Transcript Document

Welcome to
Statistics Department
State Bank of Pakistan
Being a International Investment
Position Data Provider

Do you think it is important to be a International
Investment Position (IIP) data provider ?
 If it is really important to be so, to whom is he / she
important ?
 The objective of this presentation is to tell how
important the role of a IIP data Provider is.
Being a International Investment
Position Data Provider
Any discussion of being a data provider requires a discussion about the
stakeholders.
The
job of a data provider requires professional
skills,not only to understand and do his task but
also to serve and communicate with the users.
Failure to appreciate the importance of stakeholders
often leads to poor Statistics.
Being a International Investment
Position Data Provider
Who are the stakeholders ?
Users
Legal,technical and Administrative
Support
Being a International Investment
Position Data Provider
To sum up,it is important to have a Mission and strategy.Therefore ,let us
have our Mission statement
“Our mission is to provide IIP statistics matching to
the users needs”
And our Strategy would be
“To understand the users needs and meeting those
needs. Develop and implement plans to supply
qualitative statistics”
What is International
Investment Position(IIP) ?
International Investment Position (IIP)
Definition
“ The IIP is a statistical statement that shows an
economy’s stock of external financial assets and
liabilities at a particular point. This stock is the
result of past external transactions measured
according to current market values (current
market prices and exchange rates) and other
factors (for example, write-offs or
reclassifications) at a specific point. ”
International Investment Position
Conceptual Framework
Conceptual framework-concepts
International Investment Position (IIP)
Stock of External Financial Assets and liabilities
(Financial Claims and Liabilities)
( Equity Assets and liabilities )
(Financial derivatives)
(Monetary Gold and SDRs)
Net IIP
Difference between owned and owed
Conceptual framework-concepts
Changes in IIP

Stock measured at a point in time

Changes between two time points
Transactions
Non-transaction changes
( price changes,exchange rate
movements,other changes )

Reconciliation of the IIP Statement
OP + Tx + PC + XR + OC = CP
Conceptual framework-concepts
Where :
OP = Opening Position
Tx = Transactions
PC = Price Change
XR = Exchange Rate Change
OC = Other Changes
CP = Closing Position
Conceptual FrameworkRelationship to other Statistics
National net worth
– IIP is partial balance sheet of economy
– IIP + non-financial assets = National net
worth
Conceptual FrameworkOther terms
IIP = Stock of External financial assets
and liabilities
“ Stock ” includes ‘Valuation’ and
‘Timing’ And
“ External ”requires definition of
‘Residence’
Conceptual FrameworkOther terms
Valuation

Current Market Prices
 Book values as proxy for illiquid assets
 Nominal values for non-market items
 Net present value (NPV) for non-traded securities
Timing

Time when claims and liabilities arise
 Based on accrual accounting
– Timing of ownership change
– Proxy when recorded in books
Conceptual FrameworkOther terms
 Residence
is an important attribute in IIP
because the identification of transactions
between residents and nonresidents
underpins the system
 Identical
concepts of residence are used in
BPM5 and the 1993 SNA
Conceptual FrameworkOther terms
Three Questions:
 What
is the institutional unit?
 What is the economic territory?
 Which territory is the unit closely connected
with?
Conceptual FrameworkOther terms
The residents of an economy comprise the following
types of institutional units:
1. Households
 Includes the individuals who make up a household
2.
Enterprises
 Financial and non-financial corporations
 Unincorporated businesses
3.
4.
Non profit institutions serving the households
Government
Conceptual FrameworkOther terms
The economic territory of a country is the
relevant geographical area to which the concept
of residence is applied.
 A geographic territory administrated by a
Govt.within this,persons,goods,and capital circulate
freely.
 Free trade zones
 Usually a country, but not necessarily
– Economic and monetary unions
– International organizations like IMF and UN
Conceptual FrameworkOther terms
Concepts of residence:

Economic connection of a unit to an economic
territory
– Not based on nationality or legal criteria
– Not based on currency used

Expressed as a economic unit’s Center of
economic interest
Conceptual FrameworkOther terms
Center of economic interest

Dwelling,place of production, or other
premises,within the economic territory of the
country on,or from,which the unit engages,or
intends to engage,in economic activities and
transactions on a significant scale,for an indefinite
or long period
Conceptual FrameworkOther terms

Households and Individuals
– The BPM5 guidelines to be used for determining
residence:
“ The presence or the intention to be present for a period
of one year or more”

Exceptions
–
–
–
–
–
Diplomatic representatives
Member of the armed forces
Students
Medical patients
Crew members
Conceptual FrameworkOther terms
 Enterprises
– An enterprise has a center of economic interest
and is a resident unit of a territory when the
unit is engaged in a significant amount of
production and plans to do so over an indefinite
or long period of time.
– One year guideline by BPM5
Conceptual FrameworkOther terms
Particular types of enterprises

Operator of mobile equipment
– The residency of airlines, railway, trucking and shipping
will be based on the residence of the operating unit.
 An enterprise operating in more than one economy
– Divide operations-identify “unincorporated branch” as
separate institutional unit
– Criteria used:
 Separate account
 Subject to income tax
 Substantial physical unit
 Receive funds on its own account (not as an agent)
Conceptual FrameworkClassification
Assets and liabilities
As per balance sheet
 Assets-holders are residents
 Liabilities –issuers are residents
 Financial claims and liabilities
Evidenced by a contract or security
 Specified payments of interest and capital

Conceptual FrameworkClassification
 Equity
claims and liabilities
 No fixed claim / liability
 Financial derivatives
 Monetary gold and SDRs
– Assets with no corresponding liability
Conceptual FrameworkClassification
Direct Investment

Obtain / sustain lasting interest in enterprise
 Significant degree of influence on management
 Practical definition
– At least 10 % holding of ordinary shares,voting power or
equivalent
– Three Instruments
– Equity
– Reinvested earnings
– Capital (borrowings)
– Reverse Investment
Conceptual FrameworkClassification
Portfolio Investment

Equity and debt usually traded in organized
markets
 Investment for the purpose of portfolio
diversification instead of having influence on the
management
 Two Instruments
– Equity securities(Less than 10% holdings)
– Debt Securities (Short-term and Long-term)
Conceptual FrameworkClassification
Other Investment

Trade Credits
 Loans
 Currency and Deposits
 Others
Reserves Assets





Monetary Gold
SDRs
Reserves position in IMF
Foreign Exchange
Other
Data sources - IIP
Domestic Statistical Sources:

Banks' External Assets and Liabilities
 Monetary Authorities’ External Assets and
Liabilities
 General Government External Debt
 Other sector
Domestic Non-statistical Sources

Financial Statement
 Foreign Investment Approval
 Financial Press
International Investment Position
 Standard
Components
 Enterprises' survey Questionnaires
1. Schedule-I ( Branches of Foreign Enterprises )
2. Schedule-II ( Enterprises incorporated in
Pakistan )
Thank You