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Statement by the Staff Representative on
Executive Directors have asked the staff to amplify the meaning of the term benchmark and to explain how it could be applied in the context of the proposals for strengthening data provision to the Fund for surveillance purposes made in SM/00/113. The concept of a benchmark as it applies to data provision to the Fund is one in which agreed guidelines are used as a point of reference to assess whether data provided to the Fund are adequate for surveillance purposes. Depending on the specific circumstances affecting a particular country, effective surveillance might require something different from the data specified in the benchmark. In some situations, the conclusion might be that some of the data characteristics specified by the benchmark might not be relevant or appropriate. In other instances, it might be useful to request additional data in order to conduct effective surveillance. I would like to provide two examples to clarify this approach further. Let us take a case in which the benchmark established by the Board would not be considered a floor. In the case of external debt, the benchmark establishes that countries should report quarterly external debt statistics within one quarter of the reference period, with information to be broken down by sector, by maturity, on an original maturity basis, and by instrument, as set out in the Balance of Payments Manual, fifth edition. For some countries, such as a country with a fledgling private sector and limited access to international capital markets, there would be no private sector external borrowing to be reported. This is a case in which some of the data characteristics established by the benchmark would not be relevant. As another example, we can take the case of an emerging market country that provides data to the Fund for the main categories of the template on international reserves and foreign currency liquidity, and that these data are reported on a monthly basis with a lag of less than one month. Let us assume that short-term capital flows are significant or that a financial crisis is brewing in the region. In order to monitor the situation better, it might be concluded that information on international reserves and foreign currency liquidity needs to be made available with greater frequency than specified by the benchmark. Accordingly, the authorities could be requested to report data for the template on a weekly or even daily basis as opposed to the monthly reporting specified in the benchmark. This would be a situation in which the benchmark established by the Board for data provision to the Fund would not be a ceiling. To sum up, the benchmark approach acknowledges differences in country situations. It does not take a one-size-fits-all approach, but takes into account countries' different statistical capabilities, and importantly, the fact that the data needed for effective surveillance varies over time both within the same country and among countries. Because it is flexible, the benchmark approach fosters an effective use of statistical resources, both the country's own, and those of technical assistance providers. While acknowledging country differences, it provides a consistent, well-thought-out focal point for asking ourselves and our members whether data in these important areas are adequate for the Fund to carry out its surveillance function effectively. Built in as a part of the surveillance process, the benchmark approach engages country authorities in examining important data questions, and raises the profile of data issues within the country and within the Fund. It is responsive to Board requests for candid discussion of data issues in staff reports. Finally, it draws on specifications and methodological issues that have been widely discussed in the international community over the last several years as they were put in place and will continue to be a focus of attention in the future. |