Download (BPM6) and Fourth Edition

CARICOM TRADE IN SERVICES
STATISTICS (CTIS)PROJECT
June-December 2016
Regional Training Workshop
November 21 to 25, 2016
by
Lucilla Lewis, Lead Consultant
BPM6
BOP Accounts
CREDIT
DEBIT
BALANCE
Current Account
100,000,000
150,000,000
(50,000,000)
Goods
Services
Primary Income
Secondary Income
Capital Account
500,000
+500,000
Gross acquisition/disposal
of non-produced
nonfinancial assets
Capital transfers
Financial Account
200,000,000
100,000,000
+100,000,000
Overall balance
300,500,000
250,000,000
+50,500,000
Changes in Reserves
-50,500,000
BPM6

The Formula:
Current account + income account + transfers
+ capital account + financial account = change
in reserves
Any difference is entered as errors and
omissions
• Basic accounting principle:
To every credit is a debit; so the BOP must
balance.
BOP CONCEPTUAL
FRAMEWORK
Transaction- exchanges or transfers
 Valuation
 Classification
 Resident/nonresident

BOP CONCEPTUAL
FRAMEWORK
MSITS is based on BPM 6 and is
consistent with SNA 2008
BBM6 Concepts and Definitions
Resident Nonresident

One year cut off
Valuation
of transactions
Market price
Gross basis
BOP CONCEPTUAL
FRAMEWORK
Exchange rate at time of recording
Time
of recording
Accrual basis
Difference
between provision of services
and provision of labour
BOP CONCEPTUAL
FRAMEWORK
Services
between related partiesnecessary to give full picture of the extent
to which gobalisation of services supply is
taking place (provides data for compiling
statistics on movement of natural persons
BOP CONCEPTUAL
FRAMEWORK
Statistics
by trading partners- to inform
bilateral and multilateral trade in services
negotiations; mirror statistics and quality
checks
Outsourcing- contracting another
specialist company to provide services
that were previously provided internally.
Eg.??
BOP CONCEPTUAL
FRAMEWORK
Balance
of payments trade in goods and
services vs. International Merchandise
trade statistics – adjustment necessary for
compiling FATS variable
 adjustment to convert imports to FOP
already reflected in the BOP, through service
entries against sea transportation and freight
insurance
BOP CONCEPTUAL
FRAMEWORK
BOP Travel
vs. IRTS 2008 and TSA RMF
2008
Significantly the breakdown by tourism
characteristic products is now required in the
BOP
Main differences continue to include:
Medical tourism
Education tourism
Seasonal and border workers
BPM6:IIP

The IIP is a statistical statement that
shows at a point in time
◦ the value and composition of financial assets
of residents of an economy that are claims on
nonresidents, and gold bouillon held as
reserve assets;
◦ and liabilities of residents of an economy

The net IIP can be positive or negative
BPM6:IIP by Functional Category
IIP
Beginning
of Period
Assets
Direct
Investment
Portfolio
investment
Financial
derivatives
Other
investments
Reserve
assets
Liabilities
Direct
Investment
Portfolio
investment
Financial
derivatives
Other
Financial
account
transaction
s
Other
changes in
volumes
Exchange
rate
changes
Other price
changes
End of
Period IIP
Definition of FDI
•
•
•
According to BPM6: A direct investor is an
entity or group of related entities that is able
to exercise influence over another entity
that is resident of a different economy.
FDI reflects the objective of gaining control
or a significant degree of influence by an
entity in one economy over the management
of an enterprise resident in another
economy
FDI is usually a precondition for
establishment of commercial presence
How are control and significant
degree of influence determined

When the direct investor owns equity
that entitles it to 10% or more of the
voting power in the direct investment
enterprise
The FDI Universe
FDI: the direct investor makes an international investment to
obtain control and a lasting interest in an enterprise abroad
Country A
Direct
investor
Country B
Owns >10% shares, voting power or the equivalent
Direct investment
enterprise
between 10 and 50%
FATS
more than 50%
wholly or jointly unincorporated enterprise
individuals
enterprises
associated groups of individuals/enterprises
governments...
www.bea.gov
• Associate
• Subsidiary
• Branch
Classification of direct investment
enterprises
For both inward and outward FDI the enterprise
should be classified by its industrial activity in the
host country and by the industrial activity of its
direct investor where possible. (Outward FDI
flows may be of more interest to some member
states than to others)
 For both inward and outward FDI compilation by
country of origin for the former and country of
destination for the latter is extremely critical for
especially for assessing movements of capital
intra common market members e.g. within CSME,
from other trading blocs e.g. EU CARIFORUM
members, CARIBCAN, CBI and with other
countries

TYPES OF DATA REQUIRED FOR
FDI STOCKS AND FLOWS include
1)
Direct Investment Income
1) Interest
2) Dividends/distributed profits
2)
Direct Investment Transactions (capital flows)
1) Equity (flows)
2) Reinvestment of earnings (which is ultimately
included in the capital stock)
3)
Direct investment Position (capital stock)
1) Equity
2) Reinvested earnings
3) debt
END OF SECTION