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UNECE helps countries to measure global production

It is commonly known that global exports exceed global imports. How is it possible? Is it due to the growing exports of goods to the moon? No, it is due to difficulties in capturing global production and trade flows.

Businesses once largely confined their production activities to the national economy apart from exports and imports. They employed people locally, and used mainly domestic funding. This is no longer the case. Often the products we use are a result of a chain of actions by a series of businesses, their partners and branches of multinational enterprises residing in different countries across the world.

This makes it difficult to compile insightful and high-quality statistics. Even detecting companies involved in global production is a challenge, and it is even more difficult to get information about their complex cross-border transactions and define a common terminology for measuring their activities. The Group of Experts on National Accounts met in Geneva last week to exchange country experience and share innovations on how to gather the necessary data on global business activities.

Understanding the global economy requires the best possible evidence base, and nobody can effectively provide that alone. That’s why statisticians are exploring the possibilities of combining existing and new data sources, and sharing and reusing data among public and private entities, nationally and internationally.

As the economy has become global and more complicated, the same has happened with statistics. Data on global production activities is scattered across a large number of countries, and somebody has to collect the pieces of information and organize them. Data sharing not only provides rich possibilities but is also a prerequisite for measuring today’s economy.

The Expert Group meeting, organized jointly by UNECE, Eurostat and OECD, already showed some progress in unlocking the potential of new data sources and data sharing. The participants recognized the benefits of data exchange for better quality, relevance and consistency. Data reuse also reduces the need to collect the same information again from businesses and increases the efficiency of statistical production. Yet, the potential is still underexploited, and we need to speed up the progress and develop new ways for effective data sharing among statisticians. A network of experts is now reviewing countries’ experience, obstacles and possibilities in data sharing for purely statistical purposes to see what can be done.

The Expert Group also asked UNECE to set up a wiki platform to collect and share best practices in dealing with global production. Countries rely on UNECE’s support to implement the Guide to Measuring Global Production, which UNECE developed together with countries and partner organizations (now available in English and Russian).

The meeting also discussed other current work, such as the statistical unit to be used in national accounts, valuation of natural resources and mineral exploration, and measuring human capital. A special session for East European countries focused on developing supply and use tables that would improve the quality of national accounts and provide better means for analysing their participation in global value chains. The documents of the meeting are available here.