports to STA; reforms guided by Decree 101 (February 10, 2006) and Accounting Reform Strategy 2007-2017.
  - Achievements: Treasury single account, cash planning and management, GFSM 2001 classifications applied to modified-accrual data, COFOG introduced January 2008 for Central Government and from 2010 for Local Governments.
  - Unresolved issues: classification of LEPLs by institutional sector; valuation and coverage of nonfinancial assets; need to expand balance-sheet items beyond liabilities.

### External sector statistics — methodological refinements (Georgia)
- Refined recording methodologies include:
  - external debt data from state-owned enterprises,
  - selected international trade in services data,
  - international reserves,
  - remittances,
  - transactions related to the Georgian segment of the Baku-Tbilisi-Ceyhan pipeline,
  - transfer pricing, and
  - other transactions related to the oil and gas sector.
- Regional cooperation and peer learning examples:
  - 2007: BOP compilers from National Bank of Azerbaijan visited NBG.
  - 2008: NBG compilers visited National Bank of Ukraine for ITRS experience.
  - 2009: National Bank of Armenia compilers visited NBG to learn about ITRS implementation.

### Risks to quality and sustainability; constraints on TA effectiveness
- Common risks identified:
  - Inadequate resources, especially at NSOs to generate/maintain source data and coordinate activities.
  - Heavy reliance on external financing for statistical activities.
  - Limited coordination among data-producing institutions and with data users.
  - Credibility and communication shortfalls for NSO-compiled statistics.
  - Large staff turnover (particularly in GEOSTAT) and limited access to regional seminars; training of compilers remains a challenge.
- TA effectiveness constraints:
  - TA sometimes premised on donor financing; where financing fell away, agencies (e.g., GEOSTAT) could not implement recommendations.
  - Criticism that TA was occasionally not sufficiently hands-on to be operationally useful.
  - Limited IT resources and manual processes (e.g., interlinked excel files for BOP) hamper sustainability.

### Key findings and policy recommendations
- Findings:
  - STA TA broadly successful relative to the July 2002 Data ROSC baseline; most topical areas improved from "largely observed" or "LNO" ratings.
  - Success factors: committed counterparties, low staff turnover, clearly specified target objectives.
  - Peripatetic/regional advisors were effective for pervasive BOP problems and building sustained working relationships.
  - Training demand exceeds present availability; longer methodology courses and regional offerings are preferred.
- Recommendations:
  - Where successful implementation requires additional resources (particularly GEOSTAT), STA could work with the agency to identify likely donors and jointly design projects including donor participation.
  - Explore enhancements to training availability, including assisting NBG or GEOSTAT to host regional training and offering specialized Russian-language FSI seminars.
  - Update Georgia’s Data ROSC (current ROSC outdated and may misrepresent present statistics quality).
  - Consider direct assistance to GEOSTAT’s communications strategy to build credibility and public trust.
  - Medium-term TA focus recommended (e.g., for Albania, SDDS subscription with critical path analysis to bypass road blocks and facilitate interagency coordination).
  - TA should address macroeconomic topics and other aspects of data quality (legal and institutional arrangements, transparency, revision policies, ARCs).
  - For countries with multiple providers (e.g., Albania), plan STA engagement in close coordination with EU and other providers and consider country-by-country compromise on TA scope.

*Source: Executive Summary and selected excerpts from the IMF PDF chapter "_020911" (evaluation of STA TA program to Albania and Georgia, cover period roughly 2005–2010).*

### Executive Summary ......................................................................................................

### _020911 - Executive Summary

### Executive overview
- Evaluation covers technical assistance (TA) and training in statistics to Albania and Georgia during roughly the period 2005–2010.
- TA and training covered all topical areas on which the IMF’s Statistics Department (STA) focuses: national accounts, price statistics, and monetary, balance of payments and government finance statistics, with differing emphases between the two countries.
- Funding: part of the assistance was funded directly from the IMF’s budget; other elements (in particular the peripatetic advisors) were financed externally, in these cases by the Japanese government.
- Benchmarking: the Data ROSC conducted for each country (Georgia in 2002; Albania in 2006) provided a snapshot and recommendations used to guide TA.
- Evaluation methodology: based on responses to questionnaires, desk reviews of available data, and in-country discussions with national authorities, data users, donors, and officials who had participated in IMF courses in statistics.

### Major findings: absorption and progress
- Both Georgia and Albania were initially slow in absorbing TA, in part because of legacy institutional and legal issues and severe resource constraints, particularly for the statistics agencies.
- Important successes in statistical enhancement achieved more recently in both countries:
  - Georgia subscribed to the IMF’s Special Data Dissemination Standard (SDDS) on May 17, 2010.
  - Albania has begun dissemination of quarterly national accounts.
- Institutional changes:
  - Georgia: Department of Statistics re-established as GEOSTAT, an autonomous agency responsible directly to the President (January 2010).
  - Albania: INSTAT placed directly under the office of the Prime Minister; in 2010 the government increased INSTAT’s staff resources significantly.

### TA focus and modalities
- Post-Data ROSC emphases:
  - Georgia: lead focus on external sector statistics.
  - Albania: lead focus on national accounts.
- Modes of TA delivery:
  - Short-term staff missions (usually two-week).
  - Regional or peripatetic advisors (six peripatetic two-week missions to Georgia between November 2006 and November 2008; a series of three-week peripatetic expert visits for Albania’s national accounts during 2008).
- Recipient institutions:
  - Georgia: National Bank of Georgia (NBG), Ministry of Finance (MoF), National Statistics Office / GEOSTAT.
  - Albania: Bank of Albania (BoA), Ministry of Finance (MoF), Institute of Statistics (INSTAT).

### Training and capacity building
- Universal acclaim for IMF training, particularly that delivered at IMF headquarters.
- Training participation:
  - Georgia: 30 places were granted to compilers from Georgia in various STA training courses over 2005–2009.
  - Albania: 19 INSTAT, BoA, and MoF staff members attended STA training courses over 2005–2009.
- Concern noted, particularly in Georgia, that shifting Fund priorities might reduce access to future training.
- Peripatetic advisors were seen as particularly useful by both countries; Georgia appeared more readily able to absorb lessons, possibly because the Central Bank faced fewer constraints than a national statistics agency.

### Institutional and legal reforms (selected items from Box 1)
- Albania:
  - Enhancement to INSTAT’s human resources by hiring 47 new staff (June 2010).
  - Upgrade of the national accounts (NA) unit in INSTAT into an NA Directorate with elaborated structure, and salary adjustments (2008).
  - Creation of the Statistics Board (2005) to improve synergies with data users.
  - Program of Official Statistics for 2006-2011 approved by Parliament (January 31, 2008).
  - Law 9723 On the National Registration Centre established the National Registration Centre (May 3, 2007).
  - Memoranda of Understanding recently signed between INSTAT and other data-producing agencies, namely the BoA, Ministry of Agriculture, the Tax Authorities, and the High Inspectorate of Declaration and Audit of Assets.
  - SDDS metadata drafted, SDDS data gaps defined (June 2010).
- Georgia:
  - Creation of independent GEOSTAT in January 2010.
  - Improved interagency cooperation, with the MoF and the NBG being assigned membership on the GEOSTAT Board.
  - BOP compilation function transferred to the NBG (2007).
  - Commitment to accounting reform strategy: Decree (101) issued by the MoF on February 10, 2006.
  - Legal framework for compiling external sector statistics refined with amendments to the Law on the NBG ratified by Parliament on March 14, 2008.
  - Subscription to the SDDS on May 17, 2010.

### Assessment of TA coordination and roles
- In Albania the IMF is no longer the sole provider of TA; significant EU assistance is also evident.
- All parties agreed on the importance of coordination between providers.
- STA’s country coordinator role in Georgia: assigned to coordinate preparation of technical assistance country strategy notes (TACSN), indicating the relative importance of statistics in STA’s overall TA program to Georgia.

### User engagement and perceptions
- Missions met with users, including government, private research groups, and bankers.
- Continuing skepticism among certain parts of the user community regarding official statistics, particularly in Albania, suggests scope for further reforms to enhance transparency and independence.
- Presentations of mission findings were made on the last day of the mission to compiling agencies.

### Conclusions and agreed forward priorities
- Institutional reform is an appropriate focus for TA and training; experience from both countries demonstrates the importance of appropriate institutional arrangements and statistical agency independence.
- The missions agreed with authorities on priority areas to guide future TA.
- The IMF continues to have a significant role in the provision of TA on macroeconomic statistics in Albania, alongside other providers.

*Source: Executive Summary (evaluation of STA TA program to Albania and Georgia, cover period roughly 2005–2010).*

### Box 2. STA’s Technical Assistance Evaluation Missions to Albania and Georgia:

### Box 2. STA’s Technical Assistance Evaluation Missions to Albania and Georgia: Key Achievements in Developing Statistical Products and Assessment of Risks

### Evaluation of STA courses
- Participants generally satisfied with IMF training through courses, seminars, and workshops; training found "very useful to their work."
- Preference for long (more than two-week) course format for specific datasets (e.g., NA, Prices) supplemented by short-term (up to two-week) special-topic courses (e.g., FSI, CDIS).
- Compilers in both countries emphasized importance of regional training and called for more regional training opportunities.

### Risks to the quality and sustainability of official macroeconomic statistics
- Common risks identified:
  - Inadequate resources, especially at the national statistical offices (NSOs) to generate and maintain source data and undertake coordinating activities.
  - Heavy reliance on external financing for statistical activities, especially at the NSOs.
  - Limited coordination among the data-producing institutions and with data users.
  - Pending work on improving credibility of statistics compiled by the NSOs and improving communication.
  - Large staff turnover, particularly in GEOSTAT, and relatively limited access to regional seminars; training of the compilers remains a challenge.

### Key statistical achievements by dataset — Albania
- National accounts statistics:
  - Publication of the elaborated data sources and methods for real sector statistics Description of sources and methods for GNI for Albania was prepared within the framework of IPA 2007 Multi-beneficiary Statistical Cooperation Program (November 2009).
  - The quarterly GDP series for 2002-2008 by production approach were developed and disseminated in 2008.
  - Revised the annual structural business survey (2009).
  - Data for the government nonmarket activities became available since Q1, 2008.
- Price statistics:
  - Annual national-level HBS was conducted (2008-2009).
  - CPI market basket items renewed.
- Government finance statistics:
  - Dissemination of the quarterly general government operations data.
  - New government accounting system, Albanian Ministry of Finance Treasury System (AMoFTS), has became partially operational (2008).
  - GFSM 2001 functional and economic classifications are being applied.
  - The MoF website was upgraded to improve accessibility and serviceability with longer time series.
- Monetary and financial statistics:
  - Implementation of the Monetary and Financial Statistics Manual, 2000 for the compilation of stock data in terms of monetary survey and sectoral balance sheet of depository corporations.
  - Introduction of the standardized report forms (SRFs) framework for the compilation of MFS (2006) and revision of the historical time series in accordance with the SRFs back to December 2002.
  - Compilation of non-bank financial corporations monetary survey and sectoral balance sheet statistics, starting from 2007 (not yet published).
  - Recordings of banks portfolio securities on mark to market, as required by MFSM, 2000.
- External sector statistics:
  - In cooperation with INSTAT, a quarterly survey on remittances was implemented in 2005; due to inferior quality the survey results are used for analytical purposes rather than for compilation; the cash remittances model is still in place for estimation in the balance of payments statistics.
  - Following the outcome of the 2006 foreign direct investment (FDI) survey, the annual IIP data were compiled with limited coverage; in May 2010, annual data for the period 2003-2008 were published for the first time in the time-series format.
  - Compilation of quarterly gross external debt statistics from the end of 2003; from 2009, data are reported regularly to the IMF-World Bank Quarterly External Debt Statistics Database (QEDS) database.
  - Compilation and dissemination of the Reserve Template in the draft NSDP since 2008.
  - Starting from March 2009, a new statistical appendix including BoP, IIP, gross external debt and merchandise trade data is prepared and published within the BoA Annual Report.

### Key statistical achievements by dataset — Georgia
- National accounts statistics:
  - New annual publication on national accounts was issued in 2004.
  - More detailed set of supply-and-use tables.
  - Website developed with elaborated detailed annual and quarterly national account time series, including analysis of revisions.
  - Estimates for consumption of fixed capital with the historical time series back to 1996.
  - GDP data were revised to incorporate results of conducted business survey (2009).
- Price statistics:
  - Development of agricultural price indices.
- Government finance statistics:
  - Classification of outlays based on the Classification of Outlays by Functions of Government (COFOG) (GFSM 2001 version) introduced in January 2008 for central Government, and from 2010 for Local government subsector.
  - Establishing single treasury account.
  - Introduction of cash planning and cash management (2006).
  - GFSM 2001 functional and economic classifications are being applied to the modified-accrual data.
  - The MoF website was upgraded to improve accessibility and serviceability.
- Monetary and financial statistics:
  - Implementation of the Monetary and Financial Statistics Manual, 2000 including compilation of flow data in terms of monetary survey.
  - Implementation of the Integrated Monetary Database (IMD), within which analytical accounts are produced for publication in International Financial Statistics (IFS).
  - Introduction of the standardized report forms (SRFs) framework for the compilation of MFS (2006) and revision of the historical time series in accordance with the SRFs back to December 2001.
  - Implementation of the revised chart of accounts for other financial corporations, starting from 2010 data.
  - Improved classification of financial instruments, refining attribution of residency criteria.
- External sector statistics:
  - Implementation of the International Transactions Reporting System (January 2009).
  - Compilation of the quarterly IIP, published in the Balance of Payments Statistics Yearbook (BOPSY) and IFS, starting from November 2007.
  - Participation in CPIS and CDIS.
  - Substantial improvements in BOP methodological soundness and source data.
  - Establishing gross external debt compilation program and reporting data to IMF-World Bank QEDS database.
  - Launching a new publication of the external statistics data containing data, charts, tables, analytical notes, and description of sources and methods (end of 2007).
  - Compilation and dissemination of the Reserve Template (May 2010).

### SDDS Initiatives in Albania
- Continued progress towards SDDS subscription, but road blocks remain; the country has been overtaken by others.
- Weak institutional framework, lack of adequate resources, and limited public awareness of SDDS hamper preparations.
- Need to improve interinstitutional communication, document and update progress, and prioritize the statistics program action plan with deliverables and timetables.
- Level of observance of SDDS requirements varies across BoA, MoF, and INSTAT:
  - BoA and MoF data largely in line with SDDS requirements (exception: IIP statistics).
  - Several categories of INSTAT data lack sufficient frequency, timeliness and/or coverage.
- Recent improvements:
  - Developing SDDS metadata for all data categories.
  - Updating the National Summary Data Page (NSDP).
  - Developing an Advance Release Calendar (ARC).
  - Disseminating quarterly general government operations data.
  - Adopting and disseminating a policy on data revisions.
- Remaining work to meet SDDS requirements:
  - Current-price quarterly GDP data expressed in national currency remain to be disseminated.
  - Coverage, accuracy, and timeliness of the FDI survey conducted by INSTAT need improvement to meet SDDS requirements for IIP statistics.
  - Industrial production index (IPI) needs monthly frequency and dissemination within six weeks of the reference period (currently quarterly and issued within 75 days).
  - Producer price index (PPI) to be disseminated monthly within one month of the reference period.
  - Coverage of quarterly labor market statistics—employment, unemployment and wages—needs improvement; labor force survey will be conducted starting from 2011 with questionnaires and survey frame refined.
  - Enhance role of SDDS correspondents in INSTAT and the MoF and improve coordination with SDDS country coordinator.
  - All three institutions require training in techniques of data dissemination.
- TA on data dissemination (consultation mission 2006 and SDDS assessment mission 2010) received well; request for TA to develop a specific prioritized action plan with a timetable to facilitate SDDS subscription.

### Institute of Statistics (INSTAT) — institutional capacity and reforms
- NA unit upgraded into an NA Directorate (NAD) with 11 employees in 2008.
- NAD reorganized into three sections: annual accounts, quarterly accounts, and NA development.
- Government provided resources in June 2010 for hiring of 47 new staff, among them are 30 experts, nine of whom will join the NA Directorate; staff salaries adjusted accordingly.
- Statistical Board (established by the 2004 Statistics Law) became operational end of 2005; comprises members from academia, the MoF, and the BoA.
- Program of Official Statistics for 2006-2011 approved by Parliament on January 31, 2008.
- Memoranda of Understanding signed between INSTAT and BoA, Ministry of Agriculture, Tax Authorities, and High Inspectorate of Declaration and Audit of Assets.
- Remaining institutional issues: coverage and timeliness of the FDI survey compiled by INSTAT for the BoA on a commercial basis.

### Modalities of TA delivery and major outcomes
- 2005 to mid-2010: larger part of STA’s TA program to INSTAT delivered through visits from the NA peripatetic advisor (4 three-week missions in 2008 and one two-week mission in 2009) preceded by a short three-day staff assessment visit in 2005; one-week mission in price statistics conducted in 2007.
- TA delivered predominantly by an expert due to shortage of STA staff and need for intensive delivery.
- Albania’s Project Management System (PMS) including expert’s backstopping from STA was keystone for TA provided in real sector statistics.
- INSTAT also benefited from extensive EU-financed TA:
  - Twinning Project Albanian Statistics toward EU with technical assistance of the Italian National Institute of Statistics, in partnership with Statistics Finland and the Hungarian Central Statistical Office.
  - IPA 2007 Multi-beneficiary Statistical Cooperation Program (IPA 2007) in Albania started in April 2010; provides TA for implementation of censuses of enterprises (agriculture and nonagriculture) and extensive TA on NA.
  - SIDA project from 2008 comprising two to three one-week price statistics missions each year.
- INSTAT expressed general satisfaction with mix of STA’s TA program; strong appreciation for long-term STA expert in NA and hands-on training approach.
- Feedback: longer duration visits (perhaps two months) would work better; TA could have benefited from better cooperation among all TA providers.

### Real sector statistics — TA delivery and outcomes
- March 2006 Data ROSC assigned four LNO ratings to national accounts statistics on resources, scope, source data, and statistics techniques; identified issues including untimely and poor questionnaire design, limited area coverage of HBS, insufficient frequency of surveys, insufficient estimates of nonobserved economy, weak assumptions, and limited benchmark.
- 2008 STA TA project prepared a long-term strategic plan for development of Albanian national accounts system.
- Improvements achieved:
  - Labour force survey and a country-wide HBS conducted.
  - Quarterly GDP series for 2002-2008 by production approach developed in 2008 and published each quarter since December 2008.
  - Improvements in methodology used in annual national accounts.
  - Changes in key annual source data resulted in new data for 2008 reference year during 2009.
  - 2009 review and revision of the Annual Structural Business Survey (ASBS); questionnaire improved with additional questions on changes in inventories and gross fixed capital formation.
  - Government nonmarket activities data available as of Q1, 2008.
- Some aspects of the strategic plan postponed pending start of NA component of IPA 2007 (will include censuses of agriculture and nonagriculture enterprises).
- Publication of the reference guide on data sources and methods for real sector statistics prepared within IPA 2007.

### Price statistics — TA delivery and outcomes
- 2006 Data ROSC noted outdated CPI weights, unsatisfactory HBS coverage (only urban households), and shortfalls in verification procedures.
- 2007 TA mission recommended new approach for selecting CPI market basket items; adopted and updated thereafter.
- New annual national-level HBS now conducted with data available for both urban and rural households at the 2, 3, 4, 5, and 6 digit COICOP levels; basket renewed accordingly.
- Rent estimation: each household in owner-occupied or rent-free housing asked to estimate rent on the open market; data to be used directly for weights for the new index.
- Most PFS action plan items and Data ROSC recommendations for price statistics implemented, except timeliness and periodicity of the PPI which delays SDDS subscription; difficult to overcome due to current compilation procedures (data collected by enumerators).
- Geometric means generally used for elementary aggregates; price relatives computed at individual price quotation level and aggregated employing current period to previous period matched price procedure and geometric mean formula.
- Remaining room for improvement in index construction and applying quality adjustments.

### Training for INSTAT staff
- INSTAT staff attended five training courses in real sector statistics:
  - Training course on NA at the INS (2006).
  - Quarterly NA course at the JVI (two staff, in 2008).
  - Price statistics courses at the INS (2005) and the JVI (2006).
- Four missions of STA’s 2008 NA project included significant training component.
- 2009 NA mission provided on-the-job training in concepts of quarterly GDP, including those relevant to developing a quarterly expenditure measure of GDP.

*Box 2. STA’s Technical Assistance Evaluation Missions to Albania and Georgia: Key Achievements in Developing Statistical Products and Assessment of Risks*

### 30.      Significant amounts of assistance in NA will be provided to INSTAT by the EU

### _020911 - 30.      Significant amounts of assistance in NA will be provided to INSTAT by the EU

### Assistance to INSTAT (national accounts)
- Significant amounts of assistance in NA will be provided to INSTAT by the EU in the years ahead, while a significant role remains for TA delivery by the IMF because of its flexibility in delivering targeted assistance.
- EU IPA 2007 phases and planned outputs:
  - Phase 3 (years 2010-2012): TA in compiling the quarterly national accounts by expenditure approach; SUTs, balancing commodity accounts, computing systems for final balancing; and developing sector accounts.
  - Phase 4 (2013-2014): compile symmetrical input-output tables, quarterly national accounts by income approach, and annual SUTs.
  - Phase 5 (2014-2016): produce five-yearly symmetrical input-output tables.
- Recommendation:
  - Future STA TA to INSTAT should be considered carefully in close collaboration with EU.

### INSTAT training request
- INSTAT requested more access to IMF training for price courses, and longer NA courses on methodology.
- Rationale:
  - Increased demand for training in real sector statistics is related to recent enhancements in staff complements and would support INSTAT’s reform programs.

### Bank of Albania — responsibilities and reporting
- The BoA is responsible for compiling monetary and financial statistics, and external sector statistics.
- Monetary and financial statistics (MFS), BOP and IIP statistics are reported by the BoA to STA, although there are technical difficulties in transmitting data using the integrated correspondence system (ICS).
- The BoA submits data to the IMF-World Bank Quarterly External Debt Statistics database (QEDS).
- The BoA has not yet embarked on Financial Soundness Indicators (FSIs) data compilation.
- The BoA has agreed to participate in Coordinated Direct Investment Survey (CDIS), but yet to submit data for year 2009.
- The BoA coordinates Albania’s SDDS preparations.

### Bank of Albania — staffing and resource issues
- Staffing changes and current composition:
  - In 2007, a new IIP unit was added to the external sector statistics section of the Statistics Department.
  - In 2009, three expert positions were added to the Statistics Department, resulting in a total staff of 26, of whom 12 are assigned to external sector statistics.
- Major staff resource concern: lack of IT experts.
  - Two attempts to hire an IT expert in the last three years were unsuccessful.

### Modalities of TA delivery and major outcomes (BoA external sector statistics)
- 2006 Data ROSC findings (source data rated low) identified infrequent and/or incomplete surveys for freight, insurance, smuggling adjustments for imports; travelers’ expenditures domestically and abroad; workers’ remittances; direct and portfolio investment; trade credit; and underreported grants from abroad to regional and local governments.
- STA 2006 and 2007 TA missions focused on addressing these issues.
- Progress achieved:
  - Quarterly survey on remittances started in Q1 2006 (in cooperation with INSTAT).
  - Following the 2006 FDI survey, annual IIP data started to be compiled, with limited coverage.
  - The IIP statement has been reconciled with the financial account.
  - Improved annual IIP (for 2008 data) and EDS were published in April 2010 for the first time in time series format on the BoA website and in the annual report with methodological notes.
- Constraints remaining:
  - Commercial agreement between the BoA and INSTAT (INSTAT conducts surveys on behalf of BoA at BoA expense) limits development of data sources; cost increases beyond BoA budget cause delays and affect statistical production.
  - IT infrastructure and support inadequate:
    - BOP statement generated through interlinked excel files.
    - Data entry and data verification procedures are manual.
    - IT support limited to simple data entry programs for travel and FDI surveys.
    - A project for implementation of an electronic data reporting system is at its initial stage.
    - Banking reporting system needs improvement for BOP compilation.
- BoA feedback on STA TA:
  - Broad appreciation for STA’s TA in external sector statistics.
  - Suggested improvements: widen focus of TA to more than one BOP component and avoid overlap between missions’ recommendations.

### Training for BoA staff
- BoA staff attendance (2005–2009):
  - Six IMF training courses in external statistics, including:
    - Two BOP courses in the INS (2005 and 2008).
    - Two BOP courses in the JVI (2006 and 2008).
    - One EDS course in the JVI (2008) and one in the INS (2009).
  - Two regional seminars in Ljubljana, Slovenia, on CDIS (2008) and Remittances (two participants, 2009).
- Participant feedback:
  - Value recognized for short specialized courses for experienced staff and longer general courses for newcomers.
  - Noted difficulties in proper channeling of course solicitation forms to ensure the right level of participation; STA should emphasize the statistical nature of courses designed specifically for compilers.

### TA needs for the period ahead (BoA)
- Under EU auspices, the BoA has been twinned with the Bank of Italy and Bank of France; the twinning project envisaged coverage of:
  1. Design of the development plan in the areas of BOP/IIP statistics and MFS.
  2. Delivering TA in compiling stocks and flows in FDI and portfolio investment.
  3. Staff training on EU/ESCB output requirements and methodological standards for BOP/IIP statistics (implementation of BPM6 recommendations) and for MFS.
  4. “On-the-job” training in data collection methods, questionnaire design, business registers, and IT solutions for data collection and information storage, with special attention to stocks and flows of FDI and portfolio investment.
  5. Choice of a model for strengthening the present BOP/IIP compilation method and gradual approach to EU/ESCB standards and definitions.
  6. Development of the basis for transaction accounts for the banking system.
  7. Identification of links between the banking system and external statistics, and appropriate methods for revaluations.
- Implementation status:
  - A project aimed at implementation of an electronic reporting system has started with assistance from the Bank of Italy; expected to be completed between the end of 2011 and the middle of 2012.

### Ministry of Finance of Albania — responsibilities and reporting
- The Organic Budget Law and the Guidelines on State Budget Performance mandate the MoF’s responsibility for compiling and disseminating government finance statistics (currently on a modified cash basis).
- MoF institutional arrangements:
  - A separate section under the General Treasury Directorate for Financial Reporting is responsible to compile the Fiscal Budget Consolidated Indicators table (monthly/annual), GFS (annual) and IFS (monthly) tables.
  - This section is supported by a counterpart section within the IT Department.
- The reporting of the GFS statistics to STA using the ICS has not yet started.

### Modalities of TA delivery and major outcomes (MoF)
- Progress facilitated by a strong dedicated compilation unit and authorities’ commitment.
- 2006 Data ROSC noted progress including design and implementation of an accrual-compatible database infrastructure and an advanced migration path to GFSM 2001.
- A one-week STA expert mission visited the MoF in February 2008; the MoF regards the quality of STA’s TA delivery highly.
- AMoFTS (new government accounting system) developments:
  - Since 2008, AMoFTS partially operational.
  - System operated by Oracle E-Business Suite accounting software, on line with 36 Treasury District Offices, and has facility for electronic payments with the BoA.
  - Issues remain:
    - Generating balance-sheet transactions of the Treasury, including all special funds and debt transactions—resolution dependent on banking system and Tax/Customs Administration systems (not compatible with AMoFTS).
    - AMoFTS is not able to generate modified accrual debt data.
    - General Treasury Department reports monthly/annual data of external donor financed projects only through project unit reports and does not check this information against donors’ agreements.

### Training for MoF staff
- MoF assessment of STA training in GFS: very effective.
- During 2005-2009, five staff from the MoF attended GFS statistics courses at the INS and the JVI, and one person attended the External Debt course at the JVI.

### TA needs for the period ahead (MoF)
- MoF envisages STA TA contribution across budget/treasury and debt transaction processes, specifically:
  - Moving to modified accrual basis accounting by assisting in designing and developing reports for compilation of GFS data from the AMoFTS system database.
  - Adopting the accrual basis for recording data on government debt.
- Coordination considerations:
  - The MoF is included in the IPA 2007 project, which plans by 2015 to connect online all general government units, increase staff skills/capacity, and modernize electronic equipment.
  - STA’s future GFS TA needs to be planned in coordination with the IPA 2007 program.
- MoF stressed high-level demand for STA GFS and external debt training; discussed feasibility of organizing a regional training course.

### GEORGIA: TA evaluation by recipient agency — SDDS and institutional engagement
- An STA mission visited Tbilisi July 16–18, 2010 to evaluate STA TA and met with NBG Deputy Governor Mestvirishvili, GEOSTAT Executive Director Chelidze, and MoF Financial Policy Department Head Kavelashvili.
- Georgia’s SDDS subscription:
  - Georgia subscribed to the SDDS on May 17, 2010.
  - STA’s SDDS TA included assisting with institutional issues related to SDDS subscription, developing a detailed action plan, facilitating interagency coordination, and helping populate NSDPs with SDDS data categories per IMF electronic procedures for quarterly certification of national metadata.
  - GEOSTAT, NBG, and MoF made substantial efforts to achieve SDDS objectives.
  - SDDS TA (two missions, in 2006 and 2010) was highly regarded; the 2010 mission was critical in identifying remaining blockages and providing guidance.

### National Bank of Georgia — responsibilities and reporting
- NBG is responsible for compiling monetary and financial statistics, and external sector statistics.
- MFS, BOP and IIP statistics are reported by the NBG to STA using the ICS on a timely and regular basis for publication in the IFS and BOPSY.
- NBG participates in the IMF’s CPIS and the CDIS, and submits data to QEDS.
- Georgia does not participate in the coordinated compilation exercise (CCE) for FSIs conducted by the IMF and has yet to begin compiling FSIs.

### TA delivery modalities and outcomes (NBG)
- Between 2005 and mid-2010:
  - STA delivered two TA missions in external sector statistics (2005 and 2006) and one mission in MFS (2009).
  - From November 2006 to November 2008, a long-term regional statistical advisor (RSA) in external sector statistics assisted NBG through six peripatetic missions.
  - NBG staff attended 12 training activities in monetary and external sector statistics including INS and JVI courses, regional topical seminars on FSIs, CDIS, Remittances, ITRS, and the International Trade in Services Seminar conducted by UNSD under TFITS with STA participation.
  - RSA provided hands-on training in methodology and data compilation of external sector statistics.

### Monetary statistics and Financial Soundness Indicators (NBG)
- STA is the sole provider of TA in MFS to the NBG; TA provided by IMF headquarters staff.
- July 2002 Data ROSC recommendations: improve coverage of nonbank depository corporations, transparency, and metadata documentation.
- Developments:
  - NBG began compiling monetary data using STA Standardized Report Forms (SRF); data published in IFS Supplement since September 2006.
  - Historical time series revised back to December 2001 in accordance with SRFs.
  - Publication on methodology for compiling MFS was updated, elaborated, and redisseminated.
  - A special telephone line created at NBG to communicate with users.
- March 2009 TA mission occurred significantly after initial request.
- Post-mission actions:
  - Improved classification of financial instruments and expanded coverage to include microfinance companies and insurance companies.
  - Reclassification and inclusion of a number of special deposit accounts in national and foreign currencies into broad money.
  - Inclusion of credit unions’ accounts not pursued due to statistical insignificance; regular monitoring of credit unions’ operations established via quarterly data on total assets and total liabilities collected by Supervisory Department.
  - To develop insurance company data, Monetary Statistics Division cooperates with Supervisory Department to ensure quarterly-collected data suffice for compiling accounts of other financial corporations (OFCs).
  - Chart of accounts revised and implemented from 2010 data.

### External sector statistics (NBG)
- July 2002 Data ROSC assessed BOP compilation as generally inadequate with largely non-observed ratings across legal settings, resources, source data, statistical techniques, relevance, and dissemination.
- STA responses:
  - Fielded three TA missions (2003, 2005, 2006) and provided RSA support and IMF headquarters staff assistance during 2006-2008.
  - Authorities found peripatetic RSA missions particularly effective and TA reports useful and timely.
  - Georgia’s Project Management System (PMS) shaped TA in external sector statistics.
- Institutional and source-data improvements:
  - In 2006, BOP compilation function transferred from State Department for Statistics (now GEOSTAT) to NBG.
  - RSA assisted NBG in refining legal settings for external sector statistics and improving interagency data sharing.
  - Proposed amendments to the Law on the NBG ratified by Parliament on March 14, 2008, assigning primary responsibility to NBG for compiling external sector stock and flow statistics.
  - NBG representative became a member of the GEOSTAT Board (National Statistics Council) to facilitate coordination and data sharing.
  - Internal NBG resolution implemented to ensure smooth flow of external sector data between BOP Division and other NBG units.
  - Staff resources of NBG’s BOP Division were augmented.
  - Institutional arrangements set up to ensure Georgia’s participation in QEDS, CPIS, and CDIS.
- Source data and systems:
  - In January 2009, NBG implemented the ITRS as the foundation for BOP compilation.
  - RSA-assisted preparatory work for ITRS included institutional measures, legal mandates for ITRS reporting, IT development for ITRS constituencies, ITRS design and field testing, elaboration of ITRS data verification and validation procedures, and ITRS consulting and training for reporting banks.
  - For ITRS sustainability, computer resources require improvement.
  - Program for compiling gross external debt statistics developed and resulted in submission of QEDS data required by SDDS.
  - NBG launched compilation of quarterly IIP, published in BOPSY and IFS starting from November 2007.
  - NBG finalized Georgia’s Reserve Template according to International Reserves and Foreign Currency Liquidity: Guidelines for Data Template, disseminated in May 2010.
- Policy analysis and credibility:
  - TA program aimed to facilitate policy analysis and resolve credibility issues regarding external sector statistics.
  - Discrepancies identified between IMF area department data and NBG-provided data to STA.
  - An aggregated BOP presentation format was developed and agreed by all parties, with links to standard and analytical presentations in the country’s Economic Data Sharing System.
  - At end-2007, NBG launched a new publication of Georgia’s external statistics starting with annual data for 2006; publication contains about 150 pages of stock-and-flow data, charts, tables, analytical notes, and descriptions of sources and methods.

*Source: _020911 - 30.      Significant amounts of assistance in NA will be provided to INSTAT by the EU*

### 58.      The methodology and statistics techniques for recording specific external sector

### _020911 - 58. The methodology and statistics techniques for recording specific external sector transactions

### External sector statistics: methodological refinements and coverage
- The methodology and statistics techniques for recording specific external sector transactions were refined. These include the recording of:
  - external debt data from the state-owned enterprises,
  - selected international trade in services data,
  - international reserves,
  - remittances,
  - transactions related to the Georgian segment of the Baku-Tbilisi-Ceyhan pipeline,
  - transfer pricing, and
  - other transactions related to the oil and gas sector.

### Regional cooperation and peer learning
- The TA program aimed at improved regional cooperation:
  - 2007: the RSA facilitated a visit of the BOP compilers from the National Bank of Azerbaijan to the NBG.
  - 2008: compilers from the NBG visited the National Bank of Ukraine to benefit from the ITRS experience in Ukraine.
  - 2009: compilers from the National Bank of Armenia visited the NBG to learn about the ITRS implementation process.

### Training and capacity building for the National Bank of Georgia (NBG)
- Training delivered and participation:
  - Two training courses on MFS (2005 and 2007) and one training seminar on FSI (2007) at the JVI.
  - On-the-job training during TA missions.
  - Attendance at one BOP course at the INS (2007), two BOP courses at the JVI (2008 and 2009), one EDS course at the JVI (2007).
  - Participation in regional seminars: ITRS (Baku, 2007), CDIS (Ljubljana, 2008), International Trade in Services (Kyiv, 2008), Remittances (Ljubljana, 2009).
- Participant feedback and constraints:
  - Courses were generally found beneficial; workshops and methodology discussions were useful.
  - Concerns over limited opportunities for MFS training going forward, constrained further by language.
  - Feasibility of NBG hosting a Russian-language FSI regional seminar was discussed.

### TA needs for the NBG going forward
- Identified needs:
  - TA to begin to compile financial soundness indicators.
  - Continued traditional training in MFS, including compilation issues based on the Compilation Guide, 2008.
  - Specialized training on FSIs (preferably in Russian).
  - Further TA to strengthen data sources, notably the ITRS and private external debt compilation program.
  - Training requested by the authorities in methodology of the Balance of Payments and International Investment Position Manual (BPM6), and in compilation issues for international trade in services statistics.

### GEOSTAT: institutional change and challenges
- Establishment and mandate:
  - GEOSTAT was established as an independent agency in January 2010, successor to the Statistics Department of the Ministry of Economy of Georgia.
  - New management prioritizes building trust and increasing the credibility of statistics produced by GEOSTAT.
  - Much remains to be done.
- Key lessons from GEOSTAT's TA absorption:
  - (1) Mainstream statistics in national priorities and link to the budget.
  - (2) Need for extensive coordination with donors.
  - (3) Importance of a statistical legal framework.
  - (4) Central role of adequate resources, including limited staff turnover and means to facilitate transfer and retention of knowledge.

### Modalities of TA delivery to GEOSTAT and outcomes
- TA delivered (2005 to mid-2010):
  - One TA mission in national accounts (2005).
  - Three missions in price statistics (2005, 2006, 2007).
- Constraints on effectiveness:
  - Lack of financial, staff, and computer resources.
  - Staff turnover and unresolved communication issues within GEOSTAT.

### Real sector statistics — assessment and progress
- Baseline (July 2002 Data ROSC):
  - Seven largely nonobserved (LNO) ratings assigned to national accounts statistics.
  - Critical issues: legal basis and resources for statistics; source data and statistics techniques; inadequate coverage of the business register; poor coverage in agriculture, retail trade, construction, catering, and services; limited administrative data sources to estimate the nonobserved economy; inadequate data for imports and exports of services; and data dissemination practices.
- Improvements attributable to TA:
  - Quarterly and annual GDP estimates produced according to the System of National Accounts 1993 (1993 SNA) under both production and expenditure approaches.
  - National accounts and price statistics reported by GEOSTAT to STA using the ICS on a timely and regular basis for publication in IFS.
  - 2004 and 2005 TA missions found scope for improving constant price estimates and advancing development of a system of SUTs.
- Remaining weaknesses and data gaps:
  - TA output affected by weak legal framework and inadequate resources.
  - Reporting of statistics is voluntary; no sanctions for nonreporting or misreporting under the Statistics Law.
  - 2009: GDP data revised based on business survey.
  - Need to update the sample frame for the quarterly agriculture sample survey (based on the 2004 Census of Agriculture); progress dependent on donor financing.
  - Lack of IT resources hampers development of business statistics (quarterly census of big companies and sample of SMEs).
  - Compilation methods for volume measures largely unchanged.
  - No GDP by expenditure approach at constant prices due to absence of export/import price indexes and problems with deflation of consumption.
  - Consumption of fixed capital estimated with historical time series back to 1996.
  - A set of SUTs prepared in more detail than previously for years since 1998.
  - Household consumption now broken down according to COICOP (previously published as a total figure).

### Price statistics — progress and outstanding issues
- Progress:
  - Development of agricultural price indices.
  - Plans to upgrade both the CPI and PPI methodologies.
- Outstanding issues:
  - PPI specification and dissemination practices need improvement; PPI has gaps including roads and preparation of construction sites.
  - 2007 mission: focus on extending index scope to cover agriculture; full survey at that time expected to be financed by TACIS.
  - Collection sources and methods evaluated; detailed analysis of pilot survey (July-December 2006).
  - Treatment of seasonal products in the CPI strongly criticized by users; a new imputation procedure for out-of-season prices implemented in January 2007 as part of the index rebase, but room for improvement remains.
  - No progress reported on the PPI.

### Training for GEOSTAT staff
- Training activities attended:
  - 11 training activities in real and external sectors statistics.
  - NA training courses at the INS (2006 and 2009).
  - Quarterly NA course at the JVI (two staff, 2008).
  - Price statistics course at the JVI in 2006.
  - As a compiling agency for components of external sector statistics, GEOSTAT staff attended BOP statistics courses (INS in 2005, JVI in 2006 and 2008), external debt statistics course at the INS (2007), and regional seminar on remittances (Ljubljana, 2009).
- Participant feedback:
  - Longer NA courses on methodology were more beneficial than shorter ones, as they laid a better foundation.

### TA needs for GEOSTAT going forward
- Priorities to be defined in the three-year Master Plan (under development).
- Identified TA priorities:
  - Quarterly NA volume measures.
  - Further development of SUTs.
  - Coordination of IMF TA with other TA providers (World Bank and European Commission).
  - GEOSTAT management expressed the need for more training in NA and price statistics.

### Ministry of Finance (MoF): government finance statistics (GFS)
- Responsibilities and reporting:
  - MoF compiles GFS and reports data to STA for the GFS Yearbook and IFS.
  - Consistent time series available for three years due to transition to GFSM 2001 methodology.
- Reform context:
  - Clear understanding of synergies between GFS quality and accounting reform; strategy set out in Decree 101 issued by the MoF on February 10, 2006.
  - Reforms documented in Accounting Reform Strategy 2007-2017.
- Baseline (2002 Data ROSC):
  - Fiscal statistics did not meet international standards for concepts, definitions, and classifications; analytical framework broadly based on GFSM 1986 but with important departures.
  - Largely not observed ratings for resources, transparency, and relevance of the GFS.
- Modalities of TA delivery and outcomes:
  - 2006 GFS TA mission noted considerable improvements.
  - Georgia embarked on reform of central and local government budget and accounting systems to fully adopt GFSM 2001 and IPSASs.
  - Degree of implementation constrained by budget law requirements and pace of accounting reform.
  - Achievements: Treasury single account established; cash planning and cash management introduced; GFSM 2001 functional and economic classifications applied to modified-accrual data.
  - COFOG (GFSM 2001 version) introduced in January 2008 for Central Government and from 2010 for Local Governments.
  - Unresolved issues: classification by institutional sector of Legal Entities at Public Law (LEPLs); valuation and coverage of nonfinancial assets; need to expand balance-sheet items (currently only liabilities compiled and classified according to GFSM 2001).
  - Improvements in accessibility and serviceability of GFS with expanded information on the upgraded MoF website.
  - MoF satisfied with GFS TA modalities and outcomes; expressed preference for assistance through a peripatetic advisor.
- Training for MoF staff:
  - 2005-2009: six staff attended GFS statistics courses at the JVI and INS; one person attended an External Debt course at the JVI.
  - MoF officials considered STA’s training activities in GFS very effective.
- TA needs ahead:
  - MoF expressed strong desire to increase Georgia’s access to GFS training.
  - Further TA needs to be determined later in line with pace of reform implementation.

### Conclusions relating to Georgia (context and assessment)
- Institutional changes and resource constraints:
  - Early 2010: Department of Statistics re-established as GEOSTAT, an autonomous agency responsible directly to the President.
  - GEOSTAT has considerable operational independence and in principle is no longer bound to civil service wage rates, but remains subject to the budget; financial resources have been cut by a cumulative 50 percent in recent years.
  - Consequences: wage rates below those for the public sector as a whole; difficulties in staff recruitment and retention; GEOSTAT mandated to generate revenue by charging for products.
  - Negative public perception of GEOSTAT persists as a legacy of earlier structure and management; absence of credibility in official statistics may impede effective policy implementation.
- Assessment of STA TA effectiveness:
  - STA technical assistance broadly successful relative to the July 2002 Data ROSC baseline, where most topical areas were “largely observed” or “largely not observed (LNO)”.
  - Significant reforms in recent years: adoption of ITRS, subscription to the SDDS, and multiple other statistical reforms—many directly related to STA TA.

*Italic: Source — excerpt from the IMF PDF chapter "_020911 - 58.      The methodology and statistics techniques for recording specific external sector transactions" (provided content).*

### 89.      Technical assistance was most intensive in external sector statistics, where for two

### _020911 - 89.      Technical assistance was most intensive in external sector statistics, where for two

### Technical assistance in external sector statistics
- Technical assistance (TA) was most intensive in external sector statistics, where for two years a regional advisor was based in Azerbaijan working exclusively on Azerbaijan, Georgia, and Uzbekistan.
- Additionally, there were since 2005 STA missions on national accounts, price statistics, as well as monetary and government finance statistics.
- Success factors linked to clear success results:
  - The availability of committed counterparties;
  - Low staff turnover;
  - Clearly specified target objectives.

### Constraints and coordination issues
- A key reason for unsuccessful TA: lack of resources, in particular that TA was delivered on the presumption that donor financing was essentially in place. When this financing fell away, the agency concerned—GEOSTAT—was unable to take implementation forward.
- There was some limited criticism that TA had occasionally not been sufficiently hands-on to be operationally useful.
- STA assisted Georgia through its coordinating role regarding the SDDS:
  - Georgia’s progress was stalled over issues of coordinating and monitoring the country’s commitments upon SDDS subscription.
  - An STA TA mission helped craft an arrangement between the NBG and GEOSTAT under which GEOSTAT would retain the role of SDDS coordinator, while the NBG would carry out the resource-intensive activities of maintaining the ARC and monitoring compliance with the ARC.
- Concern: Georgia and some near-neighbors are not designated to participate in an RTAC while RTACs have substantially expanded TA delivery.
- Risk: With emphasis on the “new” statistics identified in G-20 work and post-global financial crisis priorities, less prioritization might be given to a small country such as Georgia at the incipient stage of becoming an emerging market economy. This is problematic because in areas such as monetary, balance of payments, and government finance statistics there are no comparable suppliers to the Fund.

### Modes of delivery and training
- Modes of delivery were broadly appropriate according to Georgia agencies:
  - Intensity of assistance from the regional advisor suited pervasive BOP problems.
  - One-off short-term missions suited specific issues in other datasets (e.g., broadening institutional coverage in monetary statistics).
  - Looking forward, it was generally agreed that short-term single-focused missions would likely be sufficient to meet Georgia’s needs for the time being.
- Universal agreement on the importance of IMF training in statistics:
  - Many key counterparts had attended such training and stressed its benefits.
  - Georgia’s training needs were felt to be substantially greater than what was presently available.
  - Georgia has access to only the JVI among regional training centers, and highly selective eligibility for INS courses in Washington.
  - Both the NBG and GEOSTAT expressed serious interest in hosting a regional training course in Tbilisi next year.
- Suggested complementary approaches to training:
  - More in-country courses (Georgia showed interest in hosting a regional training course);
  - Emphasis on recipients passing on training (train the trainers);
  - Possibly some distance learning.

### Key findings and policy recommendations
- Key findings:
  - STA’s TA was well designed and broadly successful; where it had not been successful, this seemed due to the serious lack of available resources.
  - In each of the three agencies, a number of technical issues remain where further targeted STA TA would be useful.
  - The MoF has encountered a number of glitches in implementing its plan to migrate to GFSM 2001 by 2017, and TA might be useful to ensure that this plan stays on track.
  - Now that progress has been made and Georgia has subscribed to the SDDS, further statistical enhancements could buttress Georgia’s position at an important stage of becoming an emerging market economy.
- Recommendations:
  - Where successful implementation of TA is likely to require additional resources, particularly as regards GEOSTAT, STA could work with the agency to identify likely donors and to jointly design projects that would include the donors’ participation.
  - Explore enhancements to the availability of training, perhaps through assisting the NBG or GEOSTAT to host regional training.
  - Update Georgia’s Data ROSC, which is now very out of date and conveys a negative impression as to the quality of Georgia’s statistics; an update may be useful.
  - Consider direct assistance to GEOSTAT’s communications strategy.
  - Note: The recent increase in staff resources at INSTAT, particularly coming at a time of government cutbacks, is a strong sign of official support for macroeconomic statistics.

### Overall assessment and strategic considerations
- STA’s TA was successful in addressing priority issues and using appropriate modalities, particularly peripatetic/regional advisors for difficult topics of major concern.
- STA tailored forms and coverage of TA to country circumstances rather than applying a one-size-fits-all approach (Albania and Georgia had different courses to their present state of statistical development).
- The Data ROSC exercise was useful for identifying key issues and prioritizing recommendations. Both Georgia and Albania have shown substantial implementation since their Data ROSCs (2002 for Georgia and 2006 for Albania). For Georgia, the Data ROSC is now very much out of date and would be misleading if used as a guide to the present state of Georgian statistics; updating the Data ROSC is recommended to provide an accurate contemporary picture and guidance for TA needs.
- Peripatetic/regional advisors are effective for supplying TA in countries at a similar stage of statistical development as Albania and Georgia:
  - A substantial work program can be covered over a year or two;
  - Agencies and experts develop strong working relationships;
  - Periodic absences encourage knowledge transfer and operationalization by the agency.
- Strategic TA focus and scope:
  - A medium-term focus for TA would be useful. For Albania, one focus might be SDDS subscription with critical path analysis to identify and bypass road blocks and to facilitate interagency coordination.
  - TA should be offered not only on macroeconomic topics but also on other aspects of data quality (legal and institutional arrangements, transparency, revisions policies, advance release calendars).
  - Policy decision for countries with multiple providers (e.g., Albania): whether STA should run down assistance where others are present or concentrate on remaining areas under STA auspices. The likely approach is a country-by-country compromise with coordination among providers.

*Source: _020911 - 89.      Technical assistance was most intensive in external sector statistics, where for two*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2011/_020911.pdf_