Transcript United Arab Emirates

ICP Regional Coordinators Meeting
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1. The regional activities
Following the release of the final 2011 ICP results in
February 2014, the Western Asia Regional Office
completed the following activities:

Two missions to the National Bureau of Statistics in
the United Arab Emirates to discuss, launch and follow
up on the national project aimed at producing subnational PPPs in UAE;

An innovative exercise for the computation of PPP
estimates for the years 2012 and 2013 using methods
developed by the Regional Office;

A regional workshop in Turkey – Istanbul to validate
the produced price and national accounts data, and
the release of the final PPPs for the years 2012 and
2013;
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1. The regional activities (Cont’d)

Two missions to CAPMAS in Egypt to discuss, launch and
follow up on the national project aimed at producing subnational PPPs in Egypt;

A mission to Sudan to conduct a national conference for the
release of the 2011 ICP results and the 2012 & 2013 PPP
estimates, followed by a national workshop for launching a
national project for the computation of sub-national PPPs;

Online release and promotion of the 2011 ICP Results;

Two special editions of the WA ICP Newsletters; the first
edition featured highlights from the Final Regional ICP
Workshop (Final results and booklet), while the second
edition featured highlights from the regional workshop for
the computation of 2012 and 2013 PPP estimates;
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All the post 2011 Round activities
in Western Asia Region
originated from
Sustain the capacity building benefits and
capitalize on the experiences gained in the
2011 ICP Round, through the harmonization
of price statistics and National Accounts
activities and the production of regular PPP
estimates in Western Asia region.
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However, achieving this
vision at the regional level
is not as simple as one
might hope, given the
economical diversity of
countries involved. The
process is very long,
difficult and demanding,
and will require massive
efforts from the Regional
Office as well as the
National Statistical Offices.
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Thus, below is the outline of
 On the Short Term:
Provide a smooth transition between ICP Rounds by
computing interim PPP estimations.
 On the Medium Term:
Produce sub-national PPPs by integrating ICP with
national CPI and National Accounts activities and assess
the feasibility of the exercise on the regional level.
 On the Long Term:
Produce sub-regional and regional PPPs on a regular
basis through the harmonization of Price Statistics and
National Accounts Activities.
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On the Short Term
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1. Overview
After the release of the 2011 ICP final regional results in
February 2014, the ICP Regional Office for Western Asia
developed a new methodology:
 To
guarantee the continuity of the ICP;
provide the region’s countries with new and affordable
means to produce accurate statistical indicators on a
regular basis.
 To
The participating countries welcomed this unique initiative
and provided all the required materials. Subsequently, the
ICP regional team organized a regional meeting in Istanbul in
December 2014 to validate the submitted data and produce
the PPP estimates for 2012 & 2013.
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2. The Computation Methodology
Our methodology is based on the ICP main components:
National
Accounts
Prices
HHC
Special
Surveys
MORES
3. Prices - HHC
In order to facilitate the computation process and lighten the workload
imposed by the exercise on the National Statistical Offices:
The Regional Office at ESCWA assumed the HHC data section
The RO requested and used the most detailed CPI data (2011 – 2013), which is most of the
times not published (P2P mapping);
The RO carefully assessed the CPI lists and treated the items on individual basis;
The RO deliberately utilized ICP 2011 quarterly HHC data to:
• Preserve reliability and seasonality;
• Increase accuracy and precision.
Quarterly inflation rates were applied on the quarterly 2011 average prices;
The RO performed a thorough and systematic validation:
• Guaranteeing more precision and accuracy by double checking;
• Treating each item on an individual basis according to individual item specifications;
• Checking outliers using the ICP diagnostic tools (Dikhanov / Skainov Tables);
• Interpreting outliers by referring to CPI data and 2011 average prices;
The RO successfully produced New 2012(2013) HHC average prices sets
Prices – HHC: CPI Lists
Detailed CPI Lists were requested to produce more accurate results
Prices - HHC: Validation (Seasonality)
4. Prices – Special Surveys
The Special Surveys price data were handled by the National Statistical Offices (NSO)
NSOs focused solely on estimating the special surveys data. However, their
responsibilities will increase during the future exercises to include the preparation of
HHC data;
The devised plan did not request any price collection or survey implementation, each
country was granted the freedom to apply the method it deemed adequate for the
estimation of its price data;
Machinery &
Equipment
Construction
Private
Education
Rentals
Government
Compensation
New 2012(2013) Special Surveys data sets were produced
4. Prices – Special Surveys
Machinery &
Equipment
• Development of a Machinery and Equipment Price Index (using Foreign
Trade data and SITC Rev 4);
• The Global average changes of Metal Prices (IMF International Financial
Statistics);
• The Producers Price Index (PPI),The Wholesale Price Index (WPI);
• The Machinery and Equipment Price Index (MEPI);
• The Cost of Living Index;
• The Consumer Price Index (CPI);
• Trade Statistics;
• Field Data Collection: Specialized Agencies, Suppliers, ... (in some cases it
reached 95% of M&E item List).
Private
Education
•The Consumer Price Index (CPI);
•The Cost of Living Index;
•National Statistical Offices databases;
•Contacting several qualified private tutors;
•Field Data Collection (Schools, Universities, Teaching and Learning
centers).
4. Prices – Special Surveys
Rentals
•The Consumer Price Index (CPI) and the Cost of Living Index.
Government
Compensation
•Human Resources Management Law and National Salary Scales (44
Occupations – 4 Levels of experience).
Construction
•The Consumer Protection Directory – Ministry of Industry & Commerce
(Construction Materials);
•The Consumer Price Index (CPI);
•National Oil & Gas Authority;
•Electricity and Water Authority;
•Labour Market Regulatory Authority;
•Ministry of Municipalities Affairs and Urban Planning;
•The Producers Price Index (PPI);
•The Wholesale Price Index (WPI);
•The Construction Input Cost Index;
•The Cost of Living Index;
•Development of an Annual Weighted Average of sub-indices;
•Field Data Collection: Contractors, Engineering Consulting firms, …
5. National Accounts
The National Accounts component requiring the breakdown of GDP expenditure
was handled by the NSOs under the supervision of the Regional Office
Focus was on using MORES as the main tool for archiving the estimation of the
detailed breakdown of the expenditure data;
GDP expenditure weights were also verified and validated during the regional
workshop, and expenditure patterns were crosschecked not only across
countries, but also across the three years for the same country;
This activity supported the documentation of the methodology used to
breakdown the GDP for 2012 and 2013 through MORES and using the
expenditure approach.
New 2012(2013) expenditure weights were thoroughly estimated
The RO successfully produced New 2012(2013)
HHC average prices sets
NEW 2012(2013)
SF01
New 2012(2013) Special Surveys data sets were
produced
New 2012(2013) weights were thoroughly estimated
NEW 2012(2013)
SF06
Updated Exchange Rates and Population figures were
used
NEW 2012(2013)
SF05 & SF07
Western Asia is the first region to compute 2012
and 2013 PPP results
2011, 2012 and 2013 Regional Results
PPP variations (2012/2011 and 2013/2012) – Oman as base
2011, 2012 and 2013 Regional Results
Price Level Index - GDP Level (Region=100)
2011
2012
140
120
100
80
60
40
20
0
Bahrain
Egypt
Iraq
Jordan
Kuwait
Oman
Palestine
Qatar
Saudi
Arabia
Sudan
United
Arab
Emirates
Yemen
2013
2011, 2012 and 2013 Regional Results
Per Capita Expenditure Shares (Region =100)
6. Added Value
This exercise performed by the RO at ESCWA is a Double-Folded exercise:


1st Fold - It serves the Short term objective: The computation of 2012 & 2013 PPPs
2nd Fold - It serves the Long term objective: ICP – CPI Integration and Harmonization
• Promoting a strategic approach for the integration of CPI and ICP activities;
• Reviewing existing ICP and CPI item lists and constructing a harmonized list;
• Supporting data quality processes.
Locating the statistical weak spots and limitations of some countries;
Enhancing the statistical capacity of countries in the areas of price statistics and National
Accounts, in addition to keeping the PPP concept alive;
Giving Western Asia the opportunity to:
• Build the human capital;
• Share the know – how;
• Enhance the national statistical systems.
A constructive national and regional exercise;
Allowing for linking with Eurostat/OECD and the rest of the world to arrive at more reliable
global PPP estimates.
7. A Promising Alliance
The 2011 ICP round has very much enhanced the
cooperation and coordination between Africa (AfDB) and
Westrn Asia (ESCWA).
Currently, and as the number of countries in common
increases, we aim at increasing this level of
collaboration, share the gained experiences, and
harmonize the methodologies in order to arrive at
improved mutual outcomes.
On the Medium Term
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1. The Strategy… in brief

As is known, PPP production requires countries to collect price data
for a series of identical items, through a preset structured product
description;

Given the high cost of this process, and in order to maintain a
regular PPP production between ICP rounds, we aimed at exploring
and assessing the idea of merging ICP components within the
regular CPI work;

Choice fell on couple pilot countries to start with and exploit the idea
upon, as they resembled a regional nature;

Pilot case studies will simulate the execution of the project on a
reduced scale in order to assess its feasibility on the subregional and regional levels. Should the trial be successful, the
project will be attempted on a larger sub-regional/regional scale and
will thus extend to the Harmonized CPI initiative on the long run.
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2. The Benefits
Besides serving as a Pilot Case Study, this exercise will bring
many benefits to the implementing countries:

Help local statistical offices enhance their capacity in the fields
of Price Statistics and National Accounts;

Provide a solid estimation of the cost of living in each of the
country’s governorates/regions;

Allow local authorities to better assess their comparative
growth and advantages, their national competitiveness, and
patterns of specialization among industries;

Allow policy makers to better design and evaluate their tax and
subsidy policies to better attract investments and industries;

Allow individuals to make a real assessment of income and
purchasing ability when relocating from one region to the other
for work purposes (real salary assessment).
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3. Pilot Exercise: Case of UAE

The United Arab Emirates is a
federation
of
seven
Emirates
(equivalent to principalities), each
governed by a hereditary emir who
jointly form the “Federal Supreme
Council”. The Regional Office (RO)
exploited these unique geographic
and political structures for the
implementation of a Pilot Case study.

The UAE was considered as a region
and it’s governorates were considered
as independent countries;

This allows the simulation of the
exercise on a reduced scale before
attempting to implement it on the
regional level.
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3.1. Case of UAE: Activities
The WA Regional Office contacted the National Bureau of
Statistics (NBS) and compiled basic information regarding
the CPI and National Accounts processes in UAE.
Subsequently, the RO performed two visits to NBS:

The first meeting was held in July 2014 and focused
mainly on the price data and the CPI product lists in
each of the seven UAE emirates;

The second meeting was held in December 2014 and
tackled the National Accounts part in order to provide
GDP expenditure breakdown over 155 basic headings
for each of the emirates through the MORES.
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3.2. Case of UAE: Main Findings
Following the two visits to NBS, the main findings are:

The CPI is compiled independently in each of the seven
Emirates;

The CPI base year in UAE is 2007 for all seven Emirates;

3 CPI Lists exist in UAE (one for each of Abu Dhabi, Dubai,
and the Northern Emirates). CPI has 12 groups, and the
lists are identical at the Basic Heading level. However, at
the item level, the products differ from one list to the other;

Education, Housing and Health are covered by UAE's CPI
basket. The estimation of Construction, M&E and
Government Compensation data needs additional effort but
should not pose a challenge;

National weights for 155 Basic Headings are needed for
each of the seven Emirates. However, these disaggregated
figures are not available.
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3.3. Work Progress

The regional Office unified the 3 CPI lists used in UAE.
The unified list was devised with the cost factor in
mind. Thus, commonalities in the lists were exploited to
the maximum in order to minimize additional work;

Based on the unified list, the Regional Office created
the ICP Kit Master list for UAE, allowing NBS to
proceed with the data entry and validation
procedures;

The Regional Office and NBS agreed on the timing
and recurrence of the Special Surveys data
collection activities;

The Regional Office agreed with NBS on the
methodology which will be applied to provide the GDP
expenditure breakdown.
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4. Other Ongoing Pilot Studies

Parallel to the Pilot Case exercise that is being
implemented in UAE, the WA Regional Office
initiated a similar study for Egypt and performed two
missions (June 2014 and February 2015).

Moreover, the Regional Office suggested to launch
an the same Pilot exercise in Sudan. This initiative
was presented to the Central Bureau of Statistics
during the national ICP workshop in Khartoum in
February 2015.
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On the Long Term
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The way forward
A regional project has been developed by
the Regional Office under the title:
‘The Harmonization of Price Statistics and
National Accounts Activities and Production
of Biennial PPP Estimates in Western Asia
Region’.
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