UNITED NATIONS NPI HANDBOOK

Transcription

1 UNITED NATIONS NPI HANDBOOK test report thailand

2 Report on Testing the Handbook on Nonprofit Institution in the System of National Accounts The Case of Thailand The report on testing the handbook on nonprofit institution in the system of national accounts submits for the Global Nonprofit Information Project. The objective of this report is to provide information about nonprofit institutions accounts and data available at the office of the National Economic and Social Development Board and National Statistical Office. The content of report and its sequence are presented in accordance with the REPORT GUIDE given by the project team. The report is produced from discussion among concerned NESDB staff, NSO staff and the regional expert in national accounts from ESCAP. General background 1. System of national accounts in Thailand National Income Accounts of Thailand has been compiled and released annually for more than 40 years. From time to time, several attempts have been made regularly to improve the quality of data and timeliness. At present, the accounts were estimated with a consistence among the three approaches; production, expenditure and income. Constant prices are compiled for production and expenditure, which now it has 1988 based year. Recently, quarterly Gross Domestic Products (GDP) were also developed and now it could be released on quarterly basis, with a time lag of 11 weeks after the reference quarter. The estimations, underlying the Special Data Dissemination Standard of the International Monetary Fund, are focus to production and expenditure approach. The quarterly GDP are partially compiled using available indicators, which are different from those used in the annual estimates. The special technique, so called the Deaton lease square technique, is applied to pertain consistency among quarterly estimates and annual estimates. The system of national income accounts is based on a mixture of 1953 and Generally speaking, most of definition, valuation are followed 1968 SNA, the structure of presentation is, however, based on 1953 SNA. Apart from National Income Accounts, Input-Output Table which is compiled in every 5 years, annual Flow of Fund Accounts and monthly Balance of Payment are also constructed which most part are conceptually consisted to national income accounts. The first two accounts are conducted by the Office of National Economic and Social Development Board (NESDB) whereas the latter is estimated and released separately by Bank of Thailand. In addition, part of National Balance Sheet, capital stock figures, have also estimated based on the PIM method and it is released occasionally by NESDB. Basic data sources for National Income Accounts are obtained from both survey data and from administrative records, which are collected from various organizations. Financial statements of all private companies in the Stock Market of Thailand are also used to estimate income and expenditure of corporations in the context of national income accounts. Among all these sources, National Statistical Office (NSO) plays 1

3 crucial role in supplying data and statistics from census and survey with sufficient details that could be responded directly to the purpose of national accounts estimates. Nevertheless, NESDB have regularly conducted special surveys to collect data for its own use, in particular, to collect data for input output coefficient estimates. In addition, spot check surveys were also conducted temporally by NESDB to collect additional data or some parameters that are considered necessary to be incorporated to the survey data or administrative records for national accounts estimations. 2. Institutional accounts estimates Since the present system of national income accounts is still underlying the 1953 SNA, it is far from institutional accounts estimates. Fairly speaking, institutional units in the existing system can be classified into public sector in which comprises public sector and private sector. Public sector is considered as economic entities which belong to general government, local governments, state enterprises, government funds and independent organizations of which financial are financed intensively by government. Private refers to financial and non-financial production legitimate units and individual proprietorships. Regarding to 1993 SNA implementation plan at NESDB which was embarked in 1998, institutional economic sectors were initially attempted to estimate, institutions by institutions. Among all five institutional sectors in the account structure, government sector accounts was the first account which was already developed in The standard sequence of accounts underlying 1993 SNA in this sector, except its balance sheet, were accomplished and preliminary results had already informed to the public in the seminar in Following the government accounts, financial sector accounts was compiled in In this sector, since the commercial banks is the most important part which is accounted for larger than 80 per cent of total of the financial sector, the full sequence of the accounts, again except balance sheet, was constructed first. An estimation of FISIM, the new technical term for measuring gross output of financial institution was intensively concentrated and was tried to develop. Some technical problems and difficulties, for example inclusion of non-performing loan was found in this trial. International recommendations in this institutional sector still required in order to bring about standard treatment and valuation in national accounts. Supply and Use Table was also constructed in order to make use as supportive tool to investigate what causes an error between total demand and supply and its component. In this year, non-financial sector accounts are being developed and data collection are underway. Next year household accounts are expected to construct In the meantime, encouraging basic data sources to produce new data and statistic in response to the account requirement have been made. Nonprofit institutional serving household accounts are planned to develop at last when the first four institutional economic accounts have already achieved. This is because, due to data limitation in the sector, it may need to estimate some part of the account basing on residual of total economy. 3. Experience in NPI In fact, part of some NPI institutions have been estimated and already included in the present system of National Accounts. NPIs that were conducted by NSO have been already included in our national accounts, it is an item or activity in the service sector on 2

4 the production side. Whereas, its income has been recorded in the income side and fee of membership of labor union has been included in household expenditure. Moreover, some NPIs which are not covered in the frame of NSO have been also estimated depend on its significant and data available. For example, Thai Red Cross institution which is regarded as a crucial NPI in the country, all accounts are estimated. Production is implicitly estimated and included in the health activity. This is because the gross output of aggregate health care sector are estimated as an aggregate item using a number of patients in nationwide. Income and expenditure of Thai Red Cross are collected directly from reports of the institutions. Unlike the Thai Red Cross, accounts of Buddhist temples are estimated partly. Cremation that is an important part of temple has been already included in all accounts. The value of new constructions Buddhist temple are estimated and included in gross fixed capital formation whereas there is no estimation of temple itself in all accounts. In this case, bridging the accounts in the institutions could not be achieved. It seems far progress in data collection for NPI at NSO. Reports on NPI survey which are conducted in every 5 years time, with covering registered NPI in nationwide, are, among other sources, the most comprehensive and complete data set for this institutions sector. So far, the surveys were conducted three times, in year 1988, 1992 and Details data in the report comprised as follows 1) number of registered NPI in the country, 2) type of NPI, classified by activities and services, 3) number of employee and volunteers, 4) income and receives, 5) fixed capital and 6) assets and liabilities. The reports which are released in Thai only employed definition and valuation in consistence to SNA. Classification is, however, specially designed in response to circumstance of the country. There are 6 types of organizations namely, social welfare institutions, cremations association, trade associations, employer associations, labor unions or labor associations and state enterprise employee associations. However, NSO is going to conduct a new survey on NPI in This will cover the important NPIs such as temples and political party and other detail data which will be very useful for both NPI and NPISH accounts compilation. Reported results 1. Defining NPI 1.1 In general, definition of NPI given in the para is applicable to the Thai case. When specific details are considered, it may need, however, to clarify more details. 1.2 Refer to Private in (b) of para. 2.16, there are some point that need to be considered more. These are the following; - In the case of Thailand, some specific NPI has close coordination with government in terms of it functioning. In particular NPI, for example, auditing association, attorney association, doctor of 3

5 medicine association, these are performed implicitly as an arm of government to control or to certify quality of a member in the institution. - Some specific NPI, they perform activities, in most case, when there are a request by government. Although they do not exercise government authority but they play role as a support body of government. They can use intensively material, buildings as well as government staff from government. Most of these NPI are institutes in arm force and police. - Thai Red Cross is an example of a body that is the mixture between non-government and government. - Most NPIs which are established under the supervision of the King and the Queen of Thailand, for example, Chai Pattana Foundation of King Phumipol and Bangsai Handicraft Training Center of Queen Sirikit, these institutions have a very strong connection to the government bodies. The government has spent financial support and manpower to build up many projects which are belonged to the King s Foundation and the Queen Foundation. This is because almost all these projects aim to alleviate poverty and strengthen capability of people which government considers this is also the task of the government itself. 1.3 Refer to voluntary, non compulsory - In particular career, attorney, auditor, doctor of medicine for example, it is compulsory that all have to be a member of the association. - In almost all public school especially the second school, it is compulsory, not by law but by an announcement of the school, that the parents of their sons and daughter who enroll in the school have to be a member of teacher and parent association of the school. The associations are NPI and they run activities to support education in the school. The income of associations is received from the compulsory membership. 1.4 One issue that could make difficulty in defining NPI and non-npi is the profit and non-profit characteristic. The distinction between these two performances may apply to an institution if its basic activity can be clearly observed. On the other hand, in some non-profit institution, there is a sub-unit inside the institution which produces goods and services for profit. For example, there is a foundation in Thailand which performs main activity for development of the society. In this institution there are a number of sub-unit under the foundation of which a unit is a hospital where produces health care service which are sole in market at a price that could be considered far higher than its cost. In Thailand, there are a number of institutions which fall into this characteristic. Most of them concern to the hospital activity and education activity. In this 4

6 case, there is likely a gray area to make the borderline between profit and nonprofit to this institution. 1.5 Borderline 2. Classifying NPI - Refer to self-help group, in some specific case it could be to draw the line between development and profit. An example is Buddhist temple. It is generally accepted that all temples function as NPI due to community development. However, in some Buddhist temple, people may get together to form the group, with an encouraging of the temple, to produce commodities which are intended to sale in markets for profit. The profit will return to member of the group in proportion to their activities. - Refer to self-help group again, the cremation associations are a kind of self-help group. Members have to contribute a certain amount of money to the group and these will return to member s relative when he or she dies. In some associations, member can borrow money from the contribution and return with interest charge. In this case, it is a gray area that one may feel difficulty to draw the borderline. 2.1 It is may difficult to apply legal or registered economic activity for small labor union or club for people who come from the same hometown. It could be observed in many place like this in Bangkok that most small labor unions are place to play game such snooker and other sport that one can compete for money. Because, according to Thai Law, these kinds of sports are allowed at labor union, they need to be registered for labor association. The actual or existing activity inside is totally different. Restaurants inside these institutions may be another activity that allows owner earn income with exempt from paying tax. In conclusion, it is not so easy to make use on criterions between registered activity and existing activity. 2.2 Some activity in the item 6300 (Employment and training) may difficult to distinguish from activity in the item 2300 (Other education). For example, schools so called in Thai Sa Ra Pat Chang which refers to diversified engineering, these schools provide short period education and training for least educate and un skill people. When they graduate, they are certified by Ministry of Education. The education that they have got is rather employment and training. Ministry of Interior as well as Ministry of Industry also provides education likely this case. 2.3 Since some foundations in Thailand are registered with a wide range of activities. In some year, they may focus in one activity and after that they may change to another activity in the following years. In this case, main activities are change from time to time depending on current situation. 5

7 2.4 King Phumipol Foundation concerns to activities more than one in the classification. It is very difficult to identify which activity is the major one. 2.5 A Buddhist temple in central part of Thailand plays an important role in caring HIV people. If one classifies this particular temple in religious, it prevents spelling out the health care activity in HIV and then misleading in analysis and policy formulation. 2.6 Some NPI may have main activity that could be fall into more than one class or even one group. Association of teacher and parent in a school where primary and secondary education and higher education are tough altogether may get difficulty in categorization between class 2100 and 2200, for example. 2.7 In the country, we have a Consumer Protection Foundation. Which category should be this foundation classified into, 6100 or 6200 or ? 2.8 Some Buddhist temples in Bangkok have engaged in cremation activity. Cremation is the major source of earning to support the temple. Recommendation in classifications Regarding to classification in the handbook, I consider that NPI are only classified into group and subgroup based on activities. There are no classification in sub-institutions and classification in commodities. My personal view is that there should have further classifications in sub-institutions and commodities. I strongly recommend classification for commodities which could be considered by characteristic of commodity. My suggestions are as follows: a) NPI classified by sub-institutions, for example, - NPI serving government, - NPI serving corporation, - NPI serving household, - NPI serving community (collective), - NPI from rest of the world or from international, b) NPI classified by characteristics of commodity - NPI produce commodities which intend to sale in the market covering their cost, - NPI produce commodities which do not intend to sale in the market covering their cost, 3. Key variables and Tables 3.1 In general, variable presented in the short form seem appropriate to be applied for Thailand. Two additional variables may useful if it is possible. 1) In the market output item, Of which: donation from outside country may useful figure when one wants to observe intervention of the non-resident. 2) Final Consumption Expenditure should be classified into individual and collective. 3.2 Regarding to the existing survey data conducted by National Statistical Office, the three versions of the tables of satellite accounts could be possible to 6

8 compile. Difficulty may, however, be the estimation of FTE and volunteer valuation. 3.3 Sequence and description in the table considerably make sense. 3.4 In the case of Thailand, only a number of volunteers are colleted. Valuation to money has not yet estimated. One should consider economy-wide average wage. Since in this country, a number of labor in agricultural sector is comparatively large while wage rate is low, using average wage in the economy including agricultural sector may result in low total wage bill for the volunteer. 3.5 Structure of the tables, Regarding on existing data, table I to III are consider to be applicable for Thailand. However, in order to impute the value of volunteer labor and to estimate the non-market production of the market NPI are the main difficulty. In table II.2, we cannot find the revenue from sale of services of NPI in Thailand from NSO s data. This may imply that those NPIs could be the non-market or they only provide free services to their member. Moreover, as I stated before, it may more applicable and useful for policy formulation if NPI can be classified into those produce with price covering their cost and without price covering their cost. 3.6 For Table IV, V and VI, with the available data, we cannot compile items classifying by industries. It could be possible, however, in the future if we add them in the questionnaire form. 4. Implementation NPI Satellite Accounts Conclusion 4.1 One major issue in Thailand is difficulty in collecting population frame of NPI. Since there are various government organizations concern to NPI registers, it needs to contact these organizations to collect the frame of population. 4.2 In case of non-registered NPI, How one can deal with these institutions? 4.3 Regarding to ICNPO, it could be possible, in general, for Thailand to apply this classification. A suggestion may need to be clarified as stated before. 4.4 Since National Statistical Office has conducted NPI survey, It is not very much in collecting NPI data in other census and survey. Some related information may, however, appear in other survey where necessary, for example, donation of household to NPI can be obtained from Household Socio Economic Survey. In addition, NPI activity in Thailand is a tax exempt therefore we cannot utilize the VAT for our estimation. 4.5 As mentioned before, NSO is a plan to conduct a survey on NPI in 2002 and they intend to expand the coverage and some details in order to meet the 1993 SNA. We may take this opportunity to develop both NPI satellite account and NPISH institution. NPI s satellite account in Thailand has just been studied and partly developed by using data from NSO. Data was in 1996 which comprises 10,878 organizations. The 7

9 current prices estimation was tried first whereas constant prices may need more time to consider. The relevant CPI may be considered more appropriate one. However, this account seems workable regarding handbook on NPIs in the system of National Accounts even though some details on definition, classification and data need more clarify and consider. In general we can apply ICNPO classification. Due to time limitation and data constraint, some variables are leaved and volunteer valuation is the hard one to estimate. However, this task is very important to encourage us to meet the 1993 SNA implementation or for the development of institution sector account. 8