National accounting in underdeveloped countries with special reference to Thailand
Date
1966
Authors
Panitpakdi, Prot
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Abstract
Prom the "beginning in the welfare use of national
income estimates, national income and expenditure accounts
have increasingly come to "be used as an aid to the study
of past performance of the economy, short-term economic
analysis and forecasting, and long-term economic planning
and policy formulation.
The introduction into underdeveloped countries of
simple national income estimation or more complicated national
accounting technique has met with a number of conceptual
and statistical difficulties.
The first conceptual problem is concerned with the
meaningfulness of the national income concept in primitive
areas where the mobility of conmodities and factors of production
is limited, resulting in an imperfect national price
system. It can be argued, however, that this imperfection
is a matter of degree and does not in most underdeveloped
countries invalidate the task of estimating national income.
The next problem is that of subsistence production
and its valuation. This raises two further questions. The
first is where to draw the boundary of production. For a
number of reasons, it seems desirable to exclude rural,
as well as urban, household services. The treatment of the
rest of subsistence output will in practice be dictated mainly "by the availability of data. The question of imputation
is a complex one and involves such problems as the
propriety of using any market price at all for valuing nonmarketed
output, and the choice of the appropriate market
price to use.
It has also been contended that Keynesian conceptual
distinctions between production, consumption, saving, and
investment do not apply to non-specialised agricultural economies.
The main answer to this argument is that the validity
of conventional concepts depends largely on the extent and
effectiveness of the linkage between the monetary sector
and the (partly) subsistence sector in each underdeveloped
economy.
Statistical problems of national accounting in underdeveloped
countries centre on the scarcity of reliable basic
data and the shortage of skilled statisticians and national
accountants. Some difficulties in obtaining reliable data
seem also to be inherent in the nature of underdevelopment
itself.
The spread of national accounting practice in underdeveloped
areas is due mainly to the efforts of U.N. and a
few other international agencies. The usefulness of national
accounts in these areas is impaired by the imperfection of
estimates available.
It has been argued also that an aggregative analysis,
as opposed to a commodity or sectoral analysis, is not
suitable to the need of an underdeveloped primary producing economy. The validity of this argument may he admitted with
the qualification that an integrated national accounts system
is always worth aiming at, if only to provide a useful general
background for economic analysis and forecasting.
Further, some form of disaggregation of the system seems to
he required for purposes of hoth short and long-term planning.
The cost of a national accounts project depends on
how much is to he done, which in turn depends on the availability
of data and the need for national accounts statistics
in the country concerned.
In Thailand, the place of the National Income Office
in the government hierarchy is such that its successful
operation is dependent upon its ability to maintain a close
working relationship, not only among its own three divisions,
hut also with other government departments, particular the
National Statistical Office.
The work of NIO is at present concentrated on the estimation,
in some details, of gross domestic product, private
and government consumption expenditure, and gross domestic
capital formation. No attempt has been made to prepare an
integrated national accounts system on a regular basis
although available data seem to be sufficient for the purpose.
A detailed examination of the present sources of data
and methods of national accounts estimation in Thailand reveals a serious weakness in statistics concerning the
manufacturing, wholesale and retail trade, and services
sectors. A few other industries e. g. construction, private
transport, and fishery also need more reliable benchmark
data.
Evidences indicate that the official estimate of gross
domestic fixed capital formation is probably overvalued and
that of gross domestic product is undervalued, resulting in
a high investment ratio. It is also likely that private
consumption expenditure is underestimated.
NIO has regularly accompanied its publication of national
accounts estimates by an analysis of past performance of the
economy. Projections of gross domestic product and capital
formation are also made by the National Economic Development
Board as part of the six-year economic development plan.
Owing to the fragmentary nature of estimates available,
however, these analyses and projections cannot give an integrated
picture of the structure of the economy and its operations.
It is considered that at least for two main reasons it
is desirable for Thailand to possess a more disaggregative
form of national accounts than that presented by the U.N.
standard system. The first reason is the increasing importance
and complexity of the secondary and tertiary Sectors
which indicate the growing need, for purposes of short-term
commodity analysis, for data on inter-industry and intersectoral
relationship within the economy. The second is the help that a disaggregative system of accounts can give to
the government's long-term development planning.
A sectoral-cum-national accounts system is therefore
proposed as a long-term project for Thailand, taking into
account the availability of data and the need for national
accounts statistics in the country. The proposed system
is then illustrated with a set of figures based as far as
possible on actual data. The aim of the illustration is
twofold, namely to demonstrate the feasibility of the system
and to indicate the extent to which it can be drawn up from
data currently available. The illustration appears to confirm
the feasibility of the system although limitations of
data in certain fields seem to rule out any attempt, at least
in the near future, to disaggregate the production sector
thoroughly.
An examination of recent budgets of the Thai Government
and the National Statistical Office, together with the existing
NSO Ten Year Statistical Improvement Programme, suggests
that additional costs of statistical enquiries required to
fill in the major gaps in information are well within the
financial capability of the government.
At some future time when more data are forthcoming to
complete the full system proposed, the matrix form of
presentation will be more preferable to the accounting form
and will also facilitate analysis with the aid of the
computer.
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