Mapping User Needs: Aligning Economic Policy with Statistical

ProductionStatistics South Africa

Conceptual Framework for Economic Data Collection

• 1) National accounts – as an intermediate user, rather than final user (or GDP side of national accounts) – defines the primary framework for economic data collection.

• 2) National accounts, in collaboration with source data, defines the priorities of Economic Statistics primarily though its concern with the quality of GDP.

• 3) Identifying broader priorities beyond national accounts considerations, specifically micro economic analysis.

Broad Challenges

• Change culture of being supply driven to demand driven but also lead ?

• Identify the role that econ stats will/can play in informing economic policy making

• Clearly identify the role, purpose and function of the variety of mechanisms that exists.

Scope of Economic Statistics

• Macro Economy with exception of trade in goods and services, and investment capital flows.

• Informal Sector

• Labour Statistics

• Income and Expenditure

• Poverty

Perennial Concerns of GDP

• The extent to which GDP quality will overshadow other important economic indicators depends on peculiar circumstances

• Remain important challenges in South Africa

• The extent to which demands of users have both a direct and indirect impact on GDP quality

State of GDP

Are we underestimating size (level) and/or growth ( including real growth)?

• Concerns about size ( perhaps informal sector requires scrutiny)• Challenge to convince users that Economic Activity Survey ( which

provides the main but not all the components) is unlikely to be under-estimating aggregate GDP.

Are we underestimating real GDP growth?

• Convince users we are capturing growth accurately.• Challenge is to ensure that we are not under estimating growth

owing to incorrect deflators.

State of GDP

Timeliness

• Challenge of tracking turning points better.

• Quarterly refreshment of samples

State of GDP

Allocation of GDP

• Large scope for improvement

• Absence of services indicators

• Absence of activity surveys

• Absence of provincial allocation

Economic Policy in SA

• Finding Alignment between economic policy priorities and statistical production

• One key economic policy challenge is to measure changes in the economy

• Thrust of Economic Growth central to a governments growth strategy

• Basic Economic Challenge – growth and welfare

Policy Agenda in SA

• Determinants of Growth- Labour, Capital and Productivity Core to our business with challenges

• Sources of Growth where in the economy is growth coming fromServices?

Policy Agenda

Constraints to Growth•Crime and uncertainty •The Impact of HIV/Aids•Labour market •Institutional bottlenecks and infrastructural constraints•Absence of a broad based skilled work force•Governance and the role of the state – state inertia seen as a constraint to growth•Lack of competition and mark-ups in the economy•The problem of entrepreneurship•Lack of competitiveness

Policy Agenda

The Impact of Growth• Inequality• Absolute poverty• The direct link between reform and poverty• Income distribution measures• SMMEs• Land redistribution• Social Transfers

Responding to the Policy Agenda

Determinants of growth

improve our analysis of productivity ( QES)

improve our measures of capital formation ( construction)

Sources of Growth

Introduction of Provincial Data Series

Services Sectors ( agenda for improved coverage)

Responding to the Policy Agenda

Constraints to Growthcomprehensive labour market statistics strategycompetitiveness ( better tracking of prices/improved LSS)governance and the role of the state ( government accounts/public finance)

Growth and Welfare/Poverty ?massive investment in household survey in the post apartheid eraScope for improved links between macro and micro linkages

Hybrid of Formal Processes• Regular interface with the Minister of Finance • Meetings with Parliament’s Portfolio Committee on Finance• The Statistician General is part of the Deliberations of Cabinet at

least twice year along with other Director Generals• The Deputy Director General of Economic Statistics is part of the

Cabinet Economics Cluster that meets every fortnight.• Statistics Council • Advisory Committees• Ad hoc Working Groups with various government departments and

agencies.• Annual workshops held organised by Stats SA in all the provinces

Engagement with the Minister

Very Important vehicle for mapping user needsAverage of 2 meetings a month with the entire

senior management.Nature of meetings – governance and substantive

subject mattersMinister brings unique insights about brewing

policy concernsCurrently works well with high level of democratic

accountability and highly respected minister. Risk: Individual dependent.

Statistics Council

• Full council meetings at least 3 times a year• Key function is to advise minister on work

programme• Existence of sub-committees• Broad representation from key users in

government, civil society and academia• The role and impact of council depends on skills

distribution and who is nominated.• Particularly strong group on poverty

Parliament

• Two meetings a year• Presentation of three year planning cycle to the

portfolio committee on finance• The forward work program puts pressure on

StatSA to continously justify its relevance and impact

• Presentation on annual report – once again and major achievements for the year

• Presentation to Parliament by Minster on behalf of StatsSA,

User Groups

Economics Sub committee

User Groups in Progress

User Groups Planned (2007)

Annual Forum with Economists

Biannual Workshops with Reserve Bank

Ongoing engagement Average of 3 meetings a year

CPI, Agriculture and Government Accounts

GDP, Labour Market Statistics

Industry Dynamics

Joint venture with universities

Scheduled

Improvement In User Interface

• Major weakness

• Threatens our ability to be relevant

• Affects credibility

• Lack of segmentation in defining the heterogeneity of users

• Implementation of clear and well defined mechanisms

Improvement in User Interface

• Combination of formal and informal mechanisms to enhance user interface

• Formal– User advisory committees– Information papers and manual

• Informal– Management participation in forums and

networking

Conclusion

• User Groups – requires internal analytical capacity

• Need for more systematic review of questionnaire design, etc

• Continuous attempts to reconcile demand and supply.