Vietnam Economic Data: Assessment of Availability and Quality (Letter
Report, 06/01/99, GAO/NSIAD-99-109).
Pursuant to a congressional request, GAO provided information on the
economy of Vietnam, focusing on the availability, transparency, and
quality of published economic and trade data on Vietnam.
GAO noted that: (1) Vietnam has released data on a number of key
economic indicators such as the gross domestic product (GDP), imports
and exports, foreign investments, and growth rates; (2) however, it has
not made available some other important data on the economy; (3) it does
not publish the state budget and does not provide standard financial
information used by the International Monetary Fund (IMF) for its
monthly International Financial Statistics (IFS) publication; (4)
virtually all countries in the world, including transitional economies
and the poorest countries, publish their country pages in the IFS; (5)
when data is available, it is highly aggregated and difficult to
interpret because the data collection, analysis, and reporting methods
used to produce it are not transparent or readily available to users;
(6) while the quality of the data has improved in recent years,
published indicators such as GDP contain weaknesses because they do not
include important components of the economy; (7) for example, small
businesses, the service sector, and remittances from overseas are
underreported, while growth and foreign investment estimates may be
overestimated; (8) without more accurate data, it is difficult to
effectively evaluate economic conditions in Vietnam and identify
economic and financial problems that may be occurring; and (9) several
international agencies, such as the IMF and the World Bank, have
recognized that data deficiencies exist and are providing technical and
financial assistance to the Vietnamese government to help it improve the
availability and quality of its data.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: NSIAD-99-109
TITLE: Vietnam Economic Data: Assessment of Availability and
Quality
DATE: 06/01/99
SUBJECT: Economic indicators
Developing countries
Foreign governments
Economic analysis
International organizations
Economic growth
Financial statements
Data integrity
Foreign technical aid
IDENTIFIER: Vietnam
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ns99109 GAO United States General Accounting Office
Report to Congressional Requesters
June 1999 VIETNAM ECONOMIC DATA
Assessment of Availability and Quality
GAO/NSIAD-99-109
GAO/NSIAD-99-109
Page 1 GAO/NSIAD-99-109 Vietnam Economic Data United States
General Accounting Office
Washington, D. C. 20548 Let ter National Security and
International Affairs Division
B-279772 Letter June 1, 1999 The Honorable Dana Rohrabacher The
Honorable Zoe Lofgren House of Representatives
The recent financial crisis in East Asia and the overall
importance of the region to the United States has highlighted the
need for reliable and timely economic and trade data on individual
countries in the region. In recent years, the United States has
taken several steps to normalize relations with Vietnam and is
currently negotiating a long- term trade agreement with its
government. You asked us to examine economic data on Vietnam,
which has been experiencing considerable economic growth and
development as it transitions from a centrally planned to a more
market- based economy. To respond to your requests, we examined
the availability, transparency, and
quality of published economic and trade data on Vietnam. Results
in Brief Vietnam has released data on a number of key economic
indicators such as
the gross domestic product (GDP), imports and exports, foreign
investments, and growth rates. However, it has not made available
some other important data on the economy. For example, it does not
publish the state budget and does not provide standard financial
information used by
the International Monetary Fund (IMF) for its monthly
International Financial Statistics (IFS) publication. Virtually
all countries in the world, including transitional economies and
the poorest countries, publish their country pages in the IFS.
When data is available, it is highly aggregated and difficult to
interpret because the data collection, analysis, and reporting
methods used to produce it are not transparent or readily
available to users. While the quality of the data has improved in
recent years, published indicators such as GDP contain weaknesses
because they do not include important components of the economy.
For example, small businesses, the service sector, and remittances
from overseas are underreported, while growth and foreign
investment estimates may be overestimated. Without more accurate
data, it is difficult to effectively evaluate economic conditions
in Vietnam and identify economic and financial problems that may
be
occurring. Several international agencies, such as the IMF and the
World
Lett er
B-279772 Page 2 GAO/NSIAD-99-109 Vietnam Economic Data
Bank, have recognized that data deficiencies exist and are
currently providing technical and financial assistance to the
Vietnamese government to help it improve the availability and
quality of its data.
Background Data on Vietnam's economy and trade originates
primarily from the General Statistical Office (GSO), a Vietnamese
government agency. Other
agencies such as the Ministry of Industry and the State Bank of
Vietnam also provide some data. The GSO publishes monthly and
annual reports on the economy and population that include
information on the labor force, GDP, foreign investment,
industrial sectors, retail sales, prices, and inflation rates,
among others. The IMF, the World Bank, and the United Nations also
publish economic and trade data on Vietnam, but as a standard
practice they rely primarily on the government for much of the
information. The IMF has a permanent representative in Vietnam who
monitors economic conditions, and the Fund periodically sends
missions to Vietnam to collect additional information and provide
technical assistance. As it does with most other
countries, the IMF summarizes Vietnam's economic and financial
condition in periodic staff reports that are available to the
public and generates confidential studies that examine specific
topics such as banking.
For its part, the World Bank publishes the World Development
Indicators (WDI) in collaboration with 26 other public and private
agencies, including the IMF, the International Labour
Organization, the United Nations, the World Trade Organization,
Moody's Investors Service, Price Waterhouse, and Standard and
Poor's Rating Services. The 1998 WDI includes a broad
range of economic, population, and environmental data on 210
countries from 1960 to 1996. The United Nations publishes National
Accounts Statistics on different countries, including Vietnam,
each year. The United Nations Development Programme (UNDP) also
issues a number of reports and evaluations of poverty and economic
conditions in Vietnam. There are
other publications with a narrower focus, such as the IMF's
Direction of Trade Statistics Yearbook and the United Nations'
Monthly Bulletin of Statistics. U. S. agencies such as the
Departments of Treasury, Commerce, and State and the Trade and
Development Agency rely mainly on international agencies for data
on Vietnam's economy. However, several U. S. federal agencies
jointly publish an annual report on Vietnam, the Country
Commercial Guide, written by an in- country expert. The Department
of
Lett er
B-279772 Page 3 GAO/NSIAD-99-109 Vietnam Economic Data
Commerce also releases data on bilateral trade between the United
States and its trading partners, including Vietnam. The United
Nations publishes similar bilateral trade data reported by member
states. Several economic magazines and journals also provide
economic and trade data on Vietnam. The Vietnam Business Journal,
for example, publishes indicators of Vietnam's economy, foreign
investment, imports, and exports, using the government and
international agencies as its sources. The Economist Intelligence
Unit Ltd., also issues quarterly reports on the Vietnamese economy
and covers major economic and trade indicators. It pools data from
various sources, including its own estimates.
Gaps in Availability of Data
Although the government does publish many key economic indicators,
there are major gaps. For example, by law, Vietnam's state budget
is classified as a secret document and therefore cannot be made
available to
the public. Under much pressure from international agencies and
donors, in 1998 top government officials indicated they would
release the budget, but as of March 1999, they had not yet done
so. The government includes
some estimates of the budget in its aggregate economic indicators,
but it does not provide a breakdown of the data, making it
difficult to determine specific allocations. In addition, although
the GSO did publish aggregate budget figures in its 1994
Statistical Yearbook, it did not do so in 1996.
State- owned enterprises (SOE) are a key component of the budget
and of the country's overall economy. The government has
traditionally granted SOEs special advantages over other
businesses through greater access to credit, control over markets,
and other forms of indirect support. The IMF
has reported that SOEs may account for as much as 40 percent of
Vietnam's GDP. However, the government releases very little
information about how much it spends to support SOEs and their
true financial conditions. Some
donors have raised concerns about the financial viability of SOEs
in Vietnam and have warned that without reliable information,
financial problems may develop undetected. Furthermore, the IMF's
monthly IFS reports do not contain a country page for Vietnam
because the government has not released certain key indicators and
other needed statistics. Country pages generally include data on
exchange rates, money, banking, interest rates, production,
prices, foreign reserves, international trade, balance of
payments, and government and national accounts. Virtually all
countries in the world publish their
country pages in the IFS. According to IMF officials, the
Vietnamese
B-279772 Page 4 GAO/NSIAD-99-109 Vietnam Economic Data
government has not done so in part because for many years Vietnam
used a national accounts system modeled after that of the former
Soviet Union and different from international reporting standards
(the 1993 System of National Accounts) advocated by the IMF, the
United Nations, and the World Bank. Vietnam adopted these
standards in the late 1980s but has not fully implemented the
system and has not been willing to release some
statistics. In 1998, the IMF said it was waiting for the
government to approve publication of Vietnam's country page that
the IMF had prepared. Neighboring Cambodia and Lao PDR, both of
which have also transitioned from the Soviet accounting system,
have published their country pages since April 1996. Rwanda and
Ethiopia, which had the lowest per capita incomes in the world 1
(about a third of Vietnam's), have also been publishing their
country pages.
The amount of information reported in the WDI provides another
indication of a country's overall data availability. The WDI
contains up to 526 series of data indicators for individual
countries, covering economic and trade conditions as well as other
demographic, environmental, and social indicators. Vietnam and Lao
PDR, for example, provided data for only about 250 indicators
between 1990 and 1995, while China, the Philippines, and Thailand
provided over 400 indicators during the same period (fig. 1). In
1995, the median number of indicators available for the 63
countries that the WDI classified as low income was 322. Vietnam
provided 256 indicators for that year. Only 10 of the other low-
income countries provided fewer indicators than Vietnam. 2
1 Human Development Report, UNDP, 1997. 2 Afghanistan, Bosnia-
Herzegovina, Cambodia, Eritrea, Lao PDR, Liberia, Myanmar,
Somalia, the Sudan, and Tajikstan.
B-279772 Page 5 GAO/NSIAD-99-109 Vietnam Economic Data
Figure 1: Available Data in the World Bank's World Development
Indicators, 1998.
Note: All four comparison countries are in the immediate vicinity
of Vietnam. Thailand, the Philippines, and Vietnam are similar in
population size. China, Lao PDR and Vietnam have changed from the
Soviet to the System of National Accounts accounting system.
Transparency of Data Collection and Reporting Methods
If the accuracy and quality of published economic and trade data
are to be properly assessed, the methods used by the sources of
the data to collect, analyze, and present the data must be
transparent. In other words, data transparency means that methods
should be clearly defined and explained
and made readily available to data users. Without such
information, users cannot adequately determine the value and
meaning of the published figures. For example, data can be very
different depending on whether it is developed through expert
opinion, sampling, or census. If an agency relies on other
agencies for data, it is also important that it disclose the
sources
and methods it uses to review and revise the data. In the case of
Vietnam, information on data collection and reporting methods
generally is either missing or unclear. The GSO does not publish
the methods used to collect and process economic and financial
figures and does not identify potential data limitations or gaps.
International
100 200
300 400
500 1990 1991 1992 1993 1994 1995 1996
Thailand The Philip pines China Lao PDR Vietnam
Number of Data Indicators
B-279772 Page 6 GAO/NSIAD-99-109 Vietnam Economic Data
agencies that re- publish the GSO's figures in their reports also
do not disclose the methods they use to evaluate or revise the
data. This process is consistent with how these agencies report
data for other countries. Most tables we reviewed cited their
sources as the GSO or another Vietnamese agency and staff
estimates. But the methods used to produce these staff estimates
were not specified. We also found that even when staff estimates
were cited, the published data often did not differ from the
original GSO figure. However, the IMF recently reported estimates
that differed from those published by the GSO.
The Country Commercial Guide primarily cited unofficial estimates
as its sources, without reporting the data collection methods
used, but its figures matched those we found in GSO publications.
Quality of Available Data
Although many of the published figures from the GSO, IMF, the
World Bank, and the Asian Development Bank corresponded with each
other, one should not interpret this to mean that they are valid
or correct, but simply that they came from the same source the
Vietnamese government (see
app. I). According to international agency officials and other
experts, the quality of available data on Vietnam has improved in
recent years. They all agreed, however, that data on many key
indicators such as GDP, growth rate, and foreign investments still
contained several weaknesses. In a June 1998 assessment of
economic conditions in Vietnam, the UNDP concluded that Vietnam is
in the midst of an information crisis which needs to be urgently
redressed to avert financial crisis 3 and advocated more reliable
data on
the banking and corporate sectors in particular. Most banks are
partially or wholly state owned, and information on their debt
levels, loan portfolios, and investments is not available in
sufficient detail or is of questionable
reliability. Some international agency officials, for example,
have raised concerns that these banks have made many large loans
to SOEs whose assets are largely overstated. The IMF has indicated
that the banking sector in Vietnam is in worse condition than what
the official data shows. Moody's has also cited weaknesses with
the banking system and considerable
uncertainty [arising] from the lack of transparency in the
reporting of 3 East Asia: From Miracle to Crisis, Lessons for Viet
Nam, UNDP Viet Nam, 1998. Italics in the original.
B-279772 Page 7 GAO/NSIAD-99-109 Vietnam Economic Data
official foreign exchange reserves as key factors in giving
Vietnam a low- credit rating. 4 Vietnam does not effectively
measure certain components of the economy
in its calculations of GDP, which is a measure of the total output
of a country's goods and services. For example, GDP figures do not
accurately reflect the large informal economy, small businesses,
telecommunications, or the service sector. Similarly, official
trade estimates do not include illegal smuggling of consumer
goods, which has been estimated to account for a significant
portion of the economy, according to IMF and other international
agency officials. A State Department official also noted that this
reporting problem occurs in other developing countries.
Other indicators reported by the government, on the other hand,
may be overestimated. For example, the government announced that
the economy grew at a rate of 5.8 percent in 1998, but IMF
officials made their own
in- country assessment and estimated a growth rate of between 3
and 4 percent. The government also reported $1.9 billion in
disbursements of foreign direct investments in 1998, but the IMF
estimated only $600 million, and Moody's estimated $800 million.
According to a State Department official, Vietnam counts the value
of land it contributes to joint business
ventures as part of a foreign direct investment. The IMF does not.
This may account for part of the discrepancy between official and
independent estimates. It also illustrates the importance of
transparency in data collection and reporting methods.
There are also a number of unexplained differences between reports
published by different international agencies and even between
those published by the same agency. One example is the average
employment (the average number of employees per enterprise) in the
private sector, an important component of Vietnam's economy in
terms of growth and development. According to the 1996 IMF staff
report, average employment between 1992 and 1995 was between 7.4
and 5. 1 employees. In another IMF
staff report 16 months later, the average employment for the same
period was reported as between 1.8 and 1.2 employees. It is not
clear why a 1992 figure was revised in 1998, but agency officials
noted that there are often long delays and frequent adjustments of
prior data by Vietnamese government sources. The data series cited
its sources as the GSO and staff estimates.
4 Global Credit Research: Vietnam, Moody's Investors Service,
1999.
B-279772 Page 8 GAO/NSIAD-99-109 Vietnam Economic Data
International agencies have various efforts underway to help
Vietnam with its data collection and reporting. The Asian
Development Bank is developing a project to assist Vietnam in
preparing its state budget and
calculating GDP. The IMF has also been helping Vietnam develop its
IFS country page. This aid has included providing preliminary
analytical tables necessary for completing the country page in
accordance with IMF
methodology. Other ongoing assistance is geared mainly toward the
collection of social and demographic data. Further monitoring will
be needed to determine whether these efforts are effective in
improving the
quality of data. In the late 1990s, the IMF developed and issued
two sets of standards for data production and dissemination by its
member states. The key objectives of one set of standards (known
as the General Data Dissemination System) are to improve data
quality; provide a framework for evaluating needs and setting
priorities for data improvement; and guide countries in the
provision of comprehensive, timely, accessible, and reliable
economic, financial, and sociodemographic statistics. A more
detailed set of standards (the Special Data Dissemination
Standard)
focuses on specific elements of data quality. A number of
countries in East Asia, including the Philippines and Thailand,
have voluntarily subscribed to the Special Data Dissemination
Standard, but Vietnam and none of the poorest developing countries
receiving loans from the World Bank's
International Development Agency have subscribed to this standard.
Agency Comments and Our Evaluation
We sent a draft of this report to the Departments of Treasury and
State and to the Central Intelligence Agency (CIA). Treasury and
the CIA indicated that they had no comments. The Department of
State provided oral comments. Generally, State concurred with our
overall findings and conclusions. It also provided some technical
comments, which we incorporated where appropriate.
Scope and Methodology
To assess the availability, transparency, and quality of published
economic and trade data on Vietnam, we met with officials from a
number of U. S. and international agencies, including the
Departments of Commerce, State, and the Treasury, the Trade and
Development Agency, the CIA, the IMF, the World Bank, the United
Nations Statistics Division, and the UNDP. We conducted a
literature search and contacted researchers in the field. In
B-279772 Page 9 GAO/NSIAD-99-109 Vietnam Economic Data
addition, we contacted the Embassy of Vietnam in Washington, D.
C., and the U. S. Embassy in Hanoi.
We requested information on the methods agencies use to evaluate
data and on the strengths and limitations of the data. We also
compared data from different sources and from different time
periods, concentrating on 1992, 1994, and 1996. Although we did
not conduct a systematic comparison of Vietnam's data with that of
other countries, we did make some comparisons with readily
available data in the WDI. We did not travel to Vietnam, although
we did meet with a Vietnamese embassy counselor in Washington, D.
C. We limited the documentation for this report to nonclassified
information. In addition, we did not address perspectives from the
business community regarding the availability and quality of
Vietnam's economic data.
We performed our review from March 1998 to March 1999 in
accordance with generally accepted government auditing standards.
We are sending copies of this report to the Honorable Madeleine K.
Albright, Secretary of State; the Honorable Robert E. Rubin,
Secretary of Treasury; the Honorable William M. Daley, Secretary
of Commerce; and appropriate congressional committees. Copies will
also be made available to others upon request.
Please contact me at (202) 512- 3092 if you or your staff have any
questions or would like additional information. Major contributors
to this report were John Oppenheim, L Xun Hy, and Stan Kostyla.
Kwai- Cheung Chan Director, Special Studies and Evaluations
Page 10 GAO/NSIAD-99-109 Vietnam Economic Data
Appendix I Selected Economic Statistics on Vietnam Appe ndi x I
GDP, revenue, and expenditures in billions of Vietnamese dong
Exports and imports in millions of dollars.
General Statistical Office 1996 a
Statistical Office 1994 b
GeneralInternational Monetary Fund 1998 c
International Monetary Fund 1996 d
International Monetary Fund 1997 e
United Nations
1998 f World
Bank 1998 g
Asian Development
Bank 1998 h Department
Commerce of 1998 i
1992
GDP nominal (current) 110, 535 110,535 110,535 110,535 110,535 GDP
real (constant) 33, 991 33,991 33,987 33,991 33, 991
Government revenue m 21,023 21,000 21,023 j
Government expenditure 23,711 25,800 25,121 j
Total imports, c. i. f. n 2, 540 2,541 2,817 2, 817 3, 027 2,541
2, 946 Total exports, f. o. b. o 2, 581 2,581 2,475 2, 475 2, 918
2,581 k
1994
GDP nominal (current) 170, 258 170,258 170,258 170,258 170,258
170, 258 GDP real (constant) 39, 982 39,982 39,982 39,980 39, 982
39, 982
Government revenue m 42,100 41,440 j 38, 299
Government expenditure 46,600 46,121 j 33, 355
Total imports, c. i. f. n 5, 826 5,827 5, 827 5, 826 5,826 6, 514
5,826 Total exports, f. o. b. o 4, 054 4,054 4, 054 4, 054 4,054 k
4,054
1996
GDP nominal (current) 258, 609 258,609 258, 609 258,609 GDP real
(constant) 47, 888 47,888 47,888
Government revenue m 60,900 62, 000 p j 59, 960
Government expenditure 63,900 66, 417 p j 45, 800
Appendix I Selected Economic Statistics on Vietnam
Page 11 GAO/NSIAD-99-109 Vietnam Economic Data
a Statistical Yearbook 1996. b Statistical Yearbook 1994. c Staff
country report 98/ 30, April 1998. d Staff country report 96/ 145,
December 1996. e Direction of Trade Statistics 1997. f Department
of Economic and Social Affairs, Statistics Division, Monthly
Bulletin of Statistics, July 1998. g World Development Indicators
1998. h From http:// internotes. asiandevbank. org/ notes/ vie/
VIEOTH. htm.
i 1998 Country Commercial Guide, U. S. embassy, Hanoi. j Reported
as missing. k Reported as c. i. f. l Estimated. m Including
grants. n c. i. f.: cost, insurance, freight, that is, at the
importer's custom frontier o f. o. b.: free on board, that is, at
the exporter's customs frontier. p Budgeted.
General Statistical Office 1996 a
Statistical Office 1994 b
GeneralInternational Monetary Fund 1998 c
International Monetary Fund 1996 d
International Monetary Fund 1997 e
United Nations
1998 f World
Bank 1998 g
Asian Development
Bank 1998 h Department
Commerce of 1998 i
Total imports, c. i. f. n 11, 144 l 11, 644 13,668 11, 144 12, 870
11, 144 11, 000 Total exports, f. o. b. o 7,256 l 7,337 6, 933
7,256 k 7,255 7, 000
(713020) Let t er
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