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THE REAL SITUATION ON DATA SOURCE OF NONFARM INDIVIDUAL BUSINESS HOUSEHOLD
SURVEY AND INFORMAL SECTOR for COMPILING
GDP IN VIETNAM
By Nguyen Van Nong
Deputy Director,
SNA Department
General Statistics Office,Vietnam
Content:
I.
II.
III.
IV.
Overview of the non- farm individual business
household survey in oder to compilate SNA
Vietnam.
Real situation on operation of non-farm individual
business households from the results of survey.
Several existing problems of using data sources to
estimate output and value added for the informal
sector based on the survey result of non-farm
individual busines households ( units) in Vietnam.
Action plan of data source collection and
compilation of output and value added of the
informal sector for extral estimation of GDP in
Vietnam.
I. Overview of the non- farm individual business
household survey in oder to compilate SNA Vietnam.
1. Necessary and importance of the non- farm individual business
household survey
If comments only on the informal sector, up to now in Vietnam,
there has not been a limited special survey of the informal sector
for estimating GDP.
Nevertheless,In Viet nam, along with aggriculture, forestry and
fishery households (farm households) sector, non-farm individual
business households (units) contribute an important part of
Vietnam’s economy. Non- farm individual business sector is a
speciality of Vietnam’s economy, they have been in operation for
a long time, significantly contributed to economic development,
generated millions of jobs, reduced poverty. There are about 72%
number of business non-registered units and 50% of value added
in non-farm individual business sector.
I. (Continue….)
With above-mentioned importance on December 1st every
year, the General Statistics Office carry out the survey to
collect information about the result and expenses on
individual business establishments (households) in all
economic sectors in the country (except agriculture, fishery
and forestry sector) in order to:
- Provide the basic information to consider and estimate
statistical indicators and its major as: Gross output,
intermediate expense, value added of individual business
households as well as informal sector.
- Meet the requirement to serve management, planning
and policy development production, business of non farm
individual business households of all levels and sectors.
I. (Continue….. )
2. Scope of Survey: The survey is carried out over 63 cities and
provinces. However, this survey collects samples from general
survey on basic economy and administration, so the scope is
limited.
3. Units of Survey: Units of Survey are non-farm individual business
households, include following criterions:
- Run business and production activities, service providing in all
economic activities and sectors ( except agriculture, forestry, and
fishery sector) ;
- Belong to owner, a group or a family; non-registering business
sectors ( households);
- Have definable place;
- Operate continuosly or in seasonal period or business habits.
4. Survey methodology: Direct survey: Interview owners or
managers of individual business households and units to get
information and fill in survey questionnaires.
II. Real situation on operation and data source for
estimating GDP from the survey result of non-farm
individual business household sector
The statistical survey data in the year 2007 has reflected the
business and production results as well as the development of
non-farm individual business household sector as following:
1. Number of non- farm individual business household
sector:
1.1 The survey result of table 1: has shown that number of
non-farm individual busines establishments (units) has
increased from 3.05 million ones in 2005 to 3.75 million ones
in 2007.
Comparing with the perious year, in the year 2007 the number
of individual business establishments (units) is 13.6% higher
than 2006. If we purely consider the quantitative aspect, the
number of individual business establishments ( units) in many
time higher than number of enterprises operating at the same
time 2007 year ( 3748138/ 156000)
II. (Continue….. )
1.2 The allocation of non-farm individual business establishment
( units) in urban, rural:
Grasp 1a: Allocation establishments Grasp 1b: Allocation establishments
is industry, construction sector
is trade, services Sector
20%
49%
51%
80%
Urban area
Rural area
Urban area
Rural area
II. (Continue….. )
The statistical data by year also shown that the picture on
the allocation of non-farm individual business establishments
(units) in urban, rural, 8 geographical economic regions and 63
provinces/cities. According to the survey results, about 42.9%
of non-farm individual business establishments ( units) located
in urban area while 57.1% of them operates in rural areas.
From the allocation of individual business establishments
(units) by economic industry ( pleasely refer to the chart 1a
and 1b). It shows that up 80% of non-farm individual business
establishments ( units) operating in industry and contruction
sector located in rural area; 51% of individual business
establishment ( units) operating in trade, service sectors
located in rural area, that it shown the success of economic
development strategy of Vietnam “ leaving agriculture but not
leaving native land”.
II. (Continue….. )
2. Labour in non-farm individual business households sector.
- Grasp 2: The number of employees working in non-farm
individual business households sector
person
7000000
6000000
5000000
400000
0
3000000
2000000
1000000
0
2005
2006
2007
year
II. (Continue….. )
According to survey result, the number of employees working
in non-farm individual business households sector is quite high,
which has constantly increased for 3 years, from 5.58 million in
2005 to 5.76 million in 2006 and 6.5 million in 2007. In 3 years
period ( 2005-2007), the number of employees increased by nearly
1 million persons.
3.Capital sources, assets and turnover of individual business
household sector.
According to the survey results, capital sources and assets of
non-farm individual business household sector as of september 1,
2007 is VND 242 billions ( equivalent to 20.6% of GDP)of which,
fixed assets is worth VND 150.4 billion, share 62.15% of capital
soures, liquid assets is VND 91.6 billion, share 37.8%. Average
assets/ establishment ( units) is VND 64.6 million, average
assets/employees is VND 36.7 million.
II. (Continue….. )
Capital sources, assets in non-farm individual
business households mainly concentrate in service
sector, the data in the table 2, nearly 83% of total
capital is for the investment in service sector, while
only 17% is for material manufacturing sector.
With regard turnover, the total turnover created by
non-farm individual business household sector in 2005
is VND 439,364.2 billion, of which: service sector
shares 66.6%; in 2006 is VND 479,541.3 billion, of
which service sector shares 67.9%; in 2007 is VND
672,087 billions, of which service sector shares 60%;
average turnover per establishment ( unit) in 2007 is
VND 179.3 million/establishment; average turnover
per employee is VND 101.9 million.
II. (Continue….. )
4. Basing on the survey results of non-farm individual business
establishments (units) to estimate GDP of individual ( household)
sector by the kind of economic activity as belows:
According to the data in the below table 3:
Value added created by individual sector ( including agriculture,
forestry and fishery sector) accounts for 29.68% of GDP in 2006,
30.28% GDP in 2007 and 31.1% of GDP in 2008; of which nonfarm individual business household sector ( industry, construction
and service sector) accounts for nearly 15% of GDP in 2006, 14%
of GDP in 2007 and 13.5% of GDP in 2008 and 52.14% in 2006,
47.48% in 2007 and nearly 43% of the individual sector in 2008.
The movement in non-farm individual business household sector
is from industry and construction to trade and service. Value added
created by trade and service sector account for 49.34% of nonfarm individual busines household sector in 2006, increased
52.42% in 2007 and 57% in 2008, while industry and construction
sector has continuosly decreased year by year ( in 2006 is 50.66%,
in 2007 is 47.58% and in 2008 is 43% of non-farm individual
business household sector).
III. Several existing problems of using data sources to
estimate output and value added for the informal sector
based on the survey result of non-farm individual busines
households ( units) in Vietnam
.
Beside achieved results, some existing prolems of estimating Gross
output and Value added for the informal sector in Vietnam are
summarised as belows:
1. In non-farm individual business households ( units) survey, there are
problems of informing of false turnover and cost of production to
avoid taxes and payment of social security, or registration of
business for hiding illegal activities or production of a mumber of
products different from the number allowed to be produced, for
instance, publishing houses produce an excess of publication, units
exploit more wood than what is permitted and don’t record….etc…
these isues, now, there is not any reasonable basis and adjustment
method for data included in GDP.
2. Production by military forces for own final consumption or assistant
to local goverment and habitants or support in cases of natural
disaster or service accidents do not estimated in GDP.
III. (Continue….. )
3. Production by prisons or re-education camps. Every year, these
units also make a significatant amount of products for own final
consumption and sale in markets also don’t including in GDP.
4. products of activities of farm households such as gathering,
picking and processing in the form of making soft noodles, cakes,
fish sausce,… for service and own final consumption are not fully
estimated.
5. GO, VA of other own –account production such as construction
and repair of owner- occupied dwelling, contribution by habitants
of building small rural public structures such as irrigation works,
roads, schools, ..etc… are not fully recorded.
6. Series of other activities by farmer are moving to cities, town to
work during period of non-season agriculture activities. Activities
which farmers usually do are simple and hand-made works, trade
of refuse materials, street vending, transportation of goods and
passengers by motobicycle,..etc,.. Number of these kinds of labor
and their income are not official recorded.
IV. Action plan of data source collection and compilation
of output and value added of the informal sector for extral
estimation of GDP in Vietnam.
1. Deeper study in type, scope, calculation method and
mobilization of essential statistics data on the informal
sector is very crucial for not only enough evaluation of
GDP but also request of enhancing gradually capacity
and davelopment of Vietnam National Account Statistics.
2. Checking through the remaining activities and sectors
not covered in GDP.
3. Setting up and re-organise the information sources,
restructure other branch statistics to meet better data
collection requirement of the informal sector and SNA.
IV. (Continue….. )
4. According to the Decision of Vietnam goverment,
begining from year 2010, with cycle every two years the
General Statistics Office will be conducting surveys of
all activities of informal sector in the whole country.
5. Implementing some other special surveys for SNA in
fields of estimating quarterly GDP by final expenditure
approach, building major coefficients on intermediate
consumption and VA of base year for compiling Goss
output, Value added of informal sector and other
sectors.