First Conference

First conference OF THE BANK OF ALBANIA
"Statistical information in albania"




Bank of Albania and Statistics Institute, INSTAT held in Tirana the National Conference on the statistical information in Albania on November 2 - 3, 2000.

Through the participation of a wide audience, producing and user of statistics, private business community, non-government organization, research and scientific institutions of the country, as well as guests from international institutions such as IMF, European Commission, Governors' Board of Federal Reserve, Eurostat, etc..

The conference aims:
- To make aware the executive authorities of the country, private business community and public, to extend their support for the expansion of statistical system through assessing the present situation of statistics development, the role and significance of statistical information on decision - making of the economic policies.
- To assess the information sources, types of information provided by various economic actors, their credibility degree as well as to introduce alternatives on the diversification of statistical information sources.
The most successful domestic and foreign experts of statistics field will make present a range of issues for discussion and debates, starting with the process of withdrawing and gathering information, its elaboration, the use of information technology, dealing with legal and regulative aspects in these terms.
Hoping the high level of presentations and discussions during these two days, will contribute in meeting our targets, we wish also that business representative will join our endeavors to consolidate this process, we have started together.

OPening speech of the First Conference

If the world would become smaller to a village and its population reduced to 100 inhabitants, preserving the present proportion, then:

  • The village would consist of: 57 Asians, 21 Europeans, 14 inhabitants from the West Hemisphere, both of south and north, 8 Africans.
  • The village would have 52 females and 48 mails
  • 70 of inhabitants would be of yellow color and 30 white
  • 30 persons would be of Christian religion while 70 non-Christian
  • 6 people would possess 59 % of the entire world' s wealth and all of 6 would be from the United States
  • 80 would live in houses of standard conditions
  • 70 would be unable to read, 50 would suffer from malnutrition, 1 would own a computer
  • 1 would be near to death; 1 would be near to birth

Good morning,

I just presented statistical demographic information. At first glance this interesting information may resemble a sad reality of contemporary global demography, but it represents as a matter of fact the situation of world population today: the ratios among racial and religious groups; the situation of ownership and nutrition, the education levels and demographic change.

The information may serve as a basis on which decisions can be taken in the future to improve these ratios. The above sentences could be used to begin any comment on the presented demographic statistics. However the propose of our meeting today is not a discussion or comment on demographic, fiscal, monetary and banking statistics.

During the following two days we will attend the conference "Statistical information in Alabnia" the proceedings of which I have the honor to open. The discussions will deal with the statistical information situation in Albania. This conference is the first being organized as the result of cooperation between the Bank of Albania and the Institute of Statistics (INSTAT). Let me present my gratitude on the part of both these institutions for your showed participation and interest. Let us hope the organizers of this conference will not disappoint you.

Why a conference on statistics at a time when Albania economy is encountering many more serious problems? Why is Bank of Albania at the center of such an activity and not of a conference on inflation or exchange rates? What will be the contribution of this conference to the development of statistics in Albania?

I happened to find the answers to these questions in the Economist which read: Statistics as everybody knows can be even worse than lies and demand. But they are to central bankers what evidence is to juries."

The possession of statistics and especially of reliable statistics represents a crucial condition for the compilation of appropriate financial and macroeconomic policies. This is a conclusion derived and proved by others before us. In Albania the system of data reporting, accumulation and processing is underdevelopment. The condition of statistics can be considered rueful.

The problems of statistics are related to the total lack of one or several statistics categories, the report of insufficient or contradictory data, the existence of incomplete statistics, reports beyond the deadline and a minimal publication of available data. The situation of statistical information hinders the understating of economy, prevents full analyses of this economy, renders impossible the competition of forecasts and corrupts the decision taking process. Under these circumstances the Albanian institutions, especially those that study economical matters, are encountering major difficulties in their endeavors. In figurative terms, as the Governor of the Bank of Albania, I would say that I am not entirely convinced the decisions of this institution as far as monetary policies are concerned are to be taken, by "a righteous judge who decides on the basis of firm and sufficient facts". The fact neither obtained by statistical system in Albania do nor represents a guarantee for the right decisions. This situation and difficulties we are faced with every day as generators and users of statistics were materialized in the joint effort of BoA and the INSTAT to organize this conference which will deal with this issue. No one should think that the organization of this conference will lead to a solution of all problems we have come across. Our goal is to call public's attention toward the importance of statistics for a state, an institution, a business, a family or even an individual. The conference aims to increase the awareness of all the groups which in one way or the other need statistics and it also aims to explain the necessity of investments which all assist statistics progress.

For the above reasons during the following two days the guest speakers will discuss problems related to this area. For the same reason the audience of the conference includes government officials, representatives of state institutions, businesses and academics.

Statistics in Albania has experienced a considerable development in the last few years and this is an uncontestable fact. The most important aspect of this development consists on the efforts to approximate the Albanian statistics to international standards. Many projects have been compiled and put into practice in this respect. Other projects are still in the process of compilation or realization. It is appropriate to mention the fact that IMF elected Albania as a pilot country in which the General Data dissemination System will be applied and the evaluations regarding this project have been positive. However today I would like to focus on several deficiencies of the statistical system in Albania.

Albania lacks a system of national accounts. A part of the reported data including GDP represents evaluations rather than factual measurements.
The methodologies that have been used for the measurement of several indicators are either incorrect or obsolete. A relevant example would be the measurement of CPI.
The statistical information is incomplete as far as different fractions of economy or time series are concerned. For example a considerable amount of information on fractions of private sectors is not reported; consequently data on the private sector are not available. We lack evidence on a large fraction of our economy. The same problem that of incomplete data, is present in the time series which dates back in the beginning of 90's.
The statistical information is "locked in safe". Many indicators or data are not being published. Even those that are made reach a limited public or are published at a date when they are not longer useful.
The degree of information exchange is low. If I were to use mathematical expressions: "This affirmation holds true for public and private sectors, for public institutions and individuals. In other words this affirmation hold true in the whole population". It is not an exaggeration to claim that several institutions refuse to disclose their data even when they do not qualify as confidential. On the other hand the private sectors and individuals display lack of trust in the declaration of their data to INSTAT or other institutions which bear the legal right to the data collection. The collaboration of the above mentioned clients in these statistical observations is almost minimal even when confidentiality is guaranteed.

The deficiencies mentioned above restrict our vision of the situation of Albanian economy since entire fractions of this of this economy are left out of the picture. The deficiencies also distort the vision of those parts of economy that we can measure and unfortunately this situation is detrimental to all.

First, the government and public institutions can not obtain the necessary information for a complete and correct assessment thus lacking the conditions for right and useful decisions.

Second, private business in Albania is encountering decisions that can be harmful. At the same time the private business in Albania lack the necessary means to analyze the environment and to develop successful enterprises.

Finally the activity of every family and individual may be restricted for insufficient information thus they may end up forgoing many profitable opportunities.

We could mention many other deficiencies and problems. The speakers in this conference will help create a fuller and clearer vision. They will also come up with useful and rational proposals that can improve the situation. I would like to focus on three elements which I deem important in the efforts to improve our statistics.

ü Investment in the field of statistics. We are aware of the requests for increased foreign, private or public investments. At the moment a serious investment especially on the side of the government is necessary in the field of statistics. The development of statistics should be included in the list of priorities.
ü Transparence in the reporting of statistical information. A need for increased publishing and reporting of the data arises at the moment. The data should also be made available to a greater number of users.
ü An increased education of the subjects that provide the information. Individuals, businesses, any other subject need to understand the usefulness of information disclosure. Rather than being harmful the information disclosure can help these subjects make better decisions.

At the end of speech I would like to thank the audience for the attention and I also invite the participants to discuss their opinions and present rational proposals for the development of statistics. Every contribution on your side is welcome and useful.

Thank you!

Dr. Shkelqim Cani

Compliments for the Conference

Dear participants,

It is a most valuable thing, finally is being held this national conference on the subject: "Statistical information in Albania". I thoroughly hope that it reflects the will and efforts to analyze the statististical information in its depth and content, by depicting the problems, and to define the ways for their solutions, for increasing statistical reliability, for introducing new technologies, raising the number of information sources, especially of the private sector. The development stage where Albania is situated imposes such a reflection, the adoption and continuous connection of this system with the worldwide scheme of similar systems.

As a systematic user and scholar of statistics, being these related to economics, demography, other social fields, etc., I generally have experienced difficulties in their right deciphering, and consequently it was hard to draw exact conclusions. Of course the eye with which I have examined them is relatively skilled, at least with regard to the applied methods of calculations, error theories, etc. that represent a common basis of all sciences dealing with statistics and its techniques and methods as a way towards getting acquainted with the complex reality they study, to make comparisons and construct images of its varying or positive evaluation. It is on bases of this preliminary experience, and recurrent considerations, I dare say the situation of statistics in Albania is problematic.

This conclusion of mine relies on the fact the system presented here, first of all, by statistics main processing institution, INSTAT, is supplied by a partial and often far from accurate information; frequently delayed in time, by absence of acceleration of processing and time correction, by absence of a well organized system of national calculations in the widest sense of word. It is furthermore apparent the need of improvement of observation techniques and the so-called survey research technologies. In this context, a statistical survey regarding the "re-making of the food basket, either with an increase of articles and items, or with an alteration of their quantities and weights, would be quite useful and on right time for precisely defining the inflation rate, and for representing and reflecting the new reality, quite different from the one of 7-8 years ago. Similarly, it is worth studding and observing the issue of "open market" foreign currency exchange (on streets and squares), in order to make it a competency of the normal system of licensed and computerized bureaus and agencies. Obviously the analysis of the reasons that stimulate the observation of these issues would take time and people, but I hope that the participation scale, the proper way of focusing on these issues or similar problems on the side of the organizers and participants of this conference would provide the right conditions for improving the information quality in these sectors of special values in our overall development.

Sharing your opinion I would like to point out the recent increase of engagement on the part of INSTAT and its directors and experts in order to immunize the negative impacts or to improve the input quality and adoption of new technologies for obtaining statistics. However, in the same way is to be admitted that the impediments came across by people using statistics, by real policy makers, are more than evident and have been argument, failing to reflect the need and rhythm of progress. Specifically starting from the rank of priorities for paying attention and considering the suggestions of conference organizers, I would like to be concerned with some of them. This is really important with regards of improvements to be effected in decision making, which relies on one side on the input offered by the statistical sector wile setting its equations that identify the fairest policies. On the other side, this process itself relies on analyses upon reality factors or examined indicators, being these last one of economy, demographic or social nature. And it is more than obvious that the quality and outcome of the analysis would be nothing but wrong conclusions, in case that its raw material has been of poor quality.

The right analysis is the foundation stone of development prognosis and of detailed forecasts of policy maker institutions. Therefore, it is clear the view of damage and its impacts in our social - political system. I am of the opinion that due to its deficiencies, the imposing situations, limited or sequenced perspectives of people that create the programs, logic of moment solutions, which we have come across up to now in this long lasting and transitory period, our society is still suffering from the syndrome of emergencies and short terms sights. On the contrary, we have to admit that our politics has not been farsighted; it has to take this status now and gradually is taking it. It would be sufficient to take one example from power - planting sector to understand the consequences. For a period of more than 15 years, there has been litter persistence on the increase of power supply sources, on strengthening the distribution network, on administrating with rationality and cover concepts of market economy this valuable national property. That is the reason why situation of this sector is not responding to the current status of development, left aside that it might be long term, that is anticipate to the demand for a prompt economic and social progress, increase of producing investments, tourism, etc. I am not going into further details, so that I might broaden the subject and skip the framework of your activity.

I consider appropriate and really a priority the strengthening of legal framework for statistics, which organically affects a considerable number of subjects. This framework indispensably needs a new structural organization and a stronger financial support. In essence, this legal basis has to clearly define the role of statistics and specialized agencies of data collecting and processing, that on their side shall serve as controllers of price, product and services, of social development, employment level, of entrance and exit of several companies from these activities, etc. So in two words, the state has to make possible its control, without having ownership, on the product, social-cultural indicators, economic-financial and demographic indicators, etc.

It is self-explanatory that this implies the establishment of mandatory mechanisms for statistical reporting from the lowest level to the highest one, and further the preservation of confidentiality before its verification and processing. It should be worked on a better organized and programmed way for the rationalization of sources and qualification of employees engaged on this sector. Similarly, in the human resources planning is to be increased the responsibility and confidence of reporting quality, accompanied and guaranteed with penalties in case of its absence.

And this is valid not only for the central level, but also for the local one. I underline, this due to the fact that studying the recent data of INSTAT for 6 regular quarters, and comparing their evolution in time, I came across many questions and problems. An example for illustration would be the employment calculation statements, or those of unemployment level. Regarding these calculations, I would primarily suggest that the unemployment calculation be based on the employment rates, taking into consideration the respective ratios of observations for illegal employment, through market testing, or testing in the field of services or construction, observations and direct contacts with business men and customers alike, in order to collect the necessary indirect information, besides the direct one granted by the state institutions. However, to make things simple, I would stop at the employment rates for the rural area.

There are two striking questions from the very beginning: first, is it possible that this rate be the same for 6 regular quarters, that is for a 18 month period accounting the possibility of immigration and internal migration? Second, is seasonal employment a completely unknown phenomenon for Albania? Through this simple illustration, the problem that comes into the light of discussion is the correction issue that of statistical dynamism, i.e. of scheduled and prompt reflection of the alteration, being this of a short, medium or long tern matures.

On these grounds, the engagement in this sector not only of specialists, experts and scholars, but also of several ministries that are the main feeders and users of statistics, makes indispensable the strengthening of cooperation among the proper Institution of Statistics, as well as the cooperation among institutions, ministries and local authorities to accomplish the quick collection, processing and providing qualitative statistics that shall supply the system. Hence any institution will compile its own statistical map to correctly determine the concrete obligation and type of statistics of every institution, at the same time the "expansion" of audience, apart of public authorities there will be also included the Parliament and Government, economic entities, foreign institutions, juridical persons, media, public audiences, etc..

It is felt a lack of information sharing for different objective and subjective reasons. Thus we aim to evade the obstacles for obtaining an optimal information sharing. To achieve this, alongside with the growth of qualification level, there should be worked on the introduction and efficient implementation of electronic connections to insure the statistical network and data bases. Furthermore, there should be raised the transparency of statistical data, through organizing a awareness campaign, particularly with the private sector and individuals, to involve and get them with the relationships system they establish in their daily work, which obviously impacts the social progress in general.

But there is another essential argument for altering, or better collapsing the current situation and evaluation of statistics. especially the expansion of telecommunication system and its companion, Internet. Eventually, through the internet is enabled the integration of those great principles upon which are constructed the free market and harmonious liberal development of market economy, classically defined by Adam Smith.

One of these is the possibility to have access to information for all the demanders and suppliers present in the market, but also the knowledge on other parameters of social cultural, technical - professional and economic - financial progress.

The preparation, accuracy and transparency of statistics completes a direct or indirect way the other demand of market transparency, of workforce and qualification level, apart from the demand of transparency towards the audience. This helps to interpret facts, in the fair orientation of business and customer, in setting in effective function the demand - supply mechanism for the market and new investments, their orientation, etc...

Therefore, there should be pointed out also the importance that gains public education in general and that of customer in particular, as well as the effectiveness of this process. Alongside with the transparency within and outside the statistical system and its multidimensional intervention, it comes out the need of statistical institutions independence and especially of statistical data, toward the policies and its direct or indirect impact on them.

Personally, I consider independence extremely positive and compulsory, implying the integration of the private sector in this process, what's more in this viewpoint it should be encouraged the increase of Chambers of Commerce and Industry role in this direction through various publications, Internet pages, specific catalogues and almanacs, the integration of regional and national data regarding private enterprise, the type and quantity of products and services, employment rate, level of the adopted technologies, etc.. I also consider the efforts of the Bank of Albania and its inclusive engagement in the process of developing the level, content and accuracy of statistics. I would like to conclude this consideration, on one side with the encouragement of efforts for improving the statistical view, and on the others side with the wish that our system comes integrated in the regional or worldwide statistical systems, either technologically, or from the information exchange viewpoint. A positive example may consist on the status of Albania as a pilot country in the General Data Distribution GDDS) and the successful transition of the first stage of this project. This is our way to integration through progress. At the very end our opening imposes this integration, which shall have a certain impact on the increase of information quality and of statistical system in Albania.

I wish you every success. Thank you

Rexhep Meidani
President of Republic of Albania

Presentations and discussions of Conference