EUROSTAT
&
UN ECONOMIC COMMISSION FOR EUROPE
Statistical System of the
Federal Republic of Yugoslavia
-
Global Assessment
March 2002 page 2
CONTENTS Page
Preface 4 Executive Summary 5 A. Institutional Setting 11 1. Legal Setting 11 1.1. Statistical Law 1.2. Other Legislation 16 1.3. Statistical Council, Statistical Programme, Inter-ministerial Consultations, Consultations with Users 18 1.4. Protection of Independence 25 1.5. Data Protection and Confidentiality 29 2. Federal Statistical System 33 2.1. Principles 33 2.2. Structure of the System 34 2.3. Liaison with Research Institutes and Universities 36 2.4. Liaison with the Business Community 37 2.5. Product and Dissemination Policies 38 2.6. Relations with the Federal and Republic Governments 40 2.7. Relations with Local Governments 41 2.8. Access to Administrative Records 42 3. Description of the FSO and the SOR 43 3.1. Mission, Internal Organisation 43 3.2. Planning, Programming and Priority Setting 46 3.3. Monitoring Quality in All Activities 49 3.4. Finance and Budgeting 51 3.5. Staffing, Staff Recruitment, and Training 54 3.6. Information Technology 58 3.7. Internal Monitoring of Performance 60 3.8. External Accountability 60
B. Capacity of Producing Statistics in Various Areas 61 1. Assessment of Overall Capacity 61 2. Capacity to Organise and Carry out Censuses 62 3. Capacity to Produce Annual Population Statistics 66 4. Capacity to Carry out Household Surveys 68 5. Capacity to Maintain Business Registers 71 5.1. Legal Units Register 71 5.2. Central Shops Register 74 5.3. Territorial Units Register 75 Page 3
6. Capacity to Carry out Business Surveys and Related Short-term and Structural Statistics, Including Price Statistics 75 6.1. Business Surveys and Related Short-term and Structural Statistics 75 6.2. Price Indices 78 Page 7. Capacity to Carry out Surveys of Agricultural Holdings and Related Agricultural Surveys 80 8. Capacity to Produce National Accounts 81 9. Capacity to Produce Data on Public Sector Activities 83 10. Capacity to Produce Monetary, Financial, and Balance of Payments Statistics 85 10.1. Monetary and Financial Statistics 85 10.2. Balance of Payments Statistics 86 page 4
PREFACE
The global assessment of the Yugoslav System of Official Statistics, a joint mandate by EUROSTAT and the United Nations Economic Commission for Europe (UNECE), was carried out by the following two experts: Mr. Jean-Etienne CHAPRON, Regional Adviser on Statistics, UNECE, and Mr. Heinrich BRÜNGGER, Swiss Federal Statistical Office, who worked under a contractual arrangement between this office and EUROSTAT. This assessment was focused on describing and analysing, from a horizontal point of view, the present situation in the Federal Statistical Office (FSO), in the Statistical Offices of the Republic of Serbia (SORS) and of Montenegro (SORM) and in the statistical system as a whole, as well as their capacity to provide, in a sustainable way, timely, accurate, authoritative and relevant information to users. A detailed analysis of specific statistics such as national accounts or CPI, including their compliance with international requirements was not part of the mandate; nevertheless, the report includes in its Part B an assessment by broad subject area on whether the basic elements to produce key statistics according to international standards are in place either today or in the near future.
The assessment has exploited the material available at ECE and EUROSTAT, and the detailed methodological descriptions contained in the Statistical Yearbook of Yugoslavia published by the FSO. The experts were also given a great range of additional material prior to and at the occasion of their first visit to FSO and SORS (12 to 16 November 2001), notably translations of statistical and other legislation. The experts' first visit to Belgrade was followed by a visit to SORM at Podgorica (29/30 November), and by a second mission to Belgrade (29 January to 1 February 2002) for discussions on a draft of this report with representatives of all three statistical offices. The visits included sessions with representatives from the National Bank of Yugoslavia, the Federal Ministry of Finance, the UNDP office in Belgrade, and the Central Bank of Montenegro, as well as a visit to one of the regional offices of SORS (at Pancevo in the province of Vojvodina). The report was finally approved by the Deputy Director of the FSO, on behalf of all three statistical offices, on 5 March 2002. .
The experts were greatly helped in their task by the staff of FSO, SORS and SORM, who did an excellent job in preparing the missions and organising the discussions, which have inevitably made considerable demands on the time of the management and of other staff. 56 staff members from the three statistical offices participated in the discussions willingly, openly and actively, in spite of an already heavy work load. Without their contributions, and without the on- the-spot-translation for many sessions provided by staff from the statistical offices, it would not have been possible to carry out the mandate in such a short time. Special thanks therefore to all the people at FSO, SORS and SORM for the warm welcome, the hospitality and the help the experts received. Page 5
Executive Summary
1. The former Yugoslavia had a well functioning system of official statistics, composed of the Federal Statistical Office (FSO) in Belgrade, six statistical offices in the republics, and two in the Serb provinces of Vojvodina and Kosovo/Metohia. Among the republic statistical offices, the one for Serbia (Statistical Office of the Republic of Serbia or SORS) was the biggest, and the one for Montenegro (Statistical Office of the Republic of Montenegro or SORM) the smallest. The FSO was fully integrated into international co-operation, and Yugoslavia's bridge function between East and West helped statisticians to be familiar with a variety of statistical concepts and methods.
2. The present Federal Republic of Yugoslavia is composed of Serbia and Montenegro, with the three statistical offices mentioned above acting as the focal points in official statistics. SORS and SORM have, in addition to their headquarters in Belgrade and in Podgorica, 14 (including the former province office for Vojvodina) respectively 7 regional departments, used for data collection and, in Serbia, for data entry. The City of Belgrade has an office of statistics and informatics that is not part of the SORS, but of the municipal administration. The province of Kosovo and Metohia, by international law part of Yugoslavia, remains outside the current data collection activities of Yugoslav official statistics.
3. From 1992 to 2000, Yugoslavia experienced adverse measures of the international community, including bans on commercial transactions and international contacts, and in 1999, military intervention by NATO. Before 2000, it has not experienced the type of transition toward pluralistic democracies and market economies that other countries of the region, including former Yugoslav republics which became independent in the beginning of the 1990s, were able to undertake. Yugoslavian statistics has up to now, except for a small number of relatively minor contributions in recent time, not benefited from EU funds for statistics. These factors are the major causes why today's system of official statistics in Yugoslavia is relatively far away from being able to cope with the future challenges, and is in a great need of a major reshape. Targeted outside assistance, both in terms of resources and know-how, is crucial to start a process of change by which this gap can be gradually closed.
4. In purely quantitative terms of staff numbers, the size of approximately 900 persons working in official statistics (the three statistical offices, plus the statistics part of the Belgrade city office, plus a rough estimate for other producers), a level that has not changed much in the past decade except for SORS in 2000 and 2001, are a proof that the latter were able to upheld to a large extent the level of activities at the end of 1980s. This can also be demonstrated by the statistical programme, a list of surveys that, with some reductions that were the result of horizontal measures of downsizing in the government sectors, and few, but important amendments such as the introduction of a labour force surveys, is more or less the same as end of 1980s. The strategy chosen to keep official statistics out of controversial discussions on politics and out of attention by leaders, through reference to a programme set up for the needs of the former page 6
Yugoslavia with a legitimacy of the past difficult to question, was certainly instrumental to this relatively successful strategy. In addition, it helped to ensure continuity of series and comparisons over time. 5. With the opening up of Yugoslavia since 2000, and its gradual introduction of the market economy, the negative aspects of this strategy start now to become visible. They are as follows: - Decrease in relevance: many traditional series, such as macro-economic aggregates that are still largely based on the MPS system, are referring to outdated standards, which makes their relevance to present users’ needs questionable. Statistical producers have avoided to ascertain relevance of existing series, and have therefore not monitored the actual use of their results. - No network with users or respondents: there are no regular contacts with actual or potential users, in the governments, in the research or in the business communities, to assess present and forthcoming information needs and their changes, and to receive feed-back on present products. Neither do fora exist where the statistical offices can regularly meet with representatives from respondents, especially from the various sectors of economic operators. There are presently no statistical councils or similar committees foreseen in the statistical legislation that would be able to provide an informed advice with a high degree of legitimacy. - Concentration on the social sector (state enterprises and co-operatives): the focus on exhaustive surveys in this sector leaves out the emerging private sector for many important economic indicators. The exceptions worth to be noted are price, wholesale and retail trade, catering trade, and agricultural statistics. - Insufficient spread of professional know-how in modern methods of statistical data collection and processing such as sampling, treatment of non-response, and monitoring of quality, which had only rarely been used in the old system. - Low visibility of results: dissemination is concentrated on announcing results as foreseen by the statistical programme, with some technical comments on definitions and sources, in a routine way. No explanatory or analytical comments are added, and the lack of any interpretation of results does not make visible potential relevance either. The attention of the media, especially for new results such as 1993 SNA national accounts aggregates or labour force survey results, or for new forms of dissemination such as the attractive web-sites FSO and SORS have opened recently, is not solicited actively enough. - Low status of the statistical offices: both to governments and to outside users, the image of the statistical offices portrayed is the one of a technical service executing routinely a programme for mainly governmental users, and not as a an agency that produces authoritative, relevant and unbiased information that are accessible to everybody in a proactive way. This low status is also underlined by the fact that none of the statistical offices is involved as observers in important committees preparing decisions for governments, or consulted for forthcoming legislation. Furthermore, the formal status of independent government agencies leaves them without spokesman at ministerial level to defend their position. - The institutional environment, reflected also in the statistical legislation, deprives the statistical offices of being able to act proactively and in an innovative way, and to manage their activities on the basis of clear priorities with sufficient ex-ante knowledge of the resource implications. The present detailed statistical programme is not instrumental in this Page 7
respect, and the concern with its implementation to the letter detracts the attention and scarce capacity of the senior management from more important strategic issues. - There is no distinction made, neither in the statistical legislation nor in practice, between statistical surveys proper (data collection from private households or businesses for exclusively statistical use, on the methodology of which statisticians decide autonomously with respect to all phases) and data collection that serves both administrative and statistical purposes (where the professional autonomy only covers processing for statistics and dissemination of results). As a consequence, many statistical surveys proper are made unnecessarily dependent on administrative concepts enshrined in other legislation, at the detriment of the ability to reflect relevant international concepts of official statistics.
6. All three statistical offices are in charge of administrative registers, and one of them carries out IT activities connected to control purposes for other governmental units with respect to additional administrative data. Two statistical offices are, by law, part of "government information systems" which still permit an unlimited exchange of data among governmental bodies, irrespective of the purpose, which is in obvious conflict with the confidentiality provisions of the statistical legislation. Although these laws seem not have to be invoked recently, their existence is an obstacle in gaining the confidence of respondents, notably from private businesses, and building up public credibility as an impartial institution that can withstand pressures for withholding or biasing statistical results. This is reinforced by the lack of a clearly visible institutional separation between official statistics and other government functions that are in a potential conflict with the paradigms of official statistics (such as the management of administrative registers for units subject to statistical confidentiality).
7. Since the opening up of Yugoslavia in 2000, the three statistical offices have been able to again respect the essential part of fundamental principles of official statistics like independence and confidentiality in practice, in spite of the ambiguous legal situation. This important achievement has not been publicly announced so far, however.
8. It is worth noticing one feature of the present system that is common to most parts of the administration: the complicated relationship between federal and republic legislation and institutions in a given area. Statistical laws exist in parallel at federal level (from 1994), and at republic level for Serbia (from 1992), but not for Montenegro; on the other hand, the adoption of the statistical programme 2001 to 2005 by the federal Parliament is mirrored by a parallel legal act in Montenegro (only for 2001, at government and not at Parliament level), but not at all in Serbia. The FSO is responsible to ensure uniform methodology (which de facto is established by consensus between the directors of the three offices), whereas data collection and data entry are left to the statistical offices of the republics (SOR). Data processing is split between the federal and the republic levels with arrangements that differ from one survey to another, whereas dissemination is taking place in parallel by federal and republic statistical offices.
9. The parallelism in the legal frames complicates the decision-making about statistics unnecessarily. More importantly, because the statistical programme being de facto page 8
determined at the federal level, the main users, who are in the administrations of the republics, and the main providers of resources (also through republican budgets), have only an indirect influence on the statistical programme. Because of the stability of the programme in the past decade this may not have mattered too much, but for a more user-oriented modern approach to official statistics with a sufficient degree of flexibility, the present institutional arrangements are inadequate and therefore in need of being revised. Furthermore, the present ways of parallel dissemination of results can lead to incoherence, a risk that, without appropriate arrangements, will rise with the increasing ability to use statistics from a growing community of users, with increasing media attention, with growing pressure on timeliness, and with a larger variety of channels of dissemination.
10. Yugoslavia is on the way to carrying out the population census (including some questions on agriculture), more or less in the same way as in 1991. The date was April 2002 for the whole Federation. However, the government of Montenegro has just decided to postpone the census to the spring of 2003. The Republic of Serbia is not likely to postpone the census. If population censuses are conducted in 2002 in Serbia, and in 2003 in Montenegro, this will strongly reduce the possibility of improving the quality of migration estimates between the two republics. Nevertheless, the capacity to organise and finance such a large scale data collection effectively is present in Serbia.
11. The same holds for the capacity to carry out a range of regular surveys with economic actors from the social sector (i.e. state enterprises and co-operatives) contained in the programme in both Serbia and Montenegro. With regard to sample surveys with households, and to sample surveys with businesses or agricultural holdings, the capacity should be improved, concerning sampling frames, methodology, and fieldwork aspects. The same is true with elaborate constructs such as national accounts according to the United Nations standard System of National Accounts (1993 SNA), which are not yet given the status of the official national accounts of Yugoslavia. As a consequence, there is still a serious lack of internationally comparable short-term indicators, and of comprehensive annual indicators of the economy, that is greater than with other countries that used to be part of the former Yugoslavia.
12. The above description of the situation indicates that a major change in the paradigm of official statistics, and in the structure of its activities, are required in Yugoslavia, the main focus of which should be a much higher user- and output-orientation with clear priorities, due regard to efficient and co-ordinated implementation, and a decision- making process that gives those levels of the country that have to bear the majority of the cost burden an official say in the final adoption. The prerequisite for embarking on such a road is the development and adoption of a master plan with milestones, priorities and resources indicated. Its preparation and implementation will inevitably mean a reallocation of existing resources away from current activities to be set free for preparing the future, and an increase in resources for the two statistical offices of the republics. One of the items to be included in the master plan will be the revision of the statistical legislation, and the development and implementation of an IT strategy. If no strong action is taken now, official statistics will become increasingly irrelevant for Page 9
important users, who will then try to get their needs covered by the way of financing statistical activities, including surveys, outside the framework of official statistics.
13. With the help of expertise from abroad, such a master plan should be developed as soon as possible as a joint strategic action of the three statistical offices, conducted in close co-operation with other producers of key official statistics, especially the National Bank of Yugoslavia and the Central Bank of Montenegro, as well as the Ministries of Finance of the Federation and the two Republics. This master plan should be submitted to the federal and republic governments, as well as to the federal (and if republics wish to their) Parliament(s), for adoption as national commitment that will supersede the present programme (otherwise in force until the end of 2005) to an important extent. The federal government should, at the same time it is invited to adopt the master plan, be asked to participate in the IMF's General Data Dissemination System (GDDS) as a clear international commitment to develop its system of official statistics. The master plan would ensure that the many necessary steps to change the Yugoslav system of statistics will be made in coherent framework, in a logical sequence with clear priorities, in taking due regard of the limited absorption capacity and resources, and in associating all stakeholders. All items in the master plan will be relevant for official statistics whatever the general institutional environment in Yugoslavia as regards relationship between the federal and republic levels will look like in the future. The way some of the items will be implemented once the master plan is adopted (such as the new statistical law) will however be clearly influenced by the shape of the future institutional framework.
14. There are some important elements that can and should be started without waiting for the formal adoption of master plan. They are as follows: - Reviewing the present statistical programme to identify items that can be dropped, i.e. items that are neither necessary for the GDDS nor serve presently an identified and legitimate use any longer; - Preparing short-term solutions for the major bottlenecks in IT in a way that they can be later integrated in a future IT-strategy; - Preparing a training programme for the staff of the three statistical offices with respect to the new paradigms of official statistics, basic concepts of official statistics such as national accounts, statistical methodology such as sampling, foreign languages (English) and IT; - Preparing the outline of an efficient and sustainable system of data collection for the GDDS indicators that can be gradually implemented as rapidly as possible once the master plan will be adopted and the available resources known; - Preparing and financing a much higher degree of participation of Yugoslav statisticians in relevant groups of international and regional official statistics, with due regard to the priority needs for the Yugoslav statistical system, and enabling visits of Yugoslav statisticians to statistical offices in other countries from which a transfer of experience seems most relevant.
15. Even though it is likely that some activities of the existing programme can be dropped without too much loss of relevant information, the volume of resources that can be put at the disposal for the change process in this way will not be sufficient to implement the master plan, let alone to reach the level of full compatibility with EU standards. The page 10
Yugoslav statisticians will have to be supported, in terms of financial resources and expertise, by donors from abroad, but national authorities will have to bring back the relative share of public expenditure for official statistics at least to the level of 2000 (0.17%) in a sustainable way. In 2001, this share dropped not so much because of a cut in global resources for statistical offices, but because of significant increases of total government expenditure at republic level, and a less than proportional increase for the statistical offices of the republics (and even a cut in staff for the SORS). More activities in government tend to increase the demand for official statistics, and the statistical system is ill equipped presently to meet these demands. The gap is greatest for the SORM which today is far away, in terms of both staff, IT and other resources, from the minimum level necessary for a statistical office to produce and disseminate relevant key statistics for an open economy and society. But also the SORS, in view of the high share of population and economic units it has to cover with data collections that will have to be reshaped and reoriented, will not only have to come back to its staff level of 1998 and raise the average skill level of its present staff, but increase its size and its budget further. In total, it is estimated that overall staff for official statistics will have to raised gradually by 50%. 16. As stressed above, the master plan should cover the whole system of official statistics, i.e. with including that part of the production which is presently in the competence of other producers than statistical offices or not mentioned at all in the current programme. The most important areas in this context will be government finance statistics, monetary and balance of payments statistics, and certain indicators of health. The statistical programme at federal level currently lists the National Bank, the Clearing and Payment Service (a special institution under the National Bank), and six federal ministries as producers of official statistics. The senior management of the statistical offices recognises the need for fundamental changes and observing international standards, and co-operation between the three statistical offices is excellent. In practice, the co-ordinated monitoring of the development of the statistical system does not extend, however, to other producers, who act more or less on their own, with their proper legal basis, and with few considerations given to horizontal issues of official statistics like the fundamental principles. The capacity of upgrading statistics of other producers is even smaller. In the areas of competence of Central Banks it may be compromised by the monetary independence of Montenegro and the complete lack of co-operation between the statisticians of the National Bank of Yugoslavia and the Central Bank of Montenegro. In the present legal framework, statistical offices have neither a mandate to co-ordinate nor any instruments or capacity at their disposal to follow the statistical production of other producers and to monitor whether this production is coherent and in line with international standards. Page 11
GLOBAL ASSESSMENT OF THE STATISTICAL SYSTEM OF YUGOSLAVIA
A Institutional Setting
1 Legal Setting
1.1 Statistical Law
1. In order to obtain an understanding of the legal framework for official statistics in Yugoslavia, the legal framework of the Federation in general has to be presented first. Yugoslavia is a Federation with two Member States, the republics of Serbia and Montenegro, governed by a constitution from 1992 where the few competencies at federal level are listed exhaustively. The subject areas in exclusive federal competence are, legally speaking, defence, foreign affairs, customs and money/currency, but de facto Montenegro has unilaterally adopted, in 1998, the Deutsch Mark as its official currency and set up a Monetary Institute of its own. Legally speaking, federal legislation in these four areas have direct applicability, whereas federal legislation in other areas, where competencies are shared between the federal level and the republics, are not directly applicable and require, for their application to citizens, economic actors and public bodies at the republic level, parallel legislation by each republic. In these subject areas such as economics, finance, labour, social security, education, health, police, environment, federal ministries have few operational tasks and are in essence limited to co-ordination and international relationships (the latter not being operational at a subject area level in the period when the international community imposed bans and restrictions on Yugoslavia). As an example, the federal ministry of finance has a staff of 100 persons only. Federal competencies in such areas used to be much stronger, but they were reduced considerably with the change of the constitution in 1974. Looking at the de facto situation today, Yugoslavia is better described as a confederation than as a federal state.
2. The present statistical law at federal level (the literal translation of its title being Law on the System of Statistical Surveys) dates from 1994. It contains some basic provisions on the purpose of statistics and lists the principles of "objectivity, rationality, experts independence and political neutrality". As competent actors of official statistics at federal level, it lists the National Bank of Yugoslavia, the federal organisation for payments operation (Clearing and Payment Service hereafter, which is a subsidiary of the National Bank with special status), and "federal bodies and organisations", under which the FSO is subsumed without being explicitly mentioned anywhere in this law. The law provides for programmes of statistical surveys for periods of five years to be decided by the Federal Parliament, with possible annual amendments. The law is silent about the division of work and competencies between the federal and the republic levels, except that decisions on methodology of statistical surveys are a federal competence, and that funds from the federal budgets will only be used for covering the costs of the federal institutions. De facto, most of the data collection and a big part of data entry and processing, as well as a substantial part of dissemination is carried out page 12
by SOR at their cost. The federal statistics law continues with chapters on dissemination, confidentiality and penalty provisions, but no provisions about the co- ordination of federal producers can be found. The translation of the full text is given as Annex 1.
3. This law finds a more or less exact parallel law at the level of the republic of Serbia (no translation could be provided, however). Unlike the federal law, this law lists the producers of official statistics, notably the SORS. In Montenegro however, the 1994 federal law has not yet been accompanied by a parallel law at the republic level; de facto the federal law is directly applied. There is a project for a statistical law in Montenegro. The situation is somewhat reversed for the federal programme of statistical surveys, enacted by the Federal Parliament: in Serbia, this is directly applicable, whereas Montenegro’s government has passed a legal act of implementation at republic level. In addition to the surveys listed in the federal programme, there are some surveys limited to one republic both in Serbia and Montenegro; these are not based on any specific decision by the Parliaments at the republic levels other than those concerning the budget.
4. The FSO has developed a draft for a new federal statistics law, entitled "Law on Official Statistics". It is based on the model statistical law developed by EUROSTAT, and includes more precise statements, including some definitions, than the 1994 law presently in force. It adds notably a list of responsibilities of the FSO, including a co- ordinating role (but without being specific at the instruments), as well as a Statistical Council that does not exist in the present environment. Another important issue on which the present statistics law is silent is the appointment of the director of the FSO (by the government as in the current situation, but now for a fixed term and after consultation with the Statistical Council). No additional precision is provided by this draft as regards the relationship in official statistics between the federal and the republic levels.
Assessment
5. The legal framework for official statistics presently in force. i.e. the statistics law and the other relevant legislation (see 1.2), is puzzling to an outside observer. This is basically for two reasons: the unclear relationship between federal and republic legislation on one side, and the unclear relationship between the statistics and other relevant legislation on the other side.
6. In the absence of clarification for the first issue, which would require institutional changes at a much higher level, there is not much that can be done about the first reason for the lack of clarity. In all scenarios presently discussed, the two republics would retain a substantial number of legislative and executive competences of their own. The main drawbacks of the present system in terms of federal/republic relationships in official statistics are that it formally allocates decision-making about official statistics concerning programme and methodology to federal institutions which are not directly in interaction with the main users (who are and will most probably Page 13
continue to be at the republic level, especially in the republic governments), nor have to finance the major part of the operation, nor are confronted with the respondents and the difficulties of the data collection. As other chapters of the report show, preparing these decisions, in the difficult past decade, has been driven by the various producers' attempts to continue, in the best possible way and without raising controversial issues, the status quo as reflected in a statistical programme and in the methodologies of implementing this programme which have seen few changes in the last 10 years except from a reduction of the number of surveys caused by a general cut in government expenditure. The flaws in a decision-making process that shows a built-in stability have not become obvious until very recently when the political system changed, the economy began to open up and demands for new types of statistics started to emerge.
7. Another potential disadvantage of the present general institutional set up is that it would be very difficult to create a national institute for statistics, whose mandate would be to serve statistical information needs at federal, republic and local level at the same time. There is no precedent of such an institution in Yugoslavia. Such a solution would make it possible to draw the maximum benefit of synergies, e.g. concerning IT, sampling, national accounts, dissemination and other specialised skills that are either rare or very expensive to build up and maintain. If there had been a precedent in another area, this assessment would certainly have given much more thought to a reshape of the Yugoslav statistical system along such lines.
8. Independently of the first issue, more can and should be done about the second. A number of the statistical surveys of the present programme coincide with concepts used in administrative records. Although the transmission to statistical offices of such information does not entail a later use for non-statistical (control) purposes by government any longer, statisticians have not yet changed the administrative definitions based in other legislation that determines many of the basic variables contained in such data collections and the statistical population to be observed. With respect to breakdowns and classifications, statisticians have been more successful in introducing international statistical standards such as NACE. The indirect influence of other legislation on official statistics is therefore still unusually strong, and prevents statisticians from making a more professional use of the instrument of data collection that should be free from such influences, i.e. statistical surveys in the sense of data collections for exclusively statistical use The impression of data collection based on administrative records or “evidences” is reinforced by the facts that a) the questions in the form appear in the Official Journal as legal act, that b) respondent units have to stamp and sign the filled forms before they return them to the regional office in charge, and that c) neither questionnaires, nor the accompanying letters to respondents, mention the purely statistical use of the data collected explicitly.
9. It is particularly revealing in this context that statistical surveys, based on a random sample of respondent units, have a limited role in the current statistical programme. This source is sometimes not considered, by users and by some statisticians, as potentially equivalent or in certain aspects even potentially superior to statistics based on exhaustive coverage. page 14
10. The statistical legal texts, both in the current form and in the draft of a new law, do not introduce the distinction between statistical surveys and the use of administrative records which is crucial both from a legal and substantive point of view: statistical surveys, in the usual sense of data collection for exclusively statistical use, should not depend on non-statistical legislation, as is the case with administrative data sources, and statisticians can therefore determine or at least actively propose changes in concepts, definitions and other methodological aspects instead of passively waiting for the basis of administrative data collection (e.g. accounting laws) being adapted before important new developments such as national accounts according to SNA can be pursued further.
11. It is fair to say that the present statistics law as such would not have prevented forward- looking statisticians to make much greater use of proper statistical surveys; it is rather the statistical programme, and the underlying philosophy of inertia in a very difficult period, including resource-wise, that is at the root of this situation. A modern statistical system has to make the best use of both types of data collections. This is not possible in the present framework, neither for statistical surveys nor for processing administrative data sources in view of official statistics. The use of the latter implies adjustments of basic data received from other government bodies with a view to come closer to international concepts, but the perception among statisticians that deviations from administrative concepts are not permissible also prevents this type of adjustments to be made as a routine part of the production process.
12. The proximity of the present concepts in statistical surveys to non-statistical concepts based in other legislation has recently shown another risk: the risk that the relevant Serb legislation changes before the corresponding mirror changes at the federal level follow. Serb statisticians are confronted with the requests from their authorities to come up with the indicators reflecting their modified legislation, a request which cannot be met with the unchanged data collections based on the statistical programme.
13. If the principles of official statistics such as the distinction between statistical surveys and administrative data sources are not very prominent in statistical offices, they are with a high probability virtually absent with the other producers. No attempt has been made by the FSO, due to the lack of any co-ordination mandates or instruments specified in the law, to monitor whether other producers are complying not only with the statistical programme, but also with the provisions of the statistical law concerning e.g. confidentiality or equal access of users to results. Representatives of the Clearing and Payment Service stated explicitly that, with the exception of the articles on the programme of surveys, they did not consider the provision of the statistics law to be applicable to them for issues like dissemination or confidentiality, but that they use instead the provisions of other, non-statistical legislation. The National Bank of Yugoslavia and the Central Bank of Montenegro base their statistical activities on their own legislation, which is silent about these issues.
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14. When raising with the SOR the issue of co-ordination with other producers at the level of the republics, the answer given was that co-ordination is an exclusively federal obligation (for which there is no legal basis, however). No co-ordination takes place concerning official statistics between SOR and mirror institutions, insofar they exist at the republic level, of the other federal institutions listed as producers in the programme, because there is no legal mandate either. Like for the FSO, many federal producers use mirror institutions at republic level for data collection proper and some processing.
15. In addition, the present statistics law shows the following shortcomings: - The principle of relevance is not explicitly mentioned in the present law; this omission is corrected in the draft of the new law. - There is an obligation to obtain the opinion of users (art. 10) about the draft statistical programme, the preparation of the programme and its amendments. The procedure in this respect, as well as the procedure for deciding on methodologies, is completely left to the discretion of the producers. The important "Conference of Directors" (see below 2.2) does not have any legal basis and may therefore suffer from lack of legitimacy. The only, but important element added by the draft for a new law in this respect is the submission of the draft programme to the Statistical Council. - There are no requirements, both in the old and in the draft new law, for producers to separate very clearly in organisational terms statistical and administrative functions. - The only mention of professional independence is in very general terms as "expert independence"; however, there is no article applicable to the protection of the independence of the institutions producing statistics. In the new draft, these producers are given explicit independence in the implementation of the statistical programme, without the necessary qualification, however, that this may not necessarily hold for the relationship among them. - There is an apparent contradiction between the provisions on "data obtained through statistical surveys are public" (art. 9) and the provisions on "information protection" (confidentiality, art. 24 to 28), at least as far as natural and legal persons of the private sector are concerned. This contradiction is solved in the draft for a new law. - The annual changes to a five-year programme can only be initiated by other bodies than the producers (art. 13: "requests for changes have to be submitted to the competent producer"). This illustrates the purely technical role in which statistical producers are seen, both in the old and in the draft new law. - There is an unlimited obligation to exchange available information, including individual data, between producers in all directions (e.g. also from the FSO to the Clearing and Payment Service ). Together with the absence of separation between statistical and administrative tasks, this provision is in conflict with statistical confidentiality. There is no equivalent of this provision in the draft for a new law: only the FSO can ask other producers to transmit data, but this is limited to aggregate data (which is not enough). - Whereas obligations of respondent units are clearly stated, the rights are not mentioned (e.g. right to be informed about the purpose of the survey and the confidentiality rules that re applicable). This has been corrected in the draft for a new law. - The article addressing the publication of statistical results by various agencies that show discrepancies (art. 22) is not clear. The new draft does not address this issue. page 16
- Art. 24, paragraph 2, states that individual information is an "official" secret. It is not clear whether an official secret is an obstacle only against transmission to non-official bodies, or to other parts of the administration as well. The new draft is much clearer on this. - Art. 24, paragraph 3, gives all producers the right to declare any aggregate to be confidential, "if their publishing could cause bad consequences to bodies and organisations [the aggregates] refer to". Fortunately, this clause has been dropped in the draft for a new law. - There are no provisions for giving individual information, under certain conditions, to researchers; the new draft closes this gap. - There are no limits, both in the old and the draft new law, to non-statistical tasks that statistical offices can take over, and which may lead to a conflict of interest with the core task of producing and disseminating official statistics. - There is no mention of statistical registers as important tools for official statistics, either in the old or in the draft new law. Administrative registers, of which statistical offices are in charge, are regulated by other legislation. Neither in law nor in practice is there any distinction between statistical and administrative registers. - In listing the various components of statistics (collection, processing etc., art. 4), no mention is made of analysis; this omission has been corrected in the draft for the new law. 16. In view of the complex institutional situation in statistics, and of the many changes of important laws outside statistics that are likely to occur in the near future, it may be prudent not to rush the entry into force of a new statistics law. In spite of the clear improvements of this draft in comparison to the statistics law in force, more time should be devoted to the main outstanding issues, i.e. the organisation of the statistical system and the clarification of the decision-making process, and to a careful assessment and clarification of the relationship between the statistics law and other relevant (new or old) legislation, an issue not addressed by either the present or the draft new statistics law. This latter point is of particular importance for the relationship between the statistics act and the law on the information system of bodies and organisations of the Federal Republic of Yugoslavia (see 1.2). Parallel to the work on the new law, material should be compiled that allows a homogenous interpretation of its articles, and especially of those concerning the fundamental principles, throughout the statistical system immediately after the new law will have come into force.
17. It is deliberately left open in this report whether the reference to "the new statistical law" will require only one law at the federal law or three laws for the Federation and both republics. If the latter is the case, the future laws should be complementary in substance rather than mirror legislation repeating the same substance, and explicit cross-reference should be made in order to avoid unnecessary duplication.
1.2 Other Legislation
18. The following other texts of federal legislation were available in an English translation: - Law on the census of population, households and dwellings in the year 2002 - Law on the information system of bodies and organisations of the federal republic of Yugoslavia (1998) Page 17
19. During the assessment process, it was not possible for the FSO to translate other non- statistical legislation, notably concerning the registers for which the FSO is responsible, or regulating other types of evidences, in spite of the many references made to such legislation at the occasion of the two visits. The same holds for legislation at republic level, whether statistical or other.
20. The federal census law (see Annex II) is very explicit on the variables included and the obligations of the respondents, interviewers and instructors in the process, and on the division of responsibilities between various federal institutions. It also provides sanctions for non-compliance. Both republics have passed mirror laws on the population census, where the organisation of the fieldwork and the flow of the data back to the SOR are regulated. In these laws, it is specified that municipal census committees will have to be set up to organise and monitor the census locally. At the last moment, two more variables have been introduced, but by government decree rather than by amending the census law (art. 4) itself.
21. With respect to confidentiality, some data referring to persons are considered as official secret. This is discussed more in detail under 1.5. There is no provision, however, that individual data may only be used for statistical purposes; on the other hand, there is not any explicit mention either that such data will be used for specific administrative purposes, i.e. the updating of registers. For all variables, except for nationality (ethnicity) and religion, there is a response obligation.
22. The federal law on the information system is very much reflecting the past. The public sector is one big user of data, and this law gives the authority to a ministry to impose the sharing of data between bodies and organisations of the republic of Yugoslavia (i.e. beyond the government sector); the government will decide on which data may be public or transmitted to bodies outside this information system. As positive aspects, the law calls for uniform measures of data security and protection, and asks all bodies to keep catalogues of data. In spite of its recent date, the provisions have remained without practical consequences for the FSO.
23. The republic of Serbia has a law on its public bodies and organisations covering the same issues, but reportedly without the ambiguous provisions to be found in the federal law. On the other hand, it is foreseen that the SORS will be a focal point in implementing this law, and become responsible for implementing data processing and communication tasks in a much more general way. This is also reflected in the name and the organisation chart of the SORS (see Annex 5).
24. The National Bank of Yugoslavia bases its statistical activities on articles in two laws: the law on foreign currency operations (in revision) for balance of payments statistics, and the banking law as regards monetary and financial statistics. In both laws, commercial banks (and for the revised version of the first law also other economic operators) would have to submit reports to the National Bank. There is no limitation to the statistical use of the information collected in this way. page 18
Assessment
25. The federal census law clearly gives the outside reader the impression of being a data collection for "evidences" rather than for statistical purposes. Other than in the context of the name FSO, the term "statistics" or "statistical" is completely absent from the text, nor does the census law have a cross-reference to the statistics law.
26. As a particular feature, all enterprises or other type of employers are obliged to give to every employee, before the census takes place, a form containing data about the enterprise, its address and official activity code, as well as the unique identification number of the employee and its occupation. The employee is supposed (but not legally obliged) to give this information to the enumerator. This is likely to lead to employment data covering only "official" employment, and offers few incentives for persons to report unregistered types of employment or to correct outdated information, e.g. concerning occupation, on the form given by the employer.
27. Concerning the population concept, the 2002 census will allow results based on the traditional concept that includes all citizens abroad (thus allowing comparisons with previous censuses), as well as based on the new and internationally comparable concept based on the de facto residence (and its duration) in the country only. The law fails, however, to state which of the two concepts will be the basis for the official population figures (de facto, it will be those based on the international concept). The law provides for preliminary results to be published within 30 days after the conclusion of the fieldwork.
28. The laws on the federal and republic information systems are clearly at odds with the principles of official statistics, notably with confidentiality and independence. By the great volumes of data, and the range of topics covered, the stock of individual data of statistical offices is a potentially rich source of individual information. There is no cross-reference in either law, so that the questions of primacy remains unsettled. If this source is not clearly and unambiguously excluded from any sharing with non-statistical bodies, the claim of statistical confidentiality is total contradiction to reality, with obvious consequences for the credibility. The situation is even worse if the statistical office is to become a driving force in implementing such a law; it will then be clearly perceived, like before, as part of the big brother conglomerate the main purpose of which is the control and surveillance of individual units of any kinds.
29. It is very urgent that both federal and republic laws be amended to clarify this issue. A concrete proposal is made under 1.5. In the case of Serbia, the regulation that allocates any important implementation role to SORS should be amended so as to transfer it to another body, a proposal that seems to be in the pipeline already.
30. The legal situation in the statistical areas that are in the competence of the National Bank is not transparent for several reasons. First, the adoption of the Deutsch Mark as currency of legal tender by the government of Montenegro, and the total lack of co- operation between the statisticians of the two Central Banks in Belgrade and Podgorica Page 19
respectively, do not offer optimistic prospects for harmonised statistics for the whole Federation in the areas of balance of payments and monetary/financial statistics, whatever the content of the federal laws will be. The statistical system, i.e. the three statistical offices, should offer their help in closing this gap as an intermediate step.
31. Secondly, the lack of any reference to the statistical legislation, or the statistical programme, in the relevant legal acts of the two central banks might be interpreted in a way that the statistical legislation is not any longer applicable to official statistics produced by them. This interpretation can be excluded for the time being, but the awareness of the statistical legislation and of the fundamental principles of official statistics is not very high in the central banks. It is therefore recommended to clarify the relationship between the two bodies of legislation through the new statistical law.
1.3 Statistical Council, Statistical Programme, Inter-ministerial Consultations, Consultations with Users
32. Only the draft of the new statistical law at federal level provides for a Statistical Council as an advisory body. In the present draft, it should consist of 33 members, with 9 members representing the producers at federal level, and 6 members representing the producers at republic level. User ministries/public bodies are given 5 members (at federal) and 4 members (at republic level) respectively. Professional organisations, science and research, and other users are given 3 members each. The members shall be appointed by the government on the proposal of the groups they represent for a period of four years. Any of its members can be elected chairperson by the Council.
33. The functions foreseen for the Statistical Council are as follows: - To give an opinion and to make recommendations on the preparation of the draft programme; - To monitor, evaluate and give advice about the implementation of the programme of statistical surveys; - To issue recommendations for the further development of official statistics; - To comment on the budgetary situation in relation to the implementation of the programme; - To give an opinion on the proposal for the nomination of the Director of the FSO. No co-ordination or arbitration roles are given to the Council. The work of the Council shall be public.
34. No advisory bodies for official statistics are presently in place or foreseen at the republic level.
35. In its present form, the statistical programme 2001 to 2005 lists 320 "surveys", of which 315 were carried out in 2000. The FSO was in charge of 199, the rest being shared between the National Bank of Yugoslavia (13), the Clearing and Payment Service (20) and 6 other federal ministries or offices (the latter not being mentioned, like the FSO, in the statistics law, but only in the statistical programme). This number is smaller in the present programme compared to previous programmes, as shows Annex III. The breakdown of "surveys" by periodicity and responsible producer is also given in Annex III. In the draft for a new law, only the FSO in mentioned in the law page 20
itself, all other federal producers would be listed in the statistical programme legal act, but not in the law itself.
36. As mentioned in 1.1, the term survey includes all types of data collection, without clear distinction between statistical surveys in the narrow sense and files or aggregates based on administrative records. In addition, it also includes statistics based on combination of a variety of sources such as national accounts or balance of payments, as well as a number of research, pilot or innovation items, which may or may not involve additional data collection. The statistical programme may therefore be better characterised as programme of all statistical activities that includes all forms of data collection. Whatever is proposed as statistical activity, and finds the agreement of the various bodies involved, will be included in the programme.
37. Article 12 of the statistics law prescribes the following items for each programme activity: title, code, short description of the survey's contents, terms of implementation, obligations of the federal and member republic bodies that are competent for the implementation, provisions on who is the data provider (delimitation of respondent units) and in what terms they should be provided, as well as terms of publishing the first results of the survey. All activities with data collection imply a response obligation, but this has never been enforced by legal procedures. The programme of statistical surveys, a document of 80 pages in the original language, has only partially been translated into English. It is divided into 28 chapters (mainly subject areas), and the translated part is reproduced as Annex XIII. 38. The involvement of users, prescribed by the law, in the preparation of the programme is essentially left for the SOR to organise. The reason is that the federal ministries, with the possible exception of the customs, are not important users of statistics today. The opinion of the National Bank, and of the Clearing and Payment Service , as users of statistics are supposed to be covered when the Conference of Directors, essentially a group of producers, discusses the draft multi-annual programme. This conference is also the place where the opinions of the SOR, and of the users consulted by them, will be fed into the process.
39. The draft programme, established by the Conference of Directors, is distributed by the SOR to a number of users, mainly ministries at republic level, organisations like the Chamber of Commerce, and scientific institutions. The feedback is rather low; few users are able to use statistics for the preparation of decisions, e.g. through developing scenarios and model-building. The main interest of ministries in statistics is to see those aggregates produced, i.e. the retail price index, by which the size of payments by the respective governments and their adjustments over time are determined on the basis of specific laws and regulations, and these users are interested in a methodology that changes over time as little as possible. Only recently have some ministries in Serbia started to express needs for statistical information in a wider sense, mainly as a consequence of requests from foreign advisers and international organisations.
40. The final draft for a programme of statistical surveys is submitted to the federal government, which discusses it in the presence of the director of the FSO. Adoption of Page 21
the programme is the responsibility of the Federal Parliament, which constitutes of two Chambers, one representing the republics (but not through members of the governments of the republics). The present programme (2001 to 2005) was formally adopted only in the second half of 2001, due to a heavy agenda for the Parliament. The same procedure is applicable to annual amendments, which for additional items, according to the law, have to be based on a request from a user (which could be an international organisation as well).
41. The programme of surveys has no link to resources, which are determined through the annual budgetary processes at federal and republic level, with the latter having to provide the major part of resources. When the federal government discusses resources for statistics, the director of the FSO is not present. Resources for the population census are decided separately from the other activities of the FSO and SOR.
42. Additions to the federal programme at republic level are made, both in Serbia and in Montenegro. The implementation of the federal programme accounts for 90% of the cost of the SORS, whereas in Montenegro there is only one seasonal item (tourism) added to the federal programme by the SORM. It was not possible to explore the nature of the decision-making processes about the additional items of official statistics at republic level.
43. In the beginning of 2001, the FSO has developed a first attempt (2 pages) of a master strategic plan in responding to a request from international organisations. No further input has since then been given to develop the draft to a strategic master plan with priorities and explicit links to the current programme, nor to discuss strategic issues concerning the system of official statistics with other producers or important users on the basis of this draft.
44. Together with the Secretariat for Economic Development, the SORM has developed a partial master plan for IT and the introduction of national accounts (the content of which will be discussed under the corresponding chapters). This plan has been adopted by the government, but the resource situation for its implementation is left in the air.
45. Due to the lack of a substantive co-ordination mandate in the present law, and due to a lack of expertise in the relevant subject areas, the FSO does not question any proposals by other federal producers concerning the statistical programme and its implementation. This applies both to the question whether a certain item falls under official statistics at all, and whether an item of official statistics may show some duplication with items of another producer.
46. Under the former federal government, some ministries carried out statistical work outside the statistical programme, because they either did not trust or did not like the results produced by the authorised producers, notably by the FSO. Under the new government, the number of such activities has decreased, mainly because of the resource situation. The FSO is not informed systematically about such activities before they take place. The situations is different in Serbia; here the SORS reports about an page 22
increasing number of cases where ministries go for "ad hoc" solutions to cover their statistical information needs that cannot be met by today's programme of official statistics; frequently, the origin of such demands are with data requests from international or donor organisations addressed to ministries.
47. It is the opinion of the FSO that certain statistical activities should remain outside official statistics, notably business tendency surveys, market research, opinion polls, and media use surveys.
48. Neither the FSO nor the SOR are involved regularly in the work of high-level ministerial group that prepare new legislation, international negotiations or other relevant policy decisions that may have an impact on official statistics from either the demand side or from the point of view of the future supply of administrative records. The SORM receives all draft legislation for comments, but does not have the resources to digest and react in the short time available. In Montenegro, there is in addition an inter-ministerial working group on the introduction of national accounts chaired by SORM.
Assessment
49. The above description of the situation indicates clearly that a major change in the paradigm of official statistics and its activities is required in Yugoslavia, the main focus of which should be a much higher user- and output-orientation with clear priorities, due regard to efficient and co-ordinated implementation, and a decision-making process that gives those levels of the country that have to bear the majority of the cost burden an official say in the final adoption. The need for this major change is clearly seen by the senior management of all three statistical offices. The prerequisite for embarking on such a road is the development and adoption of a master plan with milestones, priorities and resources indicated. Its preparation and implementation will inevitably mean a reallocation of existing staff resources away from current activities to be set free for preparing the future. It will also mean the establishment of new fora where the FSO, the SOR and other producers discuss with users. 50. The existing programme of statistical surveys, and even more so the spirit with which it is prepared (minimise changes so as to get the programme adopted as a routine procedure and avoiding discussions on relevance of long-established statistics) and implemented (the most important obligation is to collect the data in time, not to produce public information, and cuts are mainly at the detriment of development activities, i.e. of investments into the future), is definitely not the framework that allows such an important change in a credible and visible way. It is too heavily linked to the past. It may be used as a grid for identifying those items which can be dropped in a very near future so as to free resources for the development of the master plan, the change process itself and the many development activities this process will have to encompass. The three statistical offices should jointly establish such a list, based on their knowledge of the actual use of the results of each activity item by different categories of users. In order to save time, the items outside the fields of competence of the statistical offices should not be questioned at this stage. Page 23
51. With help from expertise from abroad, a master plan should be developed as soon as possible, listing priorities for investment and milestones. This master plan should be submitted to the federal government and the federal Parliament for adoption, since it will to a certain extent supersede the present programme. Whether the plan should also be submitted to the Parliaments at the republic level is an issue of legitimacy, visibility and speed, rather than one of legal necessity (in Montenegro, the present programme was only adopted by the government, in Serbia, neither government nor Parliament were officially involved in the adoption process). The proposal to the federal government should also include the setting up of bodies that steer the process of change in the intermediate period until a new statistical law will be adopted later. The federal government should, at the same time it discusses the master plan, be asked to announce Yugoslavia's participation in the IMF's GDDS, to admit the FSO as observer in inter- ministerial meetings that prepare government decisions, and to include it, to the same degree as ministries, in any consultation round on draft legislation.
52. At least the last two items above, concerning the positions of the SOR, should be mirrored by explicit decisions at the republic level. For the purpose of making the governments and Parliaments of the republic aware of the issues involved, it may be a good idea to present some other elements of the master plan to them as well for explicit adoption. In the case of Montenegro, the existing master plan for IT and national accounts should be integrated, but which much more focus on implications for data collections, operational milestones, financial and human resources, and on the organisation of the co-operation between the relevant public bodies in Montenegro. Otherwise, there is a great risk that the present plan will remain wishful thinking, in spite of its adoption by the government.
53. The development of such a master plan, and its follow-up, would greatly benefit from a small advisory body of enlightened key users. Ways should be explored how to set up such a body in a way that its voice is heard and taken into account. The members of this body would then have also the task to promote, in their respective environments, the new paradigms of official statistics. If successful, this body would also serve as a kind of predecessor for the Statistical Council that will be established with the new statistical law, but which will preferably have a smaller number of members than presently envisaged in the draft for a new law. Also the functions, composition, and the procedures for appointing members and the chairperson of a future Statistical Council should be specified after careful consideration of the various options.
54. Great emphasis has been put in this assessment on the absolute need for a master plan and its implementation, and much less on how a new statistical programme with full coverage of all statistical activities might look like. It is recommended that a new statistical programme will only be set up after a new statistical law has come into force, which in turn requires that the institutional issues mentioned in 1.1 are clarified before. Apart from the lack of user orientation in the present programme, the main disadvantage of the present procedure is the fact that those who have to contribute most to financing the implementation, i.e. the governments of the republics, have no role in page 24
the formal adoption process of the programme. As outlined above, this disjunction has not lead to major difficulties until now; the responsible institutions at republic level (government and Parliament) seem to have been willing so far to make available the resources at least for the current activities. To simply assume that this will continue in future years may be overoptimistic; if republics suddenly were to question a programme decided at the federal level and refuse to provide the full resources, the statistical system would be strongly affected and may even be blocked altogether. It is therefore necessary to propose, with the new statistical law, a decision-making process concerning the statistical programme that makes the statistical system less vulnerable in this respect.
55. In view of this, and considering the need to associate to the adoption of the statistical programme the main users, who are to be found in the administrations at republic level, there is much to be said in favour of future statistical programmes being adopted at the level of both republics in a synchronised process. For reasons of flexibility, it would be preferable to have a final adoption at the level of governments, with the possibility of annual amendments. The governments should adopt the programme with knowing the resource implications (at the level of each republic) for each item, but decisions on resources would have to follow the usual budgetary procedures, involving the respective Parliament.
56. The two SOR would have to co-operate closely in the preparation of the programmes, so as to ensure that their major parts (see below) are identical. The FSO would have to steer this process as a facilitator, and make sure that additional information needs from federal institutions, and those emerging from international obligations, will be covered.
57. Some additional remarks can be made concerning the future statistical programmes: - The substantive part should be a master plan (a kind of successor plan to the first master plan described above) with strategic issues and challenges as described above. A full list of either outputs, activities or data collections (or a suitable mixture of these elements) should only be added as annex, but without pre-empting methodological decisions that fall in the final competence of statisticians. - The programmes adopted at the level of both republics, i.e. the master plans and the annexes, would have to be identical to 80 to 90%, the rest being additional activities that are specific to one or the other republic. In this way, it is also clear that the latter are part of official statistics as well. - The five-year period should be kept in principle, since it is also the duration of the statistical programmes of the EU. The years should be harmonised with the EU from 2008 onwards, i.e. the first statistical programmes under the new law should cover the period until the year 2007 included, even if this period were less than 5 years. - The possibility of annual amendments should be kept, but the final competence should be given to the government even if it were decided that the adoption of the five-year programme were to remain with the Parliament. - The FSO would have to play a very strong role in the preparation of the programmes and its annual amendments, and in monitoring its implementation, so that results of those activities that are common to both republics are not only comparable, but strictly additive at the aggregate Page 25 level, and that the underlying microdata can be processed in conjunction. For this to be achieved, it is necessary to have strict standards on documentation (metadata), on definitions, classifications, coverage and accuracy standards and on formats of storage. The questionnaires used in the two republics need not to be 100% identical; each republic should be free to add questions for its own information needs if this does not have adverse effects on the response rate. - The preparation of programmes would have to involve users and respondents in a much more systematic and transparent way than today; appropriate networks would have to be created on an ad hoc basis with the many more users who, by this point in time, will be able to give constructive inputs to such a process. In cases where users from outside the governments are addressed, it would be advisable to create such networks for the whole country, i.e. not split by republic. - There will be a few items of producing outputs at federal level that are independent, i.e. not built of aggregates at the level of republics. External trade statistics is an example (but balance of payments and monetary statistics are not as long as Serbia and Montenegro use different currencies). For the sake of completeness of the statistical programmes for users, these items will have to be added to the programmes as pro memoria items, but not for adoption at republic level. - The programmes should include provisions for development activities, which will not have to be adopted in detail at the level of government or even higher. The responsibility for each development activity should be assigned to one of the three statistical offices, so as to avoid parallel developments, but the other two offices would have to be closely associated. - Whatever the institutional arrangements will look like in future, the FSO will remain responsible for a certain number of dissemination and infrastructure activities, which will have to be determined in greater detail when the new law will be prepared. Examples are: to store and make accessible results at the federal level, including their transmission to international organisations, and to advise federal bodies on the proper use of statistics and servicing their needs. Another task will be the running of the infrastructure for the main advisory body, the Statistical Council. For such FSO activities (including those related to independent production), no procedure of adopting a separate federal programme of statistical activities distinct from the budgetary process should be required. - Those parts of the statistical programmes that are common to both republics, as well as the federal statistical activities, would have to be brought to the Statistical Council for opinion. This Council should be a body with a legal basis at federal level and operate at this level. - In order to keep this structure manageable, no agency at the federal level outside the FSO should be considered as actor in the system of official statistics. At the level of republics, this may well be different (with the exception of statistical surveys that should remain the prerogative of SOR). The place of the National Bank (a federal institution, where the production of statistics only covers one republic however) will have to be considered as a special case. 58. In terms of deciding whether a future statistical activity should be inside or outside official statistics, such decisions should not be based on the opinions of the responsible producer only. Criteria linked to the fundamental principles of official statistics should be developed, notably concerning relevance and the impact on credibility for the core tasks of official statistics. The Statistical Council should have an opinion on controversial items when discussing the draft statistical programme and draft amendments. Statistical activities outside official statistics, even in the form of statistical surveys, carried out or financed by public bodies, will appear from time to time; what is important is that the results will be published in a way that users clearly page 26
see the difference to results of official statistics, and that they do not jeopardise the implementation of a survey for official statistics that is addressed to the same group of respondents at the same time.
1.4 Protection of Independence
59. The former federal government did not respect the independence of the FSO concerning dissemination. For the same period, the situation was more or less the same at the level of the republics. Results in some sensitive areas had to be "cleared" before being disseminated.
60. The situation has considerably improved with the new federal government. There is no interference into either methodology or dissemination any more. Nevertheless, both FSO and SOR still have a policy to limit active dissemination of results to the aggregates indicated in the statistical programme, and accompany these results only with technical comments.
61. With respect to independence in methodology, the law (art. 5 and 6) is clear in assigning this competence to each producer. In reality, both major content, as well as the delimitation of the population to be questioned, are heavily influenced, if not determined, by other non-statistical legislation, especially laws and regulations concerning the allocation of public funds and their adjustment over time. This impression is reinforced by the requirement that, through paragraph 3 of article 5, such decisions have to be published as legal act in the Official Journal of the FR Yugoslavia. As a consequence, all questions included in a survey that is part of the statistical programme are enumerated in such decrees. Statisticians are free to add breakdowns to the questionnaires that are not, like in most cases the regional dimension, required by the administrative use of the results. Exhaustive coverage within the population defined is the rule, and random sampling the exception.
62. The legal protection of the institutional independence of the statistical offices is almost completely absent in the present statistics law at federal level (and most likely at the level of the republics as well). This law only talks about a vague principle of "expert independence", but does not address the issue of the relationship between the statistical office and the government. There are therefore no specific legal limits concerning the extent to which the governments might wish to interfere in professional decisions of the statistical offices, although no instances of this type have occurred recently.
63. The draft for a new statistics law is more explicit in stating that the federal producers "are independent when implementing the programme of statistical surveys" and especially by a paragraph by which "state organs and organisations, political parties and other legal and natural persons are obliged to respect the set of principles of official statistics and not to influence the staff of the producers in the performance of their tasks". Whether such an article could be invoked and stand against possible contradicting articles in other legislation, especially those of the law on the federal information system, remains open, however. Page 27
64. The federal level, and both republics, have specified the statistical office to be "an independent government body" in their respective laws on the organisation of the government. Independent in this context has another meaning than professional independence: not to be part of a ministry in organisational terms. The effect of this organisational feature on the status of the statistical offices will be analysed in more detail under 2.7.
65. One important institutional aspect of the protection of independence is the status of and the procedure for appointing the senior management of the statistical offices. Both at federal and republic level, director, deputy director, and assistant directors are appointed by the respective governments, without the prior publication of vacancies. De facto, the parties that form the government have the right to propose candidates for these posts.
66. At the federal level and in Montenegro, there is no fixed term of office for these posts. De facto, a new government has the right (and has made use of this right for at least half the senior management posts at federal level) to put an end to the term of the incumbents and to appoint new persons. The general legislation ruling these appointments in the respective administrations in general are fully applicable to statistical offices; no special rules exist that might offer some protection of independence in this respect. In Serbia, however, senior managers of the SORS are appointed for a term of four years, and have not changed with the recent change in the government, although the selection process is more or less the same as at the federal level.
67. The draft for a new federal statistics law introduces a term of four years for the director of the FSO. More importantly, it tries to limit the possibilities of appointments on purely political considerations by requiring that the Statistical Council should express an opinion about a proposal for nomination, opinion that would be made public.
68. As regards independence from pressure of public bodies other than the federal government, article 24, paragraph 3, of the present law is very problematic in this respect. It states that the producers at federal level "can proclaim as confidential results...if their publishing could cause bad consequences to bodies and organisations", thus obliging the FSO to second-guess, or to directly ask the prior opinion, about whether a result about a public body to which statistical confidentiality does not apply may cause bad consequences. If such a clause were to exist also in the Serb law on statistics, the SORS would be in a similar position with respect to public bodies at the republic level. This paragraph is omitted from the draft of a new law.
69. Another important institutional issue that affects the perception of independence by users and the public is the extent to which statistical offices are engaged in non- statistical activities, some of which might lead to conflict of interests with the perception of credibility and impartiality a statistical office must provide, or with the perception of the statistical office's respect of confidentiality. The SOR are responsible page 28
for keeping administrative registers on legal entities of the public and private sector, of entrepreneurs (SORS only), and of territorial units. The FSO processes customs data not only for its own external trade statistics, but also for administrative purposes of the Customs Agency, and is potentially subject to having to execute any data processing assigned under the "Law on the information system" at federal level. There are plans to use the relatively powerful IT equipment of the SORS for other governmental non- statistical needs; this has even caused a recent change of the title of the office to "Republic Office for Informatics and Statistics" (which for reasons of simplicity will not be used in this report). There is a proposal to correct this decision in the near future, and to allocate the respective non-statistical tasks to another public entity.
70. The city of Belgrade has a statistical office that is not part of the SORS. It is involved in the data collection for surveys of the federal statistical programme as regards the territory of Belgrade. This office also combines statistical, IT and other non-statistical tasks, the latter being determined by the city government and Parliament.
71. Activities of official statistics with other producers than the three statistical offices do not enjoy any legal or de facto protection of independence. There is not even a requirement that activities of official statistics should be in separate organisational units, and de facto, statistical activities are mixed with both either administrative or other policy implementation functions.
Assessment
72. The tradition of official statistics being independent from political interference has been gradually eroded in the last decade. Only in the last two years, there has been a timid swing to the opposite, but this does not seem to be the effect of a conscious strategy developed by statisticians and some key users who are aware of the importance of this issue. No public debate, nor any discussion with senior policy makers, about the role of official statistics in a democratic state with a market economy, and its implications for the institutional and legal framework, has occurred in these last two years. Together with the weak legal protection of independence, these recent gains are therefore on a very fragile basis, and serious thought has to be given to how the unsatisfactory situation can be improved.
73. The first issue is to render statisticians themselves more proactive in their use of the competence to determine the methodologies of the statistical surveys, notably the content of the questionnaires, the definition of the target population, the selection of respondent units, and the grossing-up of the data collected to the target population (by any form of estimation technique). In making such decisions, statisticians have to put the priority on giving an unbiased picture of the reality, by using international definitions as directly as possible. Insofar as administrative uses deviate from the aggregates or indicators with the best coverage and timeliness in the above sense, they should be compiled in addition to the main indicators, with clearly lower visibility. Today, the order of priority is rather the reverse, which seriously limits the possibility of adjusting existing data collections to international standards and definitions. Page 29
74. The second issue is to organise events where the issue of official statistics as such (as opposed to statistical production in a given subject area), and the need for important changes, can be discussed with key users and with media being present. This is best done in conjunction with the development of the master plan, which will serve as proof that statisticians are ready to implement these changes if they find the necessary support. The issue of independence has to be very prominent in this debate with the public, since it is (together with confidentiality) the key element to gain non-partisan credibility, and to move away from the perception of statistical offices as auxiliary technical government services that are 100% government controlled and have no separate identity. This external discussion has to be preceded by internal discussions with the objective to change the frame of mind of statisticians towards the new paradigms.
75. As third step, it is proposed that together with the master plan, changes of the legislation that regulates the appointment of key-level civil servants at federal and republic levels are initiated so as to specify a distinct procedure for directors, deputy and assistant directors of statistical offices. This cannot wait until the new statistical law will enter into force. While they continue to be nominated by the respective government, the specific rules may include the following: - a fixed term for the directors and the deputy directors that will not be interrupted if the government changes, with the possibility of re-appointment; - an exhaustive list of reasons for which an incumbent can be dismissed during the term of office (reaching maximum age if applicable; serious physical or mental disability; accused or convicted of serious crime); - an obligation for the government to have an open competition based on a published vacancy with specified skill requirements, among which proven experience in statistics; - the right for the director to propose to the government the assistant directors to be appointed (and dismissed; assistant directors would be appointed for an indefinite term until retirement age unless the director takes the initiative for their function to be terminated).
75. At the same time, the legislation concerning the organisation of the respective administrations should be amended. It is important to specify in these laws what being an independent government institution means in the case of the statistical office, i.e. that no public body can give orders to, or make pressure on, the statistical office concerning the choice of methods of data collection and processing, and the content of results and the ways they are disseminated. This will serve as legal protection until a new statistics law will be created later on, where this protection will then be extended to all producers. Such a change will also help to neutralise the unfortunate paragraph 3 of article 24 in the statistics law, if accompanied by a clear policy in the statistical offices not to second-guess reactions of such bodies or even ask for their prior opinion.
76. Legal protection is only the prerequisite, but not the guarantee that independence is observed in practice. The policy of the director is crucial in this respect: it must be clear that any attempt from outside to interfere with professional issues through political or other forms of pressure will be rejected, if repeated brought to the government level page 30
(where the statistical office has to have a spokesman, see 2.7), and at the last resort brought to the attention of the public. Once a statistical Council is in place, such incidents will also be brought to its attention. All staff of statistical offices must rely on being backed by their superiors if they reject attempts at interference addressed directly to them, and there has to be a uniform policy in this respect across all subject areas for all statistical offices.
77. The master plan should also outline a road map by which statistical offices can get rid, in the foreseeable future, of the responsibility for administrative registers (with the possible exception of the register on territorial units which does not seem to give rise to a conflict of interest). Assigning identification numbers and activity codes that are used to determine the tax categories of businesses is in strong conflict with the promise made to businesses from the private sector when they are asked to respond for statistical surveys that their information will only be used for statistical purposes. Instead, statistical offices should start to build up statistical registers as a combination of various (administrative and statistical) sources.
78. The conditions under which a statistical office can carry out IT services for other public bodies that are related to their administrative functions will be discussed in 3.7. The present IT services by the FSO and SORS in relation to elections can be continued without any risk for the credibility of statistical offices, as long as the responsibility for the elections results as such lies clearly with other independent bodies.
1.5 Data Protection and Confidentiality
79. As described in 1.1, all individual information concerning natural and legal persons is declared in the statistics law to be an official secret (art. 24, paragraph 2). In addition, article 25, paragraph 1, states that individual information on personal, family, health and property situation is to be used exclusively for statistical purposes. Art. 26 continues that individual information on legal persons can be published if they have agreed. The subsequent articles give the responsibility to each federal producer to implement protection measures, notably concerning IT. External collaborators used by producers will have to sign a written statement on confidentiality and data protection.
80. On the other hand, the law on the population census is rather short on this issue. It is somewhat contradictory to the statistics law insofar as "all data collected from persons relating to their personal, family, or property status, should be treated as official secret (in the statistics law, information on personal and property situation seem to be better protected than other variables, but all individual information is considered to be official secret, and not just the list given in the census law).
81. Both laws do not seem to make it possible to give individual data being an official secret to researchers.
82. Whatever the legal situation may be, de facto all three statistical offices are strict in safeguarding individual information concerning natural persons or private households. Page 31
No microdata on natural persons are transmitted in any form to anybody else than, exceptionally, from the SOR to the FSO or vice versa. There is no transfer of such data to other public bodies of the same administration. All staff in the statistical offices, including the regional departments of the SOR, is fully aware of the importance of this issue.
83. There are no general rules when names, addresses, or personal identity numbers have to be entered together with the statistical variables or left out in the data entry process, or whether they have to be stored separately from the statistical variables.
84. The experts were assured that more or less the same degree of protection holds for the population census data, in spite of the rather ambiguous legal situation. The persons in the local census committees, who will see the filled questionnaires before they are transmitted to the SORS, will have to work under great pressure to keep the deadlines and not have any time to use the information in any way. However, it seems that in Serbia personal identity numbers are entered and stored together with the statistical variables, for purposes that have not been specified.
85. The de facto situation is less clear concerning the treatment of individual data related to economic units, particularly as concerns legal units of the state and of the "social" sector. Selected users, and some bodies like the Chamber of Commerce, can get access to individual data (or to aggregates irrespective of the number of units that form an aggregate). Microdata files on economic actors normally contain the numbers of the administrative register, which are public. On the other hand, data from the various "surveys" in the programme cannot be used directly to update the administrative register of legal entities; this is only possible through a formal administrative procedure that requires in most cases a request from the entity concerned, i.e. its consent.
86. With respect to private sector economic units, SOR have reported difficulties in collecting data through statistical surveys because of fear that these data may be used for tax purposes. This is another indication that statistical offices are not perceived as being effectively separated from other government bodies in such a way that information given to statistical offices will not be shared within the administration, a perception that is still based on past behaviour and legislation that is still in force such as the law on the federal information system.
87. Individual data based on evidences received by statistical offices from other public bodies, and used for compiling statistics, are given back on request to the providing public body for administrative purposes. Such bodies use statistical offices as a kind of data warehouse, or even data entry and processing facility, for their administrative purposes, since they lack comparable IT equipment. An example is customs data based on the SAD. In the case of the SORS, the IT department processes data for a publicly owned company (without making any use of these data for its own statistics).
88. As regards aggregates composed of only a small number of units, there is no protection when the statistical programme provides for results to be published at detailed levels. page 32
For unpublished results, there is a case-by-case decision whether and to whom such results are disseminated on request. The practice seems to be rather liberal as regards dissemination of aggregates of economic units to other public bodies. The FSO has issued an internal regulation on this issue.
89. The statistics law also provides for aggregates to be declared confidential because they are either State or military secrets. Access is in these cases limited to a few governmental users. An internal FSO regulation governs this aspect at federal level as well.
90. The information given to respondents about rights and obligations is minimal. The letters accompanying the forms sent to respondents refer to the legal basis (item of the statistical programme), but without mentioning explicitly that data collection is for statistical purpose only, and that statistical confidentiality will be strictly adhered to. In the standard message used for reminding units that failed to respond in time, a further reference to the sanction paragraph in the statistical law is added.
91. The IT aspects of confidentiality will be covered under 3.7
92. Staff in statistical offices generally is of the opinion that the current practices with respect to confidentiality are sufficient.
93. The rules and practices of confidentiality with other producers than the statistical offices could not be examined. The statistics law allows them to have their own rules. Since statistics and other functions are very closely linked, these are likely not give sufficient regard to statistical confidentiality. The FSO has no authority to monitor their behaviour, nor to edict rules that would be applicable to all federal producers.
94. There is no law on general data protection, comparable to the EU directive, at either federal or republic level. The law on the federal information system only regulates data security; it does not distinguish, in terms of protection, between personal and other data.
95. The draft for a new statistics law fills most of the open questions listed above, and would be a clear step forward if complemented by clear interpretations and if applied to all producers. It does not contain any provision that names and addresses of respondent units should be deleted as soon as possible, or stored separately, nor any special provision for statistical registers.
Assessment
96. Since the perception of confidentiality is a key element for a modern statistical office, it is recommended to put more emphasis on this issue and to develop, implement and make public some measures before the new statistics law will enter into force. Otherwise, it may be very difficult to obtain the co-operation of privately owned businesses in statistical business surveys, an instrument which will become much more Page 33
important in the future compared to now because of the growing importance of the private sector and the completely insufficient coverage of this sector in the present programme. The current practice, and especially the lack of transparency to outsiders about it, is not sufficient from this perspective.
97. The first measure would be the strict adherence to the one-way principle. This states that statistical offices can receive individual data concerning natural persons, or legal persons of the private sector, from other public bodies for their tasks of official statistics, but such a transmission should never occur in the reverse direction, the only exception being transmissions between the statistical offices (transmission to researchers as another acceptable possible exception are excluded under the present statistics and census laws). The best way of making this visible would be, before a new statistical law comes into force, by amending the federal and republic laws on the information system in such a way that these laws are not applicable to data collected by statistical offices under the statistics and population census acts. Another important element in this context is to set up a time-table for the transfer of the responsibilities of the administrative registers on legal units and shops, which will require some time and careful preparation if the quality of these registers (which is an important input for the statistical registers that statistical offices are maintaining) were to remain at today's level.
98. The second measure would be a strict separation within each statistical office in terms both of the organisation chart and the IT aspects of data processing and access to individual data, between the responsibilities for administrative registers containing economic units, and official statistics proper, for the limited period until the responsibility for the former will be transferred to other public bodies. The one-way principle is applicable to the relationship between administrative registers and official statistics as well, and this should be made visible and implemented in a credible way.
99. The third measure would be a clear policy common to all statistical offices, especially for the SOR, concerning the entry and storing of names, addresses and personal identity numbers of natural persons, and of names, addresses and register numbers of legal persons or other economic actors of the private sector in the context of statistical microdata files. Outside registers, the storage of names, addresses or numbers that can serve as direct identifiers, for longer than the editing and checking process of a survey, is only justified if the same units are questioned again (panels), or if a matching with other sources of individual data for purely statistical objectives is planned; in these cases, the identifiers should be kept separate from the statistical variables however. For the population census microdata files, all identity numbers should be deleted from the file as soon as possible, so as to exclude any possible request for using census data for administrative purposes a posteriori. [The addresses of the dwellings may be kept as sampling frame for future household surveys, see B4, and the names, addresses and personal identity numbers of the agricultural households for a new statistical register of private agricultural holdings, see B7]. It goes without saying that files with individual data, even if identifiers such as names and addresses are deleted, still have to be protected because of the risk of indirect identification. page 34
100. The fourth measure is addressing the dissemination of aggregates composed of a small number of natural persons, private households, or private sector economic units (including agricultural holdings). The respective rules of the draft statistics law should be implemented by all three statistical offices as from now in a coherent way, i.e. both for results foreseen in the statistical programme and for results that are available on request. For published tables, additional aggregates will have to be suppressed to exclude calculation of a protected figure as residual. Unpublished aggregates should not be disseminated to anybody else than another statistical office if the confidentiality restrictions apply. If the confidentiality restrictions do not apply to an unpublished result requested by a user, a procedure to decide whether this result should not be communicated for other professional reasons (insufficient accuracy; better figure available from another source) has to be put in place.
101. The fifth measure is to communicate clearly that statistical confidentiality does not apply to units that are state-owned, be the owner the federal state, a republic or a municipality. A decision should be made, on the basis of clear criteria to be developed, which units of the social sector should be treated, from the confidentiality point of view, like private sector economic units and which like state-owned units. Privatised entities should be subject to statistical confidentiality, as well as state-owned economic actors that compete with privately owned businesses. On the other hand, units that receive subsidies from government budgets, or where the governments have to cover losses and deficits, can be legitimately exempt from statistical confidentiality in order to increase transparency in the use of public funds.
102. State or military secret considerations may apply to certain aggregates, which do not fall under statistical confidentiality, but this should be clearly indicated in any tables in which such aggregates are suppressed (or where a total does not include components subject to State or military secrets).
103. All these measures should be communicated and explained internally and externally so that they become visible to respondents and users. Internally, procedures to monitor compliance will have to be set up. They should be identical for all three statistical offices (and, with the adoption of a new statistical law, for all producers of official statistics). Externally, the questionnaires (or the accompanying letters) have to be much more explicit about the purposes of a statistical survey and the confidentiality issue. The present way of informing respondents is very close to collecting evidence type of information and does not treat respondents as important partners, but rather as receivers of governmental orders. Other than by consulting the legal basis themselves, respondents cannot know the limits the statistical offices have to respect in the use of the information given. This is clearly not in line with good practice, nor with the relevant standards of the Council of Europe.
104. It is very important that statistical offices will be associated when a general data protection legislation that is in line with the EU directive (and with relevant resolutions of the Council of Europe) will be drafted at either federal or republic level. Such a law Page 35
has to include some exceptions for the processing of individual data for the purposes of official statistics; if they are not foreseen, it could make life very difficult for statistical offices and inflict unnecessary cost upon them.
2 Federal Statistical System
2.1 Principles
105. The statistical system of the Federal Republic of Yugoslavia is currently ruled by the Federal Law on the System of Statistical Surveys, that dates from 1994 (see 1.1 above). This law makes an explicit reference to the principles of objectivity, rationality, experts’ independence, political neutrality, and confidentiality of individual information concerning natural and legal persons.
106. In practice, it is clear that the Federal Statistical Office, as well as the Statistical Offices of the Republics of Serbia and Montenegro are attaching a great importance to the preservation of the confidentiality of individual data collected for statistical purposes. With regard to the professional independence and the neutrality of official statistics, it appears that the dissemination of statistics is made without any interference of governmental authorities, at the Federal and the Republic level. Due to lack of time, this practice could not be checked with the other producers of official statistics. Assessment
107. It is most important for the credibility of official statistics to have a clear reference to basic principles of professional ethics placed at the beginning of the legal framework governing official statistics. The legal setting of official statistics in Yugoslavia has been already discussed in chapter A.1 above, including the protection of independence and the confidentiality of individual data.
108. In addition to specific legal aspects, it is advisable that the new statistical law refers in its preamble to the Fundamental Principles of Official Statistics. Adopted by the Economic Commission for Europe of the United Nations in April 1992, these Principles have been recognised of universal significance by the Statistical Commission of the United Nations, that adopted them in April 1994.
109. Another important feature of principles is with relevance, expressed in implicit priorities and decisions on methodology. Here, the basic paradigm has to move towards giving clear priority and prime visibility to those official statistics that correspond to international standards.
2.2 Structure of the System
110. The main statistical governmental agencies in Yugoslavia are the Federal Statistical Office (FSO), the Statistical Office of the Republic of Serbia (SORS), and the Statistical Office of the Republic of Montenegro (SORM). The government of the Republic of Serbia has recently changed the name of the SORS into Republic Office page 36
for Informatics and Statistics. This change means that SORS is also in charge of Information Technology activities that are not related to statistics. However, it appears that this new mission has not yet been concretely developed. For convenience, the acronym SORS will continue to be used in this report for the statistical office of Serbia.
111. The federal statistical system of Yugoslavia also includes producers of official statistics outside the FSO, the SORS, and the SORM. The statistical activities of these producers are listed in the draft Programme of Statistical Surveys over the Period 2001-2005 that has been approved by the Federal Parliament.
112. The Payments Agency of the National Bank of Yugoslavia is in charge of clearing and payment of all transactions of legal entities in the Federation. All legal entities, including enterprises, must have an account at this Agency, through which their domestic payments are made. The Payments Agency is able to produce daily records of payments made by legal entities, according to a standard accounting framework that is in compliance with the Fourth Directive of the European Commission on enterprises accounting rules. This organisation is going to disappear. Starting in January 2002, the clearing of payments of legal entities will be progressively transferred to the banking system, as it is usual in market economies.
113. The National Bank of Yugoslavia is also responsible for money and banking statistics and balance of payments statistics for the Republic of Serbia. Since the Republic of Montenegro has adopted the Deutsch Mark – the Euro from 1 January 2002 - as national currency, the newly created Central Bank of Montenegro is responsible for money and banking statistics, as well as balance of payments statistics, in the Republic of Montenegro.
114. Other producers of official statistics listed in the official programme of statistical surveys are: The Ministries of Interior of the Republics of Serbia and Montenegro (registered vehicles; crossing of the state borders); the Federal Ministry of Justice (activity of general and appellate courts); the Federal Office of Labour Market and Migrations (employment and unemployment); the Federal Office of Health Protection and Improvement (diseases); the Federal Office of Social Insurance (health insurance; pension and disability insurance); the Federal Hydro-Meteorological Institute (climate; quality of air and water).
115. In principle, the FSO is responsible for the methodology of official statistics. However, there are exceptions for money and banking statistics and balance of payment statistics. For these statistics, the National Bank of Yugoslavia and the Central Bank of Montenegro are responsible for their own methodology that is based on international standards published by the International Monetary Fund. In the same way, government finance statistics are compiled by the Clearing and Payment Service, following the standards published by the International Monetary Fund, without any involvement of the FSO. Page 37
116. The Statistical Offices of Republics (SORS and SORM) participate in the definition of the methodology and are responsible for its implementation in the field. They are responsible for the collection of data and individual data entry. For some statistics, individual data are then forwarded to the FSO for processing. Once data have been processed, tabulation and dissemination at the level of Republics are carried out by the Statistical Offices of Republics. The FSO is responsible for tabulation and dissemination of data at the Federal level only. The distribution of work is the same for other producers of official statistics. The National Bank of Yugoslavia, and the Central Bank of Montenegro, produce money and banking statistics and balance of payments statistics on their own.
117. This distribution of work and the number of bodies involved requires a strong co- ordination and monitoring of the whole process of production and dissemination of statistics. This is the role of the monthly Conference of Directors. Directors of the FSO, the SORS, and of the SORM meet every month to review the programme of work, approve methodology and calendars, and monitor the work in progress. The meetings of the Conference of Directors are prepared in ad hoc meetings of assistant-directors of the FSO, the SORS, and the SORM. Formally, the heads of statistical units of other producers are also members of the Conference of Directors, but their participation is very infrequent.
118. The main purpose of the structure of the statistical system, as well as the distribution of work, is to preserve the complete statistical role of the statistical offices of the Republics. It is considered as a legacy of the previous system. It is also strongly linked to current political issues on which statisticians clearly have not the leading role.
Assessment
119. As explained in Chapter A 1 on the Legal Setting above, the decentralised structure of the official statistical system in Yugoslavia is closely linked to the political structure of the Federation. It is not only related to the federal structure itself. There are countries with a federal structure where the statistical system is much more centralised than in Yugoslavia, for instance Canada, and Australia.
120. Of course, it is not the role of this report to assess the political context of the official statistical system in Yugoslavia. At the same time, it seems possible to make two remarks that are based on purely technical considerations.
121. At first sight a positive assessment can be made when considering the way in which the complete statistical role of the three offices, namely the FSO, the SORS, and the SORM has been so far completely preserved. The merit is probably to be attributed to the work of the Conference of Directors and its subsidiary bodies, and to the strong page 38
commitment to public service demonstrated by staff members at every level. The spirit of co-operation between the three statistical offices is excellent.
122. However, one has to consider the cost of this achievement. The maintenance of three parallel and mutually consistent systems of data dissemination is a potential source of difficulties and conflicts between the federal and the republic levels. At every level, there are not enough human, financial and technological resources for carrying out the official programme of work. The benefit of the preservation of the complete statistical role of the three offices should be assessed, therefore, against the cost of this achievement.
123. The Conference of Directors is the only mechanism by which co-ordination between statistical offices takes place. However, it lacks legitimacy, since it is not mentioned in the statistical law (or any other legal text). Furthermore, the almost complete lack of participation of other producers in this conference is an expression of lack of interest by and relevance to these other producers, which de facto act independently though formally part of the statistical system.
2.3 Liaison with Research Institutes and Universities
124. There are good relations between the three statistical offices and the academic community, in Belgrade and Podgorica. Researchers can get tailored sets of statistical data for the purpose of their research. In general, these data are provided free, subject to the decision of the Director.
125. Personal links exist between the academic community of Belgrade and the management team of the FSO and the SORS. The Deputy Director of the FSO and the Director of the SORS are University Professors. The Statistical Society of Serbia also provides opportunities of contacts. 126. At the institutional level, the draft official statistical programme is distributed by SORs to scientific institutions in each Republic. The feed-back is reportedly rather low.
Assessment
127. There is a good capacity of contact and exchange between the statistical offices and the research and academic community. However, this depends more on private relations and bilateral contacts than on institutional links. The draft of the new statistical law makes provision for a statistical council where scientific institutions are represented (see part 1.3 above). This will improve the effectiveness of interlinkages between the research and academic community and the official statistical system.
128. Statistical offices should be encouraged to engage in other forms of co-operation with empirical and methodological research, e.g. in the form of joint projects, or by sub- contracting parts of certain development project to research institutes. In this way, shortages of skills within statistical offices can be temporarily compensated. Page 39
2.4 Liaison with the Business Community
129. In the current situation the business community mainly appears as one of the most important providers of economic basic data. As it can be seen in the description of statistical tools used by the FSO and the SOR in part B of the present report, enterprises are in direct relations with statisticians, especially statisticians of SOR, through the business registers and the business surveys. This liaison is very important for the satisfactory completion of the statistical programme. However it is based on bilateral relations between SOR and individual enterprises, and probably rather enterprises of the social sector and privatised enterprises than newly created private enterprises.
130. Another important link to the business community is established through the preparation of the statistical programme. The draft programme is circulated to many institutions and organisations, of which the Chambers of Commerce. It seems that the feed back from these institutions is rather low.
Assessment
131. The current liaison with the business community should be improved, in order to get more advice about the statistical programme. The economic structure of Yugoslavia is rapidly changing, especially with the development of private enterprises. It is the opinion of FSO and SOR that the new private enterprises are less likely to respond to statistical surveys than the enterprises of the social sector.
132. To maintain the quality of economic statistics, it is very important to establish a permanent liaison network with the business community. The dialogue between statisticians and representative bodies of the business community (Chambers of Commerce and other existing business associations and groups) should not be confined to the information on the statistical programme. A feed-back is needed on the relevance of statistical surveys, as well as the statistical reporting burden to enterprises. More information should be given on the protection of confidentiality, as a response to questions raised by the business community on this issue.
133. The purpose of this intensified dialogue is to create a better confidence of enterprises with respect to statistical surveys. The draft of the new statistical law provides for an advisory statistical council where professional organisations would be represented. This would be a significant progress in the liaison with the business community. One could expect a better confidence of enterprises, as well as a better relevance of questionnaires to internal information systems of enterprises, that would decrease the statistical reporting burden.
2.5 Product and Dissemination Policies
134. The official Programme of Statistical Surveys contains information about which results will be published. The first results are disseminated through so-called statistical releases (around 200 – 300 per year at the Federal and Republic levels). More detailed page 40
results are disseminated later in ad hoc publications. In general, the statistical release takes place two or three days after the deadline for production indicated in the official programme of statistical surveys.
135. In the FSO, the data are first reviewed for clearance by the assistant-director in charge of the statistical area concerned. They are then forwarded to the dissemination unit. For most surveys in the official programme it is agreed that the FSO releases first the federal results, except for monthly indicators that are released earlier by the SORS. The SORM is used to hold a press conference every month (on the 15) to release all newly produced statistical data.
136. At the Federal and the Republic levels the ministers and the Parliament receive the releases only a few hours before the dissemination to the public. There is no possibility of political interference in the current political context.
137. Comments released with data are only of statistical nature, at the Federal and Republic level. It is a general policy not to make analytical comments of data.
138. Data dissemination practice is not identical among the three statistical offices. The FSO circulates its releases to authorities, Statistical Offices of Republics, and the national press agency TANJUG for further dissemination to the media. Releases are simultaneously made available on the web site of the FSO. Twice a month, the FSO holds a press conference for the release of the price indices, and the index of production. There is no advance release calendar. Ad hoc publications provide more detailed statistics. In addition, non-published tables that are available upon request are indicated in the publication. The Director or his deputy decide in each case whether non-published material can be given to the requesting user, and whether it will be charged or not. In general, data requested by the scientific community or by the government are not charged. For requests from other users, the price is equivalent to the marginal cost, i.e., the cost of time spent by staff in preparing tables plus the cost of printing or copying on electronic support. In addition to specialised publications, the FSO publishes a Monthly Review of Economic Statistics, an Economic Trend bulletin, a Statistical Pocket Book, and a Statistical Yearbook, all four in Serb and in English, that are made available on the web site of the FSO, too. The FSO maintains a well- designed web site in Serb and in English. The FSO has also a library open to the public with room available for consultation of documents on the spot.
139. The SORS circulates its releases to authorities of the Republic, the media, and the general public. In the latter case, this is made through the web site of the SORS, which is available in Serb and in English, and provides clear and attractive information. In addition, two databases are accessible on industry and on foreign trade. The SORS does not organise periodic press conferences. An advance release calendar is made available at the beginning of the year. There are numerous specialised publications. Non- published tables are often requested, especially by big enterprises. They are given, providing that confidentiality of individual data is preserved. In addition to specialised publications, the SORS publishes a Monthly Review and a Statistical Yearbook. The Page 41
SORS has a library open to the public, with room available for consultation of documents on the spot.
140. The SORM holds a monthly press conference on newly produced statistics, as said above. It publishes a Monthly Bulletin and a Yearbook. Quarterly and annual statistics are disseminated to bodies and organisations that have manifested interest in them. Detailed data whose publication is announced in the official statistical programme are available upon request. There is currently no web site, for financial reasons. There are plans for opening a library accessible by the public, with room available for consultation of documents on the spot, but the major obstacle currently is the lack of space.
141. The National Bank of Yugoslavia and the Central Bank of Montenegro have their specific product and dissemination policies, without co-ordination with the statistical offices in their respective Republics. The National Bank of Yugoslavia, that de facto covers the Republic of Serbia since Montenegro has adopted the Deutsch Mark as currency of legal tender in December 2000, produces and disseminates monetary and financial statistics on a monthly basis. The dissemination is made through a monthly Bulletin (in Serb; the English version is published on a quarterly basis), and through the Bank’s web site. The balance of payments is produced on a monthly basis and put on the web site of the Bank. It is also published in the annual Bulletin of the Bank.
142. The Central Bank of Montenegro produces and disseminates monetary, financial, and balance of payments statistics in its monthly Bulletin. Daily indicators on liquidity, loans, and giro accounts of banks are also produced, but for internal use of the government only.
Assessment
143. Republic and Federal Offices have product and dissemination policies that are clearly independent from political considerations. In addition to regular publications, efforts are made to meet ad hoc requests received from users. With the generalisation of online access through Internet, and advance release calendars, the Yugoslav statistical offices are going to reach the level of most advanced countries in Central and Eastern Europe. To improve further the situation, two suggestions can be made.
144. The statistical offices should abandon the policy of abstaining from any comments beyond the technical comments concerning definitions and characteristics of the sources. This limits relevance to users, especially non-experts users who are the great majority. In a transition phase where indicators and major aggregates change from old to new concepts, the comments by the statistical offices have to offer clear guidance concerning significance, major underlying factors (substantiated by facts), especially unique events that had an effect in the period concerned. Statistical offices can go quite far in such comments, if they clearly stay away from any policy-prescriptive comments. They have not to submit the drafts of these comments to non-statistical bodies. This would be incompatible with impartiality and professional independence. page 42
145. Co-ordination of dissemination between the three statistical offices is of tantamount importance, since any lack of it is immediately visible. The best solution would be of course that new results be simultaneously released for Serbia, Montenegro, and the Federation. If this were a strict rule, timeliness might suffer unduly. It is proposed that whenever the difference in timing between Serbia and Montenegro is such that the deadline in the programme (or the advance release calendar) cannot be respected for one of them, and by consequence for the Federation, the Conference of Directors would give the green light to the first republic to go ahead with dissemination, with results for the second and the Federation coming in later. If deadlines can be kept by both republics, a user-friendly policy of first release would be a unique joint action of the three offices together. After release, other products would continue to be produced by each office according to its needs, but with prior co-ordination of programmes so as to avoid unnecessary duplications.
146. It is difficult to assess the current product and dissemination policies of the National Bank of Yugoslavia and the Central Bank of Montenegro. The monetary and banking system of Yugoslavia has been completely transformed over the past twelve months, the most visible outcome of which was the creation of two separate monetary areas within the Federation. Nevertheless, it is worth noticing that both central banks are now disseminating monetary, financial, and balance of payments statistics on a monthly and annual basis with Bulletins and on the web, in a way that is close to the usual practice of central banks in other countries.
2.6. Relations with the Federal and Republic Governments
147. The Federal Statistical Office is a federal body that depends on the federal government. In the same way, the Statistical Offices of Republics are republic bodies that depend on the government of their republic. However, none of them is reporting to a specific minister in its government. As a consequence, statistical offices have no “spokesman” at the government level.
148. Moreover, as pointed out in 1.3 above, FSO and SOR in general do not participate in the work of high-level ministerial group that prepare new laws, international negotiations, and other policy decisions that can have an impact on the supply and/or use of official statistics. There are two exceptions : (i) the Director of FSO attends the meeting of the federal government that prepares the federal law on the programme of statistical surveys; and (ii) the SORM receives all draft legislation for comments.
149. The federal and republic governments, as users, receive for comments the programme of statistical surveys. They also receive all statistical releases of FSO and SOR. In both cases the feedback is considered by statisticians as relatively low, being focused on the main macro-economic aggregates, and specific indicators used for legal indexation purposes, such as the retail trade price index. However, the SORS reports that the government of Serbia is expressing an increasing interest in statistics, asking more questions and requesting more information and specific tabulations. Page 43
Assessment
150. Without making the picture too dark, the organisational independence of FSO and SOR in the present form is more a drawback rather than an advantage, especially in the current context of severe budgetary constraints at the federal and republic levels. When it comes to the discussion of budget at ministerial level, the statistical office is more likely to be “sacrificed” than other governmental bodies that are depending on a minister sitting at the table.
151. The same is true with legislation and other policy decisions with a statistical impact, except that it is not here a question of budgetary resources but a technical issue related to the feasibility and relevance of statistical actions involved. If statisticians have not a chance to see draft legislation with a statistical impact before it is adopted by the government and/or the parliament, there is risk that the new legal text creates unnecessary burden and cost for the national community as a whole. The situation is better, in principle, for the SORM, since it receives all draft legislation for comments. However, statisticians in Montenegro report that they have not enough human resources for digesting and reacting in the short time available.
152. The good news is that ministries in Serbia show an increasing interest in statistics. It provides an opportunity of dialogue between statisticians and their governmental users. It may ease the identification of the main needs of this kind of users, and therefore the improvement of relevance of official statistics. In the short or medium term, a network of users could be built in governmental areas, which would create a favourable context for the advocacy of sufficient resources for official statistics. At the same time, there is a challenge associated to this opportunity. An improved relevance of statistics to new governmental needs means the review of coverage, periodicity, and timeliness of some statistics. Here again, some flexibility will be required in the programme of statistical surveys, which means the prioritisation of actions and the development of a master plan.
2.7. Relations with the Local Governments
153. On the basis of information collected by the experts, there are no significant relations between official statisticians and local governments. Of course, municipalities are involved in some statistical actions that are not negligible at all. For instance, municipalities provide the basic information for vital statistics, and internal migrations through the Ministry of Interior (see B.3 below). They also provide the basic information used for update of the central shops register in Serbia (see B.5.2 below). However, in this part of the report, that deals with relations with various communities and bodies as data users, local governments do not appear as important stakeholders. Assessment
154. If there are no relations with the local governments, it is advisable to create them. Municipalities should not be regarded by statisticians as providers of basic information page 44
only, but as potential users of statistics, too. SOR already compile and publish basic economic, demographic, and social indicators at the local level. FSO publishes an excerpt of these local indicators in its yearbook. This provides a good starting point for a dialogue between SOR and local governments. This dialogue could be organised, resources permitting, using the network of regional offices of SOR in each republic.
2.8. Access to Administrative Records
155. The use of administrative records in the statistical system of Yugoslavia is a well- established tradition. As it can be seen in Part B below, several statistical activities are conducted on the basis of administrative records. For instance, data on internal migrations are using administrative records of the republic ministries of interior. Agricultural statistics, especially estimates of private crop production use cadastral data on land use. Custom administration produces foreign trade data from its administrative records of import and export statements. Data on registered road vehicles and trailers, as well as data on road traffic accidents have been taken from the federal ministry of interior. The Agencies of Payments of the National Bank of Yugoslavia and of the Central Bank of Montenegro provide a wealth of data from their records of domestic payments that are useful for compilation of national accounts, government finance statistics, etc.
156. The use of administrative records is not always easy for statisticians. Some government bodies are reluctant to give access to their files. The argument of confidentiality has been sporadically used in the recent past. It seems that these difficulties have recently emerged. Examples can be found with the offices in charge of cadastral surveys or registration of road vehicles.
Assessment
157. The use of administrative records by statisticians is useful because it reduces the response burden of households and enterprises, as well as the cost of data collection. Therefore, the current practice of FSO and SOR is good.
158. One major issue is well identified by the management of FSO and SOR: administrative records are primarily built for law enforcement and administrative purposes. Their conceptual framework is not necessarily consistent with the definitions and concepts used in statistics, and statisticians cannot expect from administrative bodies concerned the adoption of purely statistical concepts in place of concepts that are designed for the primary purpose of administrative data bases, especially in the current context of transition in the legal system and the statistical system.
159. The dialogue with government bodies who are managing administrative records has to be further developed and strengthened, in order to find an agreement on the provision of data that is acceptable on both sides, including the share of work related to the additional processing that might be needed for adapting data to the needs of statisticians. The revised statistical law would provide a convenient legal background. Page 45
The creation of Statistical Council would provide the appropriate forum for an enhanced dialogue between statisticians and administrative bodies.
160. As already pointed out in A.1.2 above, the conditions under which administrative records are forwarded to FSO and SOR for statistical use have to comply with the “one way” principle, with regard to the protection of confidentiality. Once individual administrative records have been forwarded to statistical offices, processed and checked again other statistical data by these offices, in order to improve their reliability, they are covered by the principle of confidentiality of individual statistical data. The administrative body of origin cannot claim from statistical offices the provision of processed individual data for its own administrative control and law enforcement purposes. This aspect of inter-administrative relations should be made clear in any agreement between statistical offices and government bodies in charge of administrative records.
3 Description of the FSO and the SOR
3.1 Mission, Internal Organisation
161. The organisation chart of the FSO is given in Annex IV. It was adjusted recently (after the most recent change of the political system) and shows three production departments, one department for IT and one department for general affairs.
162. The organisation chart of the SORS is given in Annex V. This chart, drawn up when the SORS recently became the Republic Office for Information and Statistics, is somewhat misleading, since it provides for an extension of IT activities unrelated to statistics which has not materialised so far (e.g. units 5.1. and 5.2). Three subject area departments are for production, one for dissemination, three for IT and registers. Two departments regroup the 14 regional offices of SORS (of which 9 are in Central Serbia; but without the City of Belgrade, whose statistical office is not part of the SORS structure, and 5 in Vojvodina; the latter department direction being located at Novisad at the former statistical office of the province of Vojvodina), and one department is for general affairs.
163. The SORM is organised in two sectors of production (economic and population/labour statistics respectively), subdivided further into departments. All horizontal functions are in departments directly sub-ordinate to the director: one for the 7 regional offices (some of which have local executors, i.e. one-person offices, in other places), one for IT, and one for general affairs.
164. The main internal decision-making body in all offices is composed of the director, a deputy director who is not in charge of any department or sector in addition (only in the FSO; the SORS deputy is vacant, and the SORM has no post of this type), and the assistant directors who are at the same time heads of departments/sectors (5 in the FSO, 4 in the SORS, and 2 in the SORM called deputy directors). page 46
165. There is a relatively strong emphasis on hierarchy. If a staff member is unclear about what to do in a given situation, he or she will turn to the superior. There are no official internal structures across departments (e.g. project groups; horizontal groups).
166. The directors of the offices do not have a free hand in how their office is organised within the limits of staff and budget allocations. Changes in the organisation charts have to be approved by a ministry, and whereas the allocation of the given number of posts per skill level to the different organisation units is formally in the hand of the director, there are some compulsory rules about the minimum size of such units that limit the de facto degree of freedom considerably. The directors of SORS and SORM are not free either to decide the allocation of posts between the headquarters and the regional offices.
167. The tasks of the 14 regional offices of the SORS is to distribute the questionnaires printed at the headquarters to the respondents, and to receive them back as well. For monthly surveys, data entry is carried out in these offices, and the data files are then sent to the headquarters via the public communication network. Data entry of less frequent surveys is centralised; the regional offices send the filled paper questionnaires by mail. The Novisad office, from which 4 other regional offices in Vojvodina depend, has some additional responsibilities. All data processing at the republic level is centralised in Belgrade. 190 persons are working in these regional offices (plus 65 in the statistics branch of the independent statistics and informatics office of the city of Belgrade, i.e. one third of the staff of the total city office).
168. The tasks of the SORM regional offices are relatively smaller than in Serbia, since there is no communication link to the headquarters. They distribute and collect the questionnaires, and do not carry out any data entry. 32 persons are working in the SORM regional offices.
169. Neither of the three statistical offices in Yugoslavia has a mission statement in a modern sense that could be used for external communication.
Assessment
170. Organisation charts of statistical offices differ from one country to another. More important than the chart as such is the clear definition of responsibilities and division of work, and of the procedures for working together across departments. The focus on the execution of the statistical programme clearly helps in the definition of tasks of each unit, and of each person within units, in a way that few overlap arise within each office (as regards the division of work between FSO and SOR, see 2.2).
171. The fundamental change the system will have to undergo will undoubtedly have some consequences on the internal organisation of statistical offices, but it is too early to speculate on them in detail now. Only some general ideas can be given: - A more user-oriented approach will require a less rigid programme, and a less rigid system of definition of jobs. Senior management will have to concentrate on strategic issues, such as Page 47 defining policies and criteria and less on detailed professional and micro-management issues, which in turn requires more delegation of decisions to lower levels, or to horizontal groups. - New procedures will have to be set up for staff from different departments to work together, especially for innovative activities. Managers are not necessarily the best experts on all professional issues, so that complementary forms for activating the know-how in each office and for deciding on professional issues at lower level, based on clear policy statements and criteria established by the management, should be set up, so that reverting questions of implementation to the superior can be limited to borderline cases (but this role could also be taken over by horizontal committees), to issues that may lead to deviation from the published programme, or to cases the handling of which has a strategic significance for the policy in the whole office. Once the staff of all three offices is connected to the Internet, one could also think of creating "virtual" professional groups across all three statistical offices. - Professionally independent statistical offices should be free in deciding on their internal organisation, i.e. on how to allocate the given number of staff to various units, without having to get approval from another body. - The role of regional offices should be carefully redefined in the process of change. For surveys carried out by mail, there is no reason for not using centralised mailing and collection of questionnaires within each republic, which will lead to a gain in efficiency and timeliness. Only for surveys where visits are necessary either from the outset (such as for price statistics or households surveys), or are frequently used as second-step solution when respondent units do not return forms by mail in time, a decentralised structure may have some advantages (at least in Serbia), but this has to be analysed in detail. In future, the main justification for having regional offices is unlikely to be in data collection, but in providing services to local users, especially to users from local governments. Since the use of statistics at this level is rather low, and because the present staff of regional offices have not been involved at all in dissemination (and in Montenegro not even linked by modern communication), it may turn out that the building up of this type of new services (with the appropriate upgrading of IT and communication) can be done more efficiently at the headquarters as well, with the possibility of leaving it to the initiative of big cities to create, like in the city of Belgrade, statistical units of their own for this type of service. Generally speaking, all these aspects are likely to lead to a reallocation of resources from the periphery to the headquarters or to a smaller number of regional offices at an intermediate level (for which the present Novisad office is a good example), and this has to be planned sufficiently ahead given the social implications for the staff concerned. - The role of the production departments should be redefined so as to become producers of information about a given subject area, and not merely executors of surveys with information produced only from each source separately. All data produced from a survey have to become corporate within each institute and shared between SOR and FSO. Procedures should be set up to decide, in cases where more than one source is available for compiling results, about which figure(s) will be considered as official results. - The three statistical offices will have to work together very closely. The set-up of joint groups with staff from all three offices, either as project group for a limited period of time, or as a permanent group, must be facilitated as much as possible. This will be the case, the more similar the three organisation charts and the management philosophies will be.
172. Once the future division of work between the federal and republic levels in official will be known in more detail, some simplifications in the internal organisation of each page 48
office may be possible for activities where economies of scale ask for a maximum concentration. If it were possible in the new set-up to allocate such a function to one or two (instead of all three) offices only, with a mandate to serve the whole statistical system (and with compensations from the budgets of those being served), scarce financial resources and expertise could be concentrated instead of being spread too thinly. Prime activities to be looked at under this aspect are the IT infrastructure of statistics, notably for databases, dissemination and statistical registers.
173. The following specific comments on the FSO organisation chart can be made in addition: - The sample and mathematics function is allocated to the social statistics department. This is a horizontal function that should serve economic statistics, and notably sample business surveys in the private sector, as well, and would therefore be better included in a department that regroups other horizontal functions with a considerable statistical content (such as legal services, quality control or dissemination). If legal services are part of a general affairs department, the risk is that its capacity will be mainly used for legal questions about staff, organisation and finances, at the detriment of legal issues concerning official statistics and confidentiality. - No place in the organisation chart includes the systemic function or responsibilities going beyond the FSO, e.g. the setting up and monitoring of the statistical programme and of the compliance with fundamental principles, or international affairs. These important functions should be visible in the organisation chart of a federal statistical office, and could also be part of a horizontal department as suggested above.
174. The organisation chart of the SORS has the advantage that dissemination is clearly visible as a horizontal function of its own. It is also positive that, as long as the responsibility for administrative registers is with the SORS, they are in a department separate from data collection for statistics. The main disadvantage of the organisation chart is the clear visibility of the role of the SORS as a major player in the overall information system of the government, although these boxes are de facto empty. It has been shown above (see 1.4) that this is incompatible with official statistics, and this should be made clear in reality and in the organisation chart as soon as possible. Furthermore, a unit (or units) for legal affairs and co-ordination (including co- ordination with other producers at republic level), as well as a unit for sampling and related methodological problems, should be created and treated as horizontal functions.
175. It is suggested that the change process includes an expertise from outside on management and organisation, once the division of work between FSO and SOR will have been clarified. After this step, clear mission statements for the new role of the statistical offices can be developed in close co-operation between the three offices, to be used both for internal training and external communications.
3.2 Planning, Programming and Priority Setting
176. The main description of the planning and programming process is given under 1.3. The present chapter deals with priority setting by the statistical offices. Page 49
177. If resources are not sufficient for implementing the whole programme, no explicit adjustment of the programme is made. Statistical producers feel bound to execute the programme as fully as possible, i.e. that no regular item should be dropped completely, except in situations like war or unrest. Adjustments are generally not made by postponing the data collection, but rather the processing and dissemination. Activities in the development chapter may, however, remain dormant for several years for lack of resources. The Conference of Directors is, to a large extent, occupied with such types of micro-management issues concerning the implementation of the programme.
178. The mismatch between programme and resources can be seen by the reduction of the number of surveys over the year in the consecutive five-year programmes as shown in Annex 3. The visible adaptation to the real situation is therefore made principally when a new programme is developed, but it is more a retroactive statement of facts to a real situation that has developed already during the implementation of the previous programme than a forward looking way of priority setting.
179. With the exception of the population census where the resource situation was still unclear in Montenegro (a factor that was certainly taken into account in the decision to postpone the population census for a second time), there was no major complaint about a mismatch of resources for carrying out the regular part of the present programme. The complaints about insufficient resources are much more aimed at the level of expertise of staff (including training), and at IT investments, necessary to make the system fit for future challenges in an open society, i.e. about the resources required for initiating a sustainable transformation process.
180. Recently, SORS has been confronted with an increasing demand from governmental users, in many cases triggered by international experts who advise them, for quick estimates of statistics in line with international concepts. In most cases, the results could not be produced by reprocessing existing data, but would have required a change in the data collection.
Assessment
181. The policy of all statistical offices (FSO and SOR) in the last decade was to avoid explicit priority setting between items of the statistical programme, e.g. by trying to assess aspects like relevance, coverage, timeliness and actual use and associating cost. It has also been shown in 1.3 that a fundamental change to this approach has to take in from of establishing a master plan with clear priorities and milestones that will create the foundations for the statistical system to change fundamentally and the present list of surveys to be reassessed in terms of relevance for specific users and the society in general.
182. The issue of orientation for specific users is a difficult one in a country where most users are not aware of the potential of statistics about the economy and society for preparing decisions (since their only use had been the use of statistics in implementing policies on the basis of administratively defined aggregates and indicators that were not page 50
designed to give an unbiased picture of the real situation), and where demand from the private sector economy is still week due to its limited size. In such a situation, statistical offices have to put themselves into the feet of these users, trying to anticipate what, in a context of informed decision-making, their future needs are likely to be, and to prioritise such needs.
183. If there is no input from ministerial users to this issue, the experience of other countries in the region that have started the transition process earlier might be helpful, as well as advice from foreign experts. Irrespective of any explicit expression of needs for information, rather high priority should be given in the master plan to the implementation of a key set of basic indicators in every subject area, in order to honour the citizen's right of information about the situation of the country. Such indicators should be produced according to international standards, so as to enable the highly relevant comparisons with other countries. The list of basic indicators in the General Data Dissemination System of the IMF is an excellent starting point.
184. One of the major changes in looking at official statistics will be to determine and prioritise needs in terms of outputs (information about), and not directly as surveys or data collections. These outputs should be defined as indicators or other types of aggregates, with major break-downs (the need for regional break-downs should be examined with special care, given their impact on the number of respondent units and therefore cost), periodicity, timeliness, and if possible accuracy, for all subject areas, including those the responsibility of which are allocated to another federal producer. Users of statistics are interested in outputs and their characteristics, and only in the second instance in the source of data and the responsible producer. In formulating these outputs, the present programme should not serve as a basis, for fear of leaning too much towards the status quo at the detriment of new statistics that are of key importance in a market economy and an open society, but which will take some time to implement. The major difficulty here may be with the lack of staff inside statistical offices that could be used for what is a completely new approach in Yugoslavia; regular help from abroad seems to be a must in this phase.
185. Once an approximate list of outputs has bees set up, it is then necessary to identify possible administrative sources from which some of these outputs can be generated totally or partially, and assess these sources in terms of coverage, compliance with definitions and classifications, quality and timeliness of the outputs. The same holds for observation data as source for some environmental indicators. What cannot be covered by any of these sources that lie outside of official statistics, has to be covered by statistical surveys as defined above with either households or businesses, i.e. by data collection fully determined by official statisticians. One of the major tasks of each statistical office is to bundle the information needs in such a way that they can be allocated to individual statistical surveys; in many cases, it is efficient to combine different information needs in one survey operation. In this process, due regard has to be given to response burden caused to businesses. Page 51
186. It is very important that the statistical system shows quickly that it can adapt to the new needs for indicators with good coverage of the real world, since the demand is rapidly growing. If the statistical system fails to respond, governmental users may produce quick fixes of their own (or made by international experts), or even mandate statistical surveys outside the system of official statistics, and without the statistical offices being involved. If the relevant new production is generated and disseminated outside official statistics, the image of an outdated, inert system of official statistics would be perpetuated also in the minds of governments, and the prospects for obtaining the resources required for the modernisation of the system may suffer and be directed away from official statistics towards such "ad hoc" activities instead.
187. Whenever possible, the special information needs used for allocating public funds according to existing laws should be handled as special tabulation compiled from data collected for the main purpose of official statistics, and only exceptionally give rise to expanding questionnaires (or the number of respondent units) beyond what is required for measuring the situation and development of the economy and society; in the latter case, it would be legitimate to ask the requesting agencies to fund the cost of the extra data collection from their budget (which would also act as an incentive to change their respective laws in such a way that the allocation of funds could be based on aggregates and indicators based on international statistical concepts and used for general dissemination). 188. Once the most suitable data collection (or in many cases the most suitable combination of sources) for a given output has been identified, the cost of the operation can be estimated, and priorities or timetables may have to be reassessed. The major difficulty here is the same as above; the lack of qualified staff to do the above in all subject areas with a sufficiently open frame of mind. In this work, intimate knowledge about data sources in the country is important; help from abroad may be used to develop a system of statistical surveys for businesses, agricultural holdings and households, which more or less have to be developed from scratch, under the condition that this key skill will be built up within the statistical offices and that the Yugoslav statisticians will be then be in a position to manage, develop and adapt such a system on their own.
189. What is important in this process is that no new or ad hoc statistical survey are planned and carried out before it has been ensured that it will find a place in the future framework of data collections. In particular, with the notable exception of the National Bank as regards possible statistical surveys with financial institutions, no new or ad hoc statistical survey should be carried out by other producers than the FSO or the SOR before this framework is set up. For an efficient implementation of a system of surveys in a country of the size of Yugoslavia, it is advisable to specify, in the future statistical law, that statistical offices will be the only public institutions that can carry out statistical surveys for official statistics (with the same exception for the National Bank as above). Other producers will still have the possible role of producing statistics from their administrative records, or to combine different own and other sources for the production of aggregates like the balance of payments, if they are willing to do this under full respect of the fundamental principles of official statistics and of the provisions of the future statistical law. page 52
3.3 Monitoring Quality in All Activities
190. The major quality aspects implicit in the current execution of the statistical programme seem to be exhaustiveness of response and timeliness. Exhaustiveness is interpreted in such a way that, if there is a global or item non-response, the missing observations are substituted by either taking over the values from the last period for the same respondent, or by substituting 0 or none in the case of item non-response.
191. With respect to timeliness, the deadlines of the statistical programme, which for the publication of the results are mostly in line with the “golden rule”, serve as benchmarks to be achieved. For lack of resources, or for other major external events, it was not always possible to fully respect them. Replies from respondent units that arrive too late are in some cases (when the results are presented as cumulative totals since the beginning of the year) included in the cumulative total of the subsequent period. 192. Another important aspect of quality checks relates to verification whether a respondent unit selected for a given survey, but which does not respond, is still active or not (for further details, see B 5).
193. It seems that all results prescribed by the programme are published irrespective of any quality checks at aggregate level subsequent to the collection and editing phases. For surveys with exhaustive coverage target, no grossing-up, i.e. extrapolation form the de facto number of respondents to the target population, takes place. This is tantamount not to use one standard method of implicit imputation, i.e. the assignment of the stratum average for missing item or unit non-response. Furthermore, there is no comparison between the results of different sources where they exist; outside national accounts and agricultural statistics on private holdings, the results of each survey are compiled and disseminated in completely separated processes. In the case of sample surveys such as the LFS, no indication of the variance (or confidence intervals) of the published figures is given.
194. As regards the non-published results communicated on request (mostly to government users), it is not clear whether quality considerations, or systematic comparisons between different figures based on quality aspects, are included among the criteria used in deciding on whether the information required by a user is transmitted or not, and on which figure is to be communicated if there are several options.
195. Another element of quality control is with the questionnaires as such. As outlined elsewhere, many basic concepts of questionnaires are frequently not in line with international definitions, but respond to implementation needs laid down in other laws. No systematic check of the content of questionnaires is made from a horizontal point of view, once as survey is included in the statistical programme.
Assessment Page 53
196. For a modern concept of official statistics, the present almost exclusive focus on exhaustiveness is clearly inadequate, and the present treatment of non-response leads to a high risk of bias. Item non-response should be entered as such in the microdata files, and for results expressed in percentages, the "no indication" percentage would have to be shown openly. Item non-response, and in some cases unit non-response (provided that the unit is still active and not only dormant), would have to be taken into account by an appropriate system of weights in grossing up absolute figures from the observed units to the target population, a method that would have to be introduced across the board. If major units such as big companies are not reporting, there is no way of substituting or grossing up, and the results have to show a clear warning that they are not representative of the intended universe, and indicate the reason.
197. Statisticians should make more use of all types of estimation techniques to come out with relevant results in time, even if these results have to be qualified as provisional and corrected later on. The conditions for using estimation techniques in official statistics are that they are documented and made transparent, and that results can be calibrated from time to time when other, more complete sources become available. More use of estimation techniques and provisional results would greatly increase relevance. 198. As part of the change process, a system of quality control based on clear criteria should be developed and gradually implemented by the three statistical offices working closely together, covering all phases of statistics, not only data editing. Some examples: for data collection, non-response rates as such would have to be monitored closely, at the level of results, monitoring would apply to characteristics like accuracy and coherence (comparisons with other sources), and at the level of use, to media coverage and the frequency of requests for results. Staff would have to be trained accordingly. 199. In view of the important changes the system of data collection will have to undergo, a unit responsible for systemic quality checks of questionnaires (and of survey designs) should be considered. This unit would have to give the "green light" before a questionnaire can go out, but try to advise production units as early as possible in the design process. It would check coherence with international standards and between surveys, and, for important new questionnaires, have the right to request that the questionnaire be tested in a pilot before it is fully implemented.
200. The way quality control should become enshrined in the procedures and the organisation of the statistical offices should be explicitly included in the above- mentioned expertise on management and organisation.
3.4 Finance and Budgeting
201. If the population census is excluded, the percentage of government expenditure going to statistics was 0.12% at the federal level, 0,17% for Serbia, and 0.22% for Montenegro in 2000. As a weighted average, this amounts to 0,17%. In absolute terms, the budget of SORS is highest: it represented a share of 47,1% of the total of the three statistical offices. The corresponding shares for the SORM and the FSO are 28.7% and 24.2% respectively. In general, the expenditure figures do not show unambiguously page 54
that the number of statistical activities had undergone some reductions. This is better reflected in the decrease of the number of surveys than through the absolute expenditure figures which are difficult to compare over time in real terms. As an example, the substantial increases in absolute terms from 2000 to 2001 for the FSO and the SORS are due to a substantial nominal increase in salaries to compensate for three years of freeze in a period when price increases in Serbia amounted to 50%.
202. As Annex 6 shows, the relative shares of the expenditure for statistics, measured by the expenditure of the three statistical offices, has shown ups and downs in the past 5 years, in spite of the extra funds for the population census being excluded from the 2000 and 2001 figures (which matters most for the SORS). The single peak year 1997 at the federal level was explained by leasing of new IT equipment (office automation). In Serbia, the change from 2000 to 2001 is revealing; in spite of a substantial increase for SORS, it was much less that for the Serb government as a whole, a differential that is reflected in an important reduction of staff for SORS. In Montenegro, where expenditure figures have only been asked for since the introduction of the Deutsch Mark, i.e. since 2000, SORM has not been able either to benefit from a substantial increase in total government expenditure between 2000 and 2001, with a sharp decline of the share of statistics as consequence. The relatively constant staff number of SORM in the years before 2000 are an indication that no substantial moves in resources seem to have occurred before. Concerning the FSO, it has managed to raise its budget from 2000 to 2001 both in absolute and relative terms, the share is now back at the level of 1998/99.
203. Statistical Offices have to follow the budgetary rules of their respective administrations, which are quite similar in the three administrative environments. They provide for a rather detailed structure of the budget by type of expenditure. Reallocation between budget items is only marginal. No carrying over of unused credits to subsequent years is possible. The population census has a separate budget that fixes a lump-sum amount without further details for each calendar year.
204. There are no legal obstacles that would prevent financing certain surveys (or equipment) by funds from other public bodies, or from international donors, but no use has been made so far of this possibility at the federal level, and at the republic level only for equipment (see list of co-operation projects, limited to the SORM so far, in Annex XI). EU funds have been used to allow participation in international meetings and training courses, for both FSO and SOR staff.
205. With the notable exception of the census, there is no accounting system in place that shows cost, notably staff cost, allocated to either statistical activities of the programme or to output categories. For the FSO, the possibility to generate such information is supposed to exist, but there has not been any request so far.
206. The budget allocations for the purchase of goods are considered too low by all statistical offices. This has been a serious obstacle to upgrading their IT equipment and software. With respect to services, no outsourcing of any activity to private contractors Page 55
or research institutes takes place, precisely for this reason. Even with a budget increase, mandating private companies for developing software would be too expensive compared to in-house development.
207. There are neither staff nor expenditure figures available related to official statistics by other producers than the three statistical offices.
Assessment
208. Whereas the percentage of expenditure for official statistics is about the same as for some other republics of former Yugoslavia, there seems to be a certain imbalance in its composition insofar as investments in the broadest sense (equipment, training, innovations) have been neglected so as to be able to execute the current activities of the programme. To the contrary of most other countries of the region, Yugoslavia was not only ineligible for EU funds in statistics, but was also banned from international meetings and exchanges due to the embargo. This is likely to have caused more damage to official statistics than the general reduction of public expenditure in real terms.
209. In order to implement the master plan mentioned earlier, substantial reallocation of the budgets of the statistical offices will be necessary, but it will not be possible to make Yugoslav statistics fit for EU requirements in this way only. Substantial financial assistance and expertise from abroad is required in the beginning and should be given on the condition that the respective governments (federal and republic) agree to the sustainability of these investments, i.e. that after an inception phase, the activity concerned would be carried over into a regular activity of official statistics and fully financed by federal and/or republic budgets.
210. It goes without saying that the master plan to be set up should have full details of the required resources; the availability of financial resources, both nationally and from international donors, will determine to a great extent the speed with which the various elements can be implemented. When the financing from international donors will ultimately come to an end, it would be an illusion to believe that sustainability of a statistical system, which meets the complex range of EU requirements, can be achieved with the present level of national resources, however.
211. In view of the different tasks of the statistical offices at federal and republic level, and in view of the different size of the two republics, the resource situation from the overall budget point of view is particularly unsatisfactory for the SORS, with less than 50% of the total expenditure of the three statistical offices, but in charge of producing and disseminating official statistics for the republic that makes up more than 90% of the population and of economic units in Yugoslavia. Furthermore, the substantial increase in the total expenditure of the government between 2000 and 2001 implies more activities in other parts of the administration, which are very likely to lead to increase demand for statistics that can only be met with additional resources. Instead, SORS was forced to cut the number of posts. page 56
212. If one looks at the staff figures of the three statistical offices (Annex VII), the situation with respect to the mismatch between tasks and ability to respond to them is also critical in Montenegro, a fact which is disguised in the expenditure figures by the relatively higher level of salaries when converted to Yugoslav dinars at the exchange rate (the SORM share in expenditure is 28.7%, as opposed to a staff share in the total of the three offices of 13.5%). As member of a federation, the government of Montenegro must be made aware of the fact that it cannot fulfil even the minimum of information needs of a modern state entity with the present level of skills and resources, and that investing in information gathering (of which official statistics is one important component) is inevitable for governments in modern societies. Official statistics has a strong component of economies of scale, which means that small republics or countries have to spend relatively more to achieve the same level of production in official statistics than larger territorial units. The following chapter (3.6) will go more into possible ways of achieving this ambitious objective.
213. It is a matter of concern that neither SORS nor SORM have been able to keep the share of government expenditure for their offices at the level of 2000 when a substantial increase in total budgets occurred in 2001. This is another sign of low impact and visibility, and of difficulties of getting sufficient attention for official statistics when the allocation of resources is decided.
214. All three statistical offices should co-operate in order to set up a cost-accounting system that allows cost, including staff cost, to be allocated to items of the statistical programme. The systems should be identical so that cost at federal and republic level can easily be added. These figures should become part of the management information for the three statistical offices and be taken into account when priorities are set and programmes and master plans developed and amended.
215. Efficient management and professional independence are on a weak basis if the director of a statistical office is prevented from allocating the given resources in the best possible way to the various activities and inputs through a too detailed budget that prescribes individual types of expenditure. This is especially important during the change process. Exemptions from these detailed budgeting rules should therefore be included in the master plan submitted to the respective governments, paired by a modern system of controlling and full ex-post accountability and justifications on the use that was made of the resources given to the statistical system. In particular, a director should be free in deciding between using in-house resources or, in the case of bottlenecks, reverting to outsourcing, on the sole basis of comparisons between the benefits and costs of both options.
216. It was suggested earlier that some of the current activities of the statistical programme be dropped to the benefit of preparing and implementing the master plan. If a government ministry were to insist that a specialised survey of which it is the main user, but which the statistical offices propose for discontinuation, be maintained, the hitherto unused possibility of totally or partially financing surveys from other budgets (i.e. from the budget of the user ministry in this case) could offer a way out. The Page 57
willingness to pay for the main user would be tested. The full responsibility of production and dissemination would remain with the FSO and SOR, and the activities concerned would figure in the statistical programme under FSO, irrespective of whether they are financed from other sources than FSO/SOR budgets.
217. As mentioned at several instances, a statistical office should have the legal possibility and autonomy to receive and to manage funds from other budgets for specific statistical activities, i.e. from other bodies of the same administration, from statistical offices (and other bodies) of other administrations within Yugoslavia, and from donors abroad, in addition to and separately from their regular budget. Full transparency for what and how such funds are used should be ensured, also towards the ministry of finance.
218. If in future receipts from the sales of statistical products and services to users were to increase, statistical offices should receive the legal right to use these funds as a contribution to covering the cost of such activities. This is of special importance for covering the extra cost induced by requests for special tabulation and analysis by specific users, since otherwise the capacity to render such services may either be too restricted, or they may be carried out at the detriment of regular production or of development activities.
3.5 Staffing, Staff Recruitment, and Training
219. Overall staff resources (see Annex VII) in the three statistical offices (plus the statistics branch of the City of Belgrade office) amount to approximately 750 persons (year 2000). If a rough estimate for other producers is added (with persons both at the federal and republic level), the grand total is likely to be around 900 for official statistics in the Federal Republic of Yugoslavia (less those who, while being part of statistical offices, work for administrative registers and IT unrelated to statistics, but their number is comparatively small).
220. The staff salaries are too low to allow living from this source of income alone for most categories of staff in Belgrade. At the federal level and in Montenegro, wages of FSO staff are the same as for jobs at comparable skill level in federal ministries, whereas in Serbia, salaries in the SORS, in spite of the recent increase, are still slightly lower than in ministries (and also if compared to those of the FSO). If converted to dinars at the exchange rate, the salaries in Montenegro are considerably higher than in Belgrade.
221. It is evident that the pay level affects the attractiveness of the statistical offices for those skills where there is a strong demand from the private sector, notably for IT experts and economists with good knowledge of market economies. For such skills, only young university graduates may be interested in starting their professional career in a statistical office, but there is a high risk that they leave for a better-paid job in the private sector. All three offices complained that in the last 10 years they had lost a number of key experts they were unable to replace. page 58
222. The structure of the staff by education and gender in the three offices in also given in Annex 7. For the FSO, the gender structure shows much less emphasis on women than in statistical offices of other countries of the region, whereas this share is much closer to, but still lower than, the level of other countries for the two SOR. Women are underrepresented at the senior management levels in all three offices. In terms of age structure, there is a concentration, especially for professional staff, in SOR (less so for the FSO) with persons who have many years of services. The average number of years of services is also very high (22) for SORM.
223. Most of the professionals with a certain seniority in official statistics are fully committed to the cause of official statistics and show a high degree of corporate identity with the institution they work in. In spite of the past decade, they remain motivated to bring Yugoslav statistics back to at least the level and official recognition it enjoyed before the former Yugoslavia started to disintegrate. The insight that the new system of pluralistic democracy and market economics needs a system of official statistics, and statistical series, which are in many aspects different from the 1980s is slowly, but steadily getting ground.
224. There is a huge deficit in training that is mentioned by all senior management in the three offices. No training programmes exist, for lack of resources. The need for training is felt in all relevant areas: statistical methods (especially sampling and national accounts), principles of official statistics, IT, management, and language skills (with English as first priority).
225. The generation of statisticians who had experienced the pre-1990 period in their offices with a well working statistical system in the former Yugoslavia had seen their networks and contacts cut, with an inability to be informed about the recent developments during the last decade, and with few opportunities to practice foreign languages. The possibility to access international documents, and material from other countries, via Internet, is a very recent one and not available to all staff.
226. Staff in regional offices of SORS and SORM is even less likely to receive any form of knowledge improvements than their colleagues in the headquarters or in the FSO. There are rather few meetings between headquarters and regional offices, also due to a lack of funds for domestic travel.
227. The percentage of staff with active knowledge of English is estimated at 20% for the FSO, and at 7.5% for the SORS. Very few staff members in the SORM are able to express themselves in English (or in another foreign non-Slavic language). About twice as many persons have a passive knowledge of English which was unused during the last decade, but which could be re-activated through training and sufficient opportunities to practice.
228. With the exception of the senior management, staffs are recruited at a relatively low level, subsequent to vacancies being published. In the FSO, everybody has to pass an examination after his or her first year of service (probatory period). When posts at more Page 59
senior level become vacant, they are normally filled by internal promotion, which has to be approved by another ministry. Delaying such approvals (as well as approvals for publishing vacancies) is often used as a hidden way for saving, which explains why certain posts in the organisation charts are not filled at all. There are only a limited number of cases of job rotations outside the promotions mentioned above (e.g. a transfer from SORS to FSO).
Assessment
229. From a purely quantitative point of view, a statistical system with approximately 900 persons is a solid basis. If hypothetically all statistical activities could be grouped in one national statistical office, a solution that would clearly show the highest synergy, it is estimated that Yugoslavia would need around 1100 official statisticians, working in a modern institutional and technological environment, to produce the full set of statistics presently required by EU. Taking into account that Serbia and Montenegro will have to build up and sustain, independently of the way the relationship between republics and the federal level will look like in future, almost fully fledged statistical systems of their own, able to produce almost the full range of EU statistics for their respective territories and to disseminate them to users in various forms, the estimates increase to 1050 for Serbia, and 250 for Montenegro, to which a staff number for the FSO has to be added which is difficult to estimate presently, but which is unlikely to be more than 150. From this perspective, the present staff level in official statistics should be gradually increased to a level that is approximately 50% higher.
230. However, the problem is not so much the quantity as the staff structure by skill level and institution, and within SORS and SORM, between headquarters and regional offices. A huge effort of training the staff that is present now and that has the necessary flexibility and open mind to turn training into better work, and of the staff that will be newly recruited at lower level (mostly university graduates) in the near future, has to be set up as a matter of urgency. As far as training in statistics proper is concerned, this will inevitably use some of the time of key staff who is also supposed to steer the change process in many other aspects.
231. The first and priority measure in training, to be started before any longer-term plan is established, should be training in English. Without this knowledge, professional staff cannot access some of the most important documents in their subject area, and cannot exchange experience with their counterparts in countries outside the former Yugoslavia. As a complement to the increase of language skills, a system of regular co- operation with those countries of the region should be established where there is no significant language barrier. Yugoslav official statistics can benefit from the experience of these countries, which have started transition to open societies and market economies earlier. Both measures will not be possible, however, without funding from abroad.
232. For any newly recruited person for a professional job, ability to read and to speak English should become a prerequisite that is tested before an offer for employment is page 60
made. The language training programme will have to concentrate on professional staff that is already present in statistical offices.
233. The new set up of official statistics is likely to see the following structural changes regarding staff: - From lower qualified, predetermined type of work to more conceptual or user-oriented work in a multidisciplinary context that requires a broad mix of skills; - From regional offices to headquarters of SORS and SORM (or to intermediate forms of regional offices); - From other producers to statistical offices; - From FSO to SOR. Whether jobs will be transferred with or without incumbents depends on the abilities of the persons concerned, and their willingness to change. It has to be expected that this will not be possible in all circumstances, and that there is a number of present staff members for whom solutions outside official statistics will have to be found.
234. The order of magnitude of the change is greatest for the SORM. A substantial quantitative and qualitative upgrading is necessary, so that it will amount to a complete reshape of the office. In addition, the local labour market of persons with the necessary skills is limited, unless there will be persons from FSO or SORS who are prepared to join the SORM. The size of the increase is such that it comes close to be out of possible scope even for authorities well intended to official statistics. More innovative forms of solving the SORM problem will have to be explored therefore.
235. In order to maximise economies of scale, and in order to avoid the set-up of parallel infrastructure and skills in SORM that is not absolutely necessary either for dealing with respondents or users in Montenegro, it should be seriously examined whether some of the infrastructure activities, notably with respect to IT and methodological development, cannot be outsourced to one of the other two statistical offices (against compensation). In addition, some of the staff of the SORM would be associated full time to specific activities taking place in the FSO or SORS for a fixed period: examples are development projects, or even some permanent activities in special subject areas where grouping skills from all three offices into a competence centre leads to synergies.
236. SORM is not the only statistical office where an increase in staff should be included in the master plan from the very beginning. In view of the large territory to cover with new types of official statistics and data collections, an increase in size for SORS seems inevitable, even when the first steps will be the reallocation and upgrading of existing staff. An increase in budget will also be necessary from the beginning for items like equipment, training etc., and for the higher average skill level of the staff that will inevitably have some bearing on the average salaries. Unlike SORM, SORS can start from a size and an organisational structure that will allow a stepwise increase without reshaping fundamentally the structure.
237. A certain part of the staff increase in SOR, to be determined once the new division of work between the federal and the republic levels will be known in detail, are likely to Page 61
be implemented in the context of shifting tasks from FSO to SOR. But this source of new staff for SOR cannot in itself provide them with all the resources required for their future roles in a system of official statistics; a net increase will be required in addition.
238. Once the master plan has been agreed by governments, this decision will make work in statistical offices more attractive for young university graduates and key specialists like those for IT. They will be confronted will challenging work with the possibilities of international exchange, and in view of the generation gap, with good prospects for promotion. This should compensate to a certain extent for lower pay level compared to the private sector, but the salaries in statistical offices have to be, for comparable skills, at least at the same level as for ministries. Where this is not yet the case, the master plan should include an explicit item for correcting this type of discrimination.
239. In the future system of official statistics, more attention should be paid to job rotation within and between statistical offices. Such changes should be encouraged, e.g. as a factor that increases the chance of promotion. Posts at higher level should not be filled exclusively with persons from the same statistical office, but also include the possibility of a transfer of experienced persons from one of the other two statistical offices, from universities or from ministries once the latter will have developed a "quantitative culture".
240. Another aspect to be taken up in the master plan is premises. The present premises of SORM and SORS will not be sufficient for the future size of the headquarters of these offices, even if some form of regional offices were to remain. The ideal of a "virtual" national statistical institute could be approximated closest if the headquarters of FSO and SORS could share the same building (or two adjacent buildings). This would allow the development of a joint culture of official statistics, and be most efficient in terms of IT communication infrastructure and security aspects.
3.6 Information Technology
241. At the federal level, the FSO is using both a mainframe-based system and individual PCs. There is a well-established tradition of using information technologies (IT) for data production and dissemination. A chart of the IT system of the FSO is given in Annex VIII.
242. The department for Statistical Information System consists of around 50 staff members. The equipment includes a mainframe IBM S/390, connected to dedicated application servers (Economic statistics, Social statistics, National accounts, Publications, Information technology, General affairs and planning). The statistical offices of Republics are also connected to the mainframe of the FSO. The IT equipment also consists of around 200 IBM PCs connected via Token ring LAN.
243. Software used by the mainframe are MVS, PL/1, FORTRAN, COBOL, and DB2. PCs use Windows 95, 98, and NT, as well as LINUX. SAS is used for statistical applications, too. page 62
244. Non-statistical governmental bodies are also connected to the mainframe of the FSO for non-statistical applications, because the FSO has one of the most powerful IT systems in the federal government. Connections already exist with the main federal buildings of the federal government, the federal Chamber of Commerce, the federal Ministry of Foreign Affairs, the federal Standardisation Office, and the computer centre of the University of Belgrade. Extensions of these connections are being considered by the government. The IBM RACF system is used for the protection of access by non- authorised users to statistical data.
245. The FSO is starting a co-operation with Sweden on IT strategy. This co-operation is welcome because hardware and software need to be updated as soon as possible. Furthermore, it appears that 50% of all statistical activities conducted at the FSO are processed on PCs without any central storage, or even are not using IT at all.
246. At the level of Republics, a chart of the IT system at the statistical office of the Republic of Serbia is attached in Annex IX. As explained above the SORS has a direct permanent connection to the mainframe of the FSO. There are also connections with regional branches of the SORS. Non-statistical bodies are connected to the mainframe of the SORS, such as the Chamber of Commerce of Serbia, all ministries of the Republic, universities, and the national airlines JAT (in the latter case the SORS mainframe is used as a computer centre without any statistical dimension, as a service paid by JAT). The SORS has also three internal PC networks (one per floor of the SORS building). These networks are old and modern PCs cannot be connected.
247. Both hardware and software used by the SORS are old. The budgetary cuts, and the resulting decrease in well skilled staff in the IT departments have reached a level where the risk of a complete breakdown of the mainframe is not to be excluded. In addition, there is some anarchy in the software used on PCs. A census of all software used on PCs is being launched internally. An improvement is expected to take place on the latter point.
248. The IT equipment of the statistical office of the Republic of Montenegro is very poor. The SORM has developed a plan for the development of modern IT resources, with experts from the University of Podgorica. This plan has been approved by the government of the Republic. However, the funding of the first phase of this plan is still on hold. The SORM as a permanent access to the mainframe of the FSO, and can run some applications on the mainframe of the SORS, but this is not considered as sufficient.
Assessment
249. The situation at the federal and Republics levels with regard to IT has become worse and worse over the last ten years. Both equipment and software are outdated. To restore the capacity of the three statistical offices at the relative level that had been reached at the end of the eighties require a significant investment that has to be organised in the Page 63
framework of an IT master plan. Given the necessary co-operation between FSO and statistical offices of Republics in carrying out their mission, such a master plan should cover the three offices. The co-operation with Sweden that has been initiated at the federal level is very promising, and should involve the Republic level. Clearly, the corresponding financial effort is the major obstacle on the road to a modern IT environment for the statistical system of Yugoslavia. The prominent position of the FSO as a provider of computing services to the government and some big non- governmental bodies might provide a useful leverage for getting the commitment of governmental budgetary bodies and the actual provision of funds. Of course, as often stated in the present report, this to be conducted in bearing in mind the need for very strong barriers (« firewalls ») between statistical and non-statistical uses of IT resources. Modern technologies allow to set up these security tools.
3.7 Internal Monitoring of Performance
250. There is a no regular appraisal for each staff member in the FSO or SOR except for the examination after the one-year probatory period for newly recruited staff.
251. So far, Yugoslavia has not had any external assessment of specific statistics such as national accounts or CPI. The FSO would warmly welcome such evaluations by international experts.
Assessment
252. In addition to the recommendations under 3.3 on quality, it is suggested to introduce in all three statistical offices, as part of the new staff policies, a regular (i.e. annual) appraisal of each staff member and organisational unit, against objectives that have specified the year before, based on the future master plan and statistical programmes. The three statistical offices should co-operate very closely in setting up this system.
253. It is highly recommended that selected key statistics that are part of the GDDS become the object of an independent in-depth assessment by international experts at points in time that will have to be determined later. CPI and national accounts are first priority candidates for such reviews. Progress can be monitored by repeating such external assessments from time to time
3.8 External Accountability
254. The statistical law (article 16) provides for an annual ex-post report on the implementation of the statistical programme to be submitted to the Federal Parliament. A similar provision can be found in the draft of the new statistical law. This report is first discussed at the level of the federal government (with the presence of the FSO director). It is the major tool of external accountability concerning official statistics at the federal level. No parallels at republic level exist. page 64
255. In a wider sense of accountability, transparency of all methods and definitions is an essential part of good practice and therefore explicitly mentioned in the UN Fundamental Principles. In this respect, the FSO publications have a good standard. All products contain extensive methodological descriptions of all sources and definitions. This is especially relevant for flagship publications like the statistical yearbook. Metadata are rather short, however, concerning significant aspects of results other than definitions, e.g. accuracy and de facto coverage.
Assessment
256. The annual ex-post report is an essential tool in the accountability of official statistics. Due to the lack of a translation, it was not possible to assess its content in some detail. The impression given is that it has become a routine that has not caused any discussion in substance either at government or Parliament level. No overview on resources seems to be given in this report.
257. The content could be improved beyond following the individual items of the statistical programme, by laying more emphasis on general and horizontal issues such as those laid down in the future master plan, and on resources. This would focus the attention of the government away from unnecessary details to major issues.
258. Should in future the statistical programme be adopted by the governments of the republics as suggested in 1.3, the annual ex-post reports would be addressed in the first step to the governments of the republics. Since Parliaments may not be involved in the adoption of the future statistical programmes any more, it is recommended to maintain the requirement of this ex-post reports being submitted to the respective Parliaments (not for approval, but for taking note, discussion and possible initiatives addressed to the government for taking certain types of action, this being the only opportunity of Parliaments to discuss substantive issues of official statistics). The reporting to federal authorities would have to be redefined in line with their role in the statistical activities. All reporting of this type should be given for opinion to the Statistical Council before submitted to political authorities; the opinion of the Council will be known to the governments when they discuss the report. Once adopted, the reports (and the opinions of the Council) would be made publicly available.
259. The present good FSO practice of openness on methodologies could be further improved by including accuracy (for sample surveys) and de facto coverage statements (e.g. response rates), by cross-references to other data collections when a survey is described, and by letting know all users that all this material can be obtained free of charge if it is too voluminous to be included with the dissemination of results. FSO and SOR should have the same standards of transparency in this respect.
B. Capacity of Producing Statistics in Various Areas Page 65
1. Assessment of Overall Capacity
260. Yugoslavia has experienced over the past decade a very difficult situation. The statistical system, as other official structures, has been affected by this situation in its overall capacity of producing statistics in various areas. The economic crisis and the budgetary restrictions have obliged to reduce or to cancel many statistical activities. The separation from the international community has prevented statisticians to participate in the development and update of international statistical standards, as well as the exchange of experience with other European statisticians. Against this background, the statistical system of Yugoslavia is facing since a few years the challenge of the transition to a pluralist political system and a market-oriented economy. This environment has damaged the overall capacity of the Yugoslav statistical system of producing statistics in various areas.
261. However, there is still a capacity of conducting censuses such as the forthcoming population census in 2002, and to set up and manage an important labour force household survey. One can add that the implementation of the European standard classification of economic activities NACE Rev.1 is in progress, which will give the capacity of producing economic statistics within an internationally comparable framework, as soon as this implementation is completed in the whole statistical system, including business registers. The Yugoslav statistical system has also the capacity to conduct exhaustive economic surveys on the social sector (i.e., state, cooperatives, and mixed sectors), and to compile and disseminate short-term as well as structural indicators related to this sector.
262. On the other side, there is a strong need for improving, or restoring, the statistical capacity of the Yugoslav statistical system in a number of areas. With regard to standards and conceptual frameworks, the implementation of the European standard classification of products CPA should be launched, in order to complement the implementation of the NACE Rev.1. The implementation process of the new world- wide standard of national accounts 1993 SNA should be speeded up and somewhat reoriented, in order to abandon the outdated system of national accounts MPS as soon as possible. With regard to the actual coverage of social and economic areas, there are shortcomings in annual population statistics and household consumption surveys. In the economic area the capacity of describing the growing private sector is not sufficient (with the remarkable exceptions of retail trade activities and consumer prices), which will quickly raise serious problems of reliability for a number of economic indicators. With regard to statistical technologies, sampling techniques, treatment of non- responses, and quality monitoring should be more widely used, especially in the economic area.
2. Capacity to Organise and Carry out Censuses
263. The division of work between FSO and SOR for the population census is clear: the FSO has established the methodological basis (variables, definitions etc.) and will disseminate results at the level of the Federation. The FSO is not involved at all in the page 66
fieldwork, which is in the exclusive responsibility of SORS and SORM respectively (with the FSO not having any formal role). Data entry is exclusively, and data editing to a large extent, carried out at republic level, with some additional checks at federal level once the final microdata are transmitted from the SOR to FSO. SOR will also disseminate detailed results at various geographical levels.
264. The above division of work has obvious implications on the cost. Only 4% of the total cost will be borne by the federal budget, the major part being financed by the republic level, especially by Serbia.
265. The target date for the census will be 31 March, midnight. The fieldwork takes place between 1 and 15 April 2002; it will not include Kosovo and Metohia. First results in terms of a headcount of persons, household and dwellings based on the manually controlled paper questionnaires will have be available by 30 days from the conclusion of the field work, i.e. by 15 May. 266. A new element will have an impact on the timing of the census. Due to local elections that are scheduled to take place in Montenegro in the same period, the Montenegrin authorities have announced the postponement of their census to the spring of 2003. The census was already postponed from April 2001 to April 2002 because of elections at republic level in Montenegro close to the original date. Serbia is determined to carry out the census as planned in 2002, whereas the new date proposed in Montenegro would be spring 2003.
267. SORS has developed a manual of 80 pages for the local census committees. It will organise courses to instruct the local instructors, and set up a call-centre for both the public and the responsible persons at local level. The written material will be taken over more or less entirely by SORM.
268. Unlike for the last census in 1991, no use of optical reading will be made, since Yugoslavia was barred from obtaining this type of equipment for such a long time that the lifting of the ban came too late for the originally planned census date of 2001. The SORS will install in its regional offices 120 to 150 PCs for two shifts of temporary staff who enter and code the variables. SORM will have two shifts of 30 persons, to be installed centrally in another building in Podgorica, and a tender for the corresponding IT equipment is about to be finalised (for the financing, EU funds will be used). Decentralised data entry and editing will last 6 months in the case of Serbia. The final editing and the tabulation will be carried out on the SORS mainframe for Serbia. Results based on this process will start to become available from February 2003 onwards.
269. An information campaign for the population, using various media, was set to start at Christmas 2001, in which SORS and FSO would be active.
270. The list of variables is more or less identical to those asked in 1991, which follows the recommendations of the UN/ECE. This list includes questions normally to be found in an agricultural census on area, crops and livestock. Yugoslavia has in the last three Page 67
decades combined population and agricultural censuses, and because there is a great demand for statistics about the mainly privatised agricultural sector, and in view of the low probability of getting resources for a separate agricultural census, it was decided to continue with this combination as before.
271. In the questionnaire, there are special questions for citizens of the former Yugoslavia who have been displaced, since 1991, through war and unrest and will be present on the territory covered by the census at the census date.
272. For the Yugoslav citizens with residence outside the country, and who are registered with a Yugoslav embassy, the census will be carried out via these embassies. For the armed forces, the census will be carried out by the ministry of defence. Special procedures are foreseen for persons in collective households.
273. Staff in both FSO and SORS is rather optimistic to have done everything that is necessary for a successful census. A pilot census was carried out in 1999. The major problem that was mentioned is again a lack of qualified IT staff. 274. Two months before the target date, it was decided to introduce two additional questions on religion (without response obligation) and on republican citizenship (Serbia or Montenegro). The census legislation at federal level, and in the republic of Serbia, had to be amended in a very short time, and the questionnaires that had already been printed and distributed to the local census committees in Serbia will have to be produced for a second time.
275. The data entry foresees that the names and addresses of persons will not be captured, but their personal identity numbers.
276. Another complement at the last moment that is welcome in this case is that SORS will provide the questionnaire in languages of minorities (including Albanian for municipalities in Southern Serbia), and that mixed-language teams of enumerators will be formed in areas with minority languages.
Assessment
277. The approach to the organisation of the census 2002 is very much based on the one for the last census in 1991. Many key persons from this last census are again responsible this time, and this is the main reason why no major problem is anticipated for 2002.
278. In spite of the new situation Yugoslavia faces in 2002 as compared to 1991, no consultation of potential users concerning their information needs took place. As a short cut to such a consultation, the list of variables from the last census was taken over. With a wide consultation in time, the two questions that had to be introduced at the very last moment might have been identified sufficiently early.
279. There are some additional measures for the information campaign in comparison to 1991. However, the co-ordination of efforts, and the definition of the respective roles page 68
between FSO and SOR in this campaign, do not seem to be sufficiently defined. Since the census is the most visible activity of official statistics to the public at large, it would be a pity if the messages given in the public would not be strictly identical in content, or be perceived as unnecessarily duplicative.
280. The public perception aspect is particularly sensitive because the role of official statistics is about to change in the country. Even if issues like confidentiality or government intrusion in privacy have not been voiced last time, nor in the deliberations on the present census law, it would be risky not to be prepared in advance to react to critics raised from the public, both from the point of view of content and organisation. Furthermore, since the census law does not give the impression that the census excludes the use of the individual data for administrative purposes (see the discussion under A1.2), it is the more important that the information campaign stresses this crucial difference to the last census. The impression received so far is that this aspect may not have been taken into sufficient consideration, thus giving away a unique opportunity of visibility to explain the new role of official statistics, and the new limits in the use of individual data, in the context of the census.
281. The potential of using the census campaign for making the new paradigms of official statistics better known have been given a set-back by the two latest developments, i.e. the second postponing of the date in Montenegro, and the introduction of two additional questions at a too late stage in the process. Especially the latter reflects badly both on the ability of the statistical system to identify user needs, and on the ability to oppose to pressures from outside on the content of questionnaires that threaten to jeopardise an operation already on track.
282. As regards Serbia, the organisation of the fieldwork, and the preparation on the IT side, are sufficiently well prepared and advanced. In Montenegro however, the situation is less optimistic: the very recent change in the originally agreed time-table because of elections, although this coincidence was known long in advance, is not a good sign for the organisational capacity of the administration in general. If this decision had not been made, the degree of preparation in Montenegro, notably concerning software, would have to be qualified as insufficient.
283. Another issue that remains open is the ability to create easily, i.e. without heavy programming, additional tabulation not foreseen in the publication or tabulation programme, e.g. at the request of a ministry. This is an issue connected to the IT infrastructure in general, especially the software environment. Even when such requests did not occur in the last decade, it would be prudent to assume that there will be persons with a more quantitative approach to decision making in ministries, or other users with the same skills, who will address such requests to FSO or SOR in the near future. A lack of capacity in this respect would not only shed doubt on the important funds invested into the census, but also be opposite to advancing the perception that statistical offices are at the forefront of the change in the public sector towards more user-friendliness. Page 69
284. The personal ID-number should be deleted from the files as soon as the last checks on completeness and accuracy have been carried out. This is an important safeguard against any request for using census data for non-statistical purposes that may be addressed to statistical offices at a later stage. On the other hand, serious thought should be given to capture the names and addresses of those persons that fill in the additional form on agriculture, so as to create a register of private agricultural holdings from the population census that must, however, be limited to exclusively statistical use. This is a unique opportunity to fill an important gap in the statistical infrastructure, the next one being an agricultural census that may remain wishful thinking for quite some time. (On proposals how to update such a statistical register of private agricultural holdings, see B7.)
285. Generally, whereas the present census seems to be well prepared, there are some doubts whether the same approach is likely to be effective for future large-scale operations. Once Yugoslavia will have progressed in its transition to a pluralistic society and market economy, some features of the present organisation, notably the appearance of data collection for statistics combined with collection for administrative purposes, the obligations for employers to fill in forms for their employees, the information campaign, and possibly the selection, instruction and control of enumerators at local level, will have to be reassessed and re-specified. This would also have consequences for a future census law.
286. Yugoslavia seems to be ill prepared to conduct other censuses than a population census. In the medium term, a proper agricultural census will have to be prepared and carried out according to EU and FAO specifications in view of the importance of the agricultural sector, and in view of the explicit objective of coming closer to the EU. The solution of including some questions on agriculture in the present population census is a good intermediate solution, but no permanent substitute. Expertise from abroad will be required. The same holds for all possible forms of an economic census, should the need occur.
3. Capacity to Produce Annual Population Statistics
287. Since the last census in 1991, annual population statistics have been estimated by adding births and subtracting deaths in each republic to the figures based on the prevailing population concept of permanent residence. As regards international migrations, only those from and to former republics of Yugoslavia are recorded, insofar official registration as either regular change of residence, or as displaced person, has occurred.
288. For internal migrations within each republic, the administrative records from the ministries of internal affairs leave a lot to be desired, so that only a breakdown of the annual population of Serbia into three regions is available. The situation has been aggravated by the Kosovo crisis: the last available year for population estimates for Kosovo and Metohia is 1997, and this figure has been taken over by Yugoslav statistics without change for the subsequent years. Displaced persons from Kosovo to other parts page 70
of Yugoslavia are therefore implicitly still included under Kosovo and Metohia rather than with other parts of the country.
289. There is no breakdown by age group for the estimated annual population after the last census year.
290. This situation will change when the 2002 census results become available. The population concept for the annual estimates will then be based on the international concept, and the basis from 2002 will exclude all citizens living abroad, or having been away from Yugoslavia (without Kosovo/Metohia) for 1 year or more, and include all foreigners or displaced persons, whatever their legal status, if they fulfil the relevant criterion at the time of the census. The results of vital statistics will have to be adapted to this concept as well, which should not be a problem. No solution is prepared, however, for a better capturing of both international and internal migration subsequent to 2002. Some of the estimates prior to 2002 can be adjusted retrospectively by using the question in the census 2002 on previous places of residence.
291. Since Kosovo and Metohia cannot be included in the Yugoslav population census 2002, and given that no parallel population census is planned in this territory in the near future, there is no way to include up-to date figures for this part of Yugoslavia in the future annual population statistics (nor in any other official statistics). This will have consequences for vital and migration statistics as well.
Assessment
292. The capacity to produce reliable annual population statistics after the census 2002/2003 is insufficient. Annual population by age group, sex, citizenship, and by region at an as detailed level as possible, is one of the basic and most widely used outputs of a statistical system. Any planning of infrastructure or public services will have to use, as one important parameter, such data. The overall aggregate is essential as denominator for a wide range of indicators such as GDP per capita, and any bias in the denominator can distort indicators and their development over time to the same extent as biases for the numerator.
293. Concerning international migration, there seems to be an adequate administrative source only for the movements of foreigners with official status of residence. There is no solution, however, to cover, in a representative way, cross-border movements of nationals, and possible movements back of displaced persons to their original countries, in this way.
294. For internal migration, there is an obligation to register, and the ministries of the interior in each republic collect these evidences from the local authorities. These data flows are judged as not comprehensive and timely enough by the SOR. It is Page 71
recommended that negotiations with these ministries be started so as include this data flow into the statistical programme as a matter of urgency, and to make the necessary specifications more precise and in this way more binding. There is no other realistic way to cover internal migration, and without data on internal migration, no regional annual population estimates can be produced. Annual population estimates at regional level are also necessary for grossing up the results of regionally stratified household sample surveys to the overall population, especially if there is no updated sampling frame of either dwellings or persons available. Internal migration statistics would also be necessary to reconcile the different dates of the population census in Serbia and Montenegro.
295. If no satisfactory statistics on international migration of Yugoslav citizens can be compiled on the basis of administrative records, the gap will have to be closed by other sources. One of them is the use of immigration statistics from the main countries of destination, and the other the inclusion of questions on international migration in the only regular household survey, i.e. the labour force survey, provided that the future sampling frame for this survey has a sufficient coverage of all households, especially concerning displaced persons. The first is unlikely to give a full account of de facto migration, especially concerning the future return of displaced persons. Furthermore, the statistics of the countries of destination would have to separate between immigration from Kosovo (normally subsumed under Yugoslavia). Both options (considering the present sample size of the labour force survey for the second option) could only provide results at the national level.
296. If approximate solutions cannot be found quickly, the good quality basis of the 2002 census will soon become obsolete over time due to the increasing openness of the country. A solution that would only start to be come operational in 2004 e.g. would face the problem of the need for a retrospective estimate of migration flows for the years since the census date and the starting year of the new scheme of updating, and the shorter this period, the more accurate these estimates will be. In any case, approximate solutions are preferable than not making any adjustment for certain flows at all. 297. It is highly recommended that estimates of the annual population by age groups be established, even if not all underlying sources can be broken down by age. The census 2002 can be analysed for the age structure of retrospective migration, and this structure might be used to break down future overall migration totals by age.
4. Capacity to Carry out Household Surveys
298. The Yugoslav system of official statistics has two samples surveys with households: the labour force survey (LFS), introduced in 1994 as a pilot, and regular as from 1995, and the household budget survey (Survey of Personal Consumption, SPC for short), which has a long tradition.
299. With some changes in the month (October since 1997), the LFS has been carried out every year since 1995. The latest occurrence included 4400 households (700 of which in Montenegro). Whereas the sampling frame (see below) and the questionnaire (taken page 72
over more or less from neighbouring countries) are decided by the FSO, the fieldwork is carried out by the SOR. Exceptionally, the SOR are not involved in compiling results at all; the FSO is responsible for the weighting scheme to be applied to the microdata. There is no sufficient knowledge about sampling methodology in SOR to allow them to compile results on their own. The basic data entry is carried out by SOR, whereas coding and processing is with the FSO.
300. The LFS is based on a two-stage sample, using as a first stage a selection of enumeration circles from the population census 1991, classified by three types of settlement (urban; rural; mixed). Both the sampling frame (list of names) and the figures used for determining the weights in the grossing-up process are from the 1991 census. There is an approximate 50% over sampling of names to have enough substitutes for any reason of non-achieved interview; the part due to true non-response (as opposed to persons having moved away from their 1991 residence e.g.) is unknown.
301. Dissemination of results is de facto only through the FSO, but not with the same visibility as for the results from exhaustive surveys with legal entities. The results are disseminated on their own, i.e. without comparison to other sources of employment or unemployment. There has not been any reaction by ministries or other policy users, nor from the media; only the research community (as well as international organisations) have shown interest in using the results. The national accounts department in the FSO does not use results from the LFS (but makes some use of the results of the household budget survey).
302. Selection and control of interviewers is a SOR responsibility. Payments for interviewers are low, and the incentives for SOR to ensure a sufficient level of quality is not as high as with other surveys due to the almost complete lack of dissemination or internal use by SOR.
303. Concerning the sample after the 2002 census, it is planned to apply the same method until the subsequent census. No updating of the sampling frame is foreseen.
304. The household budget survey (Survey on Personal Consumption / SPC) is a quarterly data collection with a long tradition, but the major part of results is published on an annual basis. 2350 households (of which 313 in Montenegro) are interviewed retrospectively each quarter (about 100 questions), allocated to three socio-economic categories: agricultural, non-agricultural, and mixed.
305. The methods of sampling (two-stage stratification), and the sampling frame used are very close to the methods in the LFS, with the important distinction that the LFS sample is renewed completely every year (at least from now on), whereas for the SPC only one third of the sample is renewed every year, which causes a household to be interviewed for 12 consecutive quarters. Statistical offices cannot hand out anything to the participating households in cash or in kind. This leads to a high number of households that have to be asked for their consent to participate until the above number of interviews is completed, i.e. to a high degree of over sampling. Page 73
306. The SPC is the major data source not only for personal consumption as such, bur for the weights of one of the price indices (consumer price index), food balances (there are many details on quantities of food, including own consumption by farmers), income of households, and poverty. The normal degree of visibility is given to the results from the SPC in dissemination. It is only a minor data source for national accounts (see reasons below).
Assessment
307. Given the very difficult situation of the country in the past decade, and given the limited number of innovations in this period, it is a remarkable achievement that it was possible for the FSO to set up, implement and maintain a labour force survey as a regular activity. The reasons that were behind this decision to introduce a completely new data collection instrument are not clear however; in any case, they do not seem to lie with requests from national users.
308. In spite of this welcome improvement, the above description underlines the relatively low weight of household surveys as a reliable source for official statistics, with not enough attention and resources allocated to guarantee a sustained capacity to carry out at least these two surveys, but with a minimal quality compared to other countries. Households surveys are of high relevance not only for labour market and social statistics, but for economic statistics as well, since it is the only way by which official statistics can approximate the total economy (i.e. including those parts that are hidden in the sense that they escape administrative records or business surveys). In order to raise the capacity to carry out household surveys, the first prerequisite is that the statisticians themselves become convinced of their importance, and start to actively promote them.
309. As a first step in this respect, the dissemination of the results of the LFS should be given much higher visibility, e.g. through press conferences like for short-term indicators. Comments should be much less technical than focusing on the significance of results, and stressing that the LFS is the only comprehensive source of both employment and unemployment data. Other sources have an auxiliary role at best, providing more frequent data, or breakdowns the LFS cannot show because of the limitations of the sample size.
310. As a second step, SOR have to become much more involved in the LFS than until now. The major potential of user for decision-making are at the republic level, and the users will only start to show interest if they can turn to the SOR for explanation and further tabulation. In order to be able to respond, SOR need much more knowledge about the methodology, notably the sampling. This know-how has to be built up as a matter of urgency. The change to the census 2002 as a sampling frame might be an opportunity to shift the responsibility for determining the size and the structure of the sample, for selecting the households from the sampling frame, for determining the weighting scheme within each republic, and for compiling and disseminating the results at the page 74
republic level, to the SOR, as it is the case for other statistics. The FSO would continue to be responsible for determining the minimum questionnaire and the minimum accuracy requirements for the results of each republic. The SOR would then have the possibility to add questions for their own information needs (provided they do not affect negatively the federally determined core), or to increase the sample size beyond the minimum required for the federally determined accuracy level.
311. On the other side, SOR would have to considerably improve the selection, training and control of the interviewers, as well as to improve the information of the respondents when they are contacted. For complicated questionnaires like the LFS (and even more so for the SPC), there is a certain temptation that interviewers "invent" answers if no contact can be made, or if there is an explicit refusal. Control mechanisms on a sampling basis are therefore necessary, and the reasons why interviews with the priority households cannot be realised and have to be replaced by substitute addresses should be documented so that a representative response rate can be calculated as a basic quality indicator.
312. Concerning the sampling frame, the two-stage process should be continued, but SOR should try to do more about updating the sampling frames in those enumeration circles that they have selected in the first stage. Updating a list of dwellings is easier than updating a nominal list of persons; it is therefore recommended that the selection in the second stage be based, subsequently to the census 2002, on a list of dwellings or households at a given address, rather than on a list of names of persons.
313. It goes without saying that as long as the labour force survey remains annual, the sample should be completely redrawn every year. It is too early to include a deliberate panel component in the LFS.
314. The other households survey, the SPC, needs a complete revision in all aspects, using European methodology. This is urgent as well, especially if a revised consumer price index should become the major price index as it is the case in all other European countries (see B.6.2 below), and for poverty indicators. The weights in the base year of such a new price index have to be of undoubted representativeness for the consumption of private households, which is impossible without a good quality household budget survey carried out by well trained interviewers. The methodological knowledge that has to be built up in the SOR for the LFS can be used for the revision of the SPC as well.
315. The present SPC has the following shortcomings that should be corrected with the revision:
- The sample size is to low, given the detailed breakdowns of results that are required. - The method of relying on the respondents' memories for a retrospective period of 3 months will inevitably lead to severe biases. This method should be replaced by a combination of diary (for frequently consumed items) and interviews (for less frequent purchases), with a diary covering a period of one month at the maximum. Page 75
- The same household should only have one period of participation. The sample should be big enough so that it can be spread over the whole year - Even if not repeated, willingness to co-operate in a diary exercise (as opposed to a normal interview like in the LFS) will have to be supported by material incentives in form of handouts in cash or in kind at the end
316. The food part of the questionnaire should be reviewed and limited to the information needs required by the consumer price index, the national accounts, and poverty-related indicators. On the other hand, more attention should be given to services and transfers.
317. The reason why national accounts, for the final consumption of private households aggregate, have relied so far more on producer and trade based statistics rather than on the SPC, is related to the biases and comparative lack of accuracy as described above. Compared to business surveys, more accurate households budget surveys have the advantage of better covering the whole economy (including purchases from the informal sector), and of not being blurred by unknown shares of intermediate consumption.
318. In view of the scarcity of the resources, they should be concentrated on the revision of these two major household surveys as outlined above. No other household surveys as part of official statistics should be carried out until these tasks have been accomplished successfully. Proposals for separate households surveys from donors should be carefully evaluated whether they are sustainable later, i.e. whether they will not face the risk of being ad hoc surveys unlikely to be repeated later as part of the national programme financed by national resources.
5. Capacity to Maintain Business Registers
319. The administrative business registers in Yugoslavia are managed by SOR and FSO. They are located in the mainframe of the IT system of FSO. Three registers exist: the classified units (legal units) register, the shops (small enterprises) register, and the territorial units register.
5.1. Legal Units Register
320. When a new enterprise-type legal unit is created, it has first to be registered by the economic court of the location of the new enterprise. The new enterprise forwards the registration act with a statistical form it has filled in to the local branch of the SOR concerned. The SOR defines the main economic activity of the new legal unit and gives an identification code. This identification code is compulsory for the opening of a bank account and transactions through the national Agency of Payment.
321. This procedure is used for all legal units, except for the following ones, for which the first step of registration does not pass through the economic court: (i) State agencies declare themselves to the SOR and the Clearing and Payment Service;(ii) Non- page 76
governmental organisations (NGOs) are declared through the Ministry of Interior; (iii) Political organisations are declared through the Ministry of Justice;(iv) National branches of foreign enterprises are declared through the Ministry of Foreign Affairs.
322. All economic activities are covered. All legal units are covered, except units with a military status.
323. Information recorded in the legal units administrative register covers the identification number, name of the unit, type of ownership, capital origin, location, giro account number, legal form, main economic activity, size, and name of the manager.
324. If an enterprise-type legal unit has several local units, that are not separate legal units, these units can be registered as such, with a special code linking them to their mother enterprise. In the same way, if a legal unit is controlled by a holding corporation, the identification number of the holding corporation is recorded.
325. When a legal unit disappears, its “death” has to be declared first to the economic court of its location (or any other agency listed in paragraph 321 above for specific legal units). This information is then forwarded to the SOR that drops the “dead” legal unit from the administrative register. The procedure is very slow, mainly because the information coming from economic courts is not computerised. Furthermore, a large part of non-active enterprises have not been liquidated, and are kept for some reason as “empty shells” by their owners.
326. The administrative legal units register is used for statistical purposes. As a matter of fact, satellite registers are created and managed by SORs for statistical purposes. They are updated at the same time as the administrative register. In general, updates are made upon request by registered units. For instance, the main economic activity code cannot be changed unless the registered unit makes the request, and only upon decision made by a committee consisting of representatives of the SOR and the Clearing and Payment Service.
327. Satellite statistical legal units registers can also incorporate additional information that has not (or not yet) been notified by economic courts. For instance, if an enterprise-type legal unit does not return the monthly statistical form for three consecutive months, it is considered as non-active. The Clearing and Payment Service of the National Bank of Yugoslavia, that records all payments made and received by all legal units, also provides information on legal units for which no payments have been recorded. In addition, the tax administration provides information on legal units that have returned empty tax statements. A non-active enterprise-type legal unit is not taken in the corresponding statistical surveys, but it is not dropped from the administrative register until the economic court notifies the liquidation of the unit. In Serbia, about two thirds of registered legal units are considered as non-active. In Montenegro, there is no information on the proportion of registered legal units that are not active. Page 77
328. The administrative legal units register is public, and copies are delivered upon request. The satellite statistical legal units registers are for internal use by FSO and SOR only.
329. The main challenges currently faced by FSO and SOR are related to the form of legal units and the economic activity classification. New laws have just been passed by the Serbian and Montenegrin Parliaments on the definition of legal forms of enterprises, in order to better reflect the change in the economic structure, including the development of the private sector. In addition, the official classification of economic activities used for statistical and administrative purposes should be based by law on the European standard NACE Rev.1, in principle from the beginning of 2001. Both changes are being progressively implemented in the legal units register by SOR. They are not yet completed. The administrative nature of the legal units register is slowing down the implementation process, because the changes in classifications used in the administrative register requires reclassification and re-registration of legal units by economic courts. In order to go ahead, the statisticians have introduced the new activity code as additional information, while keeping the old activity code in the administrative register.
Assessment
330. The legal units register is a cornerstone of the statistical system. It provides an image of the whole universe of legal units involved in the process of production. Together with the central shops register that is described below it is the reference for all enterprise surveys, exhaustive as well as sample surveys. The management of FSO and SOR is well aware of these facts, and significant efforts are devoted to the maintenance and adaptation of the legal units register.
331. However, the development of the private sector in Yugoslavia raises a number of issues with regard to the quality of information recorded in the register. The main issue is related to the increasing number of births and deaths of private corporations. While there is an incentive to register a new corporation, i.e., the opening of a bank account, there is no visible incentive to report the interruption of activity of a corporation to the economic court, unless the formal procedure of liquidation is initiated. The large proportion of legal units that are identified by statisticians as non-active units in Serbia is related to this issue. It would be useful to have the same information in Montenegro. In both Republics, the statistical treatment of non-active legal units should be given a high level of priority, because of the expected development of the private sector, and also in view of the development of sample surveys on enterprises.
332. The enforcement of laws on the legal forms of enterprises, and on the official classification of economic activities has been described above. This new legislation is welcome. However, it appears that the concrete implementation of the new classifications in the legal units register is not meeting the official deadline. Here again, a high level of priority should be attributed to the completion of the implementation of the new classifications. The reclassification for statistical purposes that has been made page 78
in Serbia is a good solution in the short term, providing that it is used for all economic statistics. However, it is not a sustainable solution in the medium/long term.
5.2. Central Shops Register
333. The central shops register exists only in Serbia, since1994. It covers in principle all unincorporated enterprises. It is maintained by the SORS on its own mainframe.
334. The basic source of information is municipalities. Individual entrepreneurs are obliged by law to register with their municipality, and to notify any change to their municipality. Municipalities notify updates to SORS every two weeks. The SORS gives the identification number and activity code to the newly created shops.
335. Information recorded in the central shops register covers location(s) and type of shop, main economic activity, name and address of owner, type and date of changes. The delay of notification by municipalities to SORS is actually very long. The identification of owner is missing for about 30% of registered shops.
336. Similarly to the legal units register, the central shops register is moving to the European standard classification of economic activities NACE Rev.1. The implementation of the new classification seems to meet the same difficulties as the implementation process in the legal units register, especially with regard to the deadlines stipulated by the law on the new classification of economic activities.
Assessment
337. The role of the central shops register as a cornerstone of the statistical system can be described in the same way as it is done about the legal units register in part 5.1 above. With regard to part 5.1, one can put more emphasis here on the use of this register for the identification of informal activities. One should also stress that the development of unincorporated enterprises is a significant part of the development of the whole private sector. As in many other countries, unincorporated enterprises are less covered by business registers than corporations.
338. The first assessment is that a business register covering unincorporated enterprises should be set up in Montenegro, as it is already in Serbia. In the absence of that kind of register, it is not possible to have a good view of the economy in Montenegro, especially in this period of transition.
339. In Serbia, the current central shops register is based on information coming from municipalities. As explained above, this is a source of delay in registering of new unincorporated enterprises, and dropping of dead enterprises from the register. A proactive approach of municipalities, using the network of regional offices of the SORS, should be organised. The purpose of this approach would be to identify the Page 79
main reasons of late reporting by municipalities, and to define jointly with municipalities possible improvements in the procedure of reporting. Given the number of municipalities in Serbia and the limited resources of the SORS, especially at the regional level, it would be advisable to start with a sample of municipalities that could be considered as representative with regard to the type (urban/rural), the size (small/large), and the geographical location. 340. The implementation of the new classification of economic activities in the central shops register has to be completed as son as possible. Which is said in part 5.1 above about the legal units register is also valid in the case of the central shops register.
5.3. Territorial Units Register
341. The register of territorial units has been created in 1988. It is maintained by SOR. It covers public bodies, including communities. The basic information is coming from cadastral surveys and the ministry of local government.
342. Information recorded in the territorial units register covers the type of unit, municipality, street, and house number. There are several problems with regard to addresses, such as the absence of street name and/or house number. All surveys have their own list of addresses.
343. The classification of territorial units used in the territorial units register does not comply with the European standard NUTS. FSO and SOR do not plan so far to adopt NUTS.
Assessment
344. The territorial units register is not considered as a very reliable one by SOR. The existence of specific lists of addresses for every survey is a source of inconsistency for the statistical system. Additional efforts should be made by statisticians at the appropriate level to improve the relations with offices in charge of cadastres.
345. The FSO, together with SOR, should consider the implementation of the European classification of territorial units NUTS. Difficulties of implementation should be discussed with Eurostat.
6. Capacity to Carry out Business Surveys and Short-term and Structural Economic Statistics, Including Price Statistics
6.1 Business Surveys and Related Short-term and Structural Statistics
346. Business surveys cover industry, construction, trade, catering trade and tourism, transport and communications. The basic data source consists of monthly, quarterly, and annual statistical reports returned by enterprises to the regional agencies of the Statistical Offices of Republics, centralised and partly processed by SOR, and forwarded to the FSO for final processing. In principle, all enterprises of the social page 80
sector (state, cooperative, and mixed sectors) are covered by surveys. The private sector is only partly covered. Furthermore, statisticians are concerned about the low rate of response of private enterprises covered by surveys. The classification of economic activities is now referring to the European standard NACE Rev.1. The classification of products is still different from the international standard classifications, specifically the European standard CPA. To have a better view of the situation it is necessary to separately consider the major activities. Below are the specific features of business statistics for industry, construction, and trade.
347. Industry: Following the change of classification of activities, statistics on industry now cover, in terms of NACE Rev.1, (i) mining and quarrying; (ii) manufacturing industry; and (iii) electricity, gas, and water supply. Industrial enterprises from the social sector are covered, as well as former social sector enterprises that have been privatised. Other private enterprises are not covered. Parts of non-industrial social and privatised enterprises that are performing industrial activities are also covered. Monthly surveys provide detailed information on industrial production, consumption of raw materials, consumption of electricity and fuel, and workers involved in the industrial process. Monthly indices of industrial production are derived from these data, as well as numbers of industrial workers, and indices of labour productivity. Annual surveys provide information on power equipment, on the use of industrial capacities, on balances of generation and consumption of electricity, on production and administrative workers.
348. Construction: Statistics on construction cover all constructions, including buildings, on which construction and handicrafts work were performed during the period of reference. Own-account construction performed by individuals is estimated. Construction enterprises from the social sector return monthly, quarterly, semestral, and annual reports to the statistical offices of Republics; there is a plan to extend this survey to cover companies of the private sector as well. This survey allows to produce data on the volume of construction works (that is, value at constant prices of 1994); construction infrastructure completed, including industrial buildings; number and price of dwellings completed; construction works abroad; consumption of building and working material by construction units.
349. Wholesale and retail trade: Statistics on domestic wholesale and retail trade cover all social, i.e., state, cooperative, and mixed enterprises. Trade units of non-trade social enterprises are also covered. Monthly, quarterly, and annual reports are returned to the statistical offices of Republics. Since 1992, private trade enterprises are covered by a sample survey. Private trade enterprises return only annual reports. Statistics provide monthly data on the turnover of goods for the social sector, in current value, for retail and wholesale trade. Volume data on the turnover of retail trade are derived from current value data using the monthly retail trade price index. On an annual basis, statistics provide data on turnover for the social and private sectors, number of shops, number of workers, current value of turnover by modalities of payment in retail trade, etc. Page 81
350. Catering trade and tourism: Statistics cover all social, i.e., state, cooperative, and mixed enterprises. Catering trade units of non-catering trade social enterprises are also covered. Quarterly and annual reports are returned to the statistical offices of Republics. Since 1994, private catering trade enterprises are covered by a sample survey. Statistics provide data on the type of catering trade, turnover, and number of employees. Monthly statistics provide data on the number of arrivals and nights, as well as data on the number of rooms and beds. They are based on statistical reports returned by social and private enterprises.
351. Transport and communications: Statistics on transport cover social enterprises. There is a plan to extend coverage to private enterprises, mainly present in road transport, and to use sampling techniques based on registration files of road vehicles taken from the Ministry of Interior. Statistics provide monthly and annual data on the number and carrying capacity of transport equipment, number of passenger-kilometres and ton- kilometres, number of employees, etc. Statistics on post and telecommunications activities are based on data provided by public enterprises concerned in Serbia and Montenegro.
Assessment
352. The system of business surveys in Yugoslavia covers a wide range of non-agricultural activities and provides a large number of detailed data on monthly, quarterly, and annual basis. However, the change in the economic structure of the country, especially the rapid development of the private sector, raises a number of still unsolved problems.
353. In industry, only social and privatised enterprises are covered, and the newly created private enterprises are not covered. In construction, it is not clear how well private enterprises will be covered with the planned extension of the survey. It is good, but not sufficient, to estimate the own-account construction work performed by individuals. It is to be noticed that sampling techniques used for wholesale and retail trade, catering, and in future also transport, provide data on activities in the private sector.
354. There is also a problem with the response rate of private enterprises that are in principle covered by business surveys. It appears that this response rate is much lower than the one of social enterprises. This fact may reflect a lack of confidence of new private enterprises in the statistical system, especially with regard to the protection of confidentiality of individual data.
355. To solve these problems, a first action should be to improve the coverage of business registers. Recommendations have been made in parts 5.1 and 5.2 above. In the specific case of industry, the coverage of the surveys should no longer be restricted to social enterprises and former social enterprises that have been privatised.
356. The non-response issue in the private sector should be addressed in two ways. A first action would be to develop the contacts between statisticians and private enterprises, including business associations. It is necessary to explain again and again that statistics page 82
are independent from political forces and governmental bodies such as the tax administration, and that individual data provided by enterprises will be kept strictly confidential by statisticians. This should not be a one-shot action. The contact with the private business world has to be a permanent and institutionalised task of statisticians at every level, federal, republican, and regional.
357. A second action would be to establish, and to periodically update, a sound methodology for the statistical treatment of non-responses. It seems that the principle of exhaustiveness that is still prevailing in business surveys (except for private trade, catering trade, and transport enterprises) has not yet been associated to the development of such a methodology so far.
358. From a more general point of view, the relevance of the principle of exhaustiveness that seems to largely govern the system of business surveys should be reconsidered. The rapid growth of the private sector in the economy, especially in small enterprises, raises the question of the development of sample surveys on enterprises, as it is already made with the private sector in trade, catering trade, and transport activities. Two advantages can be highlighted: (i) the reduction of the statistical burden on enterprises; the excessive statistical burden is often advocated by private enterprises in many countries as a reason for non-response, or poor quality of response to surveys; (ii) the reduction of the cost of business surveys for statistical offices. To be fair, one drawback has to be mentioned: the level of detail of disseminated data is lower than with exhaustive surveys. However, one can wonder whether the current surveys can provide very detailed data with a reasonable reliability, given the poor coverage, or the absence of coverage of private enterprises in the context of a rapidly growing private sector.
359. With regard to classifications, the delay in implementing the new classification of economic activities that is complying with the European standard NACE Rev.1 has been overcome by statisticians through an internal reclassification of enterprises (see part 5 above). This commendable achievement should be complemented with the implementation of the European standard classification of products CPA, which is articulated to the UN world standard classification of products CPC, and to the European standard classification of activities NACE Rev.1. The reference to CPA would increase the comparability of Yugoslav data with data from other European countries. It would also increase the interlinkages between data by activity and data by product, which may be useful for analytical work.
6.2. Price Indices
360. The FSO and SOR compile and publish indices of producers’ prices, wholesale and retail trade prices, and consumer prices. This chapter is focusing on the consumer price index, which is the most widely used price index in all countries. The retail price index will be also described because of its specific institutional use in Yugoslavia.
361. The monthly consumer price index is based on the prices of around 400 products that are used for personal consumption, and that are produced or traded in Yugoslavia. The Page 83
list of products is reviewed annually by experts from the FSO and the SOR. Elementary prices are collected in urban areas. The weighting structure at the aggregated level is based on the structure of the consumption of non-agricultural households, which is derived from the household survey on personal consumption of the previous year (this survey is described in part B.4 above).
362. The collection of prices is carried out by the regional offices of SOR. Towns where the collection takes place are selected to be representative of the regions of the Republic. In every town, prices are collected in the three to five shops with the highest turnover once a month, in the most important green markets twice a month on agricultural products, and in enterprises that deliver non-traded consumer goods (electricity, heating, etc.) and services once a month. The selection of shops, markets, and delivering enterprises is carried out by the regional office concerned, and is revised every three to four years.
363. For every elementary product, an average price is computed at the level of the town as a simple arithmetic mean of prices collected for this product in the sample of shops, green markets, and delivering enterprises. Average prices in towns are aggregated at the level of the region using the turnover of shops, green markets, and delivering enterprises related to this product as weights. Price indices are then aggregated at the levels of the region, the Republic, and the Federation, using the structure of consumption expenditure of households in the household survey on personal consumption as weighting structure. 364. Data entry and first quality controls are carried out by regional offices of SOR. Processing, including the main quality controls are carried out by SOR.
365. When an elementary product is no longer sold by a shop, market, or enterprise, the price collector selects the most similar product to continue the series of elementary prices. When a new product appears, its elementary prices are collected but not immediately included in the index. The price series is observed over one year, and the final decision on how to include it in the index is taken by the annual meeting of FSO and SOR that reviews the list of products covered by the consumer price index.
366. The monthly retail price index covers products sold in retail trade shops and green markets, plus some selected services (arts and crafts, public utilities, cultural, transport, mail, and telecommunication services). The coverage of the retail trade price index is therefore different from the coverage of the consumer price index. The collection of prices of elementary products is the same as the one conducted for the compilation of the consumer price index. The aggregation is carried out in the same way as the consumer price index, with the important difference that the weighting structure is derived from the turnover of retail trade, green markets, and producers of services. The statistical source for the turnover is the business surveys covering these enterprises. The methodology used for disappeared products and new products is the same as the one used in the compilation of the consumer price index.
Assessment page 84
367. The consumer price index is in most countries one of the short-term indicators that are widely used by analysts, economic actors and policy makers. It is taken as the best indicator of inflation. The retail price index, when and where it is available, is currently less used for this purpose. This is based on theoretical considerations. International organisations are generally referring to the consumer price index for international harmonisation purposes: the International Labour Office (ILO), Eurostat, OECD, UNECE, IMF, are promoting the development of consumer price indices, and co- operate in the revision of the ILO international Manual on the compilation of consumer price indices.
368. In principle, therefore, it would be advisable to devote more resources to the compilation and the dissemination of the consumer price index, and to decrease the importance attached to the compilation and the dissemination of the retail price index. Both indices are close together but the weighting structure, and above all the list of products covered are different enough to cause significant discrepancies in the short term. Many users, who are not well aware of statistical and conceptual refinements may confuse both indices and, looking at their discrepancies, may question their reliability or even their integrity.
369. However, the government of Serbia is using the retail price index for indexing some payments. This use is stipulated by law. The retail price index itself is defined in a very precise way by a law. It is not likely that statisticians of Serbia can quickly convince their government to change the laws and to refer to the consumer price index whenever it is appropriate. In any way, it is not recommended to have the methodology of the consumer price index defined by the law. It would make excessively difficult to update the methodology when necessary. In the reverse, it would make easy to alter the consumer price index for reasons that would not be statistically sound.
370. What is advisable is to clearly give the prominence to the consumer price index in Republic and Federal publications. Significant differences with figures coming from the retail price index should be pointed out and explained with more emphasis than it is currently done.
371. With regard to the compilation of the consumer price index, the restriction of coverage to domestically produced and traded products should be abandoned. There are no good conceptual reasons for this restriction, since the point of view is the one of the consumers. It also seems that there is a limited know-how about what to do when a product disappears, or when a new product appears, and how to adjust prices for changes in quality. This limited know-how should be improved through the participation of staff in training courses organised by international organisations such as Eurostat or the IMF, as well as the participation in international expert group meetings organised by ILO, Eurostat, UNECE, OECD, etc.
372. The reference to international recommendations, especially by the ILO, would bring a useful input to the update of the Yugoslav methodology. It has to be signalled that the Page 85
ILO Manual on the compilation of consumer price indices is being revised, under the auspices of an international technical expert group. It is also advisable to be aware of the work developed by Eurostat on the European harmonised consumer price index with member countries of the European Union and the EU candidate countries. The European work is coherent with the worldwide work.
7. Capacity to Carry Out Surveys of Agricultural Holdings and Related Agricultural Surveys
373. No agricultural census has been conducted since 1969. Data on type of land and livestock in agricultural holdings have been collected with the population censuses in 1971, 1981, and 1991. It is planned to do the same with the 2002 population census.
374. Annual statistics on agriculture are based on three different approaches: (i) reports returned by agricultural public enterprises and cooperatives engaged in crop production and livestock breeding; (ii) sample surveys for livestock breeding by agricultural households; (iii) estimates by experts for crop production by agricultural households. Given the structure of the agricultural sector in Yugoslavia, experts’ estimates cover almost 50% of the total volume of agricultural production. Sample surveys cover around one third of the same volume. Reports from the social sector cover the rest.
375. Experts’ estimates of private agricultural households’ crop production are carried out on an exhaustive basis. They are conducted by a network of around 1600 (1250 in Serbia except Kosovo and Metohia) statistical estimators, who are agricultural experts or advanced agricultural producers, and have received a special training. They estimate crop production for about 5300 (3850 in Serbia except Kosovo and Metohia) estimate areas consisting each of one or more cadastral communes. Estimate areas are defined by SOR using cadastral data on land use and type of ownership. Experts’ estimates are based on visits of estimate areas, available data on seeds, fuel, fertilisers, and knowledge of local conditions. The methodology is defined by FSO and SOR. The regional offices of SOR collect data from experts. Republics fund the network of experts.
376. Annual sample surveys on livestock in private farms collect data on number and turnover of livestock, as well as production of milk, eggs, honey, and wool. In Serbia (except Kosovo and Metohia), the size of the sample has been reduced to 10% of the planned size from 1998. In Montenegro, the sample selected in 1993 is still in use.
377. Data on crop production and livestock in the social sector (public enterprises and cooperatives) are collected with regular annual reports, based on accountancy records. They are collected on an exhaustive basis.
Assessment
378. The absence of a regular agricultural census that would comply with the recommendations of the FAO and the European Union, is very damageable to the page 86
reliability of agricultural statistics. As stated above in chapter B.2 on the capacity to organise and carry out censuses, the solution of including some questions on agriculture in the 2002 population census is a good intermediate solution, but no permanent substitute. For instance, this will not provide a sufficiently reliable sampling base for surveys. Expertise from abroad will be required.
379. The main source of concern is the almost complete absence of quality checks of current annual estimates, especially with crop production in private farms. It is important to remember that the latter covers approximately 85% of cultivable area and 50% of the total volume of agricultural production. In the absence of other surveys, the current cross-checks with data on agricultural products purchased and processed by the agro- food industry, as well as data on green markets and foreign trade, have to be continued and strengthened as far as possible.
380. The second source of concern relates to the severe cuts of the sample used in Serbia for the collection of data on livestock in private holdings, since 1998. The reliability of corresponding data has obviously decreased. Questions on livestock in the 2002 population census will provide some useful benchmark data for data quality check.
8. Capacity to Produce National Accounts
381. National accounts provide a unique coherent overview of the situation of the national economy and its changes over time. They are much used by analysts and policy makers in the country and abroad, including neighbour countries, market traders, and international organisations. Standards and guidelines for the compilation of national accounts have been established and updated at the international level since fifty years. Until the late eighties two major standards existed. The UN System of National Accounts (SNA) was mainly used in countries with a market economy. The Material Product System (MPS), also known as the system of Balances of the National Economy, was mainly used in countries with centrally planned economy.
382. A major change took place in the past decade. The economic and political changes in countries with formerly centrally planned economy led these countries to move from the MPS to the SNA as the system of reference for their national accounts. The current version of the SNA, 1993 SNA, and its European version, the ESA 1995, have been now adopted by nearly all countries in the world that compile national accounts.
383. Yugoslavia has started to move from the MPS to the 1993 SNA in the second half of 1994. The current system of national accounts in Yugoslavia consists of two parts: (i) a comprehensive set of macroeconomic accounts at the Federal, Republic, and regional levels according to the MPS; and (ii) an experimental set of selected macroeconomic accounts at the Federal and Republic levels, according to the 1993 SNA.
384. Both MPS and SNA accounts are compiled on an annual basis. MPS aggregates related to the supply and use of products are compiled at current prices, and at constant prices Page 87
of 1994. SNA aggregates related to the supply and use of products are compiled only at current prices.
385. MPS accounts cover all major tables and accounts recommended by MPS standards, and are published by the FSO and simultaneously by SORs over the past twenty years. SNA accounts cover the complete set of accounts for the national economy and for the major institutional sectors in the national economy that are recommended in the 1993 SNA, and are published by the FSO over the years 1997 to 1999.
386. The compilation of national accounts is carried out by FSO and SOR in close co- operation. All tables related to economic activity are now compiled according to the new classification of economic activities that refers to the European standard NACE Rev.1.
Assessment
387. The compilation of national accounts makes use of all available statistics produced at the Federal, Republic, and regional levels. Many crosschecks are conducted, in order to make the national accounts internally coherent. This is a right approach. The movement from MPS to SNA is welcome. This movement represents for statisticians a significant effort that is commendable.
388. An equivalent effort is required from domestic users of national accounts, who are used to the former MPS system. For instance, the major indicator of macro-economic performance of the whole economy has almost the same name in both systems: Gross Domestic (Material) Product according to MPS, Gross Domestic Product according to SNA. But both aggregates are conceptually very different. In the 2001 statistical yearbook of Yugoslavia, the Gross Domestic Product is higher by 20% than the Gross Domestic (Material) Product for the year 1999. This explains why targeted presentations, seminars, ad hoc workshops on the new national accounts should be organised by FSO and SOR for all categories of users, macro-economic analysts, policy makers, and academics. This is crucial for the effectiveness of the implementation of the new system.
389. With regard to priorities, the implementation of the 1993 SNA should include as soon as possible the compilation at constant prices of the Gross Domestic Product and the other aggregates related to production. The change in the Gross Domestic Product at constant prices is the most used indicator of economic growth. As long as this indicator is not disseminated, users are likely to think that the Yugoslav system of national accounts is still basically the old MPS, and they are likely to think that macro-economic indicators produced in Yugoslavia are outdated and irrelevant. It is not a question of available data. There is already raw material in basic statistics compiled by FSO and SOR that would allow to produce a preliminary estimate of the Gross Domestic Product at constant prices. page 88
390. Another priority is to improve the estimates of informal activities in the compilation of the Gross Domestic Product, at current and constant prices. This is a difficult but necessary task, especially in the new system 1993 SNA, that covers many service activities where the informal sector is probably growing since the beginning of the economic transition.
9. Capacity to Produce Data on Public Sector Activities
391. Education statistics is based on a long-established tradition of schools and similar public institutions reporting, on an annual basis, to SOR, who are in charge of data entry, processing and tabulation. The FSO is responsible for defining the content of the forms, and at the end for the aggregation of the results from the two republics. This activity is more or less a routine process without any perceived problems. No expenditure data are collected.
392. R&D statistics (including expenditure) are collected by the FSO from public research institutions (university faculties and specialised institutions), as well as from research units with enterprises, in the same way.
393. The responsibilities in the area of health statistics are divided between the FSO (mortality and causes of death) and the Federal Institute for Health Protection (health institutions in the public sector, except for expenditure). The latter collects data from health institutions such as hospitals or doctors in the public health care system via the republic institutes for health protection. SOR are not involved, and have no regular contacts to the republic health institution in charge of statistics. The private sector in health services that is starting to develop is not covered.
394. The official producer of government finance statistics is the Clearing and Payment Service (see 2.2). The published output of the Clearing and Payment Service concerning government finance statistics is very limited. The corresponding chapter in the statistical yearbook, entitled "social activities and public consumption" has been prepared mostly by the FSO and is focused on the public sector outside governments, called "social activities", i.e. an exhaustive coverage of legal entities in this area. The two tables in this chapter concerning the receipts and expenditure of the various governments, based on information published in the official gazette on the one hand and from the Clearing and Payment Service on the other, are totally incompatible. No information about purposes of government expenditure is provided.
395. The statistical unit of the Clearing and Payment Service does not seem to be aware of the new (and old) IMF manual of government finance statistics, nor the COFOG classifications. Their approach is mainly determined by considerations of treasury and clearinghouse functions, i.e. by the cash principle.
Assessment Page 89
396. The chapter on education in the statistical yearbook is a good example for demonstrating the traditional approach to official statistics still prevailing in Yugoslavia. Only absolute figures (e.g. the absolute number of pupils and teachers), but no indicators (pupil/teacher ratio) are given. Indicators combing education statistics with other sources (e.g. enrolment rates) are absent (this may be because of non-reliable estimates of the population by age group). No estimate whatsoever is given on expenditure in this chapter; this is included in the chapter on social activities (see above the paragraph on government finance statistics).
397. The same holds for the chapter on public health in the statistical yearbook. It is revealing for the more institutional than subject-oriented approach that the causes of death statistics are included in the population rather than in the public health chapter.
398. The FSO does not consider itself to have a co-ordination role in this area, nor does it feel responsible for how new demands might be introduced into the statistical programme if they arise, e.g. concerning health expenditure or health-related behaviour. It would not object to the health institute taking the lead for a health survey with the population, or for statistical business surveys with private sector entities, should the need arise, although there can be no doubt that this institute has absolutely no experience in either type of data collection. Even if the capacity of the FSO in both areas is clearly too low, it is the only public body that has proven so far that it can carry out, through the SOR, surveys for exclusively statistical purposes on a non-exhaustive basis, and the knowledge for this type of data collection, limited as it is today, is only present in statistical offices. The statistical offices should therefore be more assertive in this respect, they are also more experienced in dissemination and public access to results than other producers. The co-ordination role would also include that FSO monitors whether statistics produced by the heath institute follow international standards.
399. Government finance statistics as part of official statistics seems to be nobody's de facto responsibility. This gap has to be addressed as a matter of urgency, since the GDDS includes indicators in this area. The Clearing and Payment Service is clearly not prepared to implement international standards in this area. Based on its knowledge in national accounts, the FSO and the SOR are in a relatively better position to do so, although additional resources and expertise from abroad would be necessary. There are no problems for either of them in accessing the basic data of the Clearing and Payment Service. Assigning the responsibility in this area to statistical offices would include responsibility for the co-ordination aspects (e.g. concerning the definition, compilation and dissemination of important indicators). It is recommended to explicitly address this issue as part of the next update of the statistical programme, and to install a small group, under the leadership of the FSO, including the SOR, the Clearing and Payment Service , the Ministries of Finance, and any other authority important as a source of data, with the mandate to assist the statistical offices in developing and implementing a government finance statistics according to international standards.
10. Capacity to Produce Monetary, Financial, and Balance of Payments Statistics page 90
10.1. Monetary and Financial Statistics
400. The banking system in Yugoslavia is currently experiencing a major structural change that has a direct impact on the coverage and reliability of corresponding statistics. The period of isolation and international sanctions has damaged a number of banks: out of the 59 commercial banks registered by the National Bank of Yugoslavia, 37 have de facto interrupted their commercial activities and are under the regime of judiciary administration (some of them since several years), and 4 have been closed by the Yugoslav authorities at the beginning of 2002. Since 2000, Montenegro has officially adopted the Deutsch Mark (now the Euro) as currency of legal tender, and has created its own Central Bank. Therefore, Serbia and Montenegro have to be separately considered with regard to their statistical capacity in the monetary and financial area.
401. In Serbia, the National Bank of Yugoslavia collects monetary and financial statistics from commercial banks. The legal basis consists of the law on commercial banks and the law on the National Bank of Yugoslavia, that obliges the banks to transfer to the National Bank the data it needs for carrying out its duties. In practice, the collection of data from banks is difficult and often delayed. In Kosovo, two out of the three registered banks provide data to the National Bank of Yugoslavia. With regard to the third, non-responding, bank the most recent data it provided to the National Bank, related to 1999, are repeated in subsequent years, in order to keep the global statistics balanced.
402. Monetary and financial statistics are disseminated by the National Bank of Yugoslavia in its monthly Bulletin (in Serb) and quarterly Bulletin (in English), as well as on its web site.
403. In Montenegro, the Central Bank of Montenegro collects data from the 22 registered banks. The legal basis is the law on the Central Bank of Montenegro, which obliges banks to provide the Central Bank with the data it needs for carrying out its duties.
404. Monetary and financial statistics elaborated by the Central Bank of Montenegro have not yet been disclosed. They are currently kept for internal use by the Central Bank and the government of Montenegro.
405. The National/Central Banks of Yugoslavia and Montenegro have not institutionalised relations with the Federal and Republic Statistical Offices. For instance, they are not participating in the conference of directors that addresses, and decides on questions related to the statistical system of Yugoslavia.
Assessment
406 Given the context, all efforts made by the National Bank of Yugoslavia and the Central Bank of Montenegro to compile money and banking statistics are commendable. In both institutions there is a need for training and for additional staff in order to become more acquainted with international standards and to improve the quality of data. Page 91
407. The co-operation between both Banks and the Federal and Republic statistical offices should be developed. The minimum would be to exchange information about programmes of work and conceptual frameworks used. There are fields of common interest, such as national accounts, households’ consumption expenditure and credits, etc. The National Bank of Yugoslavia and the Central Bank of Montenegro should be associated to the Conference of Directors of the three statistical offices.
10.2. Balance of Payments Statistics
408. Balance of payments statistics are separately compiled by the National Bank of Yugoslavia and the Central Bank of Montenegro since the adoption of the Deutsch Mark as currency of legal tender by Montenegro. The balance of payments compiled by the National Bank of Yugoslavia covers transactions abroad of resident units in Serbia (except Kosovo). It is compiled in Yugoslav Dinars. The legal basis is the law on foreign currency operations. The balance of payments compiled by the Central Bank of Montenegro covers transactions abroad of resident units in Montenegro. It is compiled in Deutsch Mark (in Euro from the beginning of 2002). The legal basis is the law on the Central Bank of Montenegro.
409. The National Bank of Yugoslavia collects data on settlements abroad mainly from banks and other financial intermediaries. Data are first centralised by the regional branches of Belgrade and Novi Sad, then forwarded to headquarters in Belgrade. As an exception to this general rule, data on imports and exports of goods are taken from custom statistics compiled by the Federal Custom Agency.
410. In principle, data reported by banks and data taken from custom statistics cannot be simply put together within the balance of payments because their valuation systems and their time of recording systems are different. An adjustment is made for the difference of time of recording; no adjustment is made for the difference of valuation.
411. There is a specific problem related to the recording of movements of goods between Serbia and Montenegro. The National Bank of Yugoslavia does not estimate these movements. This is creating an internal discrepancy within the balance of payments because the counterparts of these movements (trade credits or cash transfers) are taken in the data reported by banks.
412. The National Bank of Yugoslavia compiles balance of payments statistics on a monthly basis. For a given month, data are available at the end of the following month, on a cumulative basis; they are released to the government and put on the web site of the National Bank. The balance of payments statistics are also published in the annual bulletin of the National Bank of Yugoslavia
413. The current conceptual framework does not comply with the worlwide IMF standard Balance of Payments Manual / Fifth Edition (1993). The National Bank of Yugoslavia plans to move to the IMF standard when the new law on the National Bank is approved by the Parliament, hopefully by the end of June 2002. page 92
414. Similarly to the National Bank of Yugoslavia, the Central Bank of Montenegro collects data on settlements abroad from banks and other financial intermediaries. It also uses custom statistics for imports and exports of goods. However, it does not make any adjustment for differences of time of recording nor for differences of valuation between data from banks and data from customs.
415. Statisticians of the Central Bank of Montenegro estimate the movements of goods between Serbia and Montenegro on the basis of tax statements that are made by traders on the occasion of such movements.
416. Balance of payments statistics of Montenegro are compiled on a monthly basis. They are released to the government of the Republic of Montenegro and put on the web site of the Central Bank. Statisticians of the Central bank of Montenegro report that their balance of payments statistics comply with the IMF standard.
Assessment
417. A large part of, if not all comments made above on monetary and banking statistics can be repeated on balance of payments statistics. In a very challenging context, efforts made in both national/central banks are commendable. Training and additional staff are needed to build balance of payments statistics that are reliable, consistent, and in good compliance with IMF standards.
418. A special effort should be devoted to the improvement of co-operation with the three Federal and Republic statistical offices. The common field of interest is here more important than with monetary and banking statistics. Issues raised by the use of custom statistics, for instance, should be addressed in a co-ordinated way. From a broader point of view, it is crucial for policy-makers to have a consistent set of indicators on economic growth, investment and saving, money, and external balance. This requirement can be met only through a sustained co- ordination of efforts made by all statistical bodies concerned.