By Nemat Shafik
(Version in عربي)
Recently I went orienteering with my children as part of a school trip. Orienteering is a sport whereby you have to find your way to various checkpoints through unknown terrain with only a compass and a topographical map.
Wandering through the woods with six 9-year-olds was a good lesson in the value of good directions and data to find your way when you are in unchartered territory.
Likewise, making policy decisions without adequate and timely data would also result in getting lost, wasting time and money, and making policy mistakes with obvious negative consequences for growth and development.
The Middle East and North Africa (MENA) region suffers significant shortcoming in data, which are particularly problematic at a time economic transition (see table below). There are important data gaps, poor data quality and in many cases, internationally agreed standards of statistical methodologies, compilation periodicity and timeliness, and data dissemination practices are not followed. I emphasized these issues during my participation at the ArabStat Conference in Morocco this month.
Gaps in standards
In MENA, accordance with internationally accepted statistical methodologies lags behind other regions in most data categories. IMF reports found that the main data shortcomings occur in the national accounts, government finance, and external sector data.
In compiling consumer price statistics, for instance, only 17 percent of countries in MENA follow the internationally accepted methodology.
These gaps hamper proper assessment of economic trends, effective policy formulation, and pre-emptive prediction of risks. Meteorologists cannot make forecasts without sufficient and high-quality data. Nor can economists or private investors for that matter.
More accurate and reliable macroeconomic statistics pave the way for more effective policy making and provide investors with the necessary data to make informed decisions. Efforts in this direction have been made across MENA, but more needs to be done to bring statistical systems to a level comparable to other regions.
What is needed
More transparency and wider public data dissemination are called for, as is the adoption of statistical laws that stress the independence of statistical agencies from political interference.
To these ends, we see great merit in a regional statistical body—ArabStat—that would coordinate activities among national statistical agencies and bring MENA’s statistical systems in line with international standards.
As in other regions, the purpose of such a body would be to take the lead in promoting the production and dissemination of data at the country and regional level. It would spearhead efforts to improve data quality to meet international standards and offer a forum to foster collaboration and enhance coordination across national statistical agencies to harmonize statistical methodologies and data dissemination practices.
The role of the IMF
The IMF is not only a major consumer of statistics, but also promotes transparency and compiles and disseminates data. We launched the Special Data Dissemination Standard (SDDS) in 1996 to guide countries that have, or seek to have, access to international capital markets in providing their economic and financial data to the public; and the General Data Dissemination System (GDDS) in 1997 to guide member countries in developing plans for statistical improvement. Both of these initiatives have been very successful.
Subscribing to the SDDS is somewhat a proxy of statistical development and political commitment to disseminate data according to stringent and well-defined periodicity and timeliness.
Unfortunately, only 5 MENA countries are currently subscribed to SDDS. In addition, GDDS participants from the MENA region are less successful in meeting the periodicity and timeliness guidelines compared to members from other regions. Nevertheless, several countries in the region have been successful in improving reporting on portfolio investment (Bahrain, Egypt, Kuwait, and Lebanon) and financial soundness (Bahrain, Jordan, Kuwait, Morocco, and West Bank and Gaza) – which shows progress can be made where there is commitment.
The MENA region, with support from the IMF, needs to invest more in improving statistics. “Good statistics are cheaper than bad policy,” said one official at the conference. We will continue to work with governments across the region on improving statistical systems that will help guide the formulation of sound policies and ensure a safe and smooth journey at an important time for the region.
Filed under: Economic research, Emerging Markets, growth, IMF, Inequality, International Monetary Fund, Investment, Middle East, Multilateral Cooperation, Politics, عربي | Tagged: ArabStat, Bahrain, data, Egypt, GDDS, Jordan, Kuwait, Lebanon, MENA, Middle East and North Africa, Morocco, Nemat Shafik, SDDA, statistics, transparency, West Bank and Gaza |