{
  "title": "Counting Everything That Counts",
  "publication": "IMF News, November 14, 2019",
  "sourceUrl": "https://www.imf.org/en/news/articles/2019/11/14/sp111419-counting-everything-that-counts",
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  "summary": "Opening Remarks by IMF First Deputy Managing Director, David Lipton",
  "publishDate": "2019-11-14",
  "sections": [
    {
      "heading": "Context and purpose",
      "content": "- Opening Remarks by IMF First Deputy Managing Director, David Lipton\n- IMF Seventh Statistical Forum: “Measuring the Informal Economy”\n- Washington, DC\n- November 14, 2019"
    },
    {
      "heading": "Why measure informal activity",
      "content": "- Informal activities are often hidden to avoid tax obligations or laws, complicating measurement and policy design.\n- The informal economy can be as large as, or larger than, the formal sector in some low-income countries.\n- Accurate measurement would improve policy tools, e.g., assessing debt sustainability or applying fiscal rules.\n- Illustrative experience: when working on Poland in the early ‘90s, shifts to informal production explained apparent declines in formal sector output (food processing example).\n- Relevant observations and quotations preserved from remarks:\n  - “Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted.”\n  - “if you can’t measure it, you can’t improve it.” (Peter Drucker)"
    },
    {
      "heading": "Path forward: concepts, capacity, and incentives",
      "content": "- Historical and institutional foundations:\n  - IMF established a conceptual framework to measure the informal economy in 1982 with a book called The Underground Economy in the United States and Abroad.\n- Capacity building:\n  - The IMF Statistics Department has enormous demand for Technical Assistance to improve GDP measurement.\n  - By covering economic activity that was previously not- or ill-measured, one country in Africa saw its GDP increase by 89 percent!\n- Incentives for formalization:\n  - Reforms across taxation, labor law, product markets, and the business climate can encourage formalization.\n  - Countries cited as having achieved important results through formalization efforts: Egypt, India, and Mexico.\n- Institutional initiatives:\n  - IMF staff formed a task force on the informal economy in 2017 to identify data collection techniques and compilation methods to reflect the informal economy in external sector statistics.\n  - Work with other international agencies on illicit financial flows is ongoing.\n  - One case presented at the Forum argues that tracking illegal activity in the US national accounts would have raised 2017’s GDP by 1 percent.\n- Collaboration:\n  - The World Bank, the International Labor Organization, and the UN are active on informality from labor-market perspectives; the IMF collaborates closely with them."
    },
    {
      "heading": "The power of Big Data and new techniques",
      "content": "- Big data, AI, and innovative data sources can provide new insights on economic activity and help measure the informal sector.\n- Examples highlighted for upcoming presentations:\n  - Chinese National Bureau of Statistics: using transactions on digital platforms to observe informal activities; key challenge is disentangling informal activity from already formal activity.\n  - Central Bank of Mexico: using satellite nightlights imagery to estimate that the “non-registered” economy in the country could represent up to 29 percent of GDP.\n  - Fund researchers have used similar techniques to gauge economic activity in Iran and Venezuela.\n  - Use of big data to estimate economic activity in countries where official GDP and trade data are imprecise or too delayed, e.g., Zimbabwe."
    },
    {
      "heading": "Key takeaways and objectives for the Forum",
      "content": "- Return to core statistical business: measuring economic activity accurately using all possible means.\n- Objectives for participants:\n  - Share practical advice on measuring informality.\n  - Explore methodological innovations and capacity-building approaches.\n  - Identify actionable ways to incorporate informal activity into macroeconomic statistics.\n\nOpening Remarks by IMF First Deputy Managing Director, David Lipton — IMF Seventh Statistical Forum: “Measuring the Informal Economy”, Washington, DC, November 14, 2019\n\n---\n\n\n References\n\n- David Lipton\n- 7th Statistical Forum\n- 6th Statistical Forum\n- Blog: The Global Informal Economy: Large but On The Decline\n- Mexico and the IMF\n- United States and the IMF\n- Speeches\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2019/11/14/sp111419-counting-everything-that-counts"
    }
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    "Published: November 14, 2019",
    "Opening Remarks by IMF First Deputy Managing Director, David Lipton",
    "IMF Seventh Statistical Forum: “Measuring the Informal Economy”",
    "Washington, DC",
    "November 14, 2019",
    "Informal activities are often hidden to avoid tax obligations or laws, complicating measurement and policy design.",
    "The informal economy can be as large as, or larger than, the formal sector in some low-income countries.",
    "Accurate measurement would improve policy tools, e.g., assessing debt sustainability or applying fiscal rules.",
    "Illustrative experience: when working on Poland in the early ‘90s, shifts to informal production explained apparent declines in formal sector output (food processing example).",
    "Relevant observations and quotations preserved from remarks:",
    "Historical and institutional foundations:",
    "Capacity building:",
    "Incentives for formalization:",
    "Institutional initiatives:",
    "Collaboration:",
    "Big data, AI, and innovative data sources can provide new insights on economic activity and help measure the informal sector.",
    "Examples highlighted for upcoming presentations:",
    "Return to core statistical business: measuring economic activity accurately using all possible means.",
    "Objectives for participants:",
    "[David Lipton](http://www.imf.org/external/np/omd/bios/dl.htm)",
    "[7th Statistical Forum](https://www.imf.org/en/News/Seminars/Conferences/2019/03/25/7th-statistical-forum)",
    "[6th Statistical Forum](https://www.imf.org/en/News/Seminars/Conferences/2018/04/06/6th-statistics-forum)",
    "[Blog: The Global Informal Economy: Large but On The Decline](https://blogs.imf.org/2019/10/30/the-global-informal-economy-large-but-on-the-decline/)",
    "[Mexico and the IMF](http://www.imf.org/external/country/MEX/index.htm)",
    "[United States and the IMF](http://www.imf.org/external/country/USA/index.htm)",
    "[Speeches](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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