Globalization in the Updated SNA

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• Globalization in the Updated SNA
• Carol S. Carson
• Project Manager, SNA Update
• Session on Globalization and the Effect on
  National Accounts
• Joint National Accounts Meeting
• April 25-28, 2006, Geneva

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Background

• December 2004 AEG
• Expressed interest in including a discussion of
  the statistical challenges of multinational
  enterprises within the context of globalization
  in the updated SNA
• Work to be carried forward by a subgroup
• Group on Globalization met in in July 2005,
  aiming toward a modest amount of new text drawing
  on evolving literature

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Toward an outline

• The outline attached to the paper is the current
  state of thinking
• The outline will evolve
• Comments by AEG in January-February 2006
• Some specific suggestions
• Noted potential implications of globalization for
  updated SNA
• This one-day session
• Ongoing work on the Benchmark Definition of
  Foreign Direct Investment

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Draft outline

• Definition and characterization of globalization,
  with key role of multinational enterprises
• Challenge of globalization to NAs
• Accounting complexity of recording a variety of
  stocks and flows and relating them to units,
  using examples such as goods for processing,
  merchanting, SPEs, non-permanent workers
• Source data issues for example, transfer
  pricing, multinationals, free zones, with general
  concern about consistency of the several sets of
  data

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Draft outline (2)

• Challenges of globalization to NAs Conceptual
  issues examples
• Globalization points to the analytical usefulness
  of ownership- or control-based statistics to
  supplement traditional statistics on cross-border
  transactions and positions.
• RD accounting is complex in a closed economy,
  but the complexity is multiplied in an
  international context

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Some points for discussion

• Does the draft outline capture the main topics
  for a modest amount of new text in Rev. 1 about
  globalization in general and multinational
  enterprises in particular? What is missing?
• If two, perhaps three, issues dealt with in the
  SNA Update were to be described briefly to
  illustrate the accounting challenges stemming
  from globalization (see section II.A), which
  should they be?
• Given that the SNA is not meant to be a
  compilation guide, how much attention should be
  given to practical considerations?
• What additional sources should be consulted?

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Thank you
Contact ccarson_at_imf.org