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Lao Practices in Measuring Production

of Manufacturing

International Workshop From Data to Accounts: Measuring Production in

National Accounting, Beijing, China8-9 June 2009

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Presentation Outline

1. Economic Structure

2. Introduction to Lao Statistics System and SNA compilation

3. Scope of Manufacturing

4. Data Collection

5. Data Compilation

6. Key Issues and Areas for improvement

Lao PDR: Economic Structure, 2002-Est.2007

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Contribution of Manufacturing to GDP

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• VA of manufacturing is accounted for about 8 % of the GDP and 40- 45% of the total Industrial sector Value Added over the years

Introduction- Lao Statistics system is decentralized (Horizontal and Vertical lines)

• The Department of Statistics (DoS), Ministry of Planning and Investment (MPI) is the coordinating body of production and dissemination of statistics and information within the national statistical system and also directly responsible in Producing Price Index (CPI), National Accounts, Poverty , Population and Demographics Statistics.

• The responsibility of sector oriented statistics lies with the line ministries include MOF, BOL. ( Horizontal)

• Every ministry who collects data does that through their provincial planning departments. Thus the DoS uses staff at the provincial planning department under the Ministry of Planning and Investment (MPI) to which DoS belongs (Vertical)

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Introduction- Lao Statistics system is decentralized ( con’d)

• Two parallel systems of data collection partly overlapping, partly complementing each other in administrative (routine) data collected by the line ministries and survey data by the DoS.

• The first part (Horizontal) is financed through

Central Government but relies heavily on donor support. And the vertical is financed by the provincial and district budgets.

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Introduction-NA compilation practices

National Accounts compilation officially started in 1990

Used the value added coefficient (GVAR) in calculating GDP by production approach , and the administrative data was main source.

Used the 1968 SNA guidelines, But the framework has not been fully adopted.

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Introduction-NA compilation practices

• In 1997, DoS has achieved several main sources included census and surveys ;

• In 1997 is the year DoS attempted to adopt the 1993 SNA framework and successfully achieved the first benchmark.

• Since 1997, the National Accounts complication used the 1993 SNA framework. DoS completed compilation exercises for product and expenditure approaches.

• The series of estimation ( constant and current price) are available for the years 1997, and 2002-2005. However, based on the 1993 SNA framework, some of the basic concepts were not yet applied by NSC.

Scope of Manufacturing and Boundaries

• Group of manufacturing activities is defined based on ISIC ( Section-C Section-C )

Surveys for 1997 and 2002-2005 reference years, ISIC Rev.3, 2 digits is applied.

2006 (Survey and Economic Census) and 2007 , ISIC Rev.4, 4 digits is applied.

• Classification of boundaries of a Unit Using the Value of Value added to define main and secondary activity

carried out by a unit, ( e.g Manufacturing and Trade of Motor VehicleManufacturing and Trade of Motor Vehicle) as to determine where unit should be classified

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Basic Characteristics of manufacturing Enterprises & Establishment, EC 2006

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Total Enterprises & establishment , EC 2006

126,913 units

Number of Manufacturing Enterprises & establishments

24,331 units (19%)

Employment in manufacturing

30% of total formal employment (345,772 persons)

Basis characteristics 93% is small scale, whose number of employees less then 5 persons, while large scale unit is accounted for only 0,2%.

90% is owned by domestics private. Only 1% of total who has been practiced progressive business accounting.

Data collectionData Data sources

1. Number of establishment and enterprises

2. Production in Quantity and Value

Administrative data (Ministry of Industry and Commerce)

1. Total sale and other revenue 2. Intermediate consumption /

Inputs 3. Employment 4. Wage and other expenses 5. Changing in inventory (stock) 6. Fixed asset

Surveys: Economic Census,06 Annual EstablishmentsSurvey 1997, and

2002-2007

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Data Compilation

Gross Output Total Value of output at basic price

Less Total IC at purchasers’ price

Gross Value added

GVA at basic price

•The estimates are restricted to the use of production account

•Value added is complied at aggregated level (two digits of ISIC). However, for the publication, VA of manufacturing is grouped for Food &Beverage and Others( Non-food). •

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Key Issues and Areas for Improvement The Enterprise & Establishment annual surveys improve period

data for the accounts but there are some quality problems (coverage, timeliness, coding enumerators qualification,...)

Creating a systematic & updating the Business Register Statistics as to assure appropriate sample frame, procedures

Data and information sharing system among producers ( DoS, MOF, Tax department, MIoC)

Encouraging and improving response rate of the survey

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Key Issues and Areas of Improvement

Difficulties in measuring output for mixed nature of industries (manufacture and Trade,…). Extensive case study is required

Compiling price deflators Producer Price Index and appropriate price deflators include the Volume production index

Resources are Constraint, included HRD (recruitment new staff and develop skill through job training )

Working with Survey team and MIoC Consolidating and rationalizing the system of industrial statistics( manufacture ) that better serve the users with fast and accurate statistics in the future.

Specific training in classification matters of involved stakeholders

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Thank you

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