Euro-Mediterranean Statistical Co-Operation Programme

MEDSTAT III  Euro-Mediterranean Statistical Co-operation

Euro-Mediterranean Statistical Co-operation Programme Contract: ENPI/2010/234-479 Study visit on BOP Statistics - REPORT Rome – 9/10 June 2011

Subject STUDY VISIT TO THE BANK OF ITALY ON BOP STATISTICS

Country ENP SOUTH PARTNER COUNTRIES

Participants 16 PARTICIPANTS (ALL COUNTRIES EXCEPT SYRIA)

9- 10 JUNE 2011 Dates & Venue ROME

Document’s identity:

François RENARD and Henri TYRMAN, MEDSTAT Experts for Trade and BoP Author Statistics AIDCO: Mr. Christophe INGELS, Mrs. Alessandra SENSI Recipient(s) ESTAT : Mrs. Rosemary MONTGOMERY, M. Francesco NATALINI ENP South Countries: participants to the Workshop Date 21/06/2011

1. Summary

A study visit on Balance of payments statistics has been hosted by the Bank of Italy. 8 Mediterranean countries took part to the visit (all MPCs, except Syria).

The main objective of the study visit was to learn about the conditions and constraints of implementation of a new BOP data collection system. - To present the reasons why the settlement based system has been replaced by a system based on direct reporting and surveys, - To present and discuss the specific methods and tools applied to compile the current account (with a focus on trade in services), the financial account (with a focus on Foreign Direct Investment), and the International Investment Position.

The study visit has been highly appreciated by all participants thanks to the great interest of presentations and involvement of the staff of the Bank of Italy, as well as the active participation of MPCs representatives.

2. Main contents

Presentations have focused on the following topics:

- The transition to the new BOP/IIP data collection and compilation system: what have been the reasons for changing the collection system (limits of the settlement system, the European context), the basic principles of the new system and the organization of the project.

This project is implemented by: ADETEF – MEDSTAT III 5, place des Vins de France 75573 Paris Cedex 12 – France Tel.: +33 (0)1 53 44 25 60 / 22 84 / 22 88 Fax: +33 (0)1 53 44 22 90 1 MEDSTAT III  Euro-Mediterranean Statistical Co-operation

- Overview of sources and methods used for the new system: the use of the matrix to define the appropriate sources for each of the BOP and IIP main components and the different resident sectors; the role played by direct reporting and surveys. - Presentation of the sources used for trade in services: the international travel border survey on travellers expenditures, the merchandise transport survey (defining quantities and transport costs), the direct reporting survey for data collection on “other services” (definition of the reference population and of the sample, design of the questionnaire). - The information model and the IT infrastructure: the use of an integrated reporting scheme aiming to avoid redundancies in data requests from the different categories of data providers (banks, other financial intermediaries, non-financial enterprises) and to describe all statistical data. - The business register and the sampling techniques: the rules to be used to build a BOP business register and the Italian experience (choice of auxiliary variables, methods for stratification), the selection of direct reporters. - The modelling approach for the compilation of compensation of employees and current transfers. - Foreign Direct Investment : the new requirements of international organizations (BPM6, new FDI Benchmark Definition) and the stepwise approach adopted by Italy; the direct reporting method used for the compilation of FDI flows and stocks. - Portfolio investment: the security by security data collection combining direct reporting and indirect reporting from banks and custodians. - The use of direct reporting for “other investments” data collection. - The model for the calculation of the FISIM.

3. Main Conclusions

The change of the Italian balance of payments collection from a bank settlement to a direct reporting and survey system is a consequence of: - A decreased availability and usability of settlements data due to the use of an exemption threshold within the EU zone and an increasing disconnection between settlements and BOP transactions. - The need to improve the quality of BOP statistics and to face the increasing requirements from the international organizations. - The need to reduce the reporting burden with the use of a sample survey rather than the use of a census.

The Italian experience is not unique, as most European countries had for the same reasons to adapt their BOP collection systems. EU MS were free to adopt the most appropriate solution in order to fulfill output requirements. However direct reporting and surveys have been found to be the best solution in finding the middle ground between quality, level of detail and cost.

The following conclusions can be drawn from the presentations and discussions: - The legal framework has generally to be adapted in the context of a direct reporting and survey system. The legal framework needs to clearly define the reporting obligation of respondents and to facilitate the exchange of data for statistical purposes between the different administrations (including tax authorities). - Different types of organization may be possible for BOP and IIP data collection and compilation: either a share of responsibility between the NSO (in charge of the current account) and the Central Bank (in charge of the financial account and of the BOP publication), or a concentration in the hands of the Central Bank (as it is the case in Italy). - The selection of respondents needs to rely on an accurate and updated tailor made business register initially fed with data coming from existing bank settlements system and then updated with appropriate variables derived from administrative data sources. - The focus needs to be put on “big players” when defining the population of direct reporters, while a sampling survey is generally more appropriate for small and medium enterprises. - A close and early co-operation with respondents about the change-over process and the new reporting requirements highly facilitates the change of data collection. The BI has organized road show and dedicated meetings to present the direct reporting to enterprises and organized a pilot test for the formalization and detailed definition of the reporting forms. - The transition to the new system would be highly facilitated if the Direct Reporting system starts in parallel with the “old system”, as it would help to fine-tune the results. - Changing to Direct Reporting needs appropriate resources in order to monitor the system as it increases the burden for the BOP compilation with the need to develop and maintain a business register and to maintain a close contact with companies. BOP compilers’ skills has also generally to be expanded in both domains of statistics and accountancy.

4. Evaluation

The evaluation of the study visit by the participants was very positive with regard to the contents of presentations as well as the organisation of the study visit. The average global evaluation for this event was 4,6.

Annex 1: agenda of the Study Visit THURSDAY, June 9

Chair: Mr. Enrico D’ONOFRIO (Head, Statistics Collection and Processing Dept.)

9,15 – 9,30 Welcome (Mr. Giorgio Gomel, Head, International Economic Analysis and Relations Dept.)

9,30 – 9,45 Introductory remarks (Mr. Enrico D’Onofrio, Head, Statistics Collection and Processing Dept. )

9,45 – 10,15 The transition to the new BOP/IIP data collection and compilation system (Mr. Giovanni Giuseppe Ortolani, Statistics Collection and Processing Dept.)

10,15 – 11,00 The structure of the new system: overview of sources and methods (Ms. Laura Graziani Palmieri, Statistics Collection and Processing Dept.)

11,00 – 11,15 Coffee break

11,15 – 12,00 Trade in services: the “Travel” and “Transport” surveys (Ms. Simonetta Zappa and Ms. Eva Iannario, Statistics Collection and Processing Dept.)

12,00 – 12,45 Trade in services: the “Other services” direct reporting survey (Ms. Simonetta Zappa and Ms. Eva Iannario, Statistics Collection and Processing Dept.)

12,45 – 13,45 Lunch

13,45 – 14,30 Group photo and visit of Palazzo Koch (Mr. Giorgio di Gennaro, General Secretariat Dept.)

14,30 – 15,00 Direct reporting: the IT infrastructure (Mr. Salvatore Zinna, Statistics Collection and Processing Dept.)

15,00 – 15,45 Direct reporting: the business register and sampling techniques (Mr. Andrea Carboni, Statistics Collection and Processing Dept.)

16,00 – 17,00 Compensation of employees, current and capital transfers (Mr. Gianluca Mura and Mr. Maurizio Magnani, Statistics Collection and Processing Dept.)

FRIDAY, June 10

Chair: Mr. Giovanni Giuseppe ORTOLANI (Statistics Collection and Processing Dept.)

9,30 – 10,00 Quality principles and user needs of balance of payments statistics (Mr. Giacomo Oddo, Economic and Financial Statistics Dept.)

10,00 – 11,00 Foreign Direct Investment – non-MFIs (Ms. Silvia Sabatini and Mr. Maurizio Iannaccone, Statistics Collection and Processing Dept.)

11,15 – 11,45 Foreign Direct Investment – MFIs (Mr. Luca Buldorin and, Mr. Gianluca Mura, Statistics Collection and Processing Dept.)

11,45 – 12,15 Portfolio Investment (Mr. Luca Buldorini and Mr. Maurizio Magnani, Statistics Collection and Processing Dept.)

12,15 – 13,00 Other investment and Derivatives (Ms. Giuseppina Marocchi, Mr. Maurizio Iannaccone and Ms. Nadia Accoto, Statistics Collection and Processing Dept.)

13,00 – 14,30 Lunch

14,00 – 15,15 Investment Income and FISIM (Ms. Laura Graziani Palmieri and Mr. Andrea Carboni, Statistics Collection and Processing Dept.)

15,30 – 16,00 Conclusions and general discussion

ANNEX 2 List of Participants:

Banca de Italia

Mediterranean Partner Countries:

Country Last name First name Institution Email HASSAINE Office National des Algeria Mrs Zahia [email protected] BOUMGHAR Statistiques CENTRAL BANK Egypt Mrs ABDEL RAZEK Mona Aly [email protected] OF EGYPT

CENTRAL BANK Egypt Mr ELDEMERDASH Magdy [email protected] OF EGYPT CENTRAL BUREAU Israel Mr DEGANI Amos [email protected] OF STATISTICS CENTRAL BUREAU Israel Mr HACOHEN Nitzan nitzanh @cbs.gov.il OF STATISTICS DEPARTMENT OF Jordan Mrs ALFAKORY Jumana [email protected] STATISTICS Central Bank of Jordan Mr AL-MASRI Jamal [email protected] Jordan Lebanon Mrs MOKHBAT SAADEH Claude BANQUE DU LIBAN [email protected]

Lebanon Mrs NAOUM Roula BANQUE DU LIBAN [email protected] OFFICE DES Morocco Mr EL MOUSTAOUI Driss [email protected] CHANGES OFFICE DES Morocco Mr OUMAZZA Rachid [email protected] CHANGES OFFICE DES Morocco Mr RHANDI Mounir [email protected] CHANGES Palestine Mr M. S. SBAIH Isam PCBS [email protected] Palestine Mrs ALNATSHA Amna PCBS [email protected] Banque Centrale de Tunisia Mrs BEN RAHIMA Samia samiabrt @yahoo.fr Tunisie Tunisia Mr ASMI Elyes INS TUNISIE asmilies.ins @mdci.gov.tn

Others:

France Mr RENARD François MEDSTAT III franç[email protected]

[email protected] France Mr TYRMAN Henri MEDSTAT III uv.fr

This project is implemented by: ADETEF – MEDSTAT III 5, place des Vins de France 75573 Paris Cedex 12 – France Tel.: +33 (0)1 53 44 25 60 / 22 84 / 22 88 Fax: +33 (0)1 53 44 22 90 7