Project on Reform of Official Statistics in Russia

STATISTICS 2

Cooperation Project on Reform of Official Statistics in the Russian Federation

December 1997

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Table of contents

1. Introduction...... 3

1.1 Legal basis...... 3

1.2 Rationale...... 3

1.3 The results achieved...... 4

2. The Goskomstat of Russia: an institutional appraisal...... 7

2.1 The Statistical Committee...... 7

2.2 Technological environment...... 10

2.3 Strengths, Weaknesses, Opportunities and Threats (SWOT) of the Goskomstat...... 11

3. Problem analysis...... 12

4. Objectives...... 14

5. Co-ordination with other donors...... 16

6. Intervention logic...... 18

6.1. Administrative framework...... 18

6.2. Identification of priorities...... 18

6.3. Forms of assistance...... 18

7. Links with other Tacis programmes...... 20

8. Means and costs...... 22

8.1 Means...... 22

8.2 Costs...... 22

9. Logical Frameworks...... 23

Project on reform of Official Statistics in the Russian Federation...... 24

9.1 Component 1. Classifications databases...... 25

9.2 Component 2. Training in statistics and modern management techniques ...... 26

9.3 Component 3: Creation of a Statistical databases...... 27

9.4. Component 4 Contents of and dissemination from a statistical database...... 28

9.5 Component 5. Establishment of a dialogue with the users of statistics...... 29

9.6 Component 6: Data exchange...... 30

9.7 Component 7: Establishment of a system of regular population analysis and forecasts .....31

1.Introduction

1.1Legal basis

In June 1994 a Partnership and Co-operation Agreement (PCA) was signed in Corfu between the Russian Federation and the European Union.

Article 79 of the PCA, Statistical Cooperation reads: “The cooperation shall aim at further development of efficient statistical systems, informational and programme technological compatibility of statistical data, to provide, in time, reliable statistics needed to support and monitor the process of economic reforms in Russia, the economic cooperation between the Parties and to contribute to the development of private enterprises in Russia. The parties shall cooperate in particular:

- to enhance the development of an efficient statistical system in Russia, in particular to elaborate an appropriate institutional framework;

- to improve the standards of training and the professional level of the statistical personnel;

- to bring about harmonisation with international, and in particular, Community methods, standards and classifications;

- to provide private and public sector economic operators with the appropriate macro- and microeconomic data;

- to exchange statistical information and/or to make appropriate use of databases”

The statistical project will be implemented according to the Tacis Regulation adopted by the Council of Ministers of 25 June 1996.

1.2Rationale

Tacis technical assistance to the Russian Federation started in December 1992 on an inter-state basis within the broader framework of statistical co-operation between the EU and the Newly Independent States (NIS), and continued on a national basis starting from 1996.

The Statistical Committee of the Russian Federation was faced with the challenge to take over the task to develop procedures and methodologies for the production of statistical information from the Statistical Committee of the Soviet Union, to adapt them to the new economic and political situation, and to play the role of a national statistical service, able to provide information for internal policy and for the international community.

Good progress has been made during the first two phases of co-operation, the first devoted mainly to exchange of information and basic training, and the second, focused on priority projects, in co-ordination with the assistance offered by other international organisation.

However the work to build an infrastructure able to provide relevant, comparable, accessible information based on needs, in an independent way, has only started. More investment is needed in a longer-term perspective

The final aim of the project is to put the Statistical Committee of the Russian Federation in the conditions to describe the events which are actually happening, provide internationally comparable data using international and EU standards. The information produced will serve the government for correct decision making; citizens who are to play an active role in a democratic country; business, to support investment and marketing strategies.

In order to satisfy these needs of information the Statistical Committee of the Russian Federation needs assistance, in particular concerning the following aspects:

-improvement of the legal and administrative framework;

-achievement of legitimacy and credibility;

-use of international statistical standards and methods;

-improvement of co-operation and co-ordination among public administrative bodies;

-obtaining adequate resources, especially in terms of manpower, management and equipment;

-adopting a new professional approach, able to meet the challenges of a market economy and of the needs in information of a democratic society;

-creating a modern technological infrastructure enabling to work in new conditions.

1.3The results achieved

The present project builds upon the results achieved during the first co-operation period.

In the paper introduced at the high level seminar in St Petersburg in September 1996, the work undertaken by Goskomstat is summarised as follows: “The first stage of statistics restructuring was carried out on the principle of maximum pooling of resources in the most important and fundamental areas. This led to a new definition of the set of statistical indicators that most adequately reflected the changing aspects of the Russian economy. Likewise it resulted in the creation of a Single State Register of Legal Entities and Independent Sub-Divisions and a Single Nomenclature and Codifying System for all technical-economical and social data.

Aggregated social indicators were elaborated (employment, wages, standard of living and so on), as well as aggregated economic accounts, macro-economic and financial indicators (prices, industrial production, balance of payments, state accounts, and so on), all of which are crucial factors in managing the economic development of the country.

The State Programme, however, did not resolve all the problems; above all, it did not tackle the basic principles underlying the system of collection, processing, aggregation and analysis of data”.

In particular the following concrete results have been achieved within the framework of Tacis technical assistance:

-statistical classifications: the classification of kind of activity was elaborated, based on codes and groupings of NACE. EC product classification (PRODCOM) and classification of activity and products (CPA) were translated into Russian in a coordinated way;

-business registers: the basic principles of the EGRPO (Unified National Register of Enterprises and Organisations) and of its use for statistical purposes have been set in the light of the information received through exchange of consultations with France. The creation of a system of information on enterprise demography on the basis of EGRPO is underway.

-business statistics: A strategy on small and medium enterprises has been defined and a survey on small enterprises has been implemented. Presently the Goskomstat of Russia is passing to a structural approach to the statistical observation of the activity of economic units, independently on the production sector and enterprise size. Methodology of sample surveying of small enterprises has improved, in particular with relation to the creation of mathematical and statistical tools for computing and estimating enterprise non-response, which will be used for data processing, starting from the first quarter of 1988.

• Russian experts have elaborated methods for index calculation in industry statistics, a first index of orders received has been produced. Questionnaires for further surveys have been prepared and seasonal adjustment has started.
• in construction statistics, a project for the creation a register of dwellings in construction has been worked out. It will be introduced by the Ministry of Construction of Russia;
• in transport statistics quarterly surveys on road transports are undertaken, their results are regularly published;
• in wholesale and retail trade, forms of annual statistical observation of internal trade have been developed, a methodology and software for surveying small trade companies has been worked out, as well as the first draft questionaires for the census of wholesale trade organisations.

-agricultural statistics: Recommendations on the organisation of statistics on food production, food product consumption, agricultural productions sales according to international standards have been finalised. A programme for the sample survey of the market of agricultural products was worked out. The works for the publication on “Agriculture in Russia” were launched.

-business tendency surveys: In 1995, the Centre of Economic Analysis has carried out four business monthly surveys in industry with harmonised methodology. Results are available

-labour cost. the software for processing information was defined, as well as the technology for the organisation of surveys at regional level.

-labour force: Questionnaires have been prepared for the quarterly labour force survey, sampling methodology has been defined;

-demographic statistics: A study "Sources of Information on the Population of Russia" has been published.

-foreign trade: Eurostat regularly receives Russian customs statistics dataMethodological recommendations have been worked out for the estimation of “shuttle” import. Co-operation between the Customs Administration and Goskomstat has improved. A large group of experts from the Customs administration, and key people from Goskomstat, the Ministry of Foreign Economic Relations and the Central Bank of Russia have been trained on main aspects of Customs statistics in Europe.

-In informal economy, a first assessment was made of the possibility to use Italian methods in the Russian conditions. Questionnaires and surveying programmes to undertake two sample surveys (on household and small enterprises) in one region of Russia were prepared.

-library and dissemination of statistical information: Russian experts became acquainted with the use of modern technology in producing statistical publications and the use of international data banks. Russian experts have been trained in modern library management. An information centre opened to the public has been organised. A quarterly statistical bulletin “Current Statistical Survey” has been launched, the content of a joint publication with Eurostat has been defined and an agreement with Eurostat has been achieved for exchange of data. Russian experts have been trained in modern library management in Finland. The Goskomstat of Russia started to disseminate statistical data and to deliver statistical information to a number of EU countries

-Research & Development: A database on R&D institutions was created. Statistical models for monthly forecasting of employment and average salaries in the R&D sector have been made for possible use in budget planning and decision making. Information on surveying R&D in higher education sector was obtained. First publications in English and in Russian according to international standards ("Science and Technology in Russia, 1994"; "Russian Science and Technology at a glance 1994", first directory of R&D institutions in Russia, pocket data book “Russian Science and Technology at a glance, 1996”) have been published. A pilot survey on government R&D funding and a pilot survey on innovation statistics have been implemented.

-Russian methodology for the observation of prices in conditions of low rate inflation has been thoroughly assessed and discussed.

-reorganisation of regional statistics: on the example of the region of Nizhni Novgorod a questionnaire was prepared for the regular analysis structural aspects of enterprise activities.

2.The Goskomstat of Russia: an institutional appraisal

2.1The Statistical Committee

Goskomstat of the Russian Federation employs just over 500 staff in the head office in Moscow but most of the statistical work is carried out through the 88 regional Oblkomstats and over 2,000 local offices. It has a number of associated organisations including the Institute for Statistical and Economic Research, the Computing Centre and the Centre for Economic Classifications. A Publication Centre was formed recently to enable the Goskomstat to enlarge the dissemination of its products both on paper and electronically and to publicise its work via the Internet. There are also educational institutions with which Goskomstat works closely.

Goskomstat is responsible for preparing statistical data for the President and Government of the Russian Federation, the Federal Assembly, and the State Duma, federal bodies and international organisations. It is also charged with providing all users with equal access to publicly available data in a variety of formats.

Goskomstat administers some 700 forms for data collection and carries out statistical surveys in the form of both censuses and sample bases. Additional statistical observations are conducted at the regional level for the governments of the oblasts and republics.

A federal programme for the reform of statistics between 1997-2000 has been defined and approved by the Government in November 1996.

The new draft law on the state statistical reporting has been prepared for a second submission before the State Duma.

Organisation charts of statistics in Russia and of the Statistical Committee is given on the next pages.

2.2Technological environment

In 1992 an in-depth restructuring of the computing plan was undertaken in order to migrate from a purely mainframe system to a system based on personal computers linked in local area networks and on PC, both in the centre and in the regions. It is expected that the migration will be concluded within 1998.

During the first 4 years, the Goskomstat has installed more than 3000 PCs and network equipment, telecommunication means and modem at the regional levels for transmission of data and electronic exchange of information.

The hardware presently used are 386, 486 PC’s not powerful enough to run modern software and their number covers 65% of the needs in the central office.

The system has been further developed within the framework of a project called “Technology” which foresees the needs for statistical computing until the end of 2000.

The system foresees a combination of local area networks and mainframes. Fifteen computer centres will be established on the territory of Russia, but the federal budget will hardly be able to cover its costs.

2.3Strengths, Weaknesses, Opportunities and Threats (SWOT) of the Goskomstat

Strengths
- Clear definition of a reform programme
- Sound theoretical qualifications of staff and openness to changes
- Concrete progress, at international level, in a number of statistical areas
- Improvement of the coordination of international cooperation through the Goskomstat Commission on International Cooperation (chaired by the Goskomstat President)
- Relationships with other organisations (Computer Centre, CEC, Customs Committee)
- Good basis for statistical enquiries (business register)
- Quick production of results
- Wide range of publications
- Large regional organisation
- Independent state statistics / Weaknesses
- Inadequate processing equipment
- Insufficient training of staff in use of PCs, especially at regional level
- The needs of users are not enough taken into account in medium term planning
- The burden on respondents is still high
- Dissemination does not rely enough on modern media
Opportunities
- Better understanding of customers’ needs
- Greater openness and accessibility
- Availability of cooperation support from national statistical offices and international organisations
- Readiness of the administration to support regional statistical institutions / Threats
- Shortages of the federal budget
- Low pay in comparison with the private sector
- Costs of sustaining regional organisations
- Competition from data analysts from the private sector

3.Problem analysis

Whilst the basis of Russian statistical practice is in many respects well-established, Goskomstat still needs to make many improvements in order to make the transition to international standards and to achieve comparability with best practice in developed economies. These changes will take time, and the reductions in budget allocations for statistics may make the necessary improvements more difficult to achieve.

 A system of classifications comparable with international classifications has been developed but comparability of statistical data does not exist at inter-bodies, interregional and interstate exchange. An interface for users of the classification system does not exist.

 The system of indicators in Europe and in Russia does not always correspond. A number of areas which under new economic circumstances need more careful monitoring are not sufficiently covered by statistical inquiries. Basic data, necessary to support decision making in the economic and social sphere at national and regional level, are not always easily accessible for the users.

 Although basic methodologies needed for market economy have been carefully studied by Russian statisticians and are being introduced in the statistical practice, they need being more and more compatible with the new forms of economic activities created in the country. The business register should become a basic instrument to organise business statistics, whereas new methods of statistical observation of social statistics should be established to monitor the changes on the structure of society.

 The demographic situation of Russia underwent important modification as well and is complex. The present system of demographic monitoring does not allow to have sufficiently detailed and timely information. The system of demographic analysis and forecast should be improved on the basis of modern methodology and technology.

 The old system of regional statistics is not anymore compatible with the new forms of regional development. A system of macro-economic indicators has to be put in place, taking into consideration the needs of information to support a sound policy of regional development.

 The implementation of the programme of reform of statistics can only take place in an adequate technological environment organised according to a coherent computing architecture. As described at point 2.3. the technological environment of the Goskomstat of Russia is obsolete and inadequate to meet the challenges of a modern information society.

 Although the number of publications produced by the Goskomstat has increased during the last few years and their presentation has become more attractive, the statistical information made available by the Goskomstat does not satisfy the users requirements. A marketing and dissemination policy is needed taking into consideration computer products.

 Although Goskomstat staff has a good theoretical background, the training they received was meant to serve a centrally planned economy. This applies not only to the methodological and technical skills, but also to organisational and managerial skills where the process of decision taking in public administration, according to the law coming into force from 1 January 1996, requires that public officials be able to analyse the current state of affairs, forestall the negative trends and make right decisions in due time.

Delays in the approval of the statistical law may cause delays in the implementation of the statistical reform and create gaps in inter-institutional relations.