Compiling the Gross Domestic Product: The Myanmar Experience by Ministry of National Planning and Economic Development The views expressed in this document are of the author(s) and do not necessarily reflect the views and policies of the ADB or its Board of Governors or the governments they represent.
Contents Abstract...ii I. Introduction... 1 II. The Current System of National Accounts... 1 III. Sources and Methods... 2 IV. The Way Forward... 6
Compiling the Gross Domestic Product: The Myanmar Experience by Ministry of National Planning and Economic Development 1 Abstract Myanmar is still using the 1968 System of National Accounts (SNA). The Gross Domestic Product (GDP) is compiled by the production approach on a quarterly basis, while GDP by expenditure approach is estimated annually due to insufficient data. However, the Ministry of National Planning and Economic Development is working on the improvement of the GDP expenditures under guidance of a consultant. Moreover, efforts are underway for the transition to SNA 1993 which is being done with technical assistance from international organizations. KEYWORDS AND PHRASES: System of National Accounts, SNA 93, supply and use tables, integrated set of accounts, input-output tables, use table, supply table, balancing of SUT, GDP, SUT, SNA, IO 1 The views expressed in this document are of the author(s) and do not necessarily reflect the views and policies of the ADB or its Board of Governors or the governments they represent. ii
I. Introduction Compilation of national accounts data in Myanmar was initiated in 1951/52. The Central Statistical and Economic Department (CSED) compiled and published the national accounts data in book form under the title "The National Income of Burma" from 1951/52 to 1962/63. The compilation of the national accounts of Myanmar had been undertaken by Planning Department under the Ministry of National Planning and Economic Development (MNPED) since 1963. The Planning Department is comprised of 1 head office, 17 State and Division offices including sub- Division offices, 67 district offices and 360 township offices. Nearly 2600 staffs are working across the country. The main function of the MNPED is to estimate national and regional GDPs. II. The Current System of National Accounts Myanmar is still using the 1968 System of National Accounts. GDP is compiled by Production Approach. GDP by production are compiled quarterly, while GDP by expenditure approach is estimated only annually due to insufficient source data. The final GDP aggregates are determined as GDP by production activities. That s because source data of industry activities are more abundant and seemingly more reliable than those of expenditure components. Consequently, a statistical discrepancy between GDP by production activities and GDP by expenditure components is shown explicitly on the side of GDP by expenditure components. However, most expenditure components, such as consumption and gross capital formation excluding investment on equipment, have been measured independently since 2009 through the direct estimation method using expenditure related source data instead of the commodity flow method. In order to facilitate formulation and implementation of sectoral economic plans, a system of sector classification disaggregating the economy into 14 economic sectors based on input homogeneity and output similarity has been adopted. These 14 sectors are Agriculture, Livestock and Fishery, Forestry, Energy, Mining, Processing and Manufacturing, Power, Construction, Transportation, Communications, Financial Institution, Social and Administrative Services, Rentals and other services and Trade sectors. There are 8 sectors representing production activities and 6 sectors representing services activities. Production Sectors 1. Agriculture 2. Livestock and fishery 3. Forestry 4. Energy 5. Mining 6. Processing and Manufacturing 7. Electric Power 8. Construction Services Sectors 1. Transportation 2. Communications 3. Financial Institutions 1
4. Social and Administrative Services 5. Rental and Other Services 6. Trade With a view to comparative study in structural changes, the above- mentioned economic sectors are made up of three major sectors, namely Agriculture, Industry and Services. Agriculture includes agriculture, livestock and fishery and forestry sectors. Industry composes of energy, mining, processing and manufacturing, electric power and construction sectors. Services embody transportation, communications, financial institutions, social and administrative services, rentals and other services and trade sectors. III. Sources and Methods A. Compilation Process As the product approach indicates, the gross output (GO) for all economic sector is firstly computed. The valuation is at the producers' price. Then, the gross value added (GVA) is computed by deducting the value of intermediate inputs from GO. By adding up of GVA for the economic sectors, Gross Domestic Product (GDP) is already compiled. In the process, the valuation is broken-down to State, Cooperative and Private Sectors in a bid analyze the GDP by ownership. With regards to collecting data on producers' price, there are two channels: one from the line ministries and the other from regional offices of Planning Department. Quarterly collecting price data is regularized. Output data for economic sectors are obtained mainly from two sources (1) Administrative records: for Public sector production plus some data for private sector (2) Through the regional offices of the Planning Department : especially for private sector production in addition to public sector data provided by the regional units of government agencies B. Estimates of Intermediate Inputs For the State and Cooperative sectors, data on intermediate inputs are available through respective line ministries. For the private sector, estimates are being made based on the technical coefficient existed in the State and Cooperative sectors. Therefore, efforts are being made to conduct case studies that will produce data on intermediate inputs for the private sector. Since there was weakness in GDP compilation process, endeavors are being made especially in the area of coverage and accuracy. C. Measuring GDP by Final Demand Approach In Myanmar, GDP is mainly estimated by the production approach. However, expenditure or final demand approach is also done for counter-checking purpose. In this process, main data sources are administrative records from respective line ministries and estimation is made on observation studies due to lack of regular-basis surveys. 2
D. Household Consumption Expenditure Household consumption expenditure would be estimated from household expenditure surveys conducted every five years. The estimates for the benchmark year were sourced from the Integrated Households Living Conditions Assessment (IHLCA) conducted by the Planning Department (PD) under the Ministry of National Planning and Economic Development (MNPED) with the technical as well as financial assistance provided by UNDP. PD is the focal unit in Myanmar responsible for compiling GDP in consultation with various line ministries. Private consumption expenditure includes final consumption expenditure of households and the Non-profit Institutions Serving Households. Household final consumption expenditure includes consumption expenditure of households in the domestic market. However, we can not estimate consumption abroad. In accordance with COICOP, household final consumption expenditure on goods and services in the domestic market is classified in 12 groups as follows. Commodity Group 1. Food and non-alcoholic beverages 2. Alcoholic beverages and tobacco Expenditure Coverage Bread and cereals; meat and fish; dairy products and eggs; edible oils and fats; fruit and vegetables; sugar and confectionery; non-alcoholic beverages and food products n.e.c. Beer and liquor; tobacco 3. Clothing and footwear Clothing materials; garments; other articles of clothing and clothing accessories; shoes and other footwear; repair and hire of clothing and footwear; cleaning of clothing 4. Housing, water, electricity, gas and other fuels 5. Furnishings, household equipment & routine maintenance of the house Actual and imputed rentals for housing; maintenance and repair of the dwelling; water charges; electricity; gas and other fuels Furniture; carpets; household appliances; tools and equipment for house and garden; and the repairs of these items 6. Health Medical products, appliances and equipment; and health services 7. Transport Spending on purchase, maintenance, repair and operation of vehicles or other personal transport equipment; and other transport services 8. Communication Postal services; telephone and telefax services and equipment 9. Recreation and culture Audio-visual, photographic and data processing equipment; other major durables and equipment for recreation and culture; other recreational items; gardening and pets; recreational and cultural services; newspaper, books and stationery; and package holidays 3
Commodity Group Expenditure Coverage 10. Education Tuition fees and related expenses 11. Restaurants & hotels Catering services; accommodation services 12. Miscellaneous goods and services Personal care; personal effects n.e.c.; social services; insurance; financial services n.e.c. and other services n.e.c. Estimates of household final consumption expenditure in the domestic market of the above-mentioned groups and sub-groups are derived from the results of the Integrated Household Living Condition Assessment Survey which was conducted for the first time in 2004/2005. We only get benchmark at 2004/05; while 2009/10 and other years were adjusted using the consumer price Index. Estimate of final consumption expenditure of NPISHs is compiled according to the total amount of Government transfers to these institutions. E. Government Consumption Expenditure With regards to final consumption expenditure of general government, data are collected from the Budget Department under the Ministry of Finance and Revenue. In this regard, current expenditure of various ministries and governmental organizations are taken into account. In this regard, those expenditures are not collected by the function or purpose according to the Classification of the Functions of Government (COFOG). However, some adjustments might be needed due to COFOG. Coverage of government expenditure includes activities such as public administration, public order, health, education, recreational and cultural activities, as well as other social services. F. Exports and imports In this respect, only exports and imports of goods are covered in the Myanmar estimation process. Those data are available from the Central Statistical Organization (CSO) under the same ministry, i.e. MNPED. Exports are valued at f.o.b. while imports are at c.i.f.. Myanmar foreign trade data in local currency is converted by the official exchange rate. But computation of trade indexes should be reviewed and the methods should be updated. Existing exchange rate system for trade valuation should be considered. G. Gross capital formation Gross fixed capital formation and changes in inventories are included. In this regard, investment in the State sector is available from the Budget Department. Capital expenditure is taken as State investment. Foreign currency component is also valued at official exchange rate. Data on registered enterprises especially in private sector is obtained through Directorate of Investment and Company Administration under MNPED, a focal agency for company registration and administration. Estimates for household unincorporated enterprises are being carried out based on administrative records relating with capital goods produced and expenditure incurred on fixed assets. Two major portions of gross fixed capital formation are construction and machinery. Construction of residential buildings might be estimated from the Integrated Household Living 4
Condition survey 2009-10. Other construction such as airports, bridges, highways, railways, dam, etc. may be obtained from government sources. Machinery which goes to gross fixed capital formation has to be identified to exclude small tools. H. Stock Changes Data relating to inventory are collected through the agencies under the line ministries. Those are represented only for State sector. For the private sector, only the stock changes for major crop, i.e. paddy is estimated. With an aim at improving the data and estimating method for compiling GDE, the Training Workshop on Compilation of Myanmar GDP by Expenditure Method was held in November 2009 by the Planning Department with UNDP assistance. At the workshop, Mr. Viet Vu participated and discussed about the improvement of compilation process. He also suggested the conduct of surveys for the improvement of data especially for private investment. Out of 110 basic headings, the expenditure weights of 82 basic headings for 2009/10 have been calculated from the Integrated Household Living Condition Assessment Survey. The availability of proxies for missing weights of 28 basic headings has to be considered. The missing basic headings are mentioned below. 1. Cheese 2. Jams, marmalades, and honey 3. Cleaning, repair, and hire of clothing 4. Repair and hire of footwear 5. Maintenance and repair of the dwelling 6. Carpets and other floor coverings 7. Repair of furniture, furnishings and floor coverings 8. Major tools and equipment 9. Household services 10. Animal-drawn vehicles 11. Other services in respect of personal transport equipment 12. Passenger transport by road 13. Passenger transport by sea and inland waterway 14. Other purchased transport services 15. Recording media 16. Repair of audio-visual, photographic, and information processing 17. Maintenance and repair of other major durables for recreation and culture 18. Other recreational items and equipment 19. Gardens and pets 20. Veterinary and other services for pets 21. Games of chance 22. Package holidays 23. Prostitution 24. Social protection 25. Financial intermediation services indirectly measured (FISIM) 5
26. Other financial services 27. Final consumption expenditure of resident households in the rest of the world 28. Final consumption expenditure of nonresident households on the economic territory I. Input Output tables & Supply Use table However, we are trying to improve GDE with our consultant Mr. Vu Viet for the compilation process. These tables can not used at present, but after the first GDE workshop in 2009 we were able to benefit from the Vietnamese experience in input output table compilation. IV. The Way Forward Moreover, we would like to upgrade our current compilation system to 1993 SNA and we will do closely with International organizations for a smooth transition. In August 2011 we will hold a workshop to facilitate transition to the 1993 SNA. 6