Global assessment of the statistical systems in the Western Balkan countries : proceedings of the seminar in Dubrovnik, 3 and 4 June 2002.
Date: 2002-12-23
Institutions: Eurostat
Subjects: Western Balkans, conference proceedings, official statistics, statistical method

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Global Assessment 
of the statistical systems
in the Western Balkan
countries
Proceedings of the seminar in
Dubrovnik, 3 and 4 June 2002

1

THEME 1
General
statistics

E U R O P E A N
C O M M I S S I O N

 
A great deal of additional information on the European Union is available on the Internet.
It can be accessed through the Europa server (http://europa.eu.int).

Luxembourg: Office for Official Publications of the European Communities, 2002

ISBN 92-894-3947-5

© European Communities, 2002

Dubrovnik Seminar 

Global Assessments of the Western Balkan countries 

Foreword 

The  turn  of  the  century  witnessed  a  profound  change  in  the  EU  approach  to  the 
Western  Balkans.  EU  leaders  came  to  the  decision  that  only  the  prospect  of 
integration  into  European  structures  would  offer  a  viable  and  sustainable  route  to 
stability and growth in the region. The European Councils of Feira and Nice spoke in 
turn  of  the  countries’  vocation  as  ‘potential  candidates’  and  ‘a  clear  prospect  of 
accession’ once the relevant conditions had been met. This view was translated into 
the  EU  policy  of  Stabilisation  and  Association,  the  strategic  framework  for  EU 
relations with the countries of the region. 

The Stabilisation and Association process is a framework in which a new contractual 
(Stabilisation  and  Association  Agreements)  and  an  assistance 
relationship 
programme  (CARDS)  help  each  country  to  progress,  at  its  own  pace,  towards  the 
requirements of EU membership. It is a long-term commitment to the region in terms 
of political effort, significant financial resources and a major direct input of personnel 
and  expertise.  The  Stabilisation  and  Association  Agreements  require  respect  for 
democratic  principles,  human  rights  and  the  rule  of  law.  They  foresee  the 
establishment of a free trade area with the EU and they set out rights and obligations 
in  areas  such  as  statistics,  competition,  state  aid  rules,  intellectual  property  and 
establishment, which will allow the economies of the region to begin to integrate with 
the EU's.  

Eurostat assists in the elaboration of priorities for the national and regional CARDS 
programmes  and  this  requires  an  in-depth  understanding  of  the  national  statistical 
systems  in  the  beneficiary  countries.  In  collaboration  with  EFTA,  Eurostat  therefore 
decided to commission Global Assessments of the National Statistical Systems in the 
Western Balkan region. The aim was twofold. First, to provide an assessment of the 
capacity  of  the  statistical  system  to  provide  to  its  users,  in  a  sustainable  way, 
accurate,  relevant  and  reliable  statistics.  Second,  to  analyse  the  institutional 
environment in which the statistical offices operate.  

Global  Assessments  were  subsequently  carried  out  in  Albania,  Croatia,  FR  of 
Yugoslavia  and  FYR  of  Macedonia.  Each  report  has  provided  valuable  insight  into 
the  strengths  and  weaknesses  of  the  national  statistical  systems,  and  enabled 
Eurostat  to  draft  a  new  strategy  for  statistical  co-operation  in  the  Western  Balkan 
region. 

Eurostat and EFTA, in collaboration with the Central Bureau of Statistics of Croatia, 
then organised a seminar to discuss the main conclusions of the Global Assessment 
reports and define how this information could be kept up-to-date and used as a tool 
for  the  management.  The  main  discussion  items  were  Relations  with  users, 
respondents  and  public  authorities,  Strategic  management  and  priority  setting, 
Progress  measurement  and  Donor  co-ordination.  The  proceedings  comprise  all 
seminar  documents  including  the  shorter  version  of  the  Global  Assessment  reports 
as well as the minutes of the various discussions during the 2-day seminar.  

Photius Nanopoulos, 

Director, Eurostat 

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Global Assessments of the Western Balkan countries 

Table of Contents 

Foreword 
Opening speech by Mr. Nanopoulos 
Opening speech by Mr. Gredelj 
Part 1 Minutes 

Session 1 – Background and main results 
Session 2 – Practical Use of the Global Assessments 

Subgroup I 
Subgroup II 
Plenum 

Session 3 – Progress Measurement 

Subgroup I 
Subgroup II 
Plenum 

Session 4 – Donor co-ordination and Progress Measurement 

Issue 1: What are we working for? 
Issue 2: How we have worked until now? 
Issue 3: Problematic issues 
Issue 4: Co-ordination – proposals for action 
Subgroup I 
Subgroup II 
Plenum 

Part 2 Background Documents 

Agenda of the Global Assessment Seminar 
Background of the Global Assessments 

Introduction 
General approach 
Country specific elements 
Annex – Global Assessment Report Template 

Main results of the Global Assessment exercise 

Introductory remarks 
Most important Characteristics Common to all Four Countries 
Selected Characteristics Common to Three (or Two) Countries 
Selected Elements Observed during the GA Process which are 
Important for Follow-up Activities (for both Countries and Donors) 

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Global Assessments of the Western Balkan countries 

Practical use of the Global Assessments 

Background 
Objectives 
Strategy for statistical co-operation with the Western Balkan region 
Follow-up: A Master Plan? 
Conclusion 
Annex 

Progress Measurement 

Objectives 
What has to be measured? 
How to measure progress? 
Who should measure progress? 
Annexes 

Donor co-ordination and progress measurement 

Introduction 
Activity 1 – Questionnaires 
Activity 2 – Circa site 
Activity 3 – “Catalogue of what has been achieved” and Progress 
measurement? 
Annex 

Annex – List of Participants 

Part 3 Global Assessments 

Global Assessment of the Albanian System of Official Statistics 
Global Assessment of the Croatian System of Official Statistics 
Global Assessment of the Yugoslav System of Official Statistics 
Global Assessment of the Macedonian System of Official Statistics 

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Opening speech by 
Mr. Ph. Nanopoulos, Director, Eurostat 

Introduction 

In 2000, the European Union explicitly recognised Albania, BiH, Croatia, FRY and the 
former  Yugoslav  Republic  of  Macedonia  as  potential  candidates  for  memberships, 
and put in place a policy, the Stabilisation and Association process and an instrument 
necessary to underpin the process, the CARDS programme. 

This  seminar  about  Global  Assessments  is  the  first  meeting  specially  organised 
exclusively for statistical offices of the Western Balkan countries with the presence of 
all  Director  Generals.  It  marked  the  entry  of  the  statistical  co-operation  with  the 
Western Balkan countries into a new era. 

Global  Assessments  of  the  statistical  systems  of  Western  Balkan  countries  have 
been  completed  thus  allowing  Eurostat  and  the  beneficiaries  to  be  better  informed 
about strengths and weaknesses of the statistical systems. 

Eurostat  has  developed  a  strategy  for  statistical  co-operation  with  Western  Balkan 
countries, with a focus on the building-up of the institutional capacity of the statistical 
system 
in  a  sustainable  way.  Future  co-operation  will  be  concentrated  on 
management support and on the creation of coherent national accounts systems. 
The  new strategy is reflected in the CARDS programmes in statistics, which will be 
soon implemented across the region, in fact the very first programme is already being 
implemented in Montenegro! 

Cards programmes 

With the Stabilisation and Association process, each country has committed itself to 
enforce  political  and  economic  reforms  and  more  specifically  to  move  towards  a 
gradual approximation with EC legislation.  

Reliable  and harmonised statistics is required to monitor this process, which is why 
all  CARDS  programmes  on  statistics  must  also  bring  about  an  alignment  of  the 
national  statistical  systems  in  the  Western  Balkan  region  with  EU  standards  and 
methods. 

The  European  Commission  has  allocated  some  euro  13  million  for  statistics for the 
period  2001-04.  On  the  one  hand,  this  clearly  demonstrates  the  European  Union’s 
willingness to support the necessary changes in the region, while on the other hand it 
puts  enormous  pressure  on  national  statistical  systems  for  delivering  the  expected 
results! 

In  this  context,  longer  term  planning  is  needed  to  set  directions  and  priorities  of 
National  Statistical  Institutes,  to  ask  for  and  to  allocate  resources,  to  co-ordinate 
activities  inside  the  government  and  between  international  organisations.  A  better 
long-term planning will improve decision-making, increase credibility and efficiency. 

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Strategic programming in countries 

The  key  issue  of  strategic  planning  is  the  anticipation  of  the  evolution  of  the 
operational  environment  and  the  preparation  of  the  organisation  for  managing  the 
change.  A  first  step  in  strategic  planning  is  the  strategic  framework  where  basic 
principles of official statistics are presented. A strategic framework cans include: 

-  Mission statement, describing in client-oriented way why official statistics exists 

and for whom,  

-  Vision, describing in general what the organisation intends to be and to achieve,  
-  Analyse strengths and weaknesses (SWOT), a tool used to assess what are the 
internal  and  external  success  factors of official statistics and what is their effect 
on the sustainability of long-term planning and programming. 

A  multi-annual  plan  is  then  developed  on  the  basis  of  the  mission  statement,  the 
vision and the SWOT analysis. The multi-annual plan is a systematic presentation of 
the organisation and functioning of a National Statistical Institute and the objectives 
to be achieved in the three-five next years. 

Whereas the multi-annual plan describes the general directions of developing a high 
quality  statistical  information  system,  in  the  annual  plan  the  actions  needed  to 
achieve  these  objectives  have  to  be  defined.  An  annual  action  plan  is  a  rather 
detailed  list  of  actions  linked  to  the  tasks  and  to  human,  physical  and  financial 
resources. 

Purpose of seminar 

It  is  expected  from  the  seminar  to  establish  a  permanent  system  for  reviewing  the 
National Statistical Systems and their progress towards adoption and implementation 
of  EC  legislation  in  statistics.  It  should  also  provide  input  for  strategic  planning 
(master  plan)  and  priority  setting  in  the  National  Statistical  Institutes.  Finally,  the 
seminar  is  a  good  opportunity  to  promote  personal  contacts  and  regional  co-
operation.  
The proceedings from the seminar will published, respectively made available on CD-
ROM and on CIRCA site. 

Let me finish, by expressing my sincere and warm thanks to our hosts from the CBS 
and  to  EFTA  for  financing  the  Global  Assessment  reports  as  well  as  the  seminar 
itself.  

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Opening speech by 
Mr. M. Gredelj, Director General, 
Central Bureau of Statistics in Croatia 

On  behalf  of  me  and  my  colleagues  I  greet  you  all  and  wish  you  success  at  work 
during those two days.  

The main objective of this meeting is to improve the work of statistical systems of all 
the  countries  of  the  region  in  a  way  to  achieve harmonisation with EU standards in 
shortest possible period of time. 

In  realisation  of  that  objective  there  are  several  issues  which  need  to be taken into 
account. The most important of them are the following:  

- 

- 

- 

The  Global  Assessments  clearly  indicated  that  the  level  of  development  of  our 
countries in the field of statistics is unequal; 

Joint planning is made difficult by local interests and priorities; 

The capacities of the statistical systems (an important component for realisation 
of necessary changes) are different. 

Under those circumstances it is obviously impossible to make a unique programme 
for  transformation  of  statistical  systems  for  all  5  countries.  However,  what  can  be 
done is to develop one model, applicable for all countries of the region, which would 
be used for solving the following issues: 

-  Who is supposed to update the existing GA documents during transformation of 

statistical systems, and how should it be done? 

-  What is a measure of change of a system? 

-  What is a measure of distance from targets? 

-  What are the mechanisms for controlling and managing changes of systems? 

I  believe  that  joint  effort  of  all  participants  at  this  meeting  will  contribute  to  the 
development of such a model and hope that we will reach an agreement on how and 
when the use of that model is going to begin. 

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Part 1 Minutes 

Session 1 – Background and main results 

The  aim  of  the  Global  Assessment  exercise  was  to  analyse  whether  or  not  the 
production  of  statistics  reflected  user  needs.  The  assessment  also  included  the 
institutional environment of the National Statistical Institute.  

Global Assessments have been elaborated in Albania, Croatia, FR of Yugoslavia and 
FRY  of  Macedonia.  The  same  approach  was  applied  in  each  case,  even  though  in 
FRY,  each  mission  was  longer  in  order  to  allow  for  visits  to  Serbia  as  well  as 
Montenegro and 2 consultants were considered most appropriate. 

Each  report  follows  the  same  standard  template  with  an  extensive  executive 
its 
summary  providing  a  general  description  of 
characteristics  as  well  as  the  general  strengths  and  weaknesses  of  the  National 
Statistical  System.  There  would  also  be  chapters  for  the  legal  setting  and  the 
organisation  and  structure  of  the  statistical  system  as  well  as  the  statistical 
infrastructure (classifications and registers).  

the  statistical  system  and 

An  important  feature  of  the  statistical  systems  in  the  Western  Balkan  is  their  high 
variety,  although  they  have  all  inherited  from  a  similar  political  regime.  The  main 
challenge  is  today  to  have  the capacity to adapt to the new requirements provoked 
by  the  economic  and  political  changes  and  to  have  enough  flexibility  in  adopting 
progressively the acquis communautaire in statistics.  

Here  are  the  more  frequently  asked  questions  raised  by  the  Global  Assessment 
reports and some final recommendations for the statisticians; 

What is Official Statistics today in a European Country? 
(cid:1)(cid:2) Official  statistics  used  to  have  a  completely  different role in the countries of the 

region, especially economic statistics 

(cid:1)(cid:2) Many  uncertainties  about  what  should  be  the  „right“  behaviour  of  official 
statisticians  at  all  levels  where  staff  is  confronted  with  concrete  demands in the 
new environment 

What does Professional Independence mean? 
(cid:1)(cid:2) Lack  of  clarity  about  the  operational  implications  of  professional  independence, 
i.e.  the  difference  between  the  decisions  about  the  „what“  and  the  „how“.  What 
has  to  be  produced  is  to  be  decided  by  users,  how  it  has  to  be  produced  is  a 
decision to be taken by statisticians. 

(cid:1)(cid:2) Statisticians  were  used  to  submit  or  leave  decisions  about  the  how  to  non-
professional (political) bodies and are, to a certain extent, still afraid of assuming 
their full responsibility in methodology and dissemination. Statisticians should be 
encouraged to decide on how statistics is to be produced. 

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Considerations about Dialogue and Networks 

With  key  national  users:  pro-active  and  anticipating  role  to  detect  their  present  and 
future  needs,  to  ask  them  about  effective  use  of  statistics,  to  receive  their  criticism 
about  present  production,  and  to  tell  them  that  some  of  their  demands  exceed  the 
possibilities of official statistics 
(cid:1)(cid:2) Create  or  reinforce  the  role  of  the  Statistical  Council  as  a  legitimate  body  to 

prioritise user needs and to discuss changes in the programme 

(cid:1)(cid:2) Have  frequent  contacts  with  the  academic  world  as  users;  create  and  animate 

national statistical societies 

(cid:1)(cid:2) International and EU standards should not be used as an excuse not to find out 
about national information needs (the „what“), but to strengthen the arguments for 
the „how”. The EU acquis is a definition of requested outputs, how these outputs 
must be produced (mix between surveys and administrative data) is a decision to 
be taken on a national level. 

Data Collection 
(cid:1)(cid:2) Statistical  legislation  and  statistical  programmes  used  to  include  data  collection 
(as opposed to processing) for combined administrative/statistical purposes 
(cid:1)(cid:2) Delimitation  between  data  collection  by  government  for  exclusively  statistical 
purposes  (statistical  surveys)  and  data  collection  for  administrative  purposes  is 
still blurred. 

Dialogue with respondents 
(cid:1)(cid:2) It  is  essential  to  create  networks  with  respondents,  notably  with  the  business 

community, to ensure good response rates 

(cid:1)(cid:2) International  standards  for  definitions,  classifications  and  outputs  can  rarely  be 

used literally in questionnaires 

(cid:1)(cid:2) New or modified surveys have to be tested for the respondents‘ understanding of 

the questions 

Role of the national statistical institute 
(cid:1)(cid:2) Assuming  the  leadership  role  of  statistical  offices  within  the  whole  national 

system of official statistics has been neglected 

(cid:1)(cid:2) For  a  proactive  role  in  this  respect,  a  regular  forum  where  the  director  of  the 
statistical  office  meets  with  heads  of  statistical  units  of  all  other  producers  is 
recommended  to  discuss  standards  applicable  to  all  before  they  are  made 
binding 

Final “recommendations”: 
(cid:1)(cid:2) Be courageous, pro-active and visible, but have a consistent line 
(cid:1)(cid:2) Build confidence in impartiality and in independence 
(cid:1)(cid:2) Be  flexible  when  necessary,  for  example  regarding  the  needs  of  key  users,  but 
never at the detriment of sustainability or even of the fundamental principles. 
(cid:1)(cid:2) Build up the perception of official statistics as being objective and relevant, and of 
the statistical office as being impartial in the true sense and of providing value to 
users 

(cid:1)(cid:2) Initiate and publicise a coherent plan for change (master plan). 

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In  the  discussion  following  the  presentation  of  Mr  Bruengger,  several  interventions 
highlighted  the  usefulness  and  timeliness  of  the  Global  Assessment  reports.  All 
countries are today in a context of important economic reforms where users’ needs 
change quickly. GA reports are a decisive input planning the changes and in defining 
new strategies. 

Strategies should be built on the following main elements: 

1.  Acceptance  of  the  main  principles  and  values  that  should  lead  statistics 

(statistical culture), 

2.  Legal framework and the interaction with other producers 
3.  The statistical production, including processes and methods 
4.  The management and in particular the quality management. 

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Global Assessments of the Western Balkan countries 

Session 2 - Practical Use of the Global 
Assessments 

The  Global  Assessment  exercise  was  initiated  in  order  to  obtain  a  better 
understanding of the national statistical systems in the beneficiary countries. The aim 
was twofold. First, to provide an assessment of the capacity of the statistical system 
to provide to its users, in a sustainable way, accurate, relevant and reliable statistics. 
Second,  to  analyse  the  institutional  environment  in  which  the  statistical  offices 
operate.  

This  approach  would  thus  directly  identify  the  strengths  and  weaknesses  of  the 
national statistical systems and thereby point out areas in need of improvement. The 
beneficiaries  would  be  able  to  identify  whether  or  not  their  internal  priority  setting, 
strategic  programming  or  statistical  law  should  be  improved.  The  European 
Commission  would  get  a  better  basis  for  their  decision  making  as  the  results could 
feed  into  the  strategic  framework  for  the  CARDS  programme  (country  and  regional 
strategy  papers).  In  particular,  Eurostat  could  use  these  Assessments  to  design  a 
strategy for statistical co-operation with the Western Balkan region. 

Subgroup I 

Subgroup leader: Milva Ekonomi, INSTAT 
Reporter: Johan Sjostrand, Statistics Sweden 

The discussions focussed on the following aspects:  

- Users of statistics 
- Repondents and providers of data 

Issue 1: Users of statistics 
The  discussion  began  with  some  general  statements  and  reflections  on  how  user 
services function and how these services can be improved. The Balkan countries are 
currently  in  different  stages  in  the  user-friendly  tool  development  process.  For 
example,  the  SSO  of  Macedonia  has  launched  a  programme  aimed  at  educating 
university students and pupils at secondary level in the use of statistics. The need for 
recurrent meetings with users was emphasised by INSTAT, but they also need to be 
better  defined.  INSTAT  reported  that  a  publication  plan  for  the  forthcoming  year  is 
published  in  December  each  year.  The  Republic  Statistical  Office  of  Serbia 
expressed the need for openness and to make meetings with user groups standard 
procedure. 

Eventually, six main user groups were identified. They were: 

(cid:1)(cid:2) Government and administration; 
(cid:1)(cid:2)
Institutions, e.g. for economic analyses; 
(cid:1)(cid:2) The business sector and its associations; 
(cid:1)(cid:2) Universities and the educational system at large; 
(cid:1)(cid:2) Mass media and the public, and 
(cid:1)(cid:2)
International organisations. 

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Furthermore, four functions of the dissemination system were identified. They were: 

(cid:1)(cid:2) Access to statistical data whatever the media; 
(cid:1)(cid:2) Communication with users via conferences and seminars; 
(cid:1)(cid:2) Service function (see box below), and 
(cid:1)(cid:2) Commitment policy (when to publish and what to publish). 

The service function was described as follows: 

Expressed request for 
statistical data

Planned 
Production of statistics

Customers perception of 
produced statistics

Realised offer 
to customer

A request for data is received and goes into production and is subsequently offered 
to  the  customer.  Note  that  there  is  a  gap  between  the  product  and  the  customer’s 
perception of the product. 

The NSOs agreed that a monitoring process need to be established in order to meet 
the increment of needs and quality in regards to statistical products offered to users. 

Issue 2: Respondents and providers of data 
Everyone  agreed  that  good  relations  with  respondents  are  essential.  A new type of 
respondents can be discerned in different countries. Respondent rates are still high, 
but they may decline in the business sector. However, it is important to create a clear 
strategy  for  how  to  build  relations  with  respondents  who  very  often  also  are  users 
and  providers  of  data.  Several  tools  can  be  used  in  the  process  of  building  good 
relations. 

They are as follows: 

(cid:1)(cid:2)

Involve respondents in questionnaire design. Questionnaires should be tested 
before being introduced; 

(cid:1)(cid:2) More frequent use of administrative data; 
(cid:1)(cid:2) Respondents  should  be  informed  about  official  and  other  statistics  and  it 
should  be  clarified  what  benefits  respondents  can  draw  from  the  use  of 
statistics, e.g. for benchmarking purposes in the business sector; 
Introduction of new technologies, for example, data capture on the Internet; 

(cid:1)(cid:2)
(cid:1)(cid:2) Define who does what in relation to other producers of official statistics;  
(cid:1)(cid:2) An NSO receives data from external and internal providers. It is important that 

the collecting of data is coordinated to lessen the response burden; 

(cid:1)(cid:2) The  submission  of  letters  to  respondents  explaining  the  advantages  for 

participating in surveys; 

(cid:1)(cid:2) Training of enumerators. They are the NSO’s ambassadors. 
(cid:1)(cid:2)

Introduction  of  communication  tools,  for  example,  advertising,  letters  and 
inducements. 

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Subgroup II 

The discussions focused on the following issues: 

Issue 1 Practical use of Global Assessment reports 
In  several  countries  (FRY, Albania and Croatia), the principal use of the GA was in 
the process of adapting the statistical law to international standards. 

GA  reports  were  seen  by  some  countries  as  an  opportunity  to  initiate  a  long-term 
planning  process  (master  plan).  Albania  for  example  is  developing  a  master  plan 
based  on  5  different  scenarios,  each  scenario  requesting  a  different  level  of 
resources and consequently a different level of output.  

In  Croatia,  the  GA  report  has  influenced  the  setting  of  priorities  for  the  statistical 
office and is intensively used in the development of a master plan. 

Issue 2 Relations with users 
Most of participants agreed that the main challenge addressed to the statistics in the 
Western Balkan is to regain trust among users. Different actions can be undertaken: 

(cid:1)(cid:2) Disseminated products must include methodological and analytical  comments 
(cid:1)(cid:2) Capture the requests for information regardless of whether the users are happy 

or not. 

(cid:1)(cid:2) To  ensure  that  particular  products  are  disseminated  regularly  like  the  Statistical 

Yearbook. 

(cid:1)(cid:2) Set up statistical programmes together with users on a bilateral basis or in ad hoc 

users’ forum. 

(cid:1)(cid:2) Media  coverage  should  systematically  be  reported  with  a  breakdown  by  type  of 

media. 

(cid:1)(cid:2) The Statistical Offices should be active when being subject of critics and answer 

in a transparent and positive way. 

(cid:1)(cid:2) The awareness of the staff about users’ needs should be increased; training can 

be organised on how to collect users needs via users’ satisfaction surveys. 

Issue 3 Relations with respondents 
For  almost  all  Western  Balkan  countries,  there  is  no  culture  of  relations  with 
respondents.  In  the  past,  most  of  the  surveys  were  exhaustive  and  answer 
obligatory. A particular attention has today to be paid to the private sectors, in order 
to reduce the burden of answering to statistical surveys. 

Plenum 

The  discussion  focused  on  how  to  implement  in  practise  the  suggestions  raised  in 
the  2  subgroups  linked  to  the  issues  of  relations  with  users,  relations  with 
respondents and relations with public authorities. 

-  SSOM  engaged  in  developing  a  co-ordination  tool  in  relation  to  their  business 
register, which would be used for monitoring the (internal and external) providers 
of data.  
FSO  agreed  to  test  possible  ways  of  building-up  good  relations  with  users  and 
respondents. 

- 

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- 

INSTAT wanted to test pre-announcing their dissemination, measure the access 
to 
Internet  and  report  on  advantages  and 
disadvantages of different data collection tools. 

INSTAT  products 

through 

The  co-chairman  (PhN)  finally  stressed  that  managers  should  supervise  processes 
and  initiate  change  and  innovation.  Rather  than  seeking  to  obtain  additional 
resources, they should increase their efficiency with existing resources. 

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Session 3 - Progress Measurement 

A  proposed  follow-up  and  update  of  the  Global  Assessments  is  to  measure  on  a 
regular  basis  the  progress  made  by  Western  Balkan  countries  towards  the 
compliance with EC and international standards. 

Progress can be measured according to three main groups of criteria, a first covering 
the  legal  and  institutional  aspects,  a  second  the  methodological  concepts  and 
definitions and the third the users satisfaction.  

Different actors can be involved in the progress measurement but of course the main 
ones will be the statistical institutes themselves and Eurostat as it plays a key role in 
the EU legislation process. A “peer review” to be undertaken by Candidate Countries 
would be a valuable exchange of experience. 

Subgroup I 

Subgroup leader: Mrs Blagica Novkovska (State Statistical Office of Macedonia) 
Reporter: Micaela Jouvenal (ISTAT) 

Discussions were made on the concept of progress measurement and on the need to 
identify which is the logic behind it; it was concluded that progress measurement has 
to be taken more as a vision.  

With  reference  to  the  table  proposed,  it  was  said  that  efforts  had  to  be  made  to 
analyse  more  in  depth  factors  and  indicators  constituting  the  input  for  the  table, 
rather than the table itself; only by mastering knowledge on what is the input for the 
table, the table itself becomes meaningful. 

To this end, there are milestones and pillars that have to be taken as indications for 
the  different  chapters  proposed  in  the  table.    For  example,  concerning  the  point 
“Institutional  and  legal  aspects”,  it  was  pointed  out  that  the  most  fundamental 
principle of all is art. 285 of the Treaty establishing the European Union, followed by 
Regulation  322/97,  the  so-called  European  Statistical  Law;  if  these  indications  are 
considered as milestones and adopted, they become obligations and progress will be 
measured against them.  The same process can be applied to all other items. 

Going  to  a  more  general  level,  another  issue  discussed  concerned  the  need  of 
identifying  and  setting  definite  objectives  and  marching  towards  them.    It  was  said 
that it is the specific task of the statistical institutions themselves to clearly set their 
objectives;  once  the  framework  is  openly  declared  and  adopted,  then  the  pace  to 
reach it can vary, taking different paths and deadlines, etc.; what is considered to be 
essential is deciding where to get and clearly move towards that objective. 

For example, taking the case of Global Assessments, these are considered a picture 
and  a  starting  point,  on  the  basis  of  which  countries  need  to  decide  and  set  the 
priority  of  adopting  the  acquis;  the  acquis  becomes  then  a  guide,  the  road  map  on 
how to become eventually a member.  Once the countries have set their objectives, 

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Eurostat  will  assist  them  in  their  advancement,  monitor  the  implementation  of  the 
process as well as assess their performance.  

In this framework, it was also mentioned that countries need to be aware of many of 
the concepts related to compliance with the statistical acquis communautaire in order 
to  better  define  their  way  ahead.  (Mr Nanopoulos proposed to organise a Seminar 
on the acquis communautaire). 

recognising 

implementing  yet  progress 
Finally, 
measurement,  it  was  proposed  to  try  to  identify  in  the  future  10  main  indicators  of 
progress and commonly agree upon adoption. 

that  even  Eurostat 

is  not 

Subgroup II 

Subgroup leader: Mr Robert Knezevic (CBS Croatia) 
Reporter: Ms. Friederike Wünschmann (RELEX) 

According to the agenda, the issues to be discussed within the subgroup 2 were: 
1.  Who should measure progress? 
2.  User satisfaction survey 

Who should measure progress? 
The experience in candidate countries with progress measurement was discussed as 
it  involved  setting-up  a  compliance  database.  It  was  noted  that  compliance  is  a 
moving target, and the criteria are such constantly changing due to the permanently 
developing  statistical  EC  requirements.  The  most  detailed  level  of  the  compliance 
table,  should  include  simple  ‘yes’  and  ‘no’  options.  It  was  also  stressed,  that  the 
Candidate countries started the whole process of progress measurement much later. 
They used a combination of an external assessment, and self-assessment. 
It was mentioned that Peer-review may not be appropriate in some countries, as both 
staff resources and the level of knowledge of the EC legislation is still quite limited.  
Self-assessment  may  also  currently be a difficult option for some countries and the 
countries  were  more  interested  in  Eurostat  taking  the  leading  role.  Alternatively,  an 
external expert could carry out the review with experience in progress measurement 
from candidate countries. This would guarantee the objectiveness in the process. 

Furthermore,  within  the  National  Statistical  Offices,  Management  Information 
Systems  could  be  set  up  (eventually  supported  through  EC  Technical  Assistance 
projects),  providing  the  NSO  Directors  with  reliable  and  unbiased  information  on 
progress, e.g. number of request, coverage, timeliness, etc.  
Finally,  several  delegates  suggested  combining  self-assessment  with  an  external 
assessment,  because  this  would  also  provide  the  beneficiary  countries  with  an 
opportunity  to  test  the  proposed  instruments  themselves.  It  was  also  suggested  to 
cover only some areas of the statistical systems (sample basis decided by Eurostat). 

Summing up the above, it can be stated that all countries in principle agreed that the 
statistical  offices  should  first  assess  the  progress  themselves  (self-assessment), 
followed  by  the  provision  of  an  external  opinion  either  by  an  independent  or  an 
Eurostat expert.  

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User satisfaction survey 
The  participants  then  discussed  a  draft  questionnaire  measuring  the  level  of 
satisfactions  of  users,  which  was  prepared  by  CBS  Croatia  (see  page  3).  In  the 
following, a summary of all questions, comments and suggestions is given. 
- 

It  was  proposed  to  introduce  five  instead  of  three  weighing  categories.  If  a  user 
has  to  choose  only  between  1-low,  2-medium  and  3-high,  it  is  difficult  to  extract 
the users’ differentiated opinion.   

-  The  types  of  users  were  discussed,  e.g.  whether  it  is  necessary  to  distinguish 
between  researchers  and  universities  when  you  talk  about  the  academic 
community. 

-  What can such a questionnaire really answer? Satisfaction of the user with what? 
With  a  product  or  a  service?  It  should  be  made  very  clear,  which  purpose  the 
questionnaire shall serve. CBS Croatia prepared this draft questionnaire on a very 
general level in order to give an idea, on how such a questionnaire could look like. 
In case such a questionnaire will be used for a very specific purpose, on top of it a 
short  introduction  should  be  given,  explaining  to  the  user  what  exactly  will  be 
measured and why. 
Is  such  a  user  satisfaction  questionnaire  really  relevant  for  our  purpose  if  the 
objective is to measure the progress? 
In  Statistics  Sweden,  user  questionnaires  are  widely  used,  and  the  Director 
General  through  intensive  dialogues  with  and  visits  to  main  users  follows  up 
results. In FYROM, they carry out such surveys via their Internet-site, which allows 
the SSO to obtain immediate feedback on its performance.  

- 

- 

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Users' satifaction questionnaire 

Variable 

Criteria 

Type of user 

Weights of each 
criteria 

Weights of 
each question  
10 

public administration 
business community 
academic community 
individual user 
international user 

40 
35 
10 
  5 
10 

Users' specialisation - 
subject area  
Statistical indicators/ area  
used 
Level of usefulness of 
statistical indicators to the 
user  

Relevance of statistical data 
- level of satisfaction 

Timeliness 
- level of satisfaction 

Frequency 
- level of satisfaction 

Dissemination 
- level of satisfaction 

Dissemination media 
- level of satisfaction 

Costs 
- level of satisfaction 

1 
2 
3 

1 
2 
3 

1 
2 
3 

1 
2 
3 

1 
2 
3 

1 
2 
3 

1 
2 
3 

10 

10 

25 

10 

10 

5 

10 

5 

5 

0 
50 
100 

0 
50 
100 

0 
50 
100 

0 
50 
100 

0 
50 
100 

0 
50 
100 

0 
50 
100 

Legend: 1 - Low, 2 - Medium, 3 - High 

100 

COMMENTS 

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Plenum 

The  main  conclusion  drawn  by  the  co-chairman  (PhN)  is  that  the  objective  to 
calculate  a  compliance  rate  was  too  premature  at  this  stage  of  the  development  of 
Western  Balkan  statistical  systems.  He  pleads  for  an  annual  review  based  on  a 
qualitative assessment in some key statistical domains.  

Statistical  institutes  from  Western  Balkan  countries  should  first  concentrate  their 
efforts  on  strategic  planning  and  the  development  of  multi-annual  programmes. 
Assessments are part of quality management and the recommendation based on the 
results of assessments are an input used to improve the long-term planning. 

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Session 4 - Donor Co-ordination and Progress 
Measurement 

The donors raised 4 general issues for the discussions:  

1) What are we working for? 
2) How we have worked until now? 
3) Problematic issues 
4) Co-ordination – proposals for action 

Issue 1: What are we working for? 

(cid:1)(cid:2) Support the medium/long term strengthening of the National Statistical Systems 

of partner countries 

(cid:1)(cid:2) Approximation  to  the  European  Statistical  System  (ESS)  and  international 

recommendations and standards  

(cid:1)(cid:2) Sharing  of  experience  and  transfer  of  know  how  in  given  subject  matter  areas 

and overall institutional development 

Issue 2: How we have worked until now? 

(cid:1)(cid:2) Providers  of  technical  assistance  have  worked  mainly  on  the  basis  of  their 

national policy and/or upon request 

(cid:1)(cid:2) Given  countries  have  worked  with  “traditional”  partners;  some  partner  country 

(cid:1)(cid:2)

could not find a member state available to work with them 
Initially, knowledge on a given country remained with those who had acquired it, 
no  real  information  sharing  occurred  between  the  providers  of  technical 
assistance 

(cid:1)(cid:2) As EU co-operation with these countries, taken as a whole, started only in the last 
few  years,  spontaneous  initiatives  aiming  at  an  improved  sharing  of  information 
and co-ordination of projects have taken place 

(cid:1)(cid:2) A more effective co-ordination with the programmes of international organisations 

has also been attempted 

Issue 3: Problematic issues 

(cid:1)(cid:2)

Information  is  not  exchanged,  or  not  efficiently  exchanged,  among  donors,  and 
between donors and partners 

(cid:1)(cid:2) On  the  side  of  donors,  to  write  a  good  project  document  and  to  get  the  project 
financed, topics like “activities of other donors”, “co-ordination with other projects”, 
etc.  have  to  be  included,  but  in  reality  they  are  not  really  a  major  operational 
concern 

(cid:1)(cid:2) Policies  of  individual  donor  countries  and  of  international  organisations  diverge 
between one another, and often do not match real interest of partner countries 
Implementation  procedures  differ  from  one  donor  to  another,  as  well  as 
availability of financial resources and modes of spending them 

(cid:1)(cid:2)

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(cid:1)(cid:2) Multi-donor programmes are difficult to manage and create serious co-ordination 

problems 
International experts are not always of the standards/dedication required 
Individual  donor  country’s  bargaining  power  with  international  organisations  is 
limited 
“We all talk about co-ordination but no-one wants to be co-ordinated” 

(cid:1)(cid:2)
(cid:1)(cid:2)

(cid:1)(cid:2)

Issue 4: Co-ordination – proposals for action 

(cid:1)(cid:2) Definition?  Exchange  of 

their 
implementation  and  willingness  to  design  co-ordinated  programmes, in order to: 
manage  operations  efficiently,  create  synergies,  optimise  the  use  of  available 
financial resources and ensure sustainability of intervention  

information  on  donors’  programmes  and 

(cid:1)(cid:2) Effective  co-ordination  is  country-specific  (objectives  are  mostly  common  to  all 

countries, but the path to reach them is specific to each country) 

(cid:1)(cid:2) Co-ordination  requires  the  willingness  of  all  actors  involved  and  some  constant 
and time-consuming work If it is not compulsory, there is no real incentive to do it; 
maybe a small percentage of overall costs can be set aside for this purpose 
(cid:1)(cid:2) Partner  countries  are  in  the  best  position  to  take  the  lead  and  the  main 
responsibility for co-ordination A focal point could be appointed in each country; it 
should be recognised by all actors, competent and authorised to take decisions; 
also  it  should  be  consulted  before  detailed  planning  of  a  project  or  intervention 
starts 

(cid:1)(cid:2) Co-ordination  and  information  exchange  does  not  require  frequent  and  costly 
meetings;  information  must  be  effectively  collected  and  circulated  with  other 
means  

(cid:1)(cid:2) Co-ordination  needs  to  be  proactive:  meetings  are  to  be  organised  at  country 
level, only when needed and only with those actors whose intervention is crucial 
to find solutions to the given problem 

Subgroup I 

Subgroup leader: Raul Suarez de Miguel, (Swiss Federal Statistical Office) 
Reporter: Gero Carletto (World Bank) 

The subgroup was chaired by Mr. Raul Suarez de Miguel of SSFO who opened the 
discussion by identifying two separate, non-conflicting functions donor co-ordination 
is  to  serve.  The  first  is  at  the  policy  level  while  the  second  relates  more  directly  to 
implementation.  The  leading  role  of  Eurostat  in  relation  to  the  first  function  was 
acknowledged. All donors must work at both levels to ensure that the two functions 
are  adequately  integrated  and  best  serve  the  objectives  and  priorities  of  recipient 
countries. 

The  introduction  was  followed  by  country  statements  on  the  role  played  to  date  by 
different donors. Overall, countries expressed satisfaction with the type and level of 
support  but  recognised  the  need  for  improved  co-ordination,  as  donor’s  views  and 
agenda  are  often  conflicting.  The  point  was  raised  that  donors  often  have  binding 
political  and  inter-institutional  agreements  to  which  they  must  abide,  and  that  these 
binding constraints must be taken into account. Also, three points of potential friction 
in donor co-ordination were mentioned, and relate to (i) the standards to be adopted 

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by  each  country;  (ii)  the  prioritisation  of  actions;  and  (iii)  the  synchronisation  in  the 
provision of resources. While some rigidity must exist on the former, more flexibility 
and ad-hoc solutions must be sought by donors with respect to the latter issues. 

The  proposal  for  NSI’s  and  national  governments  to  play  a  catalytic  role  in  co-
ordinating  effort  in  their  respective  countries  was  raised  and  discussed.  Some 
consensus was expressed in support of having recipient institutions play the role of 
transparent broker in co-ordinating donors’ efforts. However, reservations were also 
expressed  about  the  in-country  capacity,  as  well  as  the  countries’s  incentives  to 
perform this function.   

Consensus  was  reached  in  the  group  that  the  statistical  masterplan  individual 
countries  are  to  prepare  can  provide  a  useful  tool  to  enhance  co-ordination  among 
donors, as it will give NSI’s a blueprint of activities to be implemented and to which 
donors  would  be  encouraged  to  contribute.  By  developing  and  following  a  donor-
endorsed  multi-year  strategy,  as  outlined  in  the  masterplan,  NSI’s  will  be  able  to 
funnel the effort of different donors in a more efficient and effective manner. 

Furthermore,  the  importance  of  renewed  efforts  by  individual  donors,  as  well  as  by 
recipients,  to  actively  promote  the  exchange  of  information  and  future  plans  was 
mentioned.  The  Circa  website  can  provide  a  viable  instrument  to  promote  such 
exchange.  However,  individual  initiative  and  renewed  professional  relationships  at 
the country level was also thought to be an important factor in promoting donor co-
ordination. 

In  conclusion,  and  in  line  with  the  findings  and  recommendations  of  the  Global 
Assessment,  participant  countries  and  donors  supported  the  development  at  the 
country level of viable multi-annual strategies which could provide the basis for donor 
co-ordination in the field of statistics. 

Subgroup II 

Subgroup leader: Ms Slavka Popovic (BHAS, BiH) 
Reporter: Ms. Carol Mottet (SFSO, CH) 

The  Group  discussion  didn’t  strictly  follow  the  proposed  items  for  discussion  as 
provided  in  the  preparatory  paper,  but  the  main  issues  it  raised  were  nevertheless 
debated.  The  Group  had  a  lively  discussion  on  issues  as  prompted  by  the  Group’s 
Chair introduction of Bosnia-Herzegovina’s experience with donors’ co-operation. On 
the  points  that  were  discussed,  experiences  in  other  countries  in  the  region  were 
proposed for comparison. However, the report hereafter does present in a synthetic 
manner the points of discussion, and does not systematically reflect the details of the 
practical experience(s) that prompted the points. 

Mainly,  a  number  of  issues  that  were  problematic  for  the  recipient  countries  were 
raised,  and  proposals  for  ways  out  of  such  problems  were  signalled.  The  issue  of 
what process for co-ordination would be most suited was also discussed in the end. 

Point 1 Donors as support for reinforcing statistics and statistical institution’s 
domestic status 
The  experience  in  B&H  provided  a  clear  illustration  of  the  difficulties  to  change  the 
statistical culture and to undertake fundamental reform to meet the new requirements 
of  a  statistical  system  having  to  cope  with  transition  to  market economy, while also 

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having  to  adapt  to  rapid  and  continuous  changes  happening  within  the  European 
statistical system itself. 

It was recognised as a general rule that the prime responsibility for such a reform lies 
with the State, but at the same time that the past and current situation in the region 
made  it  illusory  to  expect  that  the  State  could  actually  provide  alone  the  additional 
support in terms of staff training, infrastructure and financial resources as needed for 
reforming the national statistical system. 

Donors intervention therefore is useful both in providing direct support for statistical 
production,  but  just  as  important  for  backing  the  institutional  status  of  NSIs  in  their 
national  dialogue  with  Government  (in  the  extreme  case  of  B&H,  this  was  even 
directly  linked  to  the  creation  of  the  State  Agency  for  Statistics)  and  within  the 
national statistical system. 

Point  2  Avoid  burdening  recipient  countries’  statistical  institutions  with 
repetitive  and  non  co-ordinated  demands  for  basic  information  on  statistical 
development 
Each donor usually comes with its own objectives, budget, deadlines, administrative 
rules,  etc.  In  order  to  set  up  co-operation  projects  with  recipient  countries,  many 
distinct exploratory / planning missions take place, most of the time not co-ordinated. 
This  results  in  a  very  heavy  burden  for  recipient  countries  (time  and  resources 
consuming)  just  to  provide  the  background  and  current  status  information  on 
statistical development. In addition, many of these missions actually are not followed 
by  any  concrete  planning  of  activities.  There  is  a  clear  need  to  rationalise  these 
processes. 

One way to rationalise this input that is needed by donors could be precisely through 
Global Assessments such as those just conducted in 4 countries of the region, and 
through  their  regular  up  dating.  Another  way  could  be  for  donors  to  canalise  their 
demand  to  one  national  institution  recognised  for  co-ordination  of  the  national 
statistical  system,  and  not  to  address  their  demand  in  a  dispersed  way  to  several 
national  as  well  as  (when  this  applies)  to  regional  institutions.  To  avoid  any 
misunderstanding, 
to  programmes 
implementation, beneficiaries should then be not only this institution, but also all the 
various  institutions  of  the  national  statistical  system  at  the  national  and  regional 
levels. 

it  was  specified 

that  when 

it  comes 

Point 3 Avoid pushing for what is felt as non-national priorities and distracting 
scarce resources from agreed national statistical priorities 
In the course of such missions by donors, several institutions are usually contacted 
and asked about their priorities, without taking into consideration the fact that these 
institutions  may  not  have  had  yet  the  occasion  to  consolidate  a  common  set  of 
statistical  national  priorities.  Furthermore,  donors’  discussion  on  policy  needs  at 
ministry levels sometimes are the basis for deciding on specific statistical production 
priorities  in  which  the  national  statistical  institute  has  no  say,  and  that  may  not 
correspond  to  the  NSI’s  choice  for  priority  and  methods  for  producing  the  needed 
information.  

Typically,  donors  should  refrain  from  pressuring  decisions  in  such  ways  that  may 
correspond to their own needs and objectives, but not to agreed national priorities for 
statistical development. It was stated clearly that donors have to adjust to domestic 
needs and priorities, and not the other way around. 

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There  exists  a  typical  point  of  tension  between  a  government’s  decision  on  what 
information  is  needed as a priority, and the NSI’s right to decide on how to provide 
this information, and this is a process that needs be approached through a domestic 
dialogue,  from  which  national  priorities  for  statistical  programming  can  emerge. 
Donors should not be direct actors in this dialogue, although they may have demands 
that can be considered within this dialogue. 

Such  external  interventions  are  not  favourable  to  the  long-term  objective  of 
reinforcing the national statistical system of the recipient country, as: 

-  This eats away scarce domestic resources from NSI to fulfil a demand that is 

not in line with national priorities as defined through a national dialogue 

-  This  weakens  the  position  of  the  NSI  in  its  domestic  dialogue  with  the 

- 

government and other actors in the national statistical system 
It  is  unlikely  that  such  statistical  activities  will  be  repeated  as  such,  and  are 
hence not sustainable 

It  was  even  noted  that,  when  the  official  statistical  system  is  not  in  a  position  to 
answer  such  short—term  demands  as  pushed  for  by  external  actors,  recourse  to 
private  companies  is  sometimes  happening.  This  seems  even  less  in  line  with  the 
objective of fostering a sustainable national statistical system that lies at the heart of 
statistical co-operation. 

Point  4  Keep  the  process  of  statistical  development  in  the  hands  of  partner 
countries and take responsibility for this 
If donors should avoid counterproductive interventions as pointed out in the previous 
point, it was also recognised that there is also a domestic responsibility on the NSIs’ 
side to enter actively in dialogue with their authorities, so that statistical priorities can 
be  agreed  and  a  statistical  programme  can  be  adopted  nationally,  taking  also  into 
account the needs of international programmes when felt appropriate. 

When  such  bases  exist  (dialogue  and  a  national  statistical  programme  or 
masterplan),  it  is  also  easier  for  NSIs  to  react  appropriately  when  ad  hoc  external 
demands  are  entered,  that  could  derogate  from  the  priority  lines  established  for 
statistical production.  

NSIs can then refer to agreed national priorities and discuss such external demands, 
and refuse some if felt inappropriate. It was also pointed out that when NSIs are in 
the  driving  seat,  ad  hoc  external  demands  can  sometimes  also  constitute 
opportunities for NSIs to push for systemising a data collection that was initiated as a 
one-off action under external demand. 

Point  5  Statistical  institutes  in  partner  countries  should  co-ordinate  external 
support from statistical co-operation programmes 
It was agreed that the co-ordination of the flow of information needed and generated 
by the various statistical co-operation programmes of donors was best located within 
the statistical institutes in partner countries. These are in the best position to have an 
overview  of  the  complex  on-going  domestic  statistical  needs  and  statistical  priority 
setting  processes,  as  well  as  of  the  various  donors’  co-operation  programmes,  be 
they under preparation or ongoing. They are hence in the best position also to match 
them according to national priority needs. 

NSIs  need  to  have  the  proper  human  and  financial  resources  to  handle  this  co-
ordination task, and might need to get support from EU and other donors to ensure 
this. 

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Global Assessments of the Western Balkan countries 

Concretely, it was agreed that NSIs should establish some sort of internal focal point 
for  national  co-ordination  of  international  donors.  This  should  notably  inform  at 
regular  intervals  on  co-operation  projects  in  the  pipeline,  on  advancement  of  on-
going  projects,  etc.  (this  can  for  instance  be  managed  by  inclusion  in  a  simple 
matrix).  The  focal  point  could  also  propose  better  co-ordination  between  donors’ 
actions.  It  was  also  proposed  along  this  line  that  NSIs  should  chair  donors’  co-
ordination meetings at national level, when such meetings are organised. Reporters 
privilege, it could be added that partner countries’ NSIs could actually organise such 
meetings of their own initiative, as another way of taking full responsibility for national 
statistical development. 

Point 6 Statistical institutes in partner countries should co-ordinate statistical 
activities  or  activities  having  an  impact  on  statistics  that  are  undertaken  by 
other  domestic  institutions  in  their  (non-statistical)  co-operation  programmes 
with donors 
In  order  for  NSIs  to  effectively  and  efficiently  play  this  co-ordination  role,  it  is  also 
necessary  that  they  be  fully  integrated  in  the  domestic  flow  of  sharing  information 
within their own government. They should be in a position to be informed and to be 
part of processes when statistical activities or activities having an impact on statistics 
are discussed with donors and decided upon in the framework of non-statistical co-
operation programmes or with non-statistical domestic institutions. They should also 
be  in  a  position  to  inform  on  ongoing  statistical  developments  when  relevant.  This 
means that NSIs should be recognised as national co-ordinators for statistics, so that 
they can be informed and inform decisions in such frameworks, avoid duplication and 
build coherent national statistical policies. 

NSIs  should  therefore  be  in  a  position  (and  should  demand  for  this)  to  be  part  of 
national  mechanisms  of  co-ordination  that  are  not  specific  to  statistics  (such  as 
national  aid  co-ordination  units).  They  should  also  seek  that  the  national  statistical 
law recognises such a statistical co-ordination role for the NSI, and even prescribes 
an  obligation  for  other  administrative  bodies  in  the  State  to  inform  the  NSI  when 
statistical activities or activities having an impact on statistics are envisaged (as is the 
case in the new draft statistical law in Albania). 

Plenum 

In the discussions the following issues were raised:  

- 

- 

- 

- 

National  Statistical  Institutes  #  National  Statistics;  which  implies  that  co-
ordination is required also of other producers for instance in the ministries 
Provisions  in  statistical  law  needed  to  allow  co-ordination  of  non-statistical 
activities with impact on statistics (such as administrative registers) 
Donor  co-ordination  should  involve  all  stakeholders,  and  the  National 
Statistical Institutes must ensure the co-ordination at the national level.  
Lack of statistical culture prevails with little knowledge existing in the national 
administrations. 

The  co-chairman  (PhN)  stressed  that  donors  must  meet  to  co-ordinate  their 
processes  (policy  and  strategy)  and  link  activities  with  the  national  Master  plans. 
These issues could be discussed further in the forthcoming CARDS policy group or a 
conference focused on policy issues, strategy, procedures and how to work together. 
The countries must develop a statistical culture as there is  

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Global Assessments of the Western Balkan countries 

Part 2 Background Documents 

Agenda of the Global Assessment  
Seminar of 3 and 4 June 2002 
GAseminar/2002-1 
19.4.2002 

Introduction and Welcome 

The  co-chairmen,  Mr.  Nanopoulos  (Director  at  Eurostat)  and  Mr.  Gredelj 
(Director  of  CBS  in  Croatia)  will  open  the  seminar.  Hereafter,  Mr.  Ib  Thomsen, 
EFTA Adviser will make a short second opening speech. 

Background of the Global Assessments 

Doc. GAseminar/2002-2 
Eurostat  will  explain  why  and  how  the  Global  Assessment  reports  were 
prepared. 

Main results of Global Assessment exercise 

Doc. GAseminar/2002-3 
Global Assessments were carried out in Albania, Croatia, FRY and FYROM. Mr. 
Brüngger presents the main results and points out similarities and dissimilarities 
between the four Western Balkan countries. 

Practical use of the Global Assessments 

Doc. GAseminar/2002-4 
Eurostat  will  explain  the  use  of  the  Global  Assessment  reports  for  defining 
CARDS  strategy  papers  and  more  specifically  for  the  elaboration  of  a  new 
strategy  for  statistical  co-operation  with  the  Western  Balkan  region  and  Master 
Plans  for  the  national  statistical  systems.  Albania  and  FR  of  Yugoslavia  are 
invited  to  explain  how  they  use  (or  will  use)  the  global  assessment  reports  in 
general and as input for their Master Plans in particular.  

Progress measurement 

Doc. GAseminar/2002-5 
The Eurostat document provides a first attempt on how progress measurement 
could be done in practice. Croatia and FYR of Macedonia will elaborate on this 
proposal and animate the subsequent discussions in the subgroups. 

Donor co-ordination and progress measurement 

Doc. GAseminar/2002-6 
Bosnia-Herzegovina  is  invited  to  prepare  a  presentation  on  perceived  benefits 
and identification of possible negative elements of donor support. The three main 
donor  countries  (Italy,  Switzerland  and  Sweden)  are  invited  to  prepare  a  joint 
proposal on improving donor co-ordination. Subsequently, the delegates will be 
invited to discuss on the questions raised in these presentations, as well as on 
the role of progress measurement in donor co-ordination. 

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Background of the Global Assessments 
GAseminar/2002-2 
17.4.2002 

Introduction 

The Global Assessments of the National Statistical Systems of Albania, Croatia, the 
FR of Yugoslavia and the FYR of Macedonia have been carried out with the purpose 
to analyse their institutional environment and to ascertain their capacity to provide, in 
a  sustainable  way,  accurate,  timely  and  relevant  information  to  their  users.  These 
assessments should thus form a strong basis for future programming under CARDS. 
Before  analysing  the  main  results  of  the  Global  Assessments  and  discussing  how 
these exercises could effectively be used for future strategies, it seems appropriate 
to provide a summary background of the exercise in practice. 

General approach 

The Global Assessments were composed of two one-week in-country missions by an 
expert and an equivalent number of days by the same expert in the headquarters for 
preparation and reporting. For each mission the expert has sent a list of topics to be 
discussed in the country on the basis of which the expert and country could jointly fix 
an  agenda.  The  two  one-week  in-country  missions  were  always  separated  by  a 
minimum  period  of  three  weeks.  The  result  of  the  first  mission  was  a  draft  report 
approved by the country. The second mission had to complete the first assessment 
and  was  concluded  with  a  final  report.  Both  the  draft  and  final  reports  followed  a 
similar structure that was based on a template provided by Eurostat (see annex). 

The following documents have been assessed: 

(cid:1)(cid:2) Legal  basis:  statistical 

law,  population  census 

law,  data  protection  and 

confidentiality. 

(cid:1)(cid:2) Administrative capacity: country tables, mission reports, master plan. 
(cid:1)(cid:2) Statistical activities: annual work programme, sector assessments. 

During  the  country  evaluation  the  expert  continuously advised the top management 
of  the  National  Statistical  Office  on  the  objectives,  use  and  needs  for  medium  and 
long-term  programming.  During  the  second  mission  the  consultant  has  also 
formulated recommendations for an appropriate follow-up, use and implementation of 
master plans. 
In  each  of  the  countries  the  consultant  has  visited  some  of  the  regional  offices  in 
order  to  get  a  better  idea  of  their  production  capacity  and  of  the  actual  data 
transmission to the National Statistical Office. 
The  expert  also  met  representatives  of  other  public  entities,  such  as  the  National 
Bank, and Ministries that had been identified as producers of statistics. Ministries that 
are merely acting as users, not as producers, have not been contacted. It had been 
agreed that the users of statistics would not be contacted. Hence, all statements on 
users’ assessment were made by producers. 

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Country specific elements 

Due to the more complicated institutional structure of the National Statistical System 
of  Yugoslavia  with  one  federal  and  two  republican  offices,  the  FRY  Global 
Assessment was carried out by two consultants. The first in-country mission took 1,5 
week  as  opposed  to  the  one-week  mission  in  the  other  three  countries  in  order  to 
allow the two assessors to investigate and discuss with the relevant experts of each 
of the three offices. 
The National Statistical System of Bosnia-Herzegovina has not yet been subject to a 
Global Assessment, because there is no legal basis. It is expected that a new law on 
statistics,  which  would  modify  the  present  management  structure,  will  soon  be 
adopted. 
A  lighter  Global  Assessment  of  the  Statistical  System  of  Kosovo  has  recently  been 
carried out. 

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Annex - Global Assessment Report Template 

Table of Contents 

Preface 

Executive summary (maximum 5 pages): 

Topic 

Contents 

1. 

General  description  of  the  statistical 
system, 
including  some  historical 
background 

2. 

Specific characteristics of the system  

3. 
of the system 

General  strengths  and  weaknesses 

4. 

Conclusions 

statistics 

NIS,  major 
institutions  providing 
statistics,  legal    basis,  staff,  surveys, 
budget, dissemination, users, 
etc. 
e.g.  new  versus  well-established 
system; 
centralised/decentralised 
system;  not  typical  position  inside 
based 
administration; 
mainly  on  registers;  specific  network 
of 
interviewers;  unusual  additional 
tasks of NSI, peculiarities, etc. 
e.g.  committed  well-trained  staff; 
inability  recruit  and  maintain  well-
skilled  young  staff;  far  than  sufficient 
own 
of 
implementation  of  the  EU  standards 
to 
and 
classifications, 
strengthen some areas, etc. 
e.g.  possible  future  developments, 
medium-term 
immediate 
recommendations, 
improvements, 
etc. 

budget; 

need 

good 

level 

and 

A 

Institutional setting 

1 

Legal setting 

1.1 
1.2 
1.3 

1.4 
1.5 

Statistical law 
Other legislation, including censuses 
Statistical  council,  statistical  programme, 
consultations with the users 
Protection of independence 
Data protection and confidentiality 

inter-ministerial  consultations, 

2 

National Statistical System (public statistics system) 

Principles 
Structure, including regional units 
Official statistics system, providers of official statistics 
Liaison with research institutes and universities 

2.1 
2.2 
2.3 
2.4 

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Relationship with the users 
Dissemination policies 
Relations with the central government 
Relations with the regional and local government 
Relationship with other providers of statistics 

2.5 
2.6 
2.7 
2.8 
2.9 
2.10  Access to administrative records 

3 

Description of the NSI 

3.1  Mission, internal organisation 
Planning, programming and priority setting 
3.2 
3.3  Monitoring quality in all activities (quality culture) 
3.4 
3.5 
3.6 
3.7 
3.8 
3.9 

Organisation of large-scale surveys 
Finance and budgeting 
Staffing, staff recruitment and training 
Information technology 
Internal monitoring of performance 
External accountability 

4 

Statistical infrastructure 

4.1 
4.2 

Classifications 
Registers 

Annexes: 
1. 
2. 
3. 
4. 
5. 
6. 
7. 

8. 
9. 
10. 

11. 

Organigramme of the NSI, incl. regional structure; other data producers 
Law on statistics, incl. censuses 
List of surveys conducted 
Staff, number, age structure, education 
Training programme 
Publication plan, schedule for NSI press releases 
Basic  statistics  on  the  country  (area,  adm.  Structure  of  the  country, 
population, GDP per capita) 
Overview of the budget for statistics 
List of co-operation projects 
in 
Documents  specific 
legislation, reorganisation plans, schedules for implementing specific projects) 
List of meetings held during assessment missions (agenda, names) 

for  particular  country  (e.g.  proposed  changes 

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Main results of the Global Assessment exercise 
GAseminar/2002-3 
23.4.2002 

Introductory remarks 

This  paper  tries  to  give  a  cross-sectional  view  about  the  findings  of  four  global 
assessments in systems of official statistics in countries of the Western Balkans. The 
countries reviewed were Albania, Croatia, Macedonia (Former Yugoslav Republic of), 
and Yugoslavia (Federal Republic of). 

There is no attempt in this paper to give any ranking of these countries. Assessments 
are in their nature multi-dimensional, and any reduction in dimensions would lead to 
the  necessity  of  subjective  weighting.  Furthermore,  most  of  the  individual  elements 
analysed  do  not  lend  themselves  to  quantification,  and  some  of  the  elements  are 
relevant to only one or two countries. This is especially the case for Yugoslavia, the 
only country with a federal institutional framework and with statistical offices both at 
the  federal  level  and  at  the  level  of  the  two  republics  of  Serbia  and  Montenegro 
respectively. 

The approach chosen was to find characteristics that are either common to all or to at 
least  three  of  the  countries  analysed.  The  commonality  of  findings  should  not  be 
interpreted  in  the  way  that  the  same  recommendations  for  further  developments 
would be applicable to the countries concerned. Exchange of information and forms 
of co-operation between these countries on their respective ways of dealing with the 
same global assessment finding might turn out to be of mutual benefit, however. 

The  characteristics  outlined  below,  especially  those,  which  imply  a  need  for 
development and investment, are certainly not limited to the four countries analysed. 
Other  European  countries,  including  those  of  highly  developed  Western  European 
countries, are very likely to share, or have shared at a given moment in recent times, 
some of the characteristics listed as shortcomings in need of development. The four 
countries  concerned  should  not  be  seen  as  forming  a  group  of  countries  with 
systems  of  official statistics the characteristics of which are clearly distinct from the 
rest of Europe: to the contrary, the systems of official statistics in these countries will 
be  able  to  gradually  close  the  gap  to  the  EU  standard  if  the  structural  weaknesses 
found  during  the  global  assessment  are  overcome  through  mainly  national  efforts 
paired  with  foreign  advice  where  necessary,  and  if  the  resources  situation  (with 
respect  to  human,  financial  and  IT  resources)  can  be  improved.  For a certain time, 
the latter item will have to involve funds from donors from abroad, but the objective 
should  be  to  build  up  systems  that  can  be  sustained  with  national  resources  and 
know-how within the national system once the external funding will come to an end. 

The characteristics below are taken from the global assessment report (GA reports) 
and reflect therefore the situation when these assessments took place (spring 2001 
for  Albania, Croatia, and Macedonia; winter 2001/2002 for Yugoslavia). There is no 
attempt  in  this  paper  to  give  an  up-to  date  picture  of  what  has  happened  in  the 
systems  of  official  statistics  in  these  countries  since  the  GA  took  place,  with  the 

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exception of major events like a population census or the starting of work with master 
plans. 

In order to have a full benefit of the GA, they should not be seen as one snapshot at 
a  given  time  only.  It  is  hoped  that  some  regular  form  of  assessments,  be  it  self-
assessment, external assessment or a combination of both, can be set up so as to 
monitor progress over time for each of the countries concerned. 

With some slight exceptions, the visits made by experts to the countries for preparing 
the  GA  reports  did  not  include  direct  contact  with  important  users.  This  is  an 
important limitation, which should be corrected in follow-ups to these assessments. It 
is difficult to monitor progress without asking the opinion of key users. 

The European spirit in which all these GA were carried out are best illustrated by the 
remarkable  spirit  of  professional  objectivity  in  which  the  statistical  offices  of  these 
countries  were  prepared  to  help  the  experts  in  carrying  out  their  tasks.  All  offices 
were  prepared  to  discuss  critical  points  openly  and  agreed  to  see  the  assessment 
results truthfully reflected in the GA reports even if they had to refer to shortcomings 
and  weaknesses.  They  showed  an  eagerness  to  improve  and  to  learn  from  other 
European  countries  about  standards  and  good  practices,  which  is  essential  for  any 
future  professional  advice  and  future  assistance  in  resources  to  fall  on  fertile 
grounds.  

Most Important Characteristics Common to all Four Countries 

General Aspects 
In the decade starting with 1990, all countries had experienced fundamental changes 
in  their  respective  societies,  economies  and  institutional  frameworks,  and  in  some 
cases  even  war  and  unrest.  This  lead  to  very  difficult  conditions  for  the  regular 
production of official statistics, especially for data collection in the field. 

In  spite  of  these  difficulties,  all  countries  were  able  to  maintain  continuity  in 
production of some statistics, even though some important gaps could only be filled 
retrospectively. 

In  all  countries,  agriculture  has  remained  a  very  important  sector  for  the  economy 
and as part of the labour force even after the transition. 

These changes had a fundamental impact on the concept of official statistics, which 
changed  from  an  instrument  of  planning  and  control  on  the  basis  of  "evidences"  to 
official  statistics  based  on  the  UN  fundamental  principles  such  as  accessibility  of 
results  to  everybody,  transparency,  representativity,  statistical  confidentiality,  and 
international comparability. 

In  the  old  systems,  official  statistics  used  to  be  considered  as  purely  technical 
function  (collection  of  evidences/computing  of  aggregates/transmission  of  both 
individual  and  aggregate  results  to  other  authorities).  This  purely  instrumental 
approach  still  has  a  considerable  influence  on  the  perception  of  the  role  of  official 
statistics  by  part  of  staff  and  by  important  outside  stakeholders,  and  prevents 
statisticians  from  wanting  to  assume  their  new  role  fully  and  from  being  sufficiently 
self-confident, assertive, and proactive. 
Important  progress  on  certain  items  has  been  made  in  the  last  decade  in  spite  of 
difficult circumstances (labour force survey, national accounts, NACE Rev. 1) 

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In all countries, there is an urgent need for a master plan, with priorities and resource 
implications clearly indicated, to be adopted by government, which can subsequently 
serve as backbone for a full list of activities in a future statistical programme.  

Existing  surveys  will  have  to  be  cut  or  abolished  in  order  to  free  resources  for  new 
important statistical activities necessary for a modern statistical system. Such priority 
activities  may  refer  to  the  regular  production  of  a  few  key  indicators/aggregates 
according to EU standards in all subject areas, notably in economic statistics, to the 
fulfilment  of 
international 
agreements  such as the Stabilisation and Association Agreements with the EU and 
the  Special  Data  Dissemination  Standard  (or  the  General  Data  Dissemination 
System) of the IMF, or to statistics required for informed decision-making at national 
level in the present circumstances.  

requirements  enshrined 

international 

reporting 

in 

A certain number of existing surveys are still focused on past information needs the 
relevance  of  which  in  the  new  environments  has  neither  been  questioned  nor 
confirmed. 

Although  some  reallocation  of  present  resources  between  statistical  activities  is 
possible and should be planned and implemented swiftly, a net addition in resources 
(both  for  additional  qualified  staff  and  other  type  of  expenditures)  is  a  must  for  all 
countries  for  enabling  them  to  come  noticeably  closer  to  European  standards. 
Additional  resources  in  relation  to  present  resources  will  have  to  be  highest  in 
Albania  and  Montenegro,  where  the  present  system  is  not  only  relatively  far  away 
from European standards, but is too fragile in terms of sustainability in producing key 
statistics and collecting the necessary basic data on a regular basis.  

Legal Setting (Chapter A1 in the GA Reports) 
The  institutional  changes  of  the  countries  have  been  partially  reflected  in  new 
statistical laws from the 1990s (for Yugoslavia: at the federal level only). 

Statistical  offices  have  been  able  to  live  according  to  the  fundamental  principles 
recently (but are not sufficiently safeguarded from sudden pressure for the opposite). 

In  all  countries,  multi-year  statistical  programmes  (adopted  by  Parliaments  in  two 
countries,  by  governments  in  the  other  two)  exist.  They  are  essentially  lists  of  data 
collections, without links to resources or priorities. 

The  survival  strategy  in  the  past  decade  for  all  statistical  offices  was  to  upheld 
statistical  programmes  from  the  past  with  few  additions/changes,  so  as  to  remain 
outside  political  debates  and  to  facilitate  ensuring  resources  at  relatively  constant 
levels. 

New  concepts/classifications/definitions  were  introduced  gradually  to  relevant  items 
of the continuing programme; new items were added where resources permitted, or 
when funded by donors from abroad. 

While  certainly  useful  until  recently,  the  present  content,  structure  and  form  of 
statistical  programmes  are  not  helpful  for  meeting  future  challenges:  they  are  not 
user-oriented  and  not  forward  looking  to  future  user  needs,  and  do  not  encourage 
innovation and explicit priority setting. 
Statistical  offices  have  the  status  of  an  organisationally  independent  unit  of  the 
government that is not part of any ministry. 

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The  concept  of  statistical  registers  remains  unclear  (both  in  comparison  to 
administrative  registers,  and  to  datasets  with  final  microdata)  in  the  statistical 
legislation and in practice. 

Statistical offices are still in charge of administrative data handling (as managers of 
administrative registers of legal entities in three countries; and as responsible agency 
for  activity  coding  in  the  administrative  register  of  companies  in  the  fourth  country; 
one office was until recently in charge of an administrative population register) 

There  is  a  de  facto  adherence  to  statistical  confidentiality  for  both  physical  and 
private legal persons, but all offices experience problems in making rules of statistical 
confidentiality operational and known to users and respondents 

There  is  not  yet  a  systematic  separation/destruction  of  identifiers  after  data 
entry/coding. 

The  distinction  between  statistical  surveys  and  use  of  administrative  sources 
(evidences)  is  blurred  (in  old  terminology,  statistical  survey  was  a  generic  term 
covering both types of data collection). Many data collection with businesses that are 
purely  statistical  today  still  look  very  similar  to  the  collection  of  evidences  for 
administrative purposes, and respondents may perceive it in this way as well. 

No  general  data  protection 
(preparations/revisions have started in all countries except Albania). 

line  with  EU 

law 

in 

standards  exists 

No  statistical  law  contains  provisions  on  primacy/relationship  to  other  laws  in  the 
case of conflicting statements. 

Statistical System (Chapter A2 in the GA Reports) 
There  are  approximately  10  other  officially  authorised  producers  in  Croatia, 
Macedonia  and  Yugoslavia,  whereas  the  exact  number  of  other  producers  and  the 
limits of the system of official statistics are very unclear in Albania. 

The statistical law is applicable to these other producers, but except for setting up the 
statistical  programme,  they  are  mostly  unaware  of  the  provisions  in  the  statistical 
laws; they prefer to base their statistical activities on other legislation.  

The  basic  set  up  of  the  statistical  system  resembles  stovepipes,  both  within  the 
statistical offices and across producers. Each data collection is carried out separately 
until results from this survey are disseminated. 

Central  Banks  are  professional  in  substance  in  three  countries,  but  their  de  facto 
adherence  to  fundamental  principles  unknown.  Other  producers  are  not  aware  of 
fundamental  principles  at  all.  There  are  no  binding  rules  on  separation  between 
official statistics and non-compatible functions for these other producers. 

There are no data available on staff or financial resources for official statistics outside 
statistical offices. 

The "systems function" (focal point/ co-ordinator role) of statistical offices with respect 
to other producers is limited, concerning production of official statistics, to organising 
the inputs for the drafts of the statistical programme, because of either lack of legal 
provisions, lack of resources, or both.  

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The division of work between producers has not changed since 1990. New activities 
have not been allocated to producers on the basis of criteria. 

On the side of the users in government ministries and public bodies, there is a lack of 
"quantitative  culture",  i.e.  a  lack  of  skills  and  experience  in  making  good  use  of 
statistical  information  for  informed  decision-making.  They  have  also  difficulties  in 
formulating future information needs in advance.  

There  are  no  systematic  meetings  between  statistical  offices  and  users  in 
government  ministries  concerning  relevance  of  present  statistics  and  future 
information needs; only ad hoc meetings exist. 

There  is  no  network  for  contacts  with  local  governments  outside  the  population 
census. 

No  network  for  regular  contacts  with  the  business  community,  especially  with 
affiliates of foreign companies, exists. 

Official releases of new results are simultaneous to all users. 

There  is  an  advance  publications  catalogue  with  all  publications  to  be  published  by 
the statistical office 

Few  breakdowns  are  published  (except  for  censuses).  Special  tabulations  with 
additional  breakdowns  are  available  on  request,  but  mainly  for  government  users. 
Production  of  these  additional  tables  on  request  is  perceived  as  heavy  burden  by 
staff. 

Statistical  yearbooks,  with  coverage  of  subject  areas  of  other  producers,  exist  (in 
Albania, resumed after a long period of interruption). 

All  statistical  offices  except  Montenegro  have  good  websites  in  the  main  national 
language and in English. 

There is no user-friendly library for outside users (except FSO Belgrade) 

Products  focus  mainly  on  absolute  figures  and  contain  very  few  indicators  (except 
Albania in the case of ad hoc surveys funded by donors) 

Except  for  transmission  to  international  and  supranational  organisations  (see below 
3.2),  statistical  offices  do  not  offer    "one-stop  shops"  that  are  able  to  guide  users 
through the availability of all official statistics. 

Published  products  include  good  metadata  on  definitions/classifications,  but  few 
metadata on accuracy, response rates etc. 

Access  to  administrative  data  sources  beyond  what  is  mandatory  through  the 
statistical programme is perceived by statistical offices as not satisfactory. Holders of 
administrative  data  sources  can  block  amendments  of  the  programme,  and  refuse 
transmission of over and above what is foreseen in the programme. 

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Description of Statistical Offices (Chapter A3 of GA Reports) 
The  director  of  the  statistical  office  is  appointed  by  government,  as  well  as  deputy 
and assistant directors. 

In  administrative  matters,  statistical  offices  report  to  a  or  the  deputy  prime  minister 
(who in Albania represents the statistical office at government level for all issues; for 
other countries see 3.3) 

In  all  offices, 
directors/heads of departments) takes all important decisions. 

the  management  board  (director,  deputy  director,  assistant 

The  management  board  (in  Albania  the  director)  is  too  much  burdened  with  micro-
management issues. 

There  is  a  widespread  reluctance  to  use  estimation,  imputation,  grossing  up, 
calibration  etc  techniques  (except  when  explicitly  advised  by  foreign  experts), since 
these techniques have not been used in the old system where the main focus was on 
exhaustiveness. As a consequence, there are problems with the correct treatment of 
non-response or missing items. 

All  statistical  offices  have  regional  branches  (in  three  countries  except  Croatia  as 
integral  part  of  the  statistical  office,  a  move to this situation in Croatia is envisaged 
with the new statistical law). Their present function is mainly with data collection. 

The optimal size and number of these regional offices will have to be defined in the 
light  of  their  future  function  which  will  have  to  include  dissemination  and  advice  to 
local  users,  especially  local  governments,  and  inputs  into  creating  and  updating 
statistical  registers,  but  is  likely  to  show  less  involvement  in  those  data  collection 
where visits of respondent units can be replaced by postal surveys. Regional offices 
will have to be equipped with modern IT and communication links to headquarters. 

Restructuring  the  processes  of  data  collection  and  subsequent  processes  in  the 
direction  of  more  centralisation  is  a  potential  source  of  important  efficiency  gains. 
Until  now  this  potential  has  not  been  tapped  because  of  the  possible  social 
implications  for  staff  in  regional  offices  (difficulties  to  find  other  employment  in  the 
same region combined with high resistance to move to other locations). 

Statistical  offices  have  professionally  competent  and  well-motivated  staff,  who  is 
eager  to  learn  about  new  statistical  standards  in  their  respective  area,  in  spite  of 
difficult material circumstances. 

No  systematic  training  programme  exists  for  staff  of  statistical  offices.  There  is  a 
huge need for training in many aspects (foreign languages, notably English, concepts 
of  official  statistics  in  a  modern  society,  methodologies  of  official  statistics,  IT  in 
official statistics, and management in modern public administrations). 

The percentage of women staff is high (at least 2/3) in all statistical offices with the 
exception of the FSO in Belgrade. 

The standard of office automation is good (except in Montenegro). 
All offices have difficulties in keeping or recruiting IT specialists, because they cannot 
offer competitive salaries. 

There is no policy of job rotation for staff. 

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All  statistical  offices  (except  Montenegro)  own  their  IT for statistical processing and 
do not have to share it with other government bodies, but everywhere IT is in need of 
upgrading  (see  3.3.)  and  improved  communication  lines  with  the  outside.  In 
Yugoslavia,  the  federal  and  the  Serb  statistical  offices  perform  work  on  their 
equipment  for  administrative  purposes  of  other  government  bodies  or  public 
agencies. 

Capacity of Producing Statistics in Various Areas (Part B of GA Reports, incl. 
Classifications and Registers) 
NACE Rev. 1 is a compulsory standard by regulation not only for all official statistics, 
but also for all administrative records (not yet fully implemented in Yugoslavia). 

The  NUTS  classification  has  to  be  established  (in  pipeline  for  adoption  in 
Macedonia). There is no existing administrative level, which could correspond to level 
NUTS 2. 

Statistical  registers  as  distinct  from  administrative  registers  are  not  well  developed. 
Priorities for such developments are: a dwellings register after the population census 
that  could  serve  as  sampling  frame  for  household  surveys,  a  business  register  as 
sampling  frame  for  business  surveys,  and  a  farm  register  as  sampling  frame  for 
agricultural  surveys.  Where  the  opportunity  of  starting  one  of  the  above  statistical 
registers  with  a  population  census  has  been  missed  (for  the  business  register,  a 
population  census  could  provide 
the  part  on  unincorporated 
the  basis 
enterprises),  an  economic  or  agricultural  census  may  be  the  only  way  of  creating 
such registers with a solid basis.  

for 

The  system  of  business  surveys  is  characterised  by  too  many  parallel  surveys 
confined to legal units (for which administrative registers of reasonable quality exist, 
see  3.4);  many  surveys  of  this  kind  are  in  addition  heavily  focused  on  state  (or  ex-
state)  companies  with  exhaustive  coverage  of  this  part,  with  a  corresponding 
undercoverage  of  the  "new"  private  sector  (especially  marked  in  Albania  and 
Yugoslavia). 

There are few probability samples of businesses (exception: retail trade) 

Outside  national  accounts  no  extrapolation  of  business  surveys  takes  place  to 
estimate  total  economy.  Difference  between  labour  force  survey  data  and  business 
survey data concerning employment are high.  

Difficulties  in  annual  population  statistics  after  the  population  census  during  the 
1990s  have  arisen  because  of  many  unrecorded  migrations  and  displacements 
caused directly or indirectly by war and unrest. 

Few  breakdowns  concerning  age  or  region  are  available  in  annual  population 
statistics. 

There remains a weak point in annual population statistics after a recent (or future) 
population census: the systematic capture of international migration of nationals. If no 
administrative  records  of  sufficient  coverage  are  available,  the  use  of  household 
surveys (inclusion of questions in the labour force survey e.g.) is encouraged. 

Response rates in household surveys are generally high. 
Sampling  frames  for  household  surveys  and  weights  for  grossing  up  are  in  urgent 
need of being put on a more sold basis after the most recent population census.  

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Selected Characteristics Common to Three (or Two) Countries 

Legal Setting (Chapter A1 of the GA Reports) 
There is no fixed term for the director of the statistical office (exception: Macedonia). 
The  tradition  is  that  a  new  government  has  to  confirm  the  incumbent  or  appoint  a 
new director. 

Statistical  laws  need  fundamental  revisions  (exception:  Macedonia).  In  the  other 
countries,  work  on  revision  has  started,  but  for  Yugoslavia  it  has  to  wait  for  new 
constitution. 

There  is  a  legal  requirement  for  annual  ex-post  reporting  on  the  implementation  of 
the statistical programme (exception: Albania) 

Legislation on population census is basically in line with fundamental principles (not 
apparent from the law in Yugoslavia, but compliance is maintained in practice) 

Statistical programmes are based on legal acts (exception: Albania). 

A  Statistical  Council  as  the  main  advisory  body  for  official  statistics  is  in  place  in 
Albania  and  Macedonia,  and  foreseen  in  the  present  law  but  not  implemented  in 
Croatia. 

Researchers can receive microdata from official statistics (exception: Yugoslavia; in 
Macedonia, no use of this possibility has been made so far). 

IMF Dissemination Standards: Croatia has subscribed to SDDS, Albania participates 
in  GDDS.  In  both  countries,  the  country  co-ordinator  role  is  not  with  the  statistical 
office. From the range of outputs (with fiscal sector as question mark), Macedonia is 
likely  to  be  in  a  position  which  would  allow  subscription  to  the  SDDS;  Yugoslavia 
should also be in a position to participate in the GDDS. The country co-ordinator role 
should be with statistical offices.  

A  SAA  with  the  EU  is  in  force  in  two  countries  (Macedonia  and  Croatia)  with  direct 
implications for statistics. 

Statistical System (Chapter A2 of the GA Reports) 
The  transmission  of  official  data  to  international  and  supranational  organisations 
(including  data  from  other  producers)  is  well  organised  by  statistical  offices.  This  is 
one example of successful implementation of the focal point role of statistical offices 
within  the  statistical  system.  (exception:  Albania,  where  the  statistical  office  is  not 
involved at all in transmission if they concern other producers)  

With  the  exception  of  Macedonia,  there  are  few  possibilities  for  statistical  offices to 
carry  out  their  "antenna  function"  within  high-level  government  groups,  i.e.  an  early 
involvement in projects of other ministries which are likely to have a strong influence 
on future information needs or on systems of administrative data used in statistics, or 
which  make  an  intensive  use  of  presently  available  statistics.  The  perception  of 
statistical  offices  with  other  ministries  is  such  that  the  potential  contributions  of 
statistical  offices  in  this  context  are  not  known  or  not  perceived  to  be  sufficiently 
important.  The  lack  of  such  opportunities  deprives  statistical  offices  of  important 
platforms  to  raise  their  status  with  important  users,  and  to  communicate  and 
demonstrate the importance of official statistics.    

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There  are  few  possibilities  to  comment  on  draft  legislation  from  other  parts  of  the 
administration (exception: Macedonia, where involvement is regular). 

Except  for  Albania  (see  above  2.3),  directors  of  statistical  office  are  present  when 
government decides on statistical programmes or other statistical issues, but not for 
decisions  on  resources.  For  such  decisions,  these  offices  have  no  spokesman  at 
government level whose mandate it is to defend their interest.  

Advance release calendar for all subject areas exist (exception: Yugoslavia). 

Explanatory/analytical  comments  in  published  products  are  almost  totally  absent 
(exception: Albania for few surveys), due to an explicit policy in the past, and to the 
lack of relevant skills and experience in the statistical offices. Not being able to add 
explanatory  comments  is  a  significant  obstacle  to  go  beyond  the  traditional,  purely 
technical  role  of  statistical  offices  as  described  in  2.1  and  to  demonstrate  to  non-
expert users, especially from the media, the relevance of specific results (especially 
for new and unfamiliar concepts) and the changed role of official statistics. 

Attempts to set up strategic plans for official statistics were made before the GA took 
place  (exception:  Croatia),  but  without  links  to  resources  and  without  adoption  by 
government. 

Following the recommendations of GA reports, work on setting up new master plans 
for governmental adoption has been started (exception: Macedonia). 

There is a potential threat of important administrative data sources to disappear with 
the  abolishment/reorganisation  of  Payment  Agencies  (exception:  Albania,  where 
such  sources  did  not  exist).  Statistical  offices  experience  difficulties  in  working  out 
and implementing replacement strategies. 

Description of Statistical Offices (Chapter A3 of the GA Reports) 
There  are  signs  of  relatively  low  status  of  statistical  offices  if  compared  to  other 
government bodies (exception: Macedonia). 

There are no published mission statements (exception: Macedonia). 

Staff in statistical offices is paid somewhat less than staff of equal skills in ministries 
(exception: Yugoslavia at federal level and Montenegro). 

There  is  strong  emphasis  on  hierarchy;  few  experience  with  project  or  horizontal 
teams (exception: Albania). 

No modern database software/applications in use (exception: Macedonia). There is a 
strong  need  for  developing  a  clear  IT  strategy  for  official  statistics,  including 
management aspects. 

IT situation: two countries (Croatia and Yugoslavia FSO and SORS) are on the way 
of  migration  from  mainframe  to  client-server.  Applications  on  mainframes  are  often 
too rigid for answering ad hoc requests for special tabulations, or for changing tables 
in  products.  Due  to  the  lack  of  IT-experts,  there  is  a  lack  of  well-designed 
applications for data entry/data storage in client-server environments, which leads to 
frequent use of office automation tools by statisticians for the core of the production 
process (this is also the case for Albania in general where no mainframe exists). In 

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Macedonia,  the  migration  to  client-server  is  completed  (no  mainframe  anymore).  In 
Montenegro, the use of in-house IT for statistical production beyond data entry is an 
exception; most of the IT work for Montenegro is carried out either by the federal or 
the Serb statistical office. 

Two  countries  (Macedonia  and  Albania)  have  benefited  from  assistance  by 
international  and  supranational  organisations,  notably  EU,  as  regards  official 
statistics  for  some  years,  and  been  able  to  participate  in  meetings  organised  by 
EUROSTAT and in TES courses. To Croatia and Yugoslavia, the possibility to benefit 
from EU assistance has been opened only recently.  

Capacity of Producing Statistics in Various Areas (Part B of the Report)   
Two regular household surveys are carried out: Labour Force Survey and Household 
Budget  Survey  (exception:  Albania,  only  ad  hoc  surveys,  of  which  one  labour  force 
survey).  

Household  budget  surveys  are  in  need  of  upgrades  concerning  the method of data 
collection (exception: Croatia). 

Population  censuses  have  been  carried  out  (exception:  Macedonia,  Montenegro)  in 
2001  (Croatia  and  Albania)  and  2002  (Serbia),  with  in-time  production  of  results 
according to the schedule fixed in the census law in Croatia. 

The existing administrative registers held by statistical offices are a reasonably good 
basis for the legal units part of business registers (exception: Albania). In Serbia, an 
administrative  register  of  entrepreneurs,  managed  by  the  statistical  office,  exists  in 
addition, but is perceived as of dubious quality. 

Two parallel consumer price indices exist (exception: Albania). 

Official  GDP  figures  according  to  SNA/ESA  are  published  (exception:  Albania; 
Yugoslavia only at current prices). 

Production  of  economic  aggregates  according  to  old  MPS  system  has  been 
abandoned (exception: Yugoslavia). 

The  capacity  to  produce  agricultural  statistics  according  to  modern  concepts  is 
grossly insufficient (exception: Macedonia) 

No country (except Albania in 1998) has carried out an agricultural census (two have 
plans). 

Government finance statistics is not included at all in present statistical programmes 
(exception: Albania). 

Health statistics is split over three producers (exception: Albania). 

Monetary,  financial  and  BOP  statistics  are  produced  professionally  in  the  Central 
Banks  (some  reservations  for  Yugoslavia  and  notably  Montenegro  where  the 
currency is different from Yugoslavia). 

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Selected  Elements  Observed  During  the  GA  Process  which 
are Important for Follow-up Activities (for both Countries and 
Donors)  

Changing the frame of mind of staff about what official statistics is and what it is not, 
especially  that  in  the  new  concept  it  is  more  than  the  traditional  technical  function 
provided under the old system, and that it has to emancipate itself to a multi-purpose 
government function in its own right, with due regard to relevance for various types of 
users,  is  the  prerequisite  for  all  other  efforts  to  bring  maximum  and  sustainable 
benefit.  In  this  context,  it  is  crucial  that  directors  of  statistical  offices  and  the  next 
level  in  the  hierarchy  are  fully  convinced  of  the  basic  principles  of  official  statistics 
and act as multipliers by spreading to other staff, users and stakeholders what these 
principles (and some of the terminology used) mean and what their implications are 
for  everyday  work  and  relationships.  Not  all  answers  can  be  given  by  training  and 
from  documentation;  some  practical  problems  in  the  application  of  fundamental 
principles  have  to  be  discussed  with  peers  from  other  countries  and  from 
international  or  supranational  organisations;  such  a  forum  would  be  very  helpful for 
countries in the region.     

the 

information  needs  of 

There  are  still  pre-conceived  ideas  among  statisticians  and  policy-makers  that 
international  standards  for  official  statistics  are  imposed  on  countries  of  this  region 
mainly  because  of 
international  or  supranational 
organisations per se. This impression has to be corrected again and again. The great 
majority  of  the  international  obligations  are  made  for  advancing  the  concept  of 
informed decision-making at national level by producing information about their own 
society  that  is  relevant  for  national  stakeholders,  including  the  public  at  large,  in  a 
modern,  open  society.  If  this  information  is  comparable  with  the  situation  of  other 
international  and 
countries, 
supranational decision-makers.    

it  potentially  offers  more 

to  national, 

insights 

The  tradition  for  statistical  offices  in this region has been to be reactive rather than 
proactive for a long time. This is unlikely to be the best strategy in future. Statistical 
offices have to create a network by which they can regularly give adequate visibility 
not only to their results, but to their new function and its relevance, while at the same 
time strictly observing the borderline of impartiality. This requires an active policy of 
engaging  in  and  being  invited  to  debates,  round-tables,  and  in  producing  topical 
products with existing materials at the right time, and most importantly, the ability to 
write  good  explanatory  comments  with all products. Such a policy should be set up 
and maintained even if it can be foreseen that it will not be appreciated by all other 
government  bodies  in  all  possible  circumstances,  but  exactly  this  perception  of 
independence has to be created and tested in the eyes of the public in order to build 
up and reinforce the trust into the results of official statistics.   

One  particularly  useful  network  is  a  national  statistical  society  with  regular  public 
conferences,  in  which  statistical  offices  play  a  leading  role.  Statistical  offices  are 
encouraged to follow the example of Macedonia where a first successful conference 
of a national statistical society took place in autumn 2001. 

A key issue in obtaining credibility from the public, which seems not to be perceived 
as  particularly  urgent  for  improvement  by  the  statistical  offices,  is  confidentiality. 
Statistical  offices,  especially  in  transition  countries  with  a  relatively  recent  past  of 
providing individual information (even if mainly on public entities) to other government 
bodies for control purposes, must absolutely avoid to be perceived as performing the 
same  function  with  data  about  private  (and  privatised)  companies,  unincorporated 

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enterprises  and  private  households.  Therefore  measures  such  as  the  strict 
adherence  to  the  one-way  principle,  the  establishment  of  firewalls  between  the 
internal IT of statistical offices and what can be accessed by outside, the separation 
of  identifiers  from  content  variables  as  soon  as  possible,  and  a  policy  of 
disengagement  in  managing  administrative  registers,  are  important  in  gaining  or 
maintaining  the  confidence  of  respondent  units  in  a  changing  world,  confidence 
which  is  a  prerequisite  for  them  to  be  willing  to  report  in  an  unbiased  way  as 
respondents  in  statistical  surveys.  All  such  measures  and  the  current  practice  of 
ensuring  confidentiality  should  be  actively  promoted  not  only to respondents, but to 
the public a large, so that statistical offices are widely perceived as distinct from other 
government bodies also in this respect.  

Another important, hitherto mostly neglected responsibility (except for transmissions 
of data to international and supranational organisations) by statistical offices is their 
role as focal point/ co-ordinator of the whole system of official statistics. As regards 
production, it is not sufficient just to ask other producers for inputs into new statistical 
programmes,  and  to  take  on  board  their  proposals  without  further  evaluation.  Their 
activities have to fit into the whole set of activities without duplication, and have to be 
carried  out  by  following  the  fundamental  principles.  Statistical  offices  have  a 
responsibility  to  check,  not  so  much  through  ex-post  control  but  more  through  ex-
ante  discussions  and  advice.  With  respect  to  dissemination  to  national  users,  co-
ordination  implies  for  statistical  offices  to  check  on  the  terminology  used  by  other 
producers,  to  avoid  that  inconsistent  results  are  published,  and  again  whether  the 
fundamental  principles  are  observed.  Statistical  offices  should  also  offer  to  users  a 
one  stop-shop  for  all  official  statistics,  because  users  cannot  be  expected  to  know 
about  the  precise  division  of  work  between  producers.  Assuming  all  aspects  of  this 
co-ordination  role  has  some  resource  implications  and  requires  staff  who  knows 
about the production of other producers, the significance and quality of their results 
and the data sources and methods used by them.  

In  countries  where  the  informal  economy  is  not  negligible  (and  the  difference  for 
employment data between LSF and business survey sources points in this direction 
for the four countries under consideration), the instrument of household surveys is of 
particular  importance  not  only  for  labour  market,  various  social  and  some 
demographic aspects, but as a cornerstone for economic statistics and as input into 
national accounts. Household surveys are the only way by which the total economy 
(formal  and  informal  combined)  can  be  approximated.  Within  household  surveys, 
LFS and HBS are the surveys of most direct importance to economic statistics, and 
they  should  become  regular,  and  their  methods  harmonised  with  EU  standards,  as 
soon as possible. 

Harmonising with European standards does not mean to take over to 100% a model 
(e.g.  a  questionnaire)  from  a  particular  EU  country.  EU  standards  relate  in  most 
cases to output in terms of results and their definitions, classifications, coverage and 
breakdowns,  with  specified  accuracy  and  timeliness.  In  some  cases,  EU  standards 
extend  to  methods  of  data  collection  (questions  to  be  included)  and  to  statistical 
units. But it has to be repeated again and again that countries are free to find their 
own best mix of data collections (e.g. between administrative sources and statistical 
surveys or by determining the optimal allocation and bundling of questions to various 
surveys).  Different  national  requirements,  together  with  differences  in  sampling 
frames  and  infrastructure,  will  lead  to  national  data  collection  instruments  that  are 
different  between  countries  in  some  aspects  even  if  they  are  supposed  to  produce 
comparable output in line with European standards. Finding this optimal mix of data 
collections is a basic task of a national statistical office, which cannot be shortcut by 
copying  a  model  from  abroad  to  100%.  In  all  cases,  surveys  that  are  new  in  a 

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country,  or  undergo  important  modifications,  should  be  subject  to  a  pilot  before  full 
implementation, since respondent behaviour is different from one country to another 
as well. 

Some donors have funded important surveys for countries of this region. In doing so, 
they  have  not  always  respected,  however,  the  need of adapting a fixed blueprint to 
national circumstances. Furthermore, such surveys have a great risk of being carried 
out only once, without due regard to the main objective of becoming a regular activity 
of  official  statistics.  Without  the  possibility  of  comparisons  over  time,  results  are 
deprived  of  a  major  component  of  relevance  for  many  users,  and  local  staff  in 
statistical  offices  will  not  be  motivated  to  build  up  the  necessary  knowledge  about 
such  a  survey  if  the  likelihood  of  applying  this  knowledge  in  the  future  is  low. 
Therefore,  statistical  offices  should  be  encouraged  to  insist  that  such  surveys 
proposed  from  outside  fit  into  their  system  of  data  collection  (and  IT!),  will  be 
sustainable  once  the  external  funding  ends  (which  implies  that  it  is  of  sufficient 
national relevance to be continued with national resources), and that the necessary 
know-how is built up in-house during the first exercise. These conditions have to be 
met also by surveys proposed to other producers and ministries, if they are meant to 
lead to official results.  

Especially in the context of business surveys, it was found that statisticians in these 
countries are not courageous enough to change forms and questionnaires in a way 
that results based on these data come closer to European standards. The obstacle 
mentioned  often  is  that  the  results  of  such  surveys  are  used  by  ministries  for 
allocating  funds,  and  that  the  definitions  of  the  indicators  which  are  used  in  this 
context  has  been  taken  over  from  the  old  system  and  are  therefore  different  from 
international  statistical  standards.  Furthermore  these  definitions are often laid down 
in  some  non-statistical  legislation,  and  statisticians  feel  obliged  to  wait  with  the 
adaptation of their surveys until this other legislation changes. Statisticians should be 
encouraged  to  be  more  proactive  also  in  this  respect  and  to  take  the  necessary 
initiatives. Their first priority for them is to give the most representative picture of the 
reality, and if this leads to adaptation of some surveys, it is the right derived from the 
principle  of  professional  independence  that  statisticians  can  do  so  without  outside 
interference.  Ministries  should  be  encouraged  by  statistical  offices  to  base  their 
resource  allocations  on  results  of  official  statistics  based  on  international  statistical 
standards and modify their legislation accordingly, but they have of course the right, 
for whatever reason outside statistics they invoke, to use other concepts. If indicators 
in  line  with  such  special  concepts  can  be  compiled  by  using  existing  data,  they 
should  be  produced  by  statistical  offices  as  a  service  to  a  ministry,  but  be  clearly 
given much lower visibility in their dissemination than those statistical indicators that 
are  considered  the  best  reflection  of  reality.  The  same  applies  if  such  special 
indicators  would  lead  to  additional  data  collection,  but  in  addition  statistical  offices 
should be compensated for this extra burden. In no case, however, should a survey 
be  tied  entirely  and  made  hostage  of  concepts  and  definitions  that  do  not  coincide 
with  international  standards,  in  a  way  that  producers  are  prevented  to  modify  such 
surveys in time for better reflecting the situation of the country. Statistical offices have 
to take the initiative to open the dialogue with ministries and other users of this type 
in all relevant cases.       

The lack of quantitative culture in the government has a corollary: it frequently leads 
to sudden ad hoc requests from such users to statistical offices when urgent needs 
come  up  at  a  late  moment  in  the  decision-making  process  that  could  have  been 
foreseen much earlier. If such requests cannot be met with existing data in due time, 
ministries  often  lack  understanding  that  collecting  new  data  takes  much  lead  time, 
and  they  produce  "quick  fixes"  in-house  or  with  the  help  of  international  experts. 

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Such surrogates find frequently their way to the public and to the media, and risk to 
throw  a  negative  light  on  the  ability  of  statistical  offices  to  react  to  users  needs. 
Again, statistical offices should have a strategy of proactive engagement rather than 
complaining  ex-post:  by  trying  to  anticipate  information  needs  of  ministries  even  if 
they are not explicitly formulated by them, by offering advice and participation if some 
temporary  surrogates  have  to  be  produced  while  waiting  for  better  figures,  while  at 
the  same  time  insisting  on  clear  indication  of  the  status  of  such  results  when 
disseminated,  and  lastly,  but  most  importantly,  by  being  more  courageous  in  using 
estimation techniques as part of official statistics. The difference between quick fixes 
and  official  statistics  is  not  so  much  "estimation"  as  such,  but  the  fact  that  within 
official statistics all methods have to be made transparent, existing sources have to 
be  carefully  evaluated,  selected  and  used  in  the  best  possible  ways,  and 
assumptions  which  are used in the estimation process can be ascertained in future 
by new data collections within official statistics. 

New indicators and aggregates, notably in economic and labour force statistics, are 
frequently  met  with  scepticism  and  may  be  even  openly  doubted  by  some  users. 
Statistical offices should also be encouraged to be more assertive in such situations 
and to take the initiative for contacts with media and organising debates and round-
tables.  The  line  of  argument  should  always  be  that  within  the limit of the resources 
given, the results produced are the best approximation to the complex reality, that the 
methods  are  based  on  international  standards,  made  fully  transparent  (which  is 
seldom  the  case  for  any  alternative  indicator  produced  by  NGOs  or  private 
organisations  e.g.)  and  produced  and  disseminated  in  line  with  all  other  aspects  of 
the fundamental principles. Because all of these characteristics, results produced by 
official  statistics  can  claim  to  be  representative  and  authoritative.  One  of  the 
fundamental  principles  includes  the  explicit  right  for  statistical  offices  to  react  to 
erroneous  interpretation;  this  right  is  applicable  to  openly  voiced  doubts  about  the 
quality of the figures as well and should be used by statistical offices in this context. 
Where statistical councils exist, they can also play an important role in such debates 
and in helping to bolster confidence.    

The  last  recommendation:  do  not  take  any  achievement  in  official  statistics  as 
granted forever. Even a very good law cannot prevent a minister (or another interest 
group) from trying to make pressure on statistical offices with respect to professional 
issues  (or  to  any  other  issue  related  to  fundamental  principles).  The  compilation  of 
indicators according to the most recent international standards cannot prevent some 
important  users  from  trying  to  ask  for  figures  to  be  changed  (or  submitted  for 
clearance before dissemination). Interference of this kind has occurred even in well-
established  statistical  systems  of  Western  European  countries.  It  is  wise  to  have 
clear  contingency  plans  on  how  to  react  (stepwise)  in  such  situations,  but  the 
essence is to make clear to anybody from the outset that certain basic principles are 
not  negotiable,  and  that  any  attempt  to  undermine  them  would  be  rejected  and 
brought to the attention at least of the statistical council and to the minister in charge 
of  the  statistical  office,  but  possibly  also  of  other  fora  and  to  the  public.  It  is  also 
important that a statistical office in such difficult situations can rely on the support of 
the international community of official statistics, and of the EU in particular. 

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Practical use of the Global Assessments 
GAseminar/2002-4 
17.4.2002 

Background 

The  Global  Assessments  of  the  national  statistical  systems  represent  an  important 
investment for Eurostat and EFTA, but also for the beneficiary countries themselves 
as  they  have  devoted  time  and  energy  to  the  numerous  discussions  leading  to  the 
final version of the Global Assessment Reports. As a consequence, it is essential to 
ensure that these efforts lead to concrete and sustainable results. 

Objectives 

The  Global  Assessment  exercise  was  initiated  in  order  to  obtain  a  better 
understanding of the national statistical systems in the beneficiary countries. The aim 
was twofold. First, to provide an assessment of the capacity of the statistical system 
to provide to its users, in a sustainable way, accurate, relevant and reliable statistics. 
Second,  to  analyse  the  institutional  environment  in  which  the  statistical  offices 
operate.  
This  approach  would  thus  directly  identify  the  strengths  and  weaknesses  of  the 
national statistical systems and thereby point out areas in need of improvement. The 
beneficiaries  would  be  able  to  identify  whether  or  not  their  internal  priority  setting, 
strategic  programming  or  statistical  law  should  be  improved.  The  European 
Commission would get a better basis for their decision making as they results could 
feed  into  the  strategic  framework  for  the  CARDS  programme  (country  and  regional 
strategy  papers).  In  particular,  Eurostat  could  use  these  Assessments  to  design  a 
strategy for statistical co-operation with the Western Balkan region.  

Strategy  for  statistical  co-operation  with  the  Western  Balkan 
region 

The  purpose  of  the  strategy  for  statistical  co-operation  with  the  Western  Balkan 
region  is  to  make  sure  that  the  programmes  contribute  to  institutional  capacity 
building  and  thus  provide  sustainable  results  whilst  also  gradually  bringing  the 
beneficiaries closer to harmonisation with EC requirements in statistics.  

Programmes  should  contribute  to  the  development  of  coherent  statistical  systems. 
The  best  way  to  achieve  this  objective  is  to  ensure  that  programmes  help  to  the 
construction of an integrated and harmonised system of national accounts in line with 
European standards (European System of Accounts 1995). This will provide not only 
reliable  GDP  figures  for  the  analysis  of  the  functioning  and  structure  of  the 
economies,  but  also  allow  analysis  of  economic  growth  and  development  and  of 
important  policy  areas  such  as  trade  liberalisation,  poverty  and  social  change.  The 
approach  will  be  attained  through  investments  in  economic,  social  and  democratic 
statistics  to  provide  detailed  information  notably  on  production,  consumption, 
investments, external trade, income and employment. 

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Moreover,  improvements  would  be  indispensable  regarding  strategic  programming 
and  priority  setting,  human  resource  management  and  Information  Technology.  In 
addition, progress is required concerning the external institutional framework such as 
the  statistical  law  and  relations  with  users  and  producers  of  statistics  outside  the 
statistical office. 

Follow-up: A Master Plan? 

A  Master  Plan  is  a  logical  follow-up  on  the  Global  Assessment  as  it  establishes  a 
clear link between the priorities of the statistical office and the resources required for 
fulfilling  the  statistical  programme.  This  process  allows  each  statistical  office  to 
analyse to what extent its statistical production and dissemination reflects important 
user  needs.  In  this  way,  it  can  discontinue  the  least  important  data  collections  and 
thus release resources for more significant and useful activities. A good example is 
the  emerging  private  sector,  which  needs  to  be  better  covered  in  the  statistics 
through  the  introduction  of  new  data  collections  and  sampling  methods.  However, 
this  would  necessitate  close  monitoring  of  user  needs  and  regular  contacts  with 
important  respondents  and  business  associations  to  limit  as  much  as  possible  the 
burden on private enterprises.  

Conclusion 

The  Global  Assessments  have  provided  important  insight  into  the  strength  and 
weaknesses  of  the  beneficiaries’  statistical  systems.  The  Global  Assessment  thus 
have  started  a  process,  which  should  eventually  transform  each  statistical  institute 
from  mere  data  producers  to  being  recognised  as  efficient  providers  of  information 
services  for  their  key  users  and  the  general  public.  Some  of  the  beneficiaries  have 
already  started  this  process,  and  it  would  be  essential  if  they  could  share  their 
experience with the other beneficiaries in the region.  

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Annex 

Organisation of seminar - Discussions 
I.  Seminar presentations: 

INSTAT  (Albania) and the Federal Statistical Office (FRY) are kindly requested 
to make short presentations of their experiences with elaborating a Master Plan 
for  the  Statistical  System.  These  presentations  should, as a minimum, address 
the  issues  listed  in  the  annex  (see  below),  namely  relations  with  users, 
respondents and other public entities.  

II.  Subgroup discussions: 

Ms.  Milva  Ekonomi  (INSTAT)  is  asked  to  be  responsible  for  subgroup  1 
comprising  the  Director  Generals  of  each  of  the  Statistical  Offices.  Mr.  Ranko 
Nedeljkovic  (FSO)  is  asked  to  be  responsible  for  subgroup  2  comprising  the 
head of international relations (or second participant) from each statistical office. 
The  other  seminar  participants  should  be  divided  equally  between  the  2 
subgroups. 
The  subgroup 
the 
leaders  should  prepare  key  questions  and 
discussions  in  the  subgroup.  They  should  also  present  the  outcome  of  the 
debate to the seminar and for the proceedings.  

facilitate 

Issues to be discussed 

1)  Relations with users:  

The  statistical  production  and  dissemination  must  meet  user  needs,  because 
otherwise  the  public  will  have  no  confidence  in  the  statistical  office  and  worse 
still  the  financial  provisions  risk  being  reduced.  How  do  the  statistical  offices 
ensure that they fulfil user needs and what kind of contact do they have (or plan 
to create) with the important users? What is the definition of an important user?  

2)  Relations with respondents: 

The  emerging  private  sector  can  only  be  covered  in  the  statistics  through  the 
introduction of new sample based surveys and it cannot be taken for granted that 
respondents  automatically  will  provide  the  requested  information.  Respondents 
may  also  be  reluctant  to  provide  accurate  figures  because  they  fear  that  their 
answers may be used for non-statistical purposes. How, do the statistical offices 
envisage  persuading  respondents  to  provide  (accurate)  answers  and  do  they 
consult  with  respondents  and/or  business  associations  before  new  surveys  are 
introduced (questionnaire design, formulation of questions)? What is done to limit 
the respondent burden? 

3)  Relations with public authorities: 

Close  contact  with  other  public  authorities  is  essential,  as  they  can  be  both 
important users as well as producers of statistics. They are also important clients 
either  directly  (specific  data  collections  financed  by  line  ministries)  or  indirectly 
(via  the  national  budget).  Public  entities  may  also  provide  access  to  important 
administrative  data  sources,  which  could  be  crucial  for  the  statistical  office  for 
instance when setting-up statistical business registers.  

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Progress Measurement 
GAseminar/2002-5 
22.4.2002 

Objectives 

Global  assessments  aim  to  analyse  the  capacity  of  National  Statistical  Systems  in 
Western  Balkan  Countries  to  produce  in  a  sustainable  way  accurate,  reliable  and 
relevant statistics. They additionally provide an overview of the legal and institutional 
environment of the statistical systems. 
Global  assessments  will  remain  useful  and  necessary  only  if  they  can  integer  the 
constant evolution and development of national statistical systems. For that purpose, 
an  adequate  instrument  has  to  be  developed  in  order  to  measure  the  progress 
achieved on an institutional level and in the main statistical subject areas. 
A  gradual  adoption  of  the  acquis  communautaire  being  the  strategic  objective  of 
statistical  co-operation  with  Western  Balkan  countries,  an  update  of  Global 
Assessments must follow the same objective and measure the degree of compliance 
of National Statistical Systems with EC and other international standards. 
This document will deal with questions as what has to be measured, how, by whom 
and at which periodicity. 

What has to be measured? 

The  measurement  of  progress  will  cover  the  degree  of  compliance  with  EC 
requirements for the legal and institutional environment and for a selected list of key 
statistical domains.  
Statistical domains will be selected according to the strategy of Eurostat for statistical 
co-operation  in  Western  Balkan.  This  strategy  aims  to  develop  coherent  statistical 
systems  by  developing  an  integrated  and  harmonised  system  of  national  accounts. 
National  accounts  will  not  only  provide  reliable  GDP  figures  for  the  analysis  of  the 
functioning  and  structure  of  economies, but also allow analysis of economic growth 
and  other  important  policy  areas  such  as  trade  liberalisation,  poverty  and  social 
change. 
Progress will be measure with the help of criteria grouped in three main chapters. A 
first chapter deals with criteria about legal and institutional aspects, the second with 
methodological criteria and the third with users’ satisfaction. A comprehensive picture 
of  all  dimensions  to  be measured implies the use of sub-criteria; some are listed in 
the table in Annex I. 
A provisional list of criteria is given below, a more final one is an expected outcome 
of the seminar: 
1.  Legal and institutional environment 

Compliance with UN fundamental principles of official statistics 
Existence of solid legal basis, compliant with EU regulations 
Policies and practices are guided by ethical standards 
Responsibility to collect data and co-ordination between data producers is clearly 
defined. 

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2.  Users satisfaction 

Statistics are relevant and meet users’ needs 
Timeliness and periodicity correspond to users’ needs 
Dissemination media and format are adequate 
Costs are affordable 

3.  Methodologies 

Concepts and definitions follow international standards 
Scope of surveys and censuses follows international standards 
Classification and sectorisation follow international standards 

How to measure progress? 

relevance, 

Compliance with EU and international standards is to be measured at different level 
for  each  statistical  domain:  legal  and  institutional  aspect,  classification  used, 
timeliness  and 
frequency.  Additionally, 
variables  observed  and 
dissemination will be confronted with the opinion of users. Some information is easy 
to  quantify,  as  for  example  the  number  of  variables,  whereas  some  information  will 
be of a more qualitative nature, for example user’s satisfaction.  
A first attempt to report on the progress made in each statistical domain is joined in 
Annex I, Compliance Table. Compliance towards EU and international standards will 
be  measured  for  three  main  chapters:  institutional  and  legal  aspects,  user 
satisfaction and methodologies. 
The legal and institutional aspect will be reported globally, on the level of the National 
Statistical  System  and  not  on  the  detailed  level  of  each  statistical  subject  area. 
Indicators  proposed  are  the  following:  clear  responsibility  for  data  collection,  co-
ordination between producers of statistics, existence of a legal basis and compliance 
of the existing law with EU regulation. 
User satisfaction surveys are not expected to be available at the level of a particular 
statistical domain. Satisfaction of users will therefore be measured globally, referring 
to all statistical products made available to users by the National Statistical System. 
Several  dimensions  will  be  measured:  satisfaction  of  users  with  regard  to  the 
contents  of  statistics,  the  relevance,  the  timeliness,  the  frequency  and  the  media 
used for the dissemination of results. 
For  methodologies,  indeed  a  very  important  area  in  statistics,  the  degree  of 
compliance with EU and international standards will obviously be assessed for each 
statistical  subject  area.  There  will  be  five  main  criteria:  the  coverage  or  scope  of  a 
statistical domain, the variables and concepts, the classification used, the frequency 
and  the  timeliness.  Sub-criteria  are  supposed  to  provide  more  detailed  information 
about the compliance with EC requirements. 
For each criteria and sub-criteria of the three main chapters, the assessment should 
take the time dimension into consideration. A first field will present the situation at the 
time of the previous assessment, a second field will show the current situation and a 
third information will be provided about future progress expected to be achieved for 
the next assessment. An comparison could be made about the expected and actual 
results achieved between the previous and the current assessment. 
A compliance rate will be calculated for each statistical domain as the weighted result 
of the three compliance rates calculated for each main chapter. The chapters dealing 
with institutional and legal aspect and with user satisfaction will count for 15 % each 
in  the  compliance  rate,  whereas  the  chapter  about  methodologies  will  be  weighted 
with  70%.  Among  each chapter, the different indicators for which an assessment is 
made will also be weighted. A further step could be to aggregate all the results of the 
statistical  domains  and  to  produce  a  compliance  rate  on  the  level  of  the  national 
statistical system.  

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Some difficulties or risks are to be mentioned: the variety of producers requires a free 
access  to  different  ministries  and  administrations  not  always  willing  to  disclose 
information  about  their  working  methods; the question about the statistical domains 
to be covered by this exercise has still to be solved; users’ satisfaction surveys are 
certainly  not  available  at  the  same  extent  in  all  countries  of  the  region  and  in  any 
case not for each statistical domain.  

Who should measure progress?  

Depending on the measurement criteria, different actors will be asked to provide the 
necessary information. Some criteria require an external opinion, like for instance the 
compliance  with  UN fundamental principles. Eurostat is certainly the better place to 
inform about harmonisation with EU legislation.  
On  the  other  hand,  methodological  issues  are  well  adapted  to  be  subject  of  a  self-
assessment,  meaning  that  the  information  has  to  be  provided  and  updated  by  the 
national statistical system (statistical office and other producers). Methodologies are 
supposed  to  follow  concrete  definitions  and  principles,  not  subject  to  different 
interpretations. 
All  criteria  related  to  user’s  satisfaction  can  be  informed  through  regular  users’ 
consultation,  either  via  a  future  or  an  already  existing  Users  Forum,  or  via  ad  hoc 
user’s  surveys.  The  necessity  to  of  updating  Global  Assessments  is  a  perfect 
opportunity  for  all  Western  Balkan  countries  to  establish  regular  consultation  and 
exchange of opinions between producers and users of statistics. 
In the case of Candidates Countries, the Compliance Database uses a three stages 
process:  the  statistical  office  or  the  producer  is  first  invited  to  assess  the  progress 
(self-assessment),  then  Eurostat  provides  its  opinion  and  finally  a  reconciliation  is 
made between the two assessments and a final opinion produced. 
An alternative way of assessing the progresses could be a “Peer Review” where one 
Western  Balkan  country  would  be  requested  to  proceed  with  the  review  of  the 
statistical system of an other Western Balkan country. This variant has the advantage 
not  only  to  more  deeply  involve  all  statistical  institutes  in  regular  assessments  but 
also to strengthen co-operation between countries in the region. 

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Annex I: Compliance Table 

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Annex II: Organisation of the seminar - Discussions 

Presentation 

Eurostat will introduce the point on Progress Measurement. 

Subgroups discussions 

Mrs Novkovska (SSORM) is asked to be responsible for subgroup 1 composed of the 
Director  Generals  of  NSIs.  Mr  Knezevik  (CBS)  is  asked  to  be  responsible  for 
subgroup  2  where  Heads  of  international  relations  will  be  involved.  All  other 
participants to the seminar should be divided equally between the two subgroups. 

The subgroup 1 will deal with issues number 1 and 2 in the first part of the session 
about  Progress  measurement  and  with  issue  number  5  in  the  second  part  of  the 
session. 

The subgroup 2 will deal with issues number 3 and 4 in the first part of the session 
about  Progress  measurement  and  with  issue  number  5  in  the  second  part  of  the 
session. 

Issues to be discussed 

Measurement indicators 

A  set  of  indicators  is  proposed  to  monitor  the  progresses  achieved  toward 
compliance  with  EU  and  international  standards.  These  indicators  should  cover  the 
legal  and  institutional  environment,  methodologies  and  users’  satisfaction.  Is  the 
proposed  list  covering  all  aspects  of  compliance?  Are  other domains to be covered 
by periodic assessments? 

Measures of progress 

A compliance table for each statistical domain is proposed. A first point of discussion 
could be about the feasibility and practicability of the proposed table. What statistical 
domains should be covered? Is the level of detail as reported in the table adequate? 
What should be the periodicity of the assessments? Will the results reflect reality of 
progress achieved? Is the dynamic sufficiently taken into account? What are the risks 
to  be  considered  when  processing  with  such  an  assessment?  Are  the  weighting 
factors proposed for each chapter and each indicator sound and reflecting the actual 
importance of each item? 

Who should measure the progress? 

Different opinions must be confronted in order to obtain an objective view about the 
progress  achieved.  Different  actors  could  proceed  with  a  review  of  the  statistical 
systems: the national statistical institute of the country concerned, Eurostat, external 
experts,  or  a  different  statistical  office  of  the  region  (Peer  Review).  Who  should  be 
the actors involved in the review? What is the political sensitivity of results obtained 
(compliance rate)? 

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User satisfaction survey 

Based  on  the  assumption  that  systematic  user  satisfaction  surveys  are  not  carried 
out  in  the  Western  Balkan  Countries,  participant  are  invited  to  elaborate  a  draft 
questionnaire  to  measure  the  level  of  satisfactions  of  users.  They  should  also 
suggest to whom the results of such a questionnaire should be addressed. 

Case studies 

It will be asked to each subgroup to make a to calculate the compliance rate for one 
statistical  subject  area,  using 
this  document  and 
incorporating  the  changes  as  they  would  be  decided  early  in  the  seminar.  Each 
subgroup  will  deal  with  one  different  subject  area  on  the  basis  of  material  to  be 
distributed. 

the  method  proposed 

in 

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Donor co-ordination and progress measurement 
GAseminar/2002-6 
19.4.2002 

Introduction 

There is no need to stress the importance of statistical co-operation in the Western 
Balkan region as well as the involvement of the Member States, Candidate Countries 
and  other  European  States  and  international  institutions  in  this  process.  In  the 
context of international co-operation donor co-ordination is most important to obtain 
best results. It does not lead to less funding, it leads to better planning and therefore 
better results. It is not about interference, it is about avoiding overlaps and a matter 
of maximising the results of the donors’ input. 
As  largest  donor  for  statistical  co-operation,  Eurostat  has  a  very  important  co-
ordination  role  (role  that  was  confirmed  during  the  Geneva  donor  meeting  in  June 
2001). During the Management Group meeting on Statistical Co-operation of 14 and 
15  March  2002,  Eurostat  presented  three  types  of  activities  to  co-ordinate  donor 
support. 

Activity 1 − Questionnaires 

A  first  investigation  into  the  donor’s  activities  in  statistics  in  the  Western  Balkan 
countries  was  launched  in  the  beginning  of  2001,  and  followed-up  by  another 
emission of questionnaires in November 2001 to the five beneficiary countries and to 
the  donors  that  had  been  identified  during  the  first  exercise.  The  objective  of 
monitoring  the  donor  activities  is  twofold. Eurostat wishes to set up and keep up to 
date a monitoring system that records the main progress achieved by the beneficiary 
countries  on  developing  and  harmonising  their  statistical  systems.  A  part  of  this 
activity  is  to  record  the  assistance  provided  by  the  international  community  to  the 
statistical systems of the beneficiary countries. 
The  second  exercise  resulted  in  three  tables  indicating  the  global  support  given  by 
donors and received by beneficiaries, the more detailed repartition of support to each 
country into statistical areas and the support in time. The period covered was 1998-
2006 and therefore contained past, present and future engagements. 
The current plans are to send questionnaires to all beneficiaries and identified donors 
every year (towards the end of the year) and subsequently compile a report with its 
results to be presented to the MGSC and the donor meeting before the annual ECE 
Conference of European Statisticians. 
In  order  to  obtain  the  best  possible  results  in  the  future  any  suggestions  and 
comments to improve the current questionnaires would be most helpful. 

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Activity 2 − Circa site 

The  Circa  site  on  statistical  co-operation  with  the  Western  Balkan  countries  should 
be  an  excellent  donor  co-ordination  tool.  In  this  context  the  commitment  of  donors 
and beneficiaries to send information such as policy and strategy papers, as well as 
reports is very important. Both public and non public information should be reported. 
For non public information it should be clearly indicated that the document cannot be 
published on Circa. 

Activity  3  −  “Catalogue  of  what  has  been  achieved”  and 
Progress measurement? 

Eurostat was thinking of setting up “catalogues” of what has been achieved for each 
country. This would take up a lot of time and effort by Eurostat and the effectiveness 
of such an exercise would mainly depend again upon the commitment and degree of 
information transmission by both donors and beneficiaries. 
This  idea  is  quite  similar  to  progress  measurement  and  it  would  be  interesting  to 
exchange  ideas  on  how  the  delegates  of  the  Global  Assessment  seminar  see  the 
role that progress measurement could play in donor co-ordination. 

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Annex 

Organisation of seminar - Discussions 
I.  Seminar presentations: 

BHAS (Bosnia-Herzegovina) is kindly requested to prepare a short presentation 
on  their  experiences  with  donor  support  identifying  benefits,  but  also  possible 
negative element. 
The representatives of the three main donor countries are invited to make a joint 
presentation on improving donor co-ordination. 

II.  Subgroup discussions: 

Mr  Photius  Nanopoulos  (Eurostat)  is  asked  to  be  responsible  for  subgroup  1 
comprising  the  Director  Generals  of  each  of  the  Statistical  Offices.  Mrs  Slavka 
Popovic (BHAS) is asked to be responsible for subgroup 2 comprising the head 
of international relations (or second participant) from each statistical office. The 
other seminar participants should be divided equally between the 2 subgroups. 
The  subgroup 
the 
leaders  should  prepare  key  questions  and 
discussions  in  the  subgroup.  They  should  also  present  the  outcome  of  the 
debate to the seminar and for the proceedings. 

facilitate 

Issues to be discussed 

1)  Experiences with donor support:  

Identify  positive  and  negative  elements?  How  could  positive  aspects  be 
improved and negative aspects avoided? 

2)  Donor co-ordination: 

Suggestions  on  how  donor  co-ordination  could  be  improved?  How  do  donors 
and  beneficiaries  feel  about  the  Circa-site  and  are  they  willing  to  publish 
information on this site? 

3)  Role of progress measurement in donor co-ordination: 

Suggestions  on  the  link  between  progress  measurement  and  donor  co-
ordination: What about progress measurement as a tool to identify areas in need 
of support? Or what about progress measurement to identify results after donor 
support? 

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Annex - List of Participants 

NAME 
Mrs Milva EKONOMI 
Mrs Godiva REMBECI 
Mrs Slavka POPOVIC 
Mr Hasan ZOLIC 
Mr Marijan GREDELJ 
Mr Mirko GRUBISIC 
Mr Robert KNEZEVIC 
Mrs Ljiljana MARKOVIC 
Mr Miodrag ZIVKOVIC 
Mr Ranko NEDELJKOVIC  Deputy Director 
Mrs Dragana FILIPPI 
Mr Zoran JANCIC 
Mr Ilija STANISIC 
Mr Ronnie ANDERSSON  Co-director 
Mrs Blagica NOVKOVSKA  Director 
Mrs Mira BOSNJAK 
Mr Arben ILLIRIANI 
Mrs Emina KADRIC 
Mrs 
WÜNSCHMANN 
Mrs 
ALTMUTTER 
Mrs Micaela JOUVENAL 
Mrs AnnLis AABERG 
Mr Johan SJÖSTRAND 
Mr  Raul  SUAREZ  DE 
MIGUEL 
Mrs Carol MOTTET 
Mr Heinrich BRÜNGGER  Senior Expert 
Mr Gero CARLETTO 
Mrs 
POURBAIX 
Mr Photis NANOPOULOS  Director  
Mr Kjartan BJÖRNSSON  Team leader 
Desk-officer 
Mr Ronald DELÉMONT 

Head of Sector 
Task Manager 
Task Manager 
Task Manager 

Task Manager 

Marie-Luise 

Friederike 

Isabelle 

DE 

Economist 
Project manager 

INSTITUTION 
TITLE 
INSTAT (Albania) 
Director 
Director of economic statistics  INSTAT (Albania) 
Director 
Director 
Director 
Assistant Director  
Head, Directors office 
International relations 
Director 

BHAS (BiH) 
BHAS (BiH) 
CBS (Croatia) 
CBS (Croatia) 
CBS (Croatia) 
CBS (Croatia) 
FSO (FRY) 
FSO (FRY) 
Head of International relations  FSO (FRY) 
Director 
Director 

SORS (FRY/Serbia) 
SORM (FRY/Montenegro)
SOK (FRY/Kosovo) 
SSO (FYROM) 
SSO (FYROM) 
EC delegation Albania 
EC delegation BiH 
EC delegation Croatia 

Europeaid 

SSFO (Switzerland) 
SSFO (Switzerland) 
World Bank 
CESD Roma 

Eurostat 
Eurostat 
Eurostat 

International co-operation 
Head, International co-operat.  SCB (Sweden) 
SCB (Sweden) 
International co-operation 
SSFO (Switzerland) 
Head of int. co-operation 

ISTAT (Italy) 

International co-operation 

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           Global Assessments of the Western Balkan countries 

Part 3 Global Assessments 

Global Assessment of the Albanian System of 
Official Statistics 
GAseminar/2002-8 
April 2002 

reflecting the situation of 13 July 2001 when the original assessment report 
was finalised 

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Table of contents 

Preface 
Executive Summary 
A. Institutional Setting 

1. Legal Setting 

1.1. Statistical Law 
1.2. Other Legislation 
1.3. Statistical Council, Statistical Programme, Inter-Ministerial 
Consultations, Consultations with Users 
1.4. Independence 
1.5. Data Protection and Statistical Confidentiality 

2. National Statistical System 

2.1. Principles 
2.2. Structure of the System, Providers of Official Statistics, and 
Relationship between INSTAT and Other Providers 
2.4. Liaison with Research Institutes and Universities 
2.5. Liaison with the Business Community 
2.6. Product and Dissemination Policies 
2.7. Relations with the Central Government 
2.8. Relationships with Local Governments 
2.10. Access to Administrative Records 

3. Description of INSTAT 

3.1. Mission, Internal Organisation 
3.2. Planning, Programming and Priority Setting 
3.3. Monitoring Quality in all Activities 
3.5. Finance and Budgeting 
3.6. Staffing, Staff Recruitment, and Training 
3.7. Information Technology 
3.8. Internal Monitoring of Performance 
3.9. External Accountability 

4. Statistical Infrastructure 
4.1. Classifications 

B. Technical Part: Capacity of Producing Statistics in Various Areas 

1. Assessment of the Overall Capacity 
2. Capacity to Organise and Carry out Censuses 
3. Capacity to Produce Annual Population Statistics after the Population 
Census 
4. Capacity to Carry out Household Surveys 
5. Capacity to Carry out Business Surveys 
6. Capacity to Produce Data on Public Sector Activities 
7. Capacity to Produce Agricultural Statistics 
8. Capacity to Produce Monetary, Financial and Balance of Payments 
Statistics 

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Preface 

The  global  assessment  of  the  Albanian  System  of  Official  Statistics  was  conducted 
by  Mr.  Heinrich  BRÜNGGER  from  the  Swiss  Federal  Statistical  Office  under  a 
contractual arrangement between this office and EUROSTAT. This assessment was 
to  be  focused  on  finding  out  about  the  present  situation  in  the  Statistical  Office 
(INSTAT),  in  the  statistical  system  as  a  whole  and  their  respective  institutional 
environments (institutional aspects), and on the capacity of the statistical system and 
its  main  actors  to  provide,  in  a  sustainable  way,  timely,  accurate,  authoritative  and 
relevant information to users (infrastructural aspects). A detailed analysis of specific 
statistics such as national accounts or CPI with respect to their compliance with EU 
requirements  was  not  part  of  the  mandate;  nevertheless,  the  report  includes  in  its 
Part  B  an  assessment  by  broad  subject  area  on  whether  the  basic  elements  to 
produce the output required by the EU are in place either today or in the near future. 

The  assessment  has  exploited  the  material  delivered  by  EUROSTAT's  unit  A5, 
notably  the  law  on  statistics,  and  the  material  obtained  from  the  description  at  the 
IMF  website  on  the  GDDS  (General  Data  Dissemination  System)  in  which  Albania 
participates.  The  expert  was  also  given  a  great  range  of  additional  material  at  the 
occasion of his first visit to INSTAT (10 to 16 May 2001), notably a draft of the first 
statistical yearbook since 1991. The expert's first, as well as his second mission (18 
to 22 June 2001), concentrated on many in-depth discussions with the management 
and staff of INSTAT, as well as with representatives from other producers of official 
statistics; a visit to one of the regional offices (at Durrës) was also arranged. At the 
initiative  of  the  director  of  INSTAT,  the  expert  also  met  with  three  members  of  the 
Statistical  Council  and  with  the  Governor  of  the  Bank  of  Albania  during  his  second 
visit. The report was finally approved by the director of INSTAT on 6 July 2001. 

The expert was greatly helped in his task by the staff of INSTAT, who did a good job 
in  preparing  the  missions  and  organising  the  discussions,  which  have  inevitably 
made  considerable  demands  on  the  time  of  the  management  and  of  other  staff. 
Nearly  40  staff  members  from  INSTAT  participated  in  the  discussions  willingly, 
actively  and with good humour, in spite of a already heavy work load. Without their 
contributions,  it  would  not  have  been  possible  to  carry  out  the  mandate  in  such  a 
short  time.  Special  thanks  therefore  to  all  the  people  at  INSTAT  for  the  warm 
welcome and the help the expert received. 

The  present  version  established  for  the  Dubrovnik  seminar  differs  from  the  original 
assessment  report  dated  16  July  2001  insofar  that  all  annexes  have  been  omitted, 
and  that  paragraphs  in  the  main  part  of  the  report  which  contained  references  to 
these  annexes  haven  been  reformulated  without  any  change  in  their  substance. 
Comments  by  the  Statistics  Department  of  the  IMF  have  also  been  incorporated  in 
the relevant chapters.  

Executive Summary 

1. 
The statistical system of the Republic of Albania is composed of the Institute 
of  Statistics  (INSTAT  hereafter)  as  the  central  producer  and  leader,  the  Bank  of 
Albania,  and  a  range  of  other  producers  the  exact  number  of  which  is  difficult  to 
determine  precisely.  The  budget  of  INSTAT,  insofar  it  is  financed  by  government, 
amounts  to  0.04%  of  the  total  government  budget  in  1999  (non-census  year);  30% 
have  to  be  added  as  funds  received  by  INSTAT  from  international  donors  in  1999. 

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INSTAT's regular staff number amounts to 145, of which 75 are located in 36 regional 
offices spread over the country. 

2. 
The overall resource situation of INSTAT is totally inadequate for a European 
country of 3.5 million inhabitants, although some improvements have been made in 
recent years. The first years after the old system of planned economy broke down in 
1991  were  very  difficult  for  the  country  as  a  whole.  INSTAT's  staff  was  reduced 
considerably.  In  addition  to  the  conceptual  changes,  many  of  the  existing  reporting 
channels  broke  down,  those  that  subsisted  were  partly  out  of  operation  due  to  the 
extremely  difficult  economic  situation  or  to  unrest  in  parts  of  the  country,  and  the 
remaining  ones  suffered  form  a  loss  in  content.  This  caused  many  series  to  be 
interrupted,  and  limited  severely  the  possibility  of  replacing  them  by  modern 
instruments of data collection later. 

3. 
The result is that the overall capacity of the system to produce official statistics 
on  a  sustainable  basis  and  in  respect  of  the  standards  of  the  EU  is  seriously 
deficient.  The  difficult  situation  in  Albania  has  not  allowed  INSTAT  to  build  up  a 
stable  system  of  data  collection  with  private  companies,  with  private  farms,  or  with 
households,  which  is  capable  of  running  several  surveys  in  parallel  smoothly  and 
efficiently.  This  holds  for  the  fieldwork  as  such,  but  also  for  the  conceptual  and  IT 
resources required. Surveys have been set up on an ad hoc basis when international 
funds were available, with an ad hoc organisation at each occasion. This holds also 
for  the  agricultural  census  in  1998,  and  in  part  for  the  population  census  in  2001, 
which were carried out successfully. Few of this surveys have become regular, and if 
so, the ad hoc type of set up has subsisted. 

4. 
Thanks to the commitment and the know-how of the senior management and 
the  INSTAT  staff.  some  important  improvements  were  made  in  spite  of  these 
enormous  difficulties.    Users  praise  INSTAT  for  a  far  better  accessibility  to  results 
than  was  the  case  before  1997,  for  a  higher  authoritativeness  and  accuracy  of  its 
findings, and for its improved openness to user requests. INSTAT has been able to 
introduce  EU  classifications  to  all  its  data  collections,  and  to  produce  attractive 
products  which  do  not  only  contain  figures,  but  substantive  comments  and 
methodological  information.  As  from  1996,  all  INSTAT  staff  at  headquarters  are 
connected  to  a  LAN,  the  dissemination  unit  was  upgraded  recently,  and  after  10 
years,  a  new  statistical  yearbook  will  be  released  soon.  The  lack  of  a  reliable 
communication infrastructure to the outside is however a big problem.  

5. 
Most notably, INSTAT is strictly adhering to the UN Fundamental Principles of 
Official Statistics, completely unknown before, and this in spite of no reference being 
found  in  the  statistical  law  to  these  principles  with  the  important  exception  of 
statistical confidentiality.  

6. 
It is essential that priority is given to capacity building in collecting data from 
outside  the  public  sector,  based  on  a  solid  infrastructure  in  terms  of  institutional 
framework, organisation, and IT, rather than to add new ad hoc surveys in the same 
manner.  For  doing  so,  assistance  has 
this 
transformation,  but  at  the  end  this  capacity  should  be  put  on  a  sustainable  basis 
funded  by  national  resources.  In  the  area  of  household  surveys,  where  no  periodic 
survey exists a all, it is particularly urgent to introduce an annual household survey, 
focused on employment and migration, and to put the household budget survey on a 
regular  basis,  using  it  as  the  instrument  to  collect  data  on  living  standards  and 
poverty.  In  the  area  of  surveys  with  non  agricultural  businesses, where one regular 
annual  survey  and  one  quarterly  survey  on  a  sampling  basis  (plus  non-sampling 
surveys  for  price  data)  exist,  but  on  a  rather  fragile  basis  (there  is  no  official  GDP 

from  outside 

to  be  given 

for 

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figure yet e.g.), there is no other way than to have an economic census as soon as 
possible as the major building block for a future system of surveys. Some business 
surveys for short-term indicators, e.g. for wages and production, can and should be 
introduced  before  the  economic  census  takes  place  (current  indices  only  cover  the 
public  sector).  In  the  area  of  agricultural  statistics,  one  annual  sample  survey  is 
planned to start from December 2001, but this is far from being adequate given that 
close to 75% of employment is still in agriculture. 

It  is  particularly  important  to  upgrade  and  reshape  the  organisation  for 
7. 
collecting  data  with  respondents,  be  they  private  enterprises,  farms  or  households, 
and  to  give  INSTAT  sufficient  human  resources  to  prepare  the  conceptual  and  IT 
side for moving to an efficient system of interrelated surveys from the set of unrelated 
ad  hoc  surveys  today.  INSTAT  should  also  be  put  into  a  position  of  being  able  to 
organise  censuses  from  the  conceptual,  organisational  and  logistics  point  of  view 
while  at  the  same  continuing  the  production  of  statistics  through  other  regular  data 
collection. 

8. 
It  is  suggested  to  ask  an  experienced  NSI  for  an  expertise  on  how  the 
organisation  of  a  system  for  data  collection  with  private  companies,  farms  and 
household is best set up in the special context of Albania. This expertise is urgent. It 
has  to  emphasise  organisational  and  managerial  issues  with  data  collection,  and 
should be closely co-ordinated with the two other necessary pieces of expertise, on 
IT  at  INSTAT  (the  inadequacy  of  which  is  another  major  obstacle  for  carrying  out 
more surveys efficiently in the future), and on internal organisation and management 
of a future INSTAT with a new status and a newly defined role for INSTAT's regional 
offices. 

9. 
The  institutional  framework  in  which  INSTAT  currently  operates  is  far  from 
being adequate. The statistical law from 1993 is silent about many important issues 
such as the Fundamental Principles. The statistical programme, which is adopted by 
the  government,  and  which  is  meant  to  define  what  is  official  statistics,  is  still 
anchored in the past for many essential aspects, since its core part, adopted by the 
government,  only  covers  reporting  from  public  enterprises  and  statistics  based  on 
administrative  data  sources  such  as  external  trade  statistics,  but  includes  the  few 
regular sample surveys in the private sector or with households only at a secondary 
level, i.e. without adoption by the government. Censuses and ad hoc surveys are not 
included at all. 

10. 
Although the statistical law gives INSTAT some instruments to influence other 
producers  of  statistics,  INSTAT  has  not  had  the  resources  to  implement  them.  In 
ministries,  statistics  often  means  any  work  with  figures  (control,  preparation  of 
material for the minister, sometimes analysis), but only in rare cases production and 
dissemination  of  statistics  in  the  sense  of  official  statistics.  This  leaves  both  the 
boundaries and the common principles of the system very much in the air. 

11. 
The weaknesses of the present institutional environment, and the need for a 
substantial upgrading of resources, call for a reassessment of the status of INSTAT 
as an agency with a special status. The statistical law would have to be completely 
revised, and the statistical programme be given a completely different scope, content 
and  role  as  compared  to  now.  The  new  status  of  INSTAT  should  also  allow  it  to 
acquire and keep the expert staff necessary for a modern statistical system; with the 
present  status,  this  has  turned  out  to  be  increasingly  difficult,  resulting  in  a  high 
turnover  of  staff.  If  such  improvements  were  not  possible  for  a  statistical  office 
responsible to the government, other status options would have to be explored. 

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This important process of change has to be accompanied not only by different 
12. 
pieces of expertise as mentioned above, but by a kind of permanent resident advisor 
who  can  give  advise  to  the  senior  management  of  INSTAT  and  the  other  decision 
making bodies during this process, and have an overall co-ordination role which aims 
at ensuring that the different elements are part of a clear overall objective. 

13. 
Even  though  the  end  result  of  this  transformation  should  be  a  sustainable 
statistical system financed from national funds, assistance from outside is necessary 
in this key process as an investment, with respect to: 

a)  technical assistance in from of the three pieces of expertise mentioned above, i.e. 
systems of data collection; IT; and organisation and management; 
b)  financing the resident advisor;  
c)  technical  assistance  for  sectoral  issues  like  labour  force  survey,  agricultural 
statistics, national accounts, short-term indicators and business registers; 
d)  financing  the  purchase  of  equipment  (both  IT  as  such  and  communication 
infrastructure);  
e)  co-funding  large  scale  operations  like  the  economic  census  or  the  start  of  a 
labour force sampling survey;  
f) 

financing the training of staff and their participation in international meetings.  

14. 
Potential  international  donors  should  make  clear  to  Albanian  authorities  that 
the creation, maintenance and adaptation of a sustainable system of producing and 
disseminating official statistics according to European standards is a prerequisite for 
closer  integration  with  European  institutions,  and  that  this  requires  government 
actions to allocate more resources from the national budget and to put the system of 
official statistics on a solid institutional and legal basis. 

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A. Institutional Setting 

1. Legal Setting 

1.1. Statistical Law 

1. 
Albanian  Official  Statistics  is  regulated  by  the  "Law  of  Statistics"  dated 
16.3.1993 (statistical law hereafter). It is a short law with 11 articles only. It lists the 
actors,  starting  with  the  Institute  of  Statistics  (hereafter  referred  to  as  INSTAT).  It 
adds  directorates  or  divisions  of  statistics  in  the  ministries  and  other  central 
institutions (meant to have full coverage, i.e. every ministry and central institution has 
to have a statistical unit) and directorates of statistics in the 36 districts. The article 
on actors of official statistics goes on with civil registration offices, legal entities and 
individuals,  but  they  are  not  producers  of  official  statistics,  only  holders  of 
administrative records or respondent units. 

law  stipulate 

the  statistical 

Other  articles  of 

response  obligations, 
2. 
confidentiality of individual data, definition of results of official statistics (only INSTAT 
can  publish  official  national  data  according  to  the  law),  and  penalty  provisions.  4 
articles are about INSTAT and its relationship to other producers: INSTAT is defined 
as  a  central  institution  subject  to  the  Council  of  Ministers  (government),  which  can 
regulate  the  details  of  INSTAT's  rights  and  obligations  (as  well  as  the  right  and 
obligations  of  the  statistical  units  of  ministries,  other  central  bodies  an  districts)  by 
decision  (see  below  1.2).  Another  article  states  that  the  director  of  INSTAT  is 
appointed  and  dismissed  by  the  government,  and  that  the  statistical  units  of  the 
districts  are  under  his/her  control.  A  further  article  institutes  a  Council  of  Statistics, 
whose  members  are  determined  by  the  INSTAT  director,  who  takes  also  the  chair. 
INSTAT  has  to  carry  out  the  tasks  defined  in  a  statistical  programme  (which  is 
supposed  to  exist,  without  being  defined  further  in  any  way  by  the  statistical  law  or 
any  other  legal  act).  With  the  approval  of  the  government,  INSTAT  can  carry  out 
censuses; other statistical units can engage in data collection activities from private 
companies or households only with the approval of INSTAT. 

3. 
The  statistical  law  has  been  reviewed  by  a  EUROSTAT  expert  in  2000,  with 
the conclusion that a substantial revision is necessary. The IMF is also pressing for 
an urgent revision of the statistical law. 

Assessment 

As  may  be  derived  from  the  above  description,  which  listed  the  complete 
4. 
substance  of  this  short  law,  it  is  insufficient  compared  to  modern  standards  of 
Europe.  Furthermore,  some  of  the  articles  described  above  are  not  followed  in 
practice,  especially  those  concerning  the  few  instruments  for  INSTAT  to  influence 
other  producers.  The  positive  elements  of  the  present  law  may  be  summed  up  as 
follows: 
individuals  and 
- 
companies,  and  the  principle  that  data  collected  by  sample  surveys  and 
censuses  can  only  be  used  for  statistical  purposes.  This  is  the  most 
significant change to the previous legal situation. 
- 

It obliges INSTAT to follow international standards. 

It  enshrines  statistical  confidentiality 

for  both 

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It  establishes  INSTAT  as  an  institution  directly  subject  to  the 

- 
government, and places the district statistical units under its responsibility. 
- 

It institutes a Council of Statistics as advisory body. 

All other elements which are normally part of a statistical law like professional 
5. 
independence,  impartiality,  obligation  to  disseminate,  reporting  to  and  co-operation 
with  international  organisations,  transparency  about  methods,  procedures  for  and 
content of the statistical programme, financing, external accountability, or access to 
administrative  records  are  not  mentioned  anywhere  (one  could  argue  that  the  UN 
fundamental  principles  are 
international  standards 
paragraph, but this would only be known to insiders and certainly not have sufficient 
weight in controversial situations or for external visibility). Furthermore, even for the 
elements mentioned in the law like the Council of Statistics or the statistical units in 
ministries, the law does not indicate their respective roles (to a certain extent, this is 
done  by  decisions  enacted  by  the  government,  see  1.2).  The  population  census  is 
regulated by a special law. Whereas other censuses are mentioned, the law is silent 
about the decision-making process with respect to sample surveys. 

indirectly  covered 

the 

in 

6. 
The  need  for  an  urgent  and  substantial  revision  of  the  law  is  obvious,  both 
with  respect  to  its  scope  and  its  content.  This  revision  should  be  carried  out, 
however,  in  an  open  and  transparent  way  and  with  full  involvement  of  all  important 
stakeholders. That the law is silent about many issues does not mean automatically 
that  practice  is  not  in  compliance  with  international  standards;  with  respect  to  the 
fundamental principles, de facto compliance at INSTAT is fully satisfactory (see 2.1). 
However,  a  good  de  facto  standard  may  be  under  pressure  when  circumstances 
change  if  it is not anchored in a law. For maintaining this de facto acceptance, it is 
therefore  important  to  get  the  importance  of  these  principles  recognised  by  all 
stakeholders and decision-makers explicitly, as part of an open debate in the context 
of the revision of the statistical law (such a debate has never taken place in Albania). 
A  precipitated  revision  would  incur  the  risk  of  short-cutting  this  debate,  with 
controversies postponed to the phase of implementation.  Such a debate should start 
as  soon  as  possible,  as  part  of  the  reassessment  of  status  for  INSTAT  described 
below,  in  order  to  lead  to  a  revised  statistical  law  that  would  hopefully  pass  the 
Parliament in the first half of 2002. 

1.2. Other Legislation 

7. 
- 

The following legal texts were consulted in addition to the statistical law: 

Law on the General Census of Population and Dwellings (October 2000); 
Law on the Bank of Albania (December 1997); 

- 
-  Act  by  the  Council  of  Ministers  for  Carrying  out  the  General  Census  of 
Agricultural Economic Holdings (May 1996); 
-  Act by the Council of Ministers for the Creation of the Directorates of Statistics in 
the  District,  the  Directorates  or  Sectors  of  Statistics  in  Ministries  and  in  the  Central 
Institutions and for their number of Employees (March 1994); 
-  Decision by the Council of Ministers for the Approval of the Implementation of the 
Nomenclature of Economic Activities (July 1994, amended May 1996); 
-  Decision by the Council of Ministers on the Nomenclature of Products; 
Furthermore, a Law on General Data Protection exists, but which was not available in 
English.  Another  law  of  importance  for  statistics  is  the  Law  on  the  Accounts  of 
Companies, since the annual business survey refers to the definitions of this law. 

8. 
No  proper  legal  text  has  been  found  concerning  the  statistical  programme, 
what it should contain and by whom it should be prepared and adopted. Such a text 

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existed  in  the  old  system  of  planned  economy  and  was  abolished,  without 
replacement, in the transition phase. 

9. 
This  chapter  will  deal  with  the  above  items  of  legislation  insofar  as  they 
contain elements which were considered missing in the statistical law under 1.1, or if 
they are not in line with the UN Fundamental Principles. Other aspects are dealt with 
in the corresponding substantive chapters. The only article on statistics in the law on 
the Bank of Albania is discussed under B8. 

Assessment 

10. 
The  law  on  the  population  census  (23  articles)  can  be  qualified  as  up  to 
European  standards.  It  contains  one  explicit  exception  to  statistical  confidentiality: 
individual  data  may  also  be  used  "by  the  authorities  empowered  by  law  to  set  up 
electoral lists and update civil registers." This is a rather general formulation, without 
limiting  the  variables  concerned  nor  giving  details  about  the  authorities  that  can 
benefit  from  an  access  for  non-statistical  purposes.  When  the  data  were  collected, 
the respondents were informed about this possibility. It was not known at that point in 
time  which  authority  would  in fact receive what type of information; this would have 
had to be regulated by a government decision. In practice, it is unlikely that any use 
is made of this article in the census law. 

11.  Unlike  the  statistical  law,  the  population  census  law  clearly  states  that  it  is 
INSTAT's  competence  to  decide  on issues of methodology and dissemination, thus 
recognising  professional  independence  in  this  respect.  The  same  cannot  be  said 
about  the  Act  on  the  Agricultural  Census:  here,  the  decision  on  "indicators"  is 
explicitly  given  to  the  Ministry  of  Food  and  Agriculture  and  the  Ministry  of  Finance, 
and not to INSTAT. INSTAT's role is only to carry out the survey (together with the 
to  be  a  clear  violation  of 
Ministry  of  Food  and  Agriculture).  This  seems 
independence, and it may leaves some questions open with respect to confidentiality 
(but the latter has been fully maintained in practice). 

The  1994  Act  on  the  Statistical  System  closes  some  of  the  gaps  of  the 
12. 
statistical law, but not the most important ones such as professional independence or 
impartiality. The only important complement is the statement, missing in the law, that 
INSTAT "conducts, organises and co-ordinates the statistical service in the national 
level". 

13. 
The  Act  on  the  Nomenclature  of  Economic  Activities  sets  up  a  special 
Commission with the power to decide on this nomenclature, which, once adopted by 
the Commission, will be applicable in a mandatory and uniform way for all collection, 
classification  and  publication  of  official  data  under  the  statistical  law,  and  for 
administrative  use  by  all  public  bodies  that  perform  "economic  activities".  This 
commission  is  composed  of  representatives  from  several  ministries,  the  Bank  of 
Albania,  the  Chamber  of  Commerce  and  Industry,  trade  unions,  and  some 
representatives from private economic organisations (the Chamber of Commerce is 
not  a  private  organisation).  Whereas  it  is  certainly  a  very  good  idea  to  have  a 
permanent forum to help to implement this important classification across the board 
and to discuss relevant problems with different users, it is not in line with professional 
independence  to  give  decision  powers  to  such  a  commission  concerning  the 
statistical  use  of  this  classification.  In  practice,  the  commission  has  always  backed 
the proposals by INSTAT, who takes the chair of this commission as well. 

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1.3.  Statistical  Council,  Statistical  Programme,  Inter-Ministerial  Consultations, 
Consultations with Users 
14. 
The  statistical  programme,  mentioned  in  the  statistical  law  without  further 
provisions  or  rules  being  given,  exists,  but  its  core  is  very  much  a  reflection  of  the 
past.  In  the  old  system,  it  used  to  contain  all  forms  for  any  kind  of  reporting  from 
economic  operators  (all  state-owned)  to  any  part  of  the  government.  One  copy  of 
each reporting arrived at the then Statistical Office for what was then understood as 
"statistics".  Even  though  the  meaning  of  statistics  has  radically  changed  with  
transition, and many state-owned economic operators have been privatised, the core 
of the statistical programme still covers the reporting within the wider system of the 
public sector. Since the adoption of the statistical law, it contains the forms by which 
all  remaining  state  owned  bodies  (differentiated  between  state-owned  companies, 
entities  of  public  administration  at  national  level,  and  local  administrations)  have  to 
report to  INSTAT via one of its regional offices or to the headquarters. This core part 
of the programme is adopted by the government. To this core part, INSTAT adds the 
small  number  of  regular  statistical  surveys  in  the  proper  sense,  i.e.  surveys  with 
private  enterprises,  private  farms  or  households  for  purely  statistical  purposes,  but 
without prior adoption by the government. 

15. 
The  statistical  programme  is  only  available  in  Albanian.  It  was  set  up 
according to the new scheme in 1993. Prior to adoption by the government, the core 
part is prepared by INSTAT on the base of extensive discussions with the statistical 
unit  of  each  ministry/central  institution.  The  present  programme  (both  the  core  part 
and  the  amendments  by  INSTAT)  has  no  time  limit,  i.e.  it  remains  valid  until  the 
government  decides  on  a  modification  of  the  core  part  (or  INSTAT  for  the 
amendments). The programme with subsequent revisions was published in 1998 and 
2000. It is not linked to any decision on resources for INSTAT or the other producers 
of official statistics. All reporting mentioned in the statistical programme is mandatory. 

16.  Compared  to  the  situation  before  1991,  the  extent  of  reporting  obligations  is 
clearly lower. The programme describes the content (called "indicators"), periodicity, 
deadlines,  and  ways  of  data  transmission  to  INSTAT.  Very  often,  the  programme 
contains  the  forms  by  which  such  reporting  takes  place.  It  saves  INSTAT  from 
sending out the forms to all respondents in the public sector every time, which is an 
important  practical  feature.  On  the  other  hand,  the  programme  does  not  contain 
many  indications  about  the  statistical  output,  e.g.  in  terms  of  contents  (which  is 
implicitly  assumed  to  be  an  aggregation  of  the  forms  received),  over  and  above  a 
calendar of release.  

The details of definitions in the forms are left to INSTAT to decide. The main 
17. 
improvement in the statistical programme, from the point of view of INSTAT, in recent 
years  have  been  the  gradual  implementation  of  international  classifications  in  a 
growing number of reporting operations. 

18. 
INSTAT  has  repeatedly  asked  ministries  to  provide  more  detailed  data  than 
those  prescribed  by  the  statistical  programme.  This  has  resulted  in  memoranda  of 
understanding with other bodies for some data sets in some cases. In other cases, 
is  based  on  a  good  understanding  between  persons,  without 
transmission 
institutional underpinning. At various occasions, INSTAT has had difficulties in seeing 
its  requests  fulfilled,  whether  such  a  memorandum  or  exists  or  not,  or  whether 
transmission for similar data had worked before. The reasons given for not complying 
with  additional  requests  were  burden  of  work,  absence  of  equipment  or  change  in 
staff.  Some  successes  in  obtaining  aggregate  data  not  explicitly  included  in  the 

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statistical  programme  were  made  in  the  context  of  preparing  the  new  statistical 
yearbook (see 2.6). 

19.  Concerning  the  statistical  surveys  in  the  proper  sense,  no  overall  list  exists, 
only  regular surveys carried out by INSTAT are added to statistical programme. Ad 
hoc surveys (e.g. those funded by international donors) carried out by INSTAT, and 
any  statistical  survey  carried  out  by  other  government  bodies,  are  not  part  of  the 
statistical  programme.  In  the  few  cases  where  other  ministries  have  carried  out 
surveys with private enterprises, no prior approval by INSTAT, as prescribed by the 
statistical law, was sought, nor was it discussed whether the survey would better be 
carried  out  by  INSTAT.  The  exception  is  the  Bank  of  Albania,  which  has  explicitly 
mandated INSTAT (and provided the resources) to carry out statistical surveys on its 
behalf. 

20. 
The  Council  of  Statistics  has  been  in  operation  since  2000  only.  It  meets  at 
least 4 times a year. Its 12 members are appointed by INSTAT. Current members are 
from:  Parliament,  public  administration  (ministries,  Bank  of  Albania),  research 
institutions, chamber of commerce and the private economic sector; this composition 
is meant to reflect the most important users. The Council is chaired by the INSTAT 
director (INSTAT is represented in addition though an assistant director as a member 
as well). Its main task until now has been to advise INSTAT on the population census 
2000, but it has also advised INSTAT on certain other projects, like the improvement 
of  business  registers,  asked  for  the  introduction  of  a  labour  force  survey,  and  had 
encouraged the revision of the master plan. 

21. 
There  is  a  regulation  concerning  the  rules  of  procedure,  approved  by  the 
Council of Statistics at it 1st meeting and soon to be put into legal force by Decision of 
INSTAT. According to this text, the Council of Statistics will express its opinion about: 
the situation of the statistical information system and the needs which must 

- 
be covered; 
-  short-term and long-term programmes in INSTAT; 
- 
records and modalities of disseminating results; 
- 

the  census  programmes,  surveys,    statistics  based  on  administrative 

the setting and review of main economic and social nomenclatures. 

On the basis of this regulation, the Council should also try to disseminate the culture 
of statistical information and the promotion of INSTAT's image. 

22. 
The  expert  has  met  with  three  members  of  the  Council.  It  is  a  very 
encouraging  sign  that  these  members  have  a  clear  grasp  of  the  strategic issues of 
the statistical system  with which they will be confronted in the near future, and they 
expressed  a  great  willingness  to  contribute  to  the  process  of  change  and  to  the 
strengthening of INSTAT in particular. 

23. 
The  culture  of  INSTAT  when  it  meets  other  ministries  is  still  focusing  on  the 
statistical  programme  as  defined  above  and  therefore  essentially  bilateral.  There  is 
rarely a dialogue on horizontal issues concerning official statistics, be it in the Council 
of Statistics or elsewhere, nor is there any regular discussions with ministries about 
those  information  needs  which  can  only  be  met  through  statistical  surveys  with 
private enterprises, private farms or households. 

Assessment 

24. 
The  statistical  programme  is  of  very  limited  use  to  the  cause  of  official 
statistics  and  to  the  management  of  both  the  statistical  system  and  of  INSTAT.  By 
focusing mainly on what normally is called statistics based on administrative records, 

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and  by  giving  a  lower  status  to  the  increasingly  important  component  of  sample 
surveys with business and households, it conveys a completely erroneous image of 
official statistics. Getting the core part of the programme adopted by the government 
conveys legal force and legitimacy to what in many other counties is considered to be 
an  internal  issue  to  the  administration  (statistical  use  of  data  collected  for 
administrative purposes that are described in other laws), instead of focusing either 
on data collection where private respondents are involved (for legitimacy reasons), or 
on outputs of the statistical system (for accountability reasons). 

25. 
For  statistics  based  on  administrative  records,  the  programme  is  more of an 
obstacle than a help. It de facto limits the power for INSTAT to obtain administrative 
records  from  other  parts  of  the  administration  to  what  is  explicitly  contained  in  the 
programme, and it sometimes bars the access of INSTAT to micro-level data held by 
other  parts  of  the  administration,  be  they  of  administrative  or  survey  origin.  The 
current statistical law has no power for INSTAT to enforce transmission of data over 
and above the content and extent of detail specified in the statistical programme. 

26. 
For this reason, the present form of statistical programme should come to an 
end as soon as a new statistical law is in force. Its present function should in future 
be covered by a simple article in the revised law giving INSTAT the right of access to 
all administrative records at micro level whenever it has a need for them. No public 
body should be in a position to refuse this access, if it is not in a position to carry out 
the data processing itself. Any data transmission based on such an article should be 
documented, and if it takes place regularly, given a proper format in such a way that 
it  does  not  come  to  a  halt  when  there  is  a  change  in  staff.  Until  this  change  is 
effective,  work  based  on  the  existing  statistical  programme  should  be  kept  to  a 
minimum (see the priority discussion under 3.2). 

The present way of setting up the programme gives a de facto right of veto to 
27. 
other parts of the administration if they do not agree either to a proposal by INSTAT 
for modification of the programme or to provide more data to INSTAT over and above 
the programme. This is very problematic both from the relevance point of view, and 
from  the  point  of  view  of  professional  independence:  the  details  included  in  the 
programme  do  fix  many  issues  which  concern  methodology  in  the  proper  sense 
(such as terminology) which should be left for statisticians to decide. 

The  revised  law  should  also  provide  for  a  completely  different  type  of 
28. 
statistical programme to be adopted by the government. This new programme should 
focus  on  outputs  (what  is  expected  form  the  statistical  system),  and  leave  the 
decision  about  inputs  (best  method  of  data  collection)  to  the  statistical  system.  For 
legitimacy  reasons,  the  basic  parameters  of  statistical  surveys  like  periodicity  and 
group  of  respondent  units  should  also  be  adopted  by  the  government,  but  INSTAT 
(and  the  Bank  of  Albania  for  survey  with  financial  institutions)  should  be  the  only 
possible actors for carrying out such data collection activities and for deciding about 
the  details  of  each  statistical  survey,  after  having  consulted  with  both  users  and 
representatives  of  respondents.  This  is  one  important  element  of  what  is  implied  in 
the principle of professional independence of the statistical system (in the case of a 
survey being done by another actor, INSTAT's approval on methodology is required, 
however).  Finally,  the  new  statistical  programme  should  have  a  clear  link  to 
resources. 

INSTAT  can  consult  with  bodies  such  as  the  Council  or  the  Classification 
29. 
Committee on methodological issues of data collection, but the final decision should 
not be given to anybody else. As a corollary, INSTAT has the full responsibility for the 
accuracy and other components of quality of the output. 

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30. 
The present role of the Council of Statistics is somewhat ambiguous. On the 
one hand, it is clearly an instrument of INSTAT (chair, INSTAT appoints members), 
and will be perceived by others as such. On the other hand, according to the law, it 
should advise INSTAT. The present council and its members are very well placed to 
help  INSTAT  in  getting  through  the  important  changes,  and  to  advise  it  about  this 
process  in  a  constructive  way.  However,  before  the  new  law  is  proposed  to 
government and Parliament, several options for the role of a future Council or Board 
will have to be analysed; the new status of INSTAT will determine the role and tasks 
of  a  Council  to  a  considerable  extent  (se  1.4).  In  terms  of  composition,  it  would  be 
preferable  to  have  a  representative  from  the  media  added;  on  the  other  hand,  the 
number  of  representatives  from  the  national  administration  could  be  lowered; 
contacts with this stakeholder group can be organised in other fora or bilaterally. 

31. 
The  revised  statistical  law will also have to include mechanisms for ensuring 
that  INSTAT  can  carry  out  the  "antenna  function"  in  terms  of  access  to  high-level 
discussions  about  policy  issues  at  an  early  stage,  this  in  order  to  be  able  to  serve 
decision-makers  with  available  statistics  which  are  as  relevant  as  possible,  and  in 
order to initiate changes in the data collection for covering future information needs 
generated  by  forthcoming  policy  decisions  which  are  of  high  relevance  (see  2.7).  If 
this antenna function cannot be covered by INSTAT, the system of official statistics 
risks  to  be  increasingly  irrelevant  to  the  new  information  needs  of  both  decision 
makers and the society a large.  

1.4. Independence 
32. 
INSTAT has been without political interference in the last years concerning the 
choice  of  methods,  definitions  etc.,  or  the  dissemination  of  results.  The  present 
director has been able to alert staff to the importance of independence, and to get de 
facto  recognition  from  the  government  that  this  is  an  important  component  for  the 
credibility  of  INSTAT.  This  has  also  been  praised  by  a  number  of  users  as  a  clear 
improvement with respect to the situation before 1997/98. 

The  director  of  INSTAT  is,  according  to  the  statistical  law,  appointed  and 
33. 
dismissed  by  the  government.  There  is  no  term,  but  with  a  change  in  the 
government,  the  government  has  to  confirm  the  director.  The  same  is  true  for  the 
assistant  directors,  who  are  appointed  by  the  government  on  the  proposal  of  the 
director.  Although  there  have  been  frequent  changes  in  the  government,  no 
government has used the possibility not to confirm a director or assistant director of 
INSTAT in the last years. 

34. 
The situation is somewhat different for statistical units in ministries and other 
central  institutions.  They  are  unaware  of  the  UN/ECE  Fundamental  Principles,  and 
the statistical law is silent about this issue, although Albania Participates in the IMF 
GDDS  (General  Data  Dissemination  Standard),  which  includes  requirements  for 
metadata  and  system  characteristics  like  independence.  This  lack  of  knowledge 
about  basic  principles  of  official  statistics  may  seem  at  odds  with  the  article  in  the 
government  decision  on  the  statistical  system,  by  which  the  director  of  INSTAT 
approves  the  appointment  of  directors  of  statistical  units  in  ministries  and  central 
institutions  and  their  employees.  This  article  has  not  been  applied  in  practice 
because  of  repeated  changes  in  the  legal  base  that  regulates  the  public 
administration; so that the head of these units, and their employees, are appointed by 
their respective institutions to which they belong, and their prime loyalty is with them.  

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Assessment 

35. 
It  is  a  good  and  very  important  sign  for  the  respect  of  the  principle  of 
independence by recent governments that no interference has occurred, and that the 
confirmation  of  the  senior  management  of  the  INSTAT  when  the  government 
changed did not pose any problem. The legal situation with respect to independence, 
both  for  INSTAT  as  institution  as  well  as  for  its  senior  management,  leaves  to  be 
desired however. When the statistical law is revised, it is recommended that this be 
corrected. 

36. 
First,  the  new  law  should  clearly  establish  INSTAT  as  a  agency  that  is  a 
professionally  independent  organisation  and  is  subject  to  the  government  (or 
depending on it future status, to a body where the government is represented) only in 
terms  of  overall  resources,  the  statistical  programme  in  its  revised  form  (what  it 
should do, but not on the how), and on priorities. 

Secondly,  while  it  is  standard  practice  that  the  director  of  a  statistical  office 
37. 
(chief statistician) is appointed by the government, some criteria might be included in 
the law (recognised scientific and professional experience in the area of statistics or 
in a related area) to prevent partisan non-expert appointments. Other options for the 
appointment procedure might also be considered. 

38. 
Thirdly, it is crucial that the appointment is for a fixed term, independently of 
any  change  in  the  government  during  this  term,  even  if  this  is  not  the  standard  for 
other top level posts in the administration. The law should also regulate whether the 
number of re-appointments is limited or not. 

39. 
Fourthly,  the  law  should  limit  the  reasons  for  dismissal  by  the  government 
within the term to very serious misconduct, or make dismissal subject to approval by 
the an independent authority (e.g. the President). 

40. 
Furthermore, serious thought should be given to the procedure for appointing 
the assistant directors. If the government has to play a role at all, it should be limited 
to  rubber-stamp  the  proposal  by  the  director.  Since the director has to bear the full 
professional responsibility, it is necessary that as a corollary he or she should have 
the competence to decide on the next level of hierarchy when a vacancy occurs or a 
new post has to be filled, even if this is not the rule in the rest of the administration. If 
government appointment is kept for the assistant directors, the right of proposal for 
the director should be made explicit in legal terms. 

As  regards  the  organisational  separation  of  statistics  in  other  agencies,  the 
41. 
statistical  law  should  make  this  a  prerequisite  for  being  included  in  the  future 
statistical  programme  as  producer  of  official  statistics.  As  a  consequence,  these 
agencies  should  not  be  listed  in  the  statistical  law,  but  only  in  the  statistical 
programme, with the possible exception of the Bank of Albania where it is important 
that  the  applicability  of  the  statistical  law  is  not  decided  by  the  government  (from 
which  the  Bank  is  independent),  but  by  the  Parliament.  The  inclusion  in  the 
programme would depend on whether each ministry or central institution is able and 
willing  to  respect  the  obligations  of  acting  as  a  producer  of  official  statistics  with 
respect to the UN Fundamental Principles, and mechanisms would have to be set up 
to monitor how these obligations are implemented.  

42. 
For future nominations of heads of other statistical units except for the Bank, 
the  director  of  INSTAT  should  start  to  make  use  of  her  prerogative  to  approve  an 
appointment, and make it dependent on whether there is a guarantee that statistics 

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are produced according to the UN Fundamental Principles and that this be monitored 
in  a  transparent  way.  The  director  of  INSTAT  should  also  have  a  say  in  any 
reorganisation  measures  that  concerns  the  position  of  a  statistical  unit  within  their 
ministry/central institution when this unit acts as a producer of official statistics. 

1.5. Data Protection and Statistical Confidentiality 
43. 
Article 4 of the statistical law is certainly one of its major assets. It stipulates 
and defines statistical confidentiality in a way that is clear and almost unambiguous. 
All  enterprises  are  covered,  and  the  ban  on  non  statistical  use  of  such  data  by 
everybody is very clearly stated, as well as the obligations of the employees who can 
legitimately access such data. 

This  article  also  states  that  data  can  only  be  published  as  aggregates.  In 
44. 
practice, INSTAT uses the rule of 3, i.e. no aggregates composed by 1, 2 or 3 units 
are published. 

Article 5 opens the possibility to give researchers access to micro-level data, 

45. 
but no such request has been made to INSTAT until recently. 

46. 
The perception by respondents of how credible INSTAT is with respect to the 
confidentiality  is  difficult  to  assess.  Reluctance  of  companies  to  participate  in 
statistical  surveys  was  reported,  especially  from  subsidiaries  of  foreign  companies, 
and  this  may  have  to  do  with  the  perception  of  confidentiality  and  independence  of 
INSTAT.  The  increase  in  the  response  rate  in  the  structural  business  survey  over 
time is an indication that INSTAT is perceived more and more as trustworthy. In the 
population  census,  questions  on  the  use  of  the  information  were  raised  by 
respondents, but this was also due to the fact that the Albanian term for population 
census is very close to the term register. 

47. 
The  census  law  has  a  cross-reference  to  the  statistical  law  in  terms  of 
confidentiality. This will allow the dissemination of micro-level data to researchers in 
principle. 

48. 
INSTAT  perceives  the  article  in  the  statistical  law  on  confidentiality  as  not 
being a sufficient protection in the future against demands from other public bodies 
based on more recent laws. 

Assessment 

49.  With  one  possible  exception,  the  legal  situation  and  the  de  facto  practice  in 
INSTAT concerning statistical confidentiality are in line with EU standards. However, 
this  very  important  achievement  has  so  far  not  been  communicated  proactively, 
especially  to  respondents.  This  issue  should  become  an  important  element  of 
actively promoting the necessity of an independent INSTAT when the public debate 
on the revision of the statistical law and the status if INSTAT will start. 

50. 
The possible exception concerning good practice refers to coding the activity 
of companies according to NACE Rev. 1, including private companies, with the code 
used  afterwards  for  both  statistical  and  administrative  purposes  such  as  taxation. 
This is described in more detail under 4.1 

Although the legal text is very good, the relationship to other laws is not clear. 
51. 
When  revising  the  statistical  law,  this  might  be  clarified  by  adding  that  statistical 
confidentiality  has  priority  over  any  other  law,  and  that  it  can  only  be  lifted  with  the 

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explicit written consent of the unit concerned, or on the basis of article in a law (not in 
a government legal act) concerning a census. 

52. 
Another problem could emerge with the term "institutions" whose data should 
be  protected.  This  term  could  be  interpreted  in  such  a  way  as  to  include  public 
institutions.  The  objective  of  confidentiality  (not  only  statistical  confidentiality)  of 
individual  data  is  to  protect  the  privacy  of  the  individual  unit  concerned;  a  public 
institution  has  no  privacy  in  this  sense,  and  can  therefore  not  be  the  object  of 
confidentiality measures. A public institution can only ask for the protection of its data 
on  two  bases:  state  secret,  or  fair  competition  (the  latter  applies  when  the  public 
institution is active in a liberalised market where private companies, whose data are 
subject  to  confidentiality,  operate  as  well).  If  the  term  "institution"  were  to  apply  to 
public  institutions,  many  results  from  data  collections  based  on  the  statistical 
programme  as  it  is  defined  today  could  not  be  published,  and  this  would  not  make 
any sense. 

The rule of 3 is certainly a good and simple way of making confidentiality with 
53. 
respect to dissemination operational. But it can be too simplistic. This rule can lead to 
blocking  too  much  information,  especially  with  respect  to  small  area  data  from  the 
population  census.  One-dimensional  breakdowns  of  frequency  counts  of  persons, 
households, dwellings or enterprises can be published even if there are only 1 or 2 
cases, unless the breakdown or the whole table refers to variables which have to be 
classified  as  particularly  sensitive  (such  as  health,  religion,  crime).  The  rule  of  3 
should  be  adhered  to  for  cross-classifications  (especially  when  marginal  totals  are 
only 1, 2 or 3), or when other variables than frequency counts are involved such as 
income.  On  the  other  hand,  in  tables  on  private  enterprises,  some  cells  should  be 
blocked even when they are an aggregate of 4 to 9 companies: this is the case when 
one  company  accounts  for  more  than  80  to  90%  of  the  aggregate  (which  is  not 
uncommon in small countries). 

54. 
An aspect where the law (and the government acts/decisions) are silent is the 
separation  of  identifiers  from  the content variables during the data entry. This is an 
important  principle  (with  exceptions  of  course  for  panel  surveys  and  a  statistical 
business register) which is worth being made visible in a revised law. 

55.  Once the data processing of population census has been made, it is likely that 
national  or  international  research  institutes  will  ask  for  access  to  micro-level  data. 
Recently, a research institute has asked INSTAT to provide micro-level data from the 
household  budget  survey.  INSTAT  should  prepare  a  policy  in  this  respect  with  at 
least the following elements: data sets should never include identifiers; the research 
institution has to sign a contract, and access should be limited in time. 

56. 
Another  policy  issue  which  is  not  relevant  today,  but  which  might  become 
relevant in the near future, is the following: should INSTAT give micro-level data from 
its surveys or censuses to statistical units of ministries or central institutions for their 
own  research  or  analysis?  The  answer  should  be  no  as  long  as  the  fundamental 
principles have not become part of the everyday culture of such statistical units in a 
sustained  and  proven  way.  INSTAT  would  have  to  be  in  a  position  to  do  the 
tabulation  and  analysis  as  a  service  for  such  units  (and  be  reimbursed  for  this 
service, if it exceeds a certain limit). This is a clear difference to the data flow in the 
other direction: INSTAT should always have the right to receive micro-level data from 
other parts of administration, be they statistical or survey based. This asymmetry is 
deliberate:  the  only  task  of  INSTAT  is  statistical,  so  there are no conflict of interest 
which could be a potential threat to statistical confidentiality, whereas ministries and 

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other public institutions have other tasks that could be perceived by the respondent 
units as incompatible with statistical confidentiality. 

2. National Statistical System 

2.1. Principles 
57.  What  was  said  about  independence  (1.4)  and  confidentiality  (1.5)  applies  to 
other principles of official statistics as well: they are de facto respected by INSTAT, 
and  INSTAT's  staff  is  fully  aware  of  them  (through  the  collection  of  internal 
regulations),  but  they  are  not  known  to  other  producers.  The  only  proviso  with 
respect  to  INSTAT's  practice  is  the  regular  check  for  relevance  for  the items in the 
statistical  programme  as  it  is  set  up  today.  The  present  way  of  how  the  statistical 
programme is prepared is also not completely in line with professional independence.  

Assessment 

58. 
The  revision  of  the  statistical  law  should  clearly  enshrine  all  fundamental 
principles  of  official  statistics.  INSTAT  should  give  high  visibility  to  this  issue  in  all 
discussions with stakeholders and in the public debate. 

59.  When preparing the Stabilisation and Association Agreement with the EU, it is 
recommended  that  the  article  on  statistics  in  this  agreement  includes  an  explicit 
reference to the UN Fundamental Principles. 

60.  One  the  new  law  is  adopted,  the  articles  of  the  law  should  be  given 
authoritative  interpretations  by  INSTAT,  after  being  discussed  with  other  producers 
and with the Statistical Council. 

2.2.  Structure  of  the  System,  Providers  of  Official  Statistics,  and  Relationship 
between INSTAT and Other Providers 
61. 
are part of INSTAT and therefore an issue of internal organisation. 

The issue of regional statistical offices will be taken up under 3.1, since they 

62. 
The  article  in  the  statistical  law  describing  the  actors  in  the  system  is  highly 
confusing.  In  the  old  system  each  ministry,  each  public  body,  and  each  economic 
actor had a statistical unit. During transition, many of those units disappeared, either 
because of privatisation, or because ministries or state owned bodies abolished their 
statistical units because of lack of resources and other priorities. 

63. 
It cannot be seen from the statistical programme who, in addition to INSTAT 
and  the  Bank  of  Albania,  is  considered  as  a  true  producer  of  official  statistics,  with 
dissemination  of  results  taking  place  under  its  own  responsibility.  There  is  no  list 
available  where  true  producers  are  separated  from  statistical  units  which  are  either 
holder  of  administrative  records,  transmitter  of  aggregate  or  micro-level  data  to 
INSTAT, or a kind of analytical expertise to their ministers. Officially, the number of 
statistical units at national level outside INSTAT is given as 62(!). The following true 
producers have been identified (the list is not exhaustive): 

-  Bank  of  Albania  (monetary/financial  statistics;  balance  of  payments),  10 
persons; 
- Institute for Social Security: publishes a yearbook; 
- Ministry of Finance: public finance and government debt statistics; 
-  Ministry  of  Culture  and  Education:  joint  publication  with  INSTAT,  main 
responsibility in education statistics is with INSTAT. 

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The Ministry of Food an Agriculture carries out surveys, but does not publish results 
of  these  surveys.  The  Environment  Agency  collects  a  lot  of  quantitative  data,  but 
dissemination of results as official statistics is left to INSTAT. 

Some  areas,  like  crime  and  justice,  are  not  covered  at  all  (the  competent 
64. 
Ministry refuses both to act as a producer and to give INSTAT access to the micro-
level data). 

The  instruments  available  to  INSTAT  to  be  the  leader  of  the  system,  and  to 
65. 
set standards for all producers, are weak, both in legal and de facto terms. Legally, 
the  only  prerogatives  are  the  approval  of  the  head  of  statistical  units  in  ministries 
(which  has  not  been  applied  in  practice),  the  publication  of  results  as  official 
statistics, insofar they are based on the statistical programme (which offers the legal 
possibility to publish outside the statistical programme, without declaring whether it is 
official statistics or not), and the approval of sample surveys by others (which is not 
applied in practice either).  

66.  De  facto,  items  in  the  core  part  of  the  statistical  programme  have  to  be 
negotiated with the main user/provider of the data, and INSTAT cannot impose any 
modification that does not meet consensus in terms of content, frequency of reporting 
or  ways  of  data  transmission.  As  regards  terminology  and  classifications,  INSTAT 
has the right to decide as long as it does not have any impact on the forms listed in 
the statistical programme, which is difficult to avoid once the changes in methodology 
are  more  than  marginal.  As  shown  above,  other  ministries  publish  quasi-official 
statistics irrespective of the article on INSTAT being the only provider of official data. 
The Ministry of Finance has even come up with its own GDP estimates, based on a 
IMF-inspired methodology, but without revealing to INSTAT (or to anybody else) the 
sources of the input data used. 

67. 
The situation is somewhat different with respect to statistical surveys proper: 
INSTAT  would  have  the  legal  right  of  prior  approval  (but  again  this  is  not 
implemented in practice, due to the fact that other bodies do not have to include their 
statistical surveys in the statistical programme), but has absolutely no right to impose 
standards  concerning  dissemination,  since  these  surveys  are  outside  the  statistical 
programme.  For  its  own  surveys,  INSTAT  has  de  facto  taken  over  methodologies 
recommended by the respective international donor(s). In some cases, it has insisted 
to see European standards respected. 

68. 
There  is  no  monitoring  taking  place  by  INSTAT  about  what  other  statistical 
units do, or whether they follow certain standards, for the main reason of insufficient 
resources. 

69. 
In view of the absence of provisions in any legal text, transmission of official 
data to international organisations is decentralised and carried out by the agency that 
receives the questionnaire. The GDDS focal point role is carried out by the Bank of 
Albania (but not by one of its statistical units). 

Assessment 

70. 
It is hard to speak of a "system" if its scope and its ways of functioning are so 
much left in the air. It is clear that INSTAT is the main producer of official statistics, 
and the Bank of Albania is another clear producer, but beyond this, it is very difficult 
to determine who else is part of the system, and it is even more difficult to determine 
which activities carried out outside INSTAT should be considered as falling under the 
system.  It  is  perfectly  understandable  that  the  very  profound  transformation  of  the 

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system  in  the  period  of  transition  has  put  an  end  to  the  old  approach  of  all  public 
bodies  having  a  statistical  unit,  and  that  it  was  not  possible  to  define  the  new 
boundaries of the system at the time when the statistical law was passed. The next 
revision of the statistical law should put an end to this ambiguity, while at the same 
time  not  fixing  too  many  details  at  the  level  of  the  law  so  as  to  become  too  rigid 
(details  should  be  left  to  lower-level  bodies  to  decide,  or,  if  they  fall  under 
professional independence, to INSTAT and its future organs). 

Another weakness of the present set-up is that the Council of Statistics is de 
71. 
facto only dealing with advice to INSTAT in its production and dissemination role. It 
cannot  act  as  an  advisor  for  systemic  issues  when  INSTAT  and  other  producers 
disagree,  because  other  producers  are  unlikely  to  accept  an  opinion  from  a  body 
chaired by INSTAT in such cases. 

In order to bring gradually some structure into this system, the following steps 

72. 
are recommended: 

A  new  forum  should  be  created  between  INSTAT  and  all  de  facto 
- 
producers  of  official  statistics  in  order  to  discuss  systemic  issues  as  part  of 
the  revision  process  of  the  statistical  law  and  the  preparation  of  a  revised 
statistical programme based on a revised law. The mandate of this group (to 
be reshaped once the task is completed in view of the new status of INSTAT) 
would  be  to  define  criteria and boundaries for producers and activities to be 
part  of  official  statistics,  with  the  UN  Fundamental  Principles  as  the  major 
criterion, and criteria for the division of work between actors within the system 
of  official  statistics  The  chair  of  this  group  should  be  with  the  director  of 
INSTAT. 
Potential producers would be presented with the following choice: they 
- 
can  either  take  over  the  job  of  producing  official  statistics  from  their 
administrative records, but they would have to do it in full respect of the UN 
Fundamental  Principles  (which  would  have  to  be  made  more  operational  by 
this group as well), and they would have to accept approval and final decision 
by  INSTAT  on  whether  their  results  are  official  statistics  or  not,  on  their 
methods of calculation, and on the classifications used, and on terminology of 
results (definitions of micro-level data and therefore for many aspects of the 
results  will  usually  be  determined  by  the  legal  framework  around  the 
administrative  records  from  which  these  statistics  are  produced).  The  other 
option  is  to  give  the  raw  data  or  the  clean  micro-level  data  to  INSTAT,  who 
will then act as producer of official statistics from this source and disseminate 
the results under its own responsibility. 
INSTAT should by law become the only institution that can legitimately 
- 
carry  out  censuses  or  surveys  for  the  purpose  of  official  statistics.  Any 
exception  would  have  to  receive  explicit  approval  from  INSTAT,  with  the 
exception  of  the  Environment  Agency  for  their  data  collections  that  do  not 
burden respondents. The Bank of Albania should also given the competence 
to  carry  out  statistical  surveys  with  financial  institutions,  if  the  administrative 
reporting  channels  do  not  provide  sufficient  (or  timely  enough)  information, 
but for all its official statistics (whether survey based or not), the Bank would 
also  have  to  follow  the  same  rules  as  described  above  and  below  for  other 
producers. 
It  will  be  up  to  INSTAT  to  decide,  after  consultations  with  users  and 
- 
respondents,  how  to  best  allocate  information  needs  to  data  collection 
instruments,  and how information needs should be bundled and allocated to 
individual surveys. 
Once  it  is  clear  who  will  continue  be  a  producer  of  official  statistics, 
- 
their  activities  would  have  to  be  scrutinised,  item  by  item,  whether  they  are 

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within  the  limits  of  official  statistics  or  not,  using  the  compliance  with  all  UN 
Fundamental principles as one criteria. In addition, such activities have to be 
more  than  simple  counts  of  administrative  activities  or  events.  They  should 
have  a  meaning  for  a  socially  relevant  phenomenon;  if  not,  they  cannot  be 
considered as official statistics. 
Once  this  ha  been  completed,  the  list  of  other  producers  and  their 
- 
activities  can  be  integrated  into  the  new  statistical  programme  according  to 
the  relevant  rules.  In  order  to  keep  some  flexibility,  it  is  advisable  not  to 
include a nominative list of actors outside INSTAT and the Bank of Albania at 
the  level  of  the  law,  and  to  leave  this  for  the  government  to  decide  when  it 
adopts the statistical programme. 

The other change which might be introduced at short notice is to give INSTAT 
73. 
the  competence  to  organise  the  reporting  to  international  organisations  concerning 
data and metadata from official statistics, not only for data produced by INSTAT, but 
for all official statistics. It is recommended to have this change be taken by a formal 
decision/legal  act  by  the  government.  The  details  on  content  will  be  explained  in 
more detail in the dissemination chapter (2.6). 

[2.3. Official Statistics System; Providers of Official Statistics: Grouped 
together with 2.2] 

2.4. Liaison with Research Institutes and Universities 
The  research  community  is  consulted  about  the  statistical  programme,  and 
74. 
representatives  from  this  community  are  included  as  members  of  the  Council  of 
Statistics.  Contacts  between  INSTAT  and  this  community  are  less  regular  when 
statistical surveys are prepared, or when the quality of data is analysed. 

75. 
A specific feature of Albania is that some organisations called NGOs carry out 
research work including small surveys. INSTAT is about to establish regular contacts 
with NGOs as one important group of users of official statistics; one is represented in 
the statistical council. 

Assessment 

The extent of involving the research community as potential users should be 
76. 
extended  to  ad  hoc  statistical  surveys  and  censuses  and  not  be  limited  to  what  is 
currently  covered  by  the  statistical  programme.  Setting  up  a  network  of  regular 
contacts with NGOs using official statistics is encouraged, since their use is important 
for demonstrating that official statistics is not only a service to government users, but 
to other interest groups as well. 

77. 
INSTAT has insufficient resources in-house, not in quality, but in quantity, to 
carry  out  analytical  work  in  all  relevant  areas  concerning  the  quality  of  data  on  the 
one hand, and with respect to the search for relationships and explanatory factors on 
the  other.  It  is  important  that  INSTAT  increases  this  in-house  knowledge,  and 
develops  a  policy  for  when  to  mandate  research institutes with analytical work, and 
when to carry out this work in co-operation between INSTAT and such an institute. 

2.5. Liaison with the Business Community 
78. 
The  main  channel  of  contact  between  INSTAT  and  private  companies  is 
presently  via  the  regional  offices  of  INSTAT.  Their  interviewers  visit  the  companies 
regularly, but their brief is limited to the specific survey for which data are collected. 

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Except for being represented in the Statistical Council and in the Commission 
79. 
on Economic Classification, there are no institutionalised contacts between INSTAT 
and this community (e.g. of the type of a round table or network). 

According to the requests received by the dissemination unit, big companies, 
80. 
and  subsidiaries  of  foreign  companies,  are  increasingly  important  as  users  of 
statistics. 

Assessment 

81. 
The  lack  of  systematic  and  regular  links  to  the  business  community  is  an 
important gap in the present statistical system, and should be remedied as soon as 
possible,  e.g.  by  setting  up  a  new  regular  forum,    and  most  importantly,  by 
systematically including representatives from this community in discussions about the 
new statistical programme in as many subject areas as possible. 

It is important that the business community is not only seen as a potential user 
82. 
of results, but as an important provider of raw data. It should not be taken for granted 
that  response  rates  will  automatically  be  sufficient  for  all  surveys  and  pose  no 
problem.  Furthermore,  even  when  companies  respond,  it  is  not  sure  whether  they 
provide the same figures as in administrative reporting (e.g. for taxation), or whether 
they reveal the figures used for internal management purposes, which are supposed 
to  differ  and  be  a  better reflection of reality. The Albanian economy is very much a 
cash-based economy, and there is a widespread culture of transactions that are not 
reported  (or  not  to  their  full  extent)  to  an  administrative  body.  INSTAT's  objective 
should be to be seen as different from an administrative body, worth of receiving from 
companies figures based on the second source rather than on the first. 

Proactive  measures  to  ensure  goodwill  are:  associating  systematically 
83. 
representatives  from  the  relevant  sectors  of  the  economy  when  surveys  are 
prepared,  offering  help  for  companies  that  have  difficulties  with  surveys  (e.g.  by  a 
hot-line for telephone calls), good explanatory material distributed with each survey, 
including clear statements on confidentiality, providing a feed-back to respondents in 
form of a short statistical abstract free of charge, and efforts to make official statistics 
more visible in general. Furthermore, each new questionnaire for a business survey 
(or  a  modified  existing  questionnaire)  should  be  the  object  of  a  pilot  test,  and  the 
results  of  such  pilots  be  discussed  with  representatives  of  the  business  community 
before the final version is decided by INSTAT. 

84. 
In addition to the bad quality of addresses in INSTAT's list of enterprises (see 
B5),  the  lack  of  confidence  into  the  public  sector  in  general  is  invoked  why  data 
collection  via  the  postal  service  is  presently  not  feasible.  The  goodwill  measures 
mentioned above should contribute to reduce this obstacle. The objective should be 
that,  except  for  data  collection  on  prices,  a  private  business  (outside  agriculture) 
should only be visited by interviewers when it is included in a survey for the first time, 
or  when  the  questionnaire  undergoes  important  modifications.  Regular  data 
collection  with  the  same  enterprise  based  on  a  stable  questionnaire  should  be 
gradually transferred to mail (or in the long term even to electronic communication) in 
order  to  substantially  upgrade  the  system's  data  collection  capacity  from  private 
companies. As a first step, transmission by mail should be introduced as an option if 
a company agrees after being visited the first time by an interviewer. 

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2.6. Product and Dissemination Policies 
85. 
A  new  unit  on  dissemination  was  created  in  1993.  It  started  with  2  persons, 
and  has  3  persons  today.  Another  important  organisational  measure  is  a  council of 
publication internal to INSTAT, a kind of regular horizontal committee chaired by the 
director.  All  publications  (for  repeated  publications  only  the  explanatory  comments) 
have  to  be  approved  by  this  council.  The  dissemination  unit  operates  as  one-stop 
shop concerning INSTAT statistics for all users. 

INSTAT has an attractive, bilingual catalogue of publications, where all output 
86. 
is  described,  available  also  on  the  Internet.  These  publications  make  a  surprisingly 
extensive use of "indicators", but if the term indicator is used in the same way as for 
the  data  collection  via  the  statistical  programme,  it  does  not  go  much  further  than 
absolute  figures  and  changes  to  the  previous  period.  About  half  of  the  publications 
are bilingual Albanian/English (with the translation carried out by in-house staff who 
are not professional linguists). 

A  major  product,  which  will  be  released  shortly,  is  a  completely  revised 
87. 
statistical yearbook. The last statistical yearbook dates from 1991. There were many 
problems  in  maintaining  complete  coverage  of  data  collection  during  the  difficult 
years between 1991 and 1997, so that no statistical yearbook could be produced any 
more.  The  new  yearbook  will  give  the  best  overview  on  the  availability  of  Albanian 
statistics, and also close the gap, for the time being, concerning the missing overview 
on  the  statistical  system.  The  yearbook  contains  a  new  classification  of  subject 
areas,  but  two  chapters  are  still  missing:  national  accounts  (because  of  the  lack  of 
official  figures),  and  crime  and  justice  (because  of  the  lack  of  co-operation  by  the 
Ministry  of  Justice).  The  yearbook  has  extensive  methodological  notes  in  each 
chapter, and some graphs and maps at the very beginning. Data included are from 
1999 as the most recent year. 

88. 
There is one other publication where not only INSTAT, but also data from the 
Bank  of  Albania  are  included:  it  is  bilingual,  with  the  English  title  Main  Economic 
Indicators, and is released quarterly. With some other publications, INSTAT acts as 
the  official  disseminator  of  aggregates  calculated  by  another  ministry  (e.g.  for 
unemployment).  

There is an official advance release calendar for all publications, with the date 
89. 
of each release fixed for a whole calendar year. This calendar is also accessible on 
Internet. 

All releases are simultaneous to all users. There is no prior information given 

90. 
to anybody. 

91. 
The publications go, with some exceptions, beyond tables and methodological 
comments. They contain explanatory comments in the proper sense of the term. The 
council of publications is the instrument by which such comments are reviewed and a 
roughly similar approach to commenting across subject areas is ensured. There are 
also publications on interdisciplinary issues with rich analytical text (Women and Men 
in  Albania).  There  have  not  been  any  negative  reactions  from  the  outside  to  the 
present way of commenting so far. 

92. 
INSTAT does not only disseminate products, it also provides services in form 
of sending publications by e-mail and the production of tailor made tabulations. This 
second  type  of  services,  especially  for  government  users,  take  a  lot  of  the  time  of 
subject matter specialists (also due to insufficient IT). An area where the delivery of 

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more  detailed  information  than  what  is  contained  in  publications  is  efficiently 
organised  is  foreign  trade  statistics:  ministries  receive  every  month  details  on 
product/country combinations in their field of interest on diskettes or on paper.  

Pricing for both products and services is either absent or very low. All media, 
93. 
government users, and students receive everything free, and only private companies 
and sometimes institutions abroad pay. Prices are determined by INSTAT. 

The dissemination unit acts also as co-ordinator for international organisations 
94. 
for  their  data  and  metadata  requests.  It  stores  all  incoming  questionnaires 
electronically, sends it to the unit(s) concerned, and channels the replies back to the 
international  organisation.  Another  function  is  to  capture  all  information  requests 
addressed to INSTAT from any other side than international organisations. Statistics 
derived from this source indicate a marked increase in the number of requests over 
the last three years. 

There  is  a  website,  containing  a  brief  description  of  INSTAT,  the  publication 
95. 
catalogue,  the  advance  release  calendar,  the  statistical  law  and  reports  about 
activities  such  as  the  population  census.  It  is  planned  to  have  the  most  recent 
releases  of  monthly  and  quarterly  economic  indicators  added  soon.  Although  an 
English  part  of  the  website  is  foreseen,  the  elements  mentioned  above  are  only  in 
Albanian for the time being. From abroad, the INSTAT website is frequently difficult 
to access due to an insufficient number of lines. 

There  is  no  library  for  external  users  where  they  can  browse  through 
96. 
INSTAT's or other producer's statistical documents, due mainly to a lack of space in 
the present premises. Regional offices do not have such a facility either. 

Assessment 

97. 
The creation of a new unit in charge of dissemination as the main contact for 
users  has  brought  some  important  improvements  in  dealing  with  users  and  their 
requests for products and services. This is an remarkable achievement in view of the 
small resources of this unit. The publication programme gives a very good overview 
for users what they can obtain. The advance release calendar is exemplary. 

98.  Given  that  INSTAT has proven that such a horizontal service is feasible and 
effective, it should extend its scope to cover all official statistics, and not only those 
from INSTAT. Other producers should be encouraged to announce their publications 
so  as  to  be  included  in  the  publications  programme,  and  to  systematically  provide 
INSTAT's dissemination unit with copies of their documents in electronic format. This 
would  allow  this service to act as a one-stop shopping not only for INSTAT, but for 
the  statistical  system  as  a  whole.  Some  of  these  data  from  other  producers  are 
available  at  INSTAT  anyway  for  inclusion  in  the  statistical  yearbook  or  in  other 
publications. 

99. 
Another  element  where  such  an  extension  to  the  whole  system  should  be 
carried out is the transmission of statistical results to international organisations. All 
such requests should first go to INSTAT's dissemination unit, which would either fill 
them with published data and metadata, or if this is not possible, forward them to the 
competent  specialists  outside  INSTAT  for  tailor-made  results.  After  completion,  all 
transmission should be channelled back via this service as well. The only exceptions 
are  regular  transmission  of  the  same  set  of  data  by  other  producers,  which  can  be 
made  directly  by  other  producers  in  their  field  of  competence  once  it  is  fixed  which 
published official data would be used for this purpose, and once this direct procedure 

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has  been  approved  by  the  dissemination  unit  of  INSTAT.  This  approval  has  to  be 
renewed when the request changes in content, or when other national series will be 
used  .  When  a  request  concerns more than one producer, INSTAT's dissemination 
unit should be in charge of  ensuring the transmission of the overall package of data. 
In this context, the overall co-ordination for the GDDS reporting should come back to 
INSTAT. 

100.  The institution of a council of publication is an excellent device. The problem is 
that  is  very  time  consuming  for  its  members,  especially  for  the  director  who  chairs 
this  council  and  has  to  read  all  publications.  In  view  of  the  future  extension  of  the 
number of products, ways should be found to better distribute the work between the 
members of the council, and to submit to the director only important borderline cases 
where  other  members  cannot  agree,  or  products  aimed  at  media  such  as  press 
releases. 

101.  The  practice  on  including  explanatory  comments  in  as  many  products  as 
possible is very encouraging and should be continued, since it is highly relevant for 
users  and  motivating  for  staff.  It  is  recommended  that  some  principles  to  be 
respected  in  drafting  such  comments  should  be  written  down  as  rules  for  INSTAT, 
and ways should be found to organise training for staff who are not members of the 
council  on  publications.  Explanatory  comments  could  be  enhanced  further  if  more 
use  is  made  of  "true"  indicators  based  on  international  standards,  such  as 
unemployment  rates,  life  expectancy,  GDP  per  capita,  productivity  etc.  Due  to  the 
insufficient  coverage  of  many  economic  surveys,  the  present  data  basis  for  such 
comments  may  not  be  sufficient  for  all  products,  so  that  figures  would  have  to  be 
checked  for  whether  their  basis  is  strong  enough  to  back  the  scope  of  the 
interpretations given. 

102.  The main tool for answering specific user requests by the dissemination unit is 
the collection of tables from products in electronic format. As long as the amount of 
detail published is limited, this may be good enough, but even when this continues at 
the present volume per year, a growing number of years may soon make this form of 
organising  data  very  cumbersome.  It  is  therefore  recommended  to  start  a  project 
designed to create an output database, where all these data are not stored in forms 
of  documents,  but  as  a  series  of  databases  interrelated by common metadata. It is 
proposed that such a project be started in close co-operation with a leading foreign 
NSI in this area, after the basic expertise on IT as proposed under 3.7 has fixed the 
overall IT structure. 

103.  An output database as proposed above would open the possibility to include 
many  break-downs  that  are  not  published  today,  especially  those  at  district  and 
municipal  level.  This  would  have  the  important  advantage  to  alleviate  much  of  the 
burden  of  today's  tailor-made  tabulations,  by  preparing  a  broader  set  of  tables 
regularly for the output database from which detailed results can be extracted easily 
on the request of a specific user. An output database would also allow a definition of 
official statistics which is independent of the form of dissemination. 

104.  The future policy of handling tailor-made services would also be considerably 
simplified by an output database. Nevertheless, a policy of unlimited services of this 
type will not be sustainable, especially if these services are not paid for by the user. It 
is  therefore  recommended  to  set  explicit  limits  to  unpaid  services  and  make  these 
limits  known  to  clients,  especially  from  government.  Requests  exceeding  this  limit 
would have to be compensated in one form or another. 

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105.  An  issue  closely  related  to dissemination is the coherence of figures. This is 
dealt with under 3.3 

106.  Under  the  revised  statistical  law,  INSTAT  should  stop  acting  as  official 
disseminator  for  aggregates  produced  by  other  bodies,  because  this  dilutes 
responsibility. INSTAT should either take over full responsibility as a producer, which 
requires that micro-level data from administrative records be transmitted to INSTAT, 
or the other agency, with the approval of INSTAT, should act as a producer with full 
compliance  to  the  principles  of  official  statistics  and  disseminate  them  under  their 
own  name.  INSTAT  would  them  take  over  these  aggregates  in  publications  like 
statistical yearbooks, by quoting the responsible producer as source. 

107.  For  the  visibility  of  INSTAT,  it  is  important  that  it  be  quoted  when  its  figures 
are reproduced or used in a government document. INSTAT should make an effort to 
remind other governmental agencies about this; as an example, a leaflet of the Bank 
of Albania attributes CPI figures to the National Bank, and not to INSTAT. The same 
holds for INSTAT figures quoted on the websites of other government agencies. 

108.  The  classification of subject areas used in the statistical yearbook should be 
used in all overviews on the statistical system, be it the future statistical programme, 
the  publication  catalogue  etc.  No  other  classifications  of  subject  areas  should  exist 
concerning statistical products or statistical outputs. 

109.  Extension of the website should wait for improvement in communication lines 
and networks allowing better access. 

110.  Once  the  space  problem  is  solved,  consideration  should  be  given  to  how  to 
install an attractive, user-friendly library for external (and internal) users. A library is 
an  important  window  to  both  expert  and  non-exert  users,  especially  when  modern 
communication  is  unreliable.  Such  points  of  access  should  gradually  be  installed  in 
some regional offices as well, so as to cover the whole country. 

2.7. Relations with the Central Government 
111.  Since  the  statistical  law  has  been  in  force,  the director of INSTAT reports to 
the  Deputy  Prime  Minister  of  the  government  (before  it  was  to  the  Minister  of 
Finance).  The  function  of  the  Deputy  Prime  Minister  is  currently  taken  over  by  the 
Minister of Labour, but each government is free to allocate this function to any of its 
members.  The  present  deputy  acts  as  an  effective  spokesperson  for  INSTAT  at 
government level when issues of statistics are discussed (which, except for budget, 
is  rare).  The  director  has  easy  and  regular  access  to  the  deputy  prime  minister; 
access to other ministers is occasional. 

112.  Although the resource situation of INSTAT has improved slightly in the recent 
years,  the  good  contacts  with  the  government  have  not  lead  to  the  substantial 
increase in the capacity of the Albanian statistical system which would be necessary 
to fulfil its role in a European state based on democracy and market economy. The 
main  problem,  as  further  described  in  other  places,  is  the  insufficient  level  of  staff, 
financial and IT resources for an effective and sustained data collection with private 
businesses,  private  farms  and  households  that  will  be  capable  of  producing  an 
increasing number of statistics required by EU standards. 

113.  There  is  no  systematic  inclusion  of  INSTAT  as  observer  in  inter-ministerial 
policy  meetings  with  a  view  to  alert  INSTAT  on  forthcoming  information  needs 
(antenna function); the culture of decision-making on policy issues in Albania is, with 

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the possible exceptions of the ministry of finance and the Bank of Albania, not very 
much based on empirical evidence and analysis so far. 

114. 
INSTAT  figures  are  not  openly  questioned  by  other  ministries.  However, 
ministries as users feel free to replace, in their internal papers for their ministers, data 
from INSTAT by any other own source or estimate known to them, especially if they 
refer  to  a  more  recent  period  than  the  last  INSTAT  official  figures.  INSTAT  has  no 
means (from the resources point of view) to check all government documents for the 
relevance  and  accuracy  of  the  figures  used  therein,  even  if  it  were  to  receive  them 
systematically.  Other  ministries  take  a  lot  of  freedom  in  publishing  material  with 
figures without checking them with INSTAT before. There is tendency for some key 
staff in ministries to prefer own-made "quick and dirty" figures to official ones.  

Assessment 

115.  The economic situation of the country is such that it will be very difficult for the 
government to provide sufficient resources to INSTAT for enabling it to fulfil its role in 
a professionally sound way with a scope of activities that comes gradually in line with 
European standards. In discussing possible options for the future status of INSTAT, 
this is the main element to be borne in mind. 

116.  Should  INSTAT  remain  a  government  agency,  with  a  guaranteed  status  of 
professional  independence,  the  present  system  of  reporting  to  the  deputy  prime 
minister  should  be  reconsidered.  If  a  minister  who  has  practically  no  information 
needs  for  statistics  except  in  very  general  terms,  such  as  the  minister  of  foreign 
affairs or the minister of defence, were to take over the task as deputy prime minister, 
it would be difficult to see how he or she could act as an effective spokesperson for 
INSTAT. It is therefore recommended that, under this scenario, INSTAT is allocated 
to  the  Prime  Minister  in  a  permanent  and  official  way  as  line  of  reporting  to  the 
government;  any  other  minister  with  sector  demands  for  statistics  would  be  in  a 
conflict of interest as regards priority setting for the statistical programme. The choice 
of  the  Minister  of  Finance,  a  solution  to  be  found  in  many  countries,  might  be 
perceived  as  a  step  backwards  to  the  former  situation  and  as  being  too  close  to 
authorities in charge of taxation in the case of Albania. 

117.  For INSTAT to remain an independent agency reporting to the prime minister, 
a number of conditions would have to be fulfilled. Firstly, the number of staff both at 
the  headquarters  in  Tirana  and  in  the  regional  offices  would  have  to  increased 
substantially. In view of the difficult overall situation for the government's budget, this 
could  only  be  done  through  reallocating  staff  from  ministries  or  other  government 
units under the control of the government. Such a reallocation is likely to be opposed 
by the public bodies concerned, and would have to receive strong support at the top 
level of the government. More detailed proposals will be made under 3.5. Secondly, 
also the other budget components, especially concerning equipment in IT, would also 
have to be increased. Thirdly, the headquarters of a new INSTAT would have to be 
given a premise with sufficient space in Tirana, and fourthly, the government would 
have to agree to link the future statistical programme to the allocation of resources, 
even if this introduces some differences to the normal procedure of budgeting. One 
might even consider introducing, in the new statistical law, an article that prescribes 
that  INSTAT's  own  resources  have  to  be  at  least  0.1%  of  total  government 
expenditure,  with  the  additional  cost  of  special  services  (including  additional  data 
collection for specific purposes of ministries) being paid (or at least co-funded) from 
the budget of this customer.   

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In  view  of these conditions, which will be difficult to meet, other solutions for 
118. 
INSTAT  have  to  be  envisaged  and  assessed.  One  option  worth  to  be  examined 
further  would  be  an  independent  agency  jointly  with  both  the  government  and  the 
Bank of Albania as "shareholders" at equal footing, with a broad board (successor of 
the  present  Council  of  Statistics,  but  with  official  decision  power  in  certain  matters) 
where all stakeholders are represented, and a more narrow board composed of the 
Ministry of Finance (who would be the spokesman for INSTAT at government level in 
this  scenario),  the  National  Bank  and  the  Director  of  INSTAT.  The  proposals  made 
for the appointment of the director of INSTAT under 1.4 would have to be altered so 
as to give the National Bank a say that is in line with its role as co-owner of INSTAT, 
which  could  create  an  unwelcome  perception  of  interference  by  the  Bank  in  the 
public. The statistical law would have to ensure that professional independence and 
all other principles are maintained, and would have to go into some detail concerning 
the  organisation  of  INSTAT,  since  this  cannot  be  regulated  anymore  by  simple 
government decision if the National Bank is co-owner. The same would hold for the 
adoption of the statistical programme, where the National Bank would have to have a 
much greater role to play than until now. 

119.  This option of a statistical institution accountable to both government and the 
National Bank has no known precedent in other countries. It is made in the hope that 
the  National  Bank  would  be  sufficiently  interested  in  a  modern  system  of  official 
statistics to share the burden of financing beyond the statistical activities for which it 
is presently responsible, if the government cannot shoulder the burden alone. There 
are  other  countries  where  the  National  Bank  is  funding  economic  statistics  beyond 
financial, monetary and balance of payments statistics to a substantial extent, but in 
a different organisational structure. The main benefit of the above proposal would be 
that  economic  and  social  statistics  remain  together  in  the  same  institution;  if  they 
were split, there is a great risk that they develop along different paradigms, and that 
social  statistics  is  becoming  the  poor  brother.  In  addition,  areas  like  labour  market 
statistics would be difficult to allocate. The main drawback of this solution would be 
the  complications  in  the  decision-making  procedures,  and  most  probably  a  delay  in 
getting a revised statistical law adopted caused by these complications. Furthermore, 
the present law on the Bank of Albania would not allow the Bank to take over such a 
role.  This  solution  should  therefore  only  be  explored  further  if  the  conditions  for  a 
100% government solution as outlined above cannot be created. 

120.  Another  institutional  solution  to  be  found  in  some  countries  is  a  statistical 
office  reporting  to  the  Parliament.  This solution offers no advantage with respect to 
the  access  to  resources  if  compared  to  a  government  solution;  to  the  contrary,  if  a 
statistical office is completely outside the government, nobody in the government will 
feel a obligation to defend its interests at government level. It is therefore proposed 
not  to  include  this  option  among  those  to  be  considered  for  the  future  status  of 
INSTAT.  

relationships  with 

the  central  government. 

121.  Whatever  the  future  status  of  INSTAT  will  look  like,  it  is  important  to 
strengthen 
INSTAT  should  be 
systematically  included  as  observer  in  all  inter-ministerial  policy  groups  (and  in 
similar policy groups of the Bank). This "antenna function "should be shared between 
the  director  and  the  assistant  directors  of  INSTAT.  The  reasons  for  INSTAT  being 
included at high level are multiple: first to receive a very early information on future 
information needs likely to emerge as consequence of future changes in policies (the 
policy-makers  themselves  are  rarely  aware  of  the  impact  on  their  decisions  on 
information  needs),  in  order  to  start  discussing  the  implications  for  the  statistical 
system  at  a  more  technical  level,  leading  finally  to  a  modification  of  the  statistical 
programme.  If  this  does  not  function,  such  requests  risk  to  be  made  at  too  late  a 

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moment,  with  the  consequence  that  the  statistical  system  is  considered  to  be 
ineffective or irrelevant. 

122.  Secondly,  through  being  present  in  policy  discussions  at  high  level,  the 
INSTAT representative can feed the forum with the most relevant statistics that can 
be produced at a given moment in a much better way than if this has to be mediated 
through  other  persons.  This  allows  INSTAT  to  show  the  usefulness  of  official 
statistics, which contributes to the status and to a positive perception. If this does not 
take  place,  aides  of  policy  makers  in  ministries  will  make  their  own  selection  of 
available data, combine them with other sources, and even modify the official results 
for preparing decisions by their ministers with INSTAT being completely unaware of 
it,  as  outlined  above.  This  will  have  the  effect  that  important  decisions  are  made 
without taking the utmost advantage of available statistics. 

123. 
It is clear that, institutionally speaking,  INSTAT can obtain access to groups 
and  information  relevant  in  this  context  in  a  more  straightforward  way  when  it 
remains an agency under the government as compared to any other status. This is 
another important reason why this solution should be explored first. 

124. 
It is recommended that INSTAT assigns the task of systematically checking all 
government documents with respect to any statistics contained in such documents to 
one unit. If inclusion in inter-ministerial groups as above is realised, an important part 
of this job is already carried out by the INSTAT representatives in such groups. But 
there is a need for a horizontal check in addition. Such checks should be carried out 
at  an  as  early  stage  in  the  preparation  of  such  a  documents  as  possible,  so  as  to 
allow  INSTAT  to  "educate"  the  responsible  ministry  about  the  proper  use  of  official 
statistics.  It  is  important  that  the  other  parts  of  the  administration  see  this  role  of 
INSTAT as a service which is in their interest, and not as a bureaucratic control. This 
will  also  lead  to  a  gradual  increase  of  understanding  what  official  statistics  is 
throughout the top levels of he administration. 

2.8. Relationships with Local Governments 
125.  There  are  no  regular  or  institutionalised  contacts  between  INSTAT  and  local 
governments  in  their  role  as  users  of  official  statistics  until  now  (local  governments 
are funded completely from the budget of the central government). 

126.  The regional offices are not in a position to provide effective services to local 
governments, because they have access only to regional aggregates for those data 
collections of the core part of the statistical programme for which they aggregate the 
incoming  forms.  They  do  not  have  access  to  aggregates  of  any  other  regions  for 
comparison, to national aggregates (other than on paper), or to regional aggregates 
from sources such as sample surveys where processing is centralised. 

127.  The situation is likely to change, however, with the reform of the public sector. 
Local  governments  at  various  levels  will  get  more  competencies,  and  their  role  as 
user of statistics is certain to increase. The statistical system will have to prepare an 
answer on how best to respond to this group of users in the future. 

Assessment 

128.  The only effective way of dealing with local governments in the short term is 
from INSTAT headquarters. This group of users should be offered a contact person 
in the dissemination unit of INSTAT, to whom they can turn if the printed publications 
they receive automatically are not sufficient. 

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129. 
In the longer term, some regional offices should be upgraded so as to be able 
to serve local clients, of which local authorities are the most important group. But this 
would  presuppose  much  better  and  more  reliable  communication  lines  between 
headquarters  and  regional  offices,  by  which  all  regional  offices  could  have  on-line 
access to INSTAT's data stock of validated results not only for their own region, but 
for the whole territory of Albania. They would then be in a position to download any 
extract from this data base requested by their local clients. 

[2.9. Relationship with Other Providers of Official Statistics: Grouped together 
with 2.2] 

2.10. Access to Administrative Records 
130.  The legal situation with respect to access to administrative records has been 
described  already  in  1.3.  This  chapter  will  examine  whether  administrative  records 
about  persons  or  private  enterprises  exist  which  are  of  sufficient  actual  or  potential 
interest to official statistics. 

131.  The prime administrative source for external trade statistics, for which INSTAT 
is  the  producer  are  customs  data.  It  receives  every  month  a  micro-data  file  of  all 
processed  transactions  from  the  Customs  Agency,  established  on  the  basis  of  the 
Single  Administrative  Document.  This  Agency  is  also  responsible  for  the  product 
nomenclature  (in  line  with  the  Harmonised  System)..  In  general,  this  source  is 
reliable today, although the extent of unreported imports is thought to be rather high. 

132.  Another  administrative  source  used  by INSTAT for its business register (see 
B5)  are  lists  from  tax  authorities  based  on  companies  which  have  asked  for  a  tax 
number for VAT. Without this source, which includes turnover as variable for size, no 
universe would be known for any subset of enterprises. There is a threshold (minimal 
turnover)  above  which  enterprises  have  to  pay  VAT  tax;  this  threshold  has  been 
raised  by  a  factor  of  4  to  what  it  was  when  VAT  was  introduced  in  1996.  Many 
enterprises  are  not  covered,  since  they  do  not  reach  (or  claim  not  to  reach)  this 
threshold.  Some  sectors  such  as  banks  or  NGOs  are  totally  exempt  from  VAT  and 
therefore  not  covered  (even  though  some  NGOs  live  mainly  from  paid  mandates). 
INSTAT derives some statistics directly from this register. 

133.  With  respect  to  labour  market  statistics  covering  the  private  sector  but  not 
derived  from  the  business  register,  no  administrative  source  of  sufficient  validity  is 
available, neither for employment nor for wages. Only the register of unemployed is 
used for official statistics; presently, it is the only source, since a labour force survey 
does not exist. 

134.  Finally,  construction  statistics  is  based  on  administrative  records  concerning 
building  permits.  What  the  extent  of  construction  carried  out  without  permits  is,  is 
unknown. 

Assessment 

legal  situation  concerning 

135.  The 
to  access 
administrative records has been considered as insufficient. The de facto situation is 
satisfactory for the external trade and fiscal data. There is no systematic evaluation 
of  the  potential  of  other  administrative  sources  that  cover  private  actors,  but  the 
potential should not be overestimated. For this reason, the major instruments for data 
collection  for  economic  and  labour  market  statistics  will  have  to  be  business  and 

the  possibility  of 

INSTAT 

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household surveys, and as the basis for a statistical business register an economic 
census. 

3. Description of INSTAT 

3.1. Mission, Internal Organisation 
136.  There  is  a  mission  statement  of  INSTAT  as  part  of  a  collection  of  internal 
regulations, but this is not publicised toward the outside. Only a short description of 
INSTAT on the website can be found. The law does not contain anything about the 
purpose of official statistics either: it just states in article 1 that "the statistical service 
is  in  charge  of  the  collection,  the  processing,  the  analysis,  the  publication  and  the 
conservation (archiving) of statistical data. 

137.  The  internal  organisation  of  INSTAT  is  in  4  departments,  headed  by  an 
assistant  director  (presently  2  of  them  are  vacant,  as  a  result  of  which  too  many 
issues have to be decided or followed up by the director herself). 2 departments are 
subject area oriented (economic statistics; social statistics), and the two others are in 
charge  of  support  services.  These  directorates  are  subdivided  into  4  to  7  units 
(sectors).  One  unit  (the  unit  dealing  with  EU  assistance)  is  directly  attached  to  the 
director. 

138.  The  major  decision  body  is  the  meeting  of  the  director  with  the  assistant 
directors.  This  meeting  is  enlarged  to  head  of  sectors  if  decisions  concerning  their 
respective  areas  are  discussed.  For  some  issues  like  publications,  horizontal 
committees with executive power with a different composition exist. 

139.  One  sector  in  a  support  directorate  is  in  charge  of  the  36  regional  offices 
which  are  under INSTAT's responsibility. The prime role of these regional offices is 
data  collection  based  on  the  statistical  programme.  Public  bodies  have  to  bring  the 
information required in the statistical programme to the regional office of their county, 
with stamp and signature on the form (so-called evidence). The task of the regional 
offices is to control the completeness of such forms, and to remind entities which do 
not  bring  the  requested  information  in  time.  They  enter  the  data  with  office 
automation  tools  on  a  local  PC  that  is  not  connected  to  the  INSTAT  headquarters, 
and  establish  regional  aggregates.  Afterwards  the  whole  material  is  transmitted  to 
Tirana.  Some  regional  offices  (like  the  one  visited  by  the  expert  at  Durrës)  use  the 
regional aggregates to prepare paper products about the region for local authorities, 
again with their office automation tools. 

140.  Some regional offices are involved in data collection with private companies, 
such as for prices and the structural business survey. Contrary to what happens  for 
data  collection  with  public  entities  as  described  above,  for  these  surveys,  all 
companies  (or  outlets)  are  visited  by  temporary  staff  recruited  by  these  regional 
offices for this purpose. For the annual business survey, the filled forms are sent to 
Tirana for further processing. In the case of consumer prices (based on the method 
of  elementary  price  indices),  each  regional  office  calculates  the  relative  price 
increase  for  each  individual  price  series  before  sending  it  back  to  Tirana  for 
aggregation. 

141.  The  staff  of  the  regional  office  visited  feels  very  happy  and  is  proud  of 
belonging to INSTAT.  

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Assessment 

142. 
 The  main  problem  of  INSTAT  is  not  so  much  with  the  internal  organisation 
than  with  the  gross  insufficiency  of  its  overall  resources,  notably  staff.  For  these 
reasons,  there  are  no  specific  comments  to  be  made  on  the  organisation  chart, 
except  for  the  dissemination  sector  which  would  be  more  logically  placed  with  the 
other support directorate in view of its very close links with IT. 

143.  The  number,  role  and  functions  of  regional  offices  should  be  examined 
carefully.  It  does  not  seem  possible  in  the  foreseeable  future  to  organise  all  data 
collection centrally from Tirana; a network across the country for data collection will 
therefore have to exist which can collect information in an efficient way not only from 
local  governments  and  public  bodies,  but  principally  from  private  enterprises, 
agricultural  holdings  and  private  households.  The  focus  of  data  collection  will 
therefore be completely different in the future, and this will have obvious implications 
for the qualifications and training of the permanent and temporary staff in the regional 
offices. 

144.  The practical difficulties for the headquarters meeting with staff from regional 
offices,  and  the  resource  implications  for  such  meetings,  are  considerable. 
Nevertheless, for regional offices to continue to perceive themselves as being part of 
INSTAT  and  its  culture,  rather  than  seeing  INSTAT  as  a  mere  administrative 
structure  in  the  far  away  capital,  frequent  meetings  are  a must. A practical solution 
may be to reduce the number of regional offices, so as to make such meetings and 
training more frequent. This would also allow each regional office to have a minimal 
size that is important for feeling different from regional antennas of other parts of the 
central administration such as ministries. 

145.  The  perception  of  belonging  to  INSTAT  will  certainly  increase  if  regional 
offices are not only active for the inputs (data collection), but have also a greater role 
to  play  in  dissemination  and  servicing.  This  needs modern equipment and powerful 
communication  channels  to  headquarters,  which  presently  are  completely  absent. 
Also  from  this  perspective,  it  would  be  advisable  to  reduce  the  number  of  regional 
offices. 

3.2. Planning, Programming and Priority Setting 
146.  The main descriptions and recommendation for programming are given under 
1.3. The present chapter deals with priority setting. 

147. 
It  is  striking  that  most  of  the  activities  where  data  are  collected  from outside 
the  public  sector  like  population  census,  agricultural  census,  household  budget 
survey,  level  of  living  survey,  demography  of  SMEs,  could  only  be  carried  out  with 
assistance  from  abroad.  The  regular  capacity  of  the  statistical  system  was  more  or 
less exclusively used for the activities in the core part of the statistical programme as 
it  is  defined  today.  Only  in  a  very  small  number  of  cases  (foreign  trade  statistics, 
annual  business  survey,  quarterly  survey  of  retail  trade,  collection  of  prices  for  the 
CPI) are statistics covering the private sector entirely financed by national sources. 

148. 
International funding, which amounts to 30% of total expenditure in 1999 (and 
to  12%  in  2000),  has  in  many  cases  meant  to  take  over  methodology  or  even  a 
questionnaire  from  outside  donors,  some  of  them non-European, designed for their 
information needs. Some methodological adaptations to better cope with the situation 
of the country were made, but there was no attempt to examine what type of national 

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information  needs  could  be  included  in  such  a  data  collection  activity,  what  the 
relationships  are  to  the  rest  of  statistical  activities,  and  how  it  could  be  later  on 
integrated to become a regular activity. In the case of non-European donors such as 
World Bank or IMF, inclusion of EU standards in such surveys had to be requested 
by INSTAT. 

149.  This  dichotomy  implicitly  leads  to  an  image  of  relative  priorities  which  can,  if 
no measures to the contrary are taken, become a major disservice to the future of the 
statistical  system.  The  perception  for  a  non-specialist  user  like  a  minister  is  that 
national information needs are included in the core part of the statistical programme 
adopted by the government, whereas censuses and sample surveys are mainly done 
for  international  information  needs  and  financed  for  this  reason  by  international 
donors. 

150.  This difference in perception is aggravated by the fact that no permanent staff 
can be financed by international funds. Sample surveys and censuses are therefore 
based  on  a  large  number  of  temporary  staff  or  external  experts,  even  for 
methodology  and  dissemination,  whose  crucial  know-how  will  be  lost  once  the 
funding stops. 

151.  There  is  a  document  called  "The  statistical  system  of  Albania:  Strategic 
Master  Plan",  written  with  the  assistance  by  the  EU  Commission  by  the  director  of 
INSTAT.  The  most  recent  version  is  from  May  2001.  This  report  lists  most  UN 
principles,  provides  an  overview  on  the  decision-making  process  in  statistics,  and 
proposes  priorities  for  the  next  five  year  that  cover  almost  the  entire  ground  of  this 
global assessment report. 

152.  A recent example for how an externally funded project has to be incorporated 
into INSTAT's activities at rather short notice is a project entitled "Permanent system 
of  household  surveys  for  poverty  monitoring  and  policy  evaluation"  proposed  to  the 
Albanian government in the context of a growth and poverty reduction strategy by a 
consortium  of  international  donors,  notably  the  World  Bank.  It  provides  for  a  Living 
Standards Measurement Survey (LSMS) in 2002 and 2005, to be followed by panel 
surveys of a sub-sample of the LSMS in 2003, 2004 and 2006. In addition, it provides 
for  "poverty  mapping"  for  which  a  pilot  data  collection  on  public  infrastructure  in  a 
region  is  already  on  the  way.  The  paper  outlining  this  project  (Draft  Concept 
Document, March 2001) was given to the expert during his second visit. 

Assessment 

153.  Absolute  priority  must  be  given  to  built  up  a  sustainable  system  for  data 
collection through business, farm and household surveys, capable to be financed by 
national  resources  in  the  medium  term  and  designed  to  cover  in  the  first  instance 
national information needs and international obligations. No ad hoc survey should be 
carried out any more if subsequent integration as a regular data collection for official 
statistics  is  in  doubt  either  because  of  low  priority  compared  to  other  information 
needs, different methodology to be used once becoming regular, or lack of national 
resources.  Whenever  a  business  or  household  survey  is  introduced  with  the 
expectation to become a regular activity, EU standards should be applied. Being able 
to  incorporate  an  ad  hoc  survey  later  on  as  regular  activity  does  not  only  mean  to 
build up the capacity of collecting data from all types of respondents and to process 
them,  but  includes  the  acquisition  of  sufficient  conceptual  know-how  to  plan  and 
prepare data collection in such a way that good quality, timely and relevant statistical 
information can be derived. 

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154.  National needs should in the first priority focus on some key indicators in each 
subject area. For short-term economic statistics in the broad sense, the list of IMF's 
SDDS  indicators  is  a  core  element,  and  it  is  proposed  that  Albania  officially 
announces  the  objective  to  sign  SDDS in 3 to 5 years. For building up a system of 
data collection for both structural economic statistics, an economic census cannot be 
avoided. For labour market indicators, the first priority is the introduction of an annual 
labour  force  survey  following  EU  standards  (with  the  possible  exception  of  regional 
representativeness,  depending  on  cost  considerations),  into  which  questions  on 
migration should be inserted. For living standards, the household budget survey from 
2000  should  be  repeated  at  regular  intervals  and  serve  as  a  core  to  which  other 
questions can be added. 

In  view  of  this  suggested  outline  of  priorities,  the  LSMS  project  described 
155. 
above  has  some  potential  problems.  A  household  budget  survey  has  been  carried 
out  in  2000,  from  which  relevant  poverty  information  could  be  drawn.  The  clear 
priority  for  another  household  survey  would  have  been,  as  stated  above,  a  regular 
(annual)  labour  force  survey  (LFS).  The  project  description  mentions  a  LFS,  but 
states that in discussion with the government (into which INSTAT was not involved) a 
LFS  was  not  considered  feasible.  When  carrying  out  the  LSMS  in  2002,  it  is  very 
important  that  its  core  is  comparable  to  the  HBS  in  2000  (while  at  the  same  time 
covering rural areas as well), and that it leads to a capacity of the Albanian system to 
repeat  this  cross-sectional  survey  at  regular  intervals.  Furthermore,  the  panels 
foreseen 
thoroughly  assessed  against  other 
methodological  options  which  are  less  demanding;  it  may  be  better  to  use  these 
resources  to  increase  the  samples  sizes of the main surveys so as to obtain better 
regional information. 

in  2003  and  2004  should  be 

late  stage  with 

INSTAT.  Some  very 

156.  The project is a good example also for demonstrating other aspects of official 
statistics  than  priority  setting  and  sustainability,  i.e.  the  professional  independence 
and  the  role  of  INSTAT.  This  project  was  mainly  discussed  by  the  donors  with 
ministries,  and  only  at  a 
important 
methodological  decisions  were  pre-empted  before 
INSTAT  was  consulted. 
Furthermore, decision making power is given by this project description to ministries, 
or to joint groups where ministries and INSTAT are represented, rather than leaving 
this  type  of  decision  to  statisticians  from  INSTAT  and  from  the  international 
organisations  involved.  The  pilot  on  public  infrastructure  seems  to  have  been 
designed  and  is  carried  out  with  a  marginal  role  for  INSTAT  only,  with  indicators 
defined  by  each  ministry  concerned.  The  whole  structure  conveys  the  image  of 
INSTAT  being  seen  by  donors  as  mere  executor  for  certain  parts  of  the  project, 
rather  than  the  national  centre  of  competence  for  statistics,  which  is  clearly  in 
contradiction with the rules of official statistics. 

157.  Concerning priority setting for activities financed from national resources, it is 
suggested that in view of the difficult resource situation, more detailed statistics than 
what  is  necessary  for  the  above  key  indicators  be  made  dependent  on  the  co-
financing  by  the  major  client  of  such  detailed  statistics,  i.e.  by  a  ministry  in  most 
cases.  Only  if  willingness  to  pay  is  tested  for  statistics  used  for  implementing  and 
micro-managing specific policies, will it be possible to avoid that this type of statistics 
receives  an  exaggerated  share  of  national  resources  as  it  is  the  case  today  in 
comparison to multi-purpose key indicators. 

It is rather important to prepare a policy for INSTAT to carry out data collection 
158. 
funded or co-funded by ministries and other public bodies in time. Some cases exist 
already  (e.g.  for  the  Bank  of  Albania),  or  are  planned  for  the  near  future.  The  key 
condition  is  that  co-financing  by  others  cannot  compromise  in  any  way  compliance 

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with  the  fundamental  principles,  e.g.  in  terms  of  dissemination  or  professional 
independence.  The  funding  ministry  can  decide  on  the  "what",  but  INSTAT  will 
decide  on  and  carry  out  the  data  collection,  data  processing  and  dissemination 
according  to  the  rules  of  official  statistics,  and  will  take  full  responsibility  for  the 
results. The questionnaire (or the questions added to an existing surveys) will have to 
be  discussed  with  the  ministry  (and  with  other  interested  parties),  but  the  final 
decision on methods will have to remain with INSTAT as is the case for all other data 
collection. The funding agency may of course use the data for additional publications 
over  and  above  what  INSTAT  publishes,  provided  coherence  of  figures  where  they 
overlap is ensured. If an additional survey has to be carried out, it would have to be 
inserted  into  the  new  statistical  programme.  If  one  of  these  conditions  is  not  met, 
such statistical activities cannot be carried out under the umbrella of official statistics. 
Just  taking  over  the  data  collection  in  its  narrower  sense  with  a  questionnaire 
completely 
fixed  elsewhere,  and  with  data  entry,  coding,  processing  and 
dissemination  carried  out  elsewhere,  as  is  the  case  in  the  few  existing  examples, 
would not be possible as official statistics activity under these rules any more. 

159.  A proposal for how it might be possible to give a boost to national resources 
for  official  statistics  by  giving  an  improved  status  to  INSTAT  has  been  made  under 
2.7.  Recommendations  for  the  use  of  funds  from  international  donors  in  the 
perspective of the above priority setting will be made under 3.5. 

160.  The Strategic Master Plan mentioned above has been extensively discussed 
within  INSTAT,  and  has  in  this  way  increased  the  awareness  of  staff  to  systemic 
issues.  The  status  of  this  document  is  not  clear,  however.  For  understandable 
reasons (resource question), there are no concrete actions or milestones defined for 
achieving the objectives mentioned. The recommendation in this global assessment 
report  would  consist,  if  they  are  taken  up  and  resources  for  their  implementation 
provided,  a  way  towards  making  this  strategic  master  plan  more  operational  in 
certain  aspects.  Once  the  basic  parameters  such  as  the  resource situation and the 
future status of INSTAT are known, this strategic master plan should be amended, be 
given high visibility and decided by the competent decision making bodies. From this 
master plan, a revised multi-year programme should be derived as outlined under 1.3 

3.3. Monitoring Quality in all Activities 
161.  There is a strong tradition in INSTAT to check results for quality and strange 
effects before being released. The main forum is the internal publication commission. 

162.  Timeliness as one important quality indicator is very good, due to the pressure 
of the advance release calendar. In some cases, sticking to this calendar may be at 
the expense of accuracy. 

163.  As  regards  data  entry  and  coding,  quality  checks  are  less  regular.  Due  to 
insufficient IT, the inclusion of automatic checks is limited, and there are not enough 
qualified  or  experienced  staff  (high  turnover  of  staff)  to  compensate  for  this  gap. 
Neither  is  it  sure  that  interviewers  recruited  by  regional  statistical  office  are 
sufficiently  trained  to  help  respondents  with  difficult  questionnaires  such  as  the 
annual  structural  business  survey.  For  foreign  trade  statistics,  strange  effects  are 
detected  by  comparing  unit  values  at  a  transaction  level  with  aggregates  from 
previous  periods,  and  outliers  are  reported  to  the Customs Agency for validation or 
modification of erroneous data entry.  

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164.  Each  subject  area  has  created  the  statistical  terminology  in  Albanian 
language, derived from international terminology, and this terminology is used in all 
products. 

INSTAT staff (except for national accounts) have insufficient time to compare 
165. 
figures from different sources. The problem of unreported imports has already been 
mentioned:  some  quantitative  information  could  be  obtained  by  comparing  external 
trade statistics for consumer goods where domestic production is small with figures 
from retail trade statistics and from the households budget survey. Unfortunately this 
is  not  the  case,  which  leaves  ministries  and  the  Bank  of  Albania  to  come  up  with 
corrections for imports of their own.  

Assessment 

166.  The high turnover of staff is a threat to good quality work. An important way of 
ensuring quality work is therefore to reduce turnover of staff, and to invest in training 
(see  3.6).  This  is  especially  necessary  for  staff  of  the  regional  offices,  be  they 
temporary or permanent (see 3.1). 

167. 
It  is  furthermore  recommended  to  set  explicit  quality  limits  for  each  product 
below which results will not be released. This is necessary to be able not to release 
results  announced  in  the  advance  release  calendar  when  quality  is  below  this  limit 
without incurring the risk of being blamed to withhold information because of political 
interference.  These  quality  limits  should  be  made  public,  and  quality  parameters 
obtained  should  be  included  in  regular  products.  The  publication  committee  should 
be  used  to  ensure  that  this  policy  on  quality  is  more  or  less  homogenous  across 
INSTAT. 

168.  Whereas terminology within each subject area (or within each data source) is 
well managed and transparent, there is a need for cross-checking terminology across 
all areas/surveys. Different concepts, or results obtained through different methods, 
should  not  be  visible  only  when  reading  detailed  methodological  notes  and 
definitions, but visible as such in the terminology. It suggested therefore to create a 
new  horizontal  committee  with  executive  power  which  addresses  the  issue  of 
terminology  across  all  products  (not  only  from  INSTAT,  but  for  all  producers).  The 
statistical yearbook is a good starting point for this exercise. The revised law should 
give INSTAT the power to decide on the terminology used in statistical products (in 
line with international standards of course). 

169.  Another important issues is the coherence of figures in different products. It is 
only INSTAT who can finally decide on which is the best figure (in the sense of best 
approximation  to  reality)  for  a  given  phenomenon,  and  whether  figures  can  be 
considered  as  official  statistics.  This  role  should  be  explicitly  recognised  in the new 
law. Issues like the correction for unreported imports mentioned above should either 
be included as official aggregate, if the data base for this correction is sound enough 
for the purpose of official statistics (including BoP statistics); if this is not the case, a 
warning should be issued with the uncorrected figures, but no attempt to quantify the 
error  should  be  given  (the  statistical  programme  should  take  up  the  issue  when 
assessing the unmet needs and propose ways to collect data on a safer basis, if this 
gap is of sufficient relevance). 

If INSTAT is to play the leading role here, it has first to establish coherence of 
170. 
figures  across  its  own  production,  and  not  to  let  different  units  publish  slightly 
different figures without distinguishing them in terminology, and without giving a clear 
indication  to  non-expert  users  on  which  is  the  "best"  indicator  in  the  sense  of 

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coverage  and  accuracy.  This  "best"  indicator  should  be  given  much  more  visibility 
than  auxiliary  sources,  which  may  be  used  for  additional  breakdowns  or  higher 
periodicity.  The  publication  commission  should  be  explicitly  mandated  to  watch 
internal coherence and ensure differentiated visibility for closely related indicators. 

[3.4. Organisation of Large-Scale Surveys: to be found under B2] 

3.5. Finance and Budgeting 
171.  The  budget  of  INSTAT  (national  sources  only)  amounts  to  a  mere  0.04%  of 
the  total  government  budget  in  1999.  It  has  increased  somewhat  over  the  years 
before, but a horizontal rule applicable throughout the administration has limited this 
growth for each agency to 5% per year. For 2000 and 2001, the budget of INSTAT 
has almost doubled as compared to 1999 because of the population census. 

172.  The  budget  of  INSTAT  has  to  follow  the  general  rules  of  the  budget  for  the 
central government. It is divided into four categories; regular staff, purchase of goods 
and services (including for travel); statistical activities (i.e. temporary staff in form of 
interviewers,  enumerators  or  controllers),  and  investment  (e.g.  equipment).  The 
allocation of each of these categories to various statistical activities is based on cost 
accounting and approved by the director. A maximum of 5% can be transferred from 
one budget category to another (except for the first category, where the staff number 
and the level of remuneration are completely fixed). 

In  using  its  budgetary  funds,  INSTAT  receives  from  the  ministry  of  finance 
173. 
allocations to spend which cover a period of 2 months. These allocations cannot be 
exceeded. 

174. 

In addition to the regular budget, INSTAT has two sources of funds: 
-  Receipts  from  the  sales  of  products  and  services;  the  total  sum  is  very 
moderate, due to the pricing policy described in 2.6. In addition, 40% of this 
type of receipts go to the Ministry of Finance, the rest can be used be used by 
INSTAT in any way except for regular staff. 
-  International funds: this source is very important (30% on top of the official 
budget  in  1999,  but  both  the  absolute  amount  and  the  relative  share  vary 
considerably  from  year  to  year).  It  can  be  used  for  financing  equipment, 
purchase of goods (including travel) and temporary staff such as interviewers, 
but not for regular staff (except for their travel). 

175.  Transfers  of  credits  between  ministries  and  public  bodies  like  INSTAT  as 
payment for services are possible, but again not for financing regular staff. INSTAT 
has  made  use  of  this  for  carrying  out  data  collections  for  the  Bank  of  Albania  (see 
3.3) 

176.  Unused credits at the end of the year cannot be carried over to the next year 
and are therefore lost. There area no multi-annual credits from national funds where 
the allocation to single years can be determined by the director. 

177.  There is no multi-year financial plan for the central administration. There are 
plans to introduce a 3-year programme as part of a reform of the public sector. 

178.  Cost  can  be  allocated  to  statistical  activities  ex-post,  so  that  a  basic  form  of 
cost-accounting exists. 

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179.  There  are  no  total  staff  or  total  expenditure  figures  for  the  statistical  system 
available. 

Assessment  

180.  As with staff numbers, the overall budget allocation to INSTAT as leader of the 
statistical system and main producer of official statistics is totally inadequate, both in 
absolute and relative terms. 

181.  The  present  system  of  financing  and  budgeting  is  rather  traditional,  and  far 
away from concepts of new public management. It is unrealistic, however, to expect 
a profound change in the near future, since this would mean a change of the system 
for the whole administration. The same holds for the maximum of an increase of 5% 
as compared to the previous year. 

182.  The  major  imbalance  in  activities, mentioned at several places in this report, 
cannot be redressed under the present budgetary rules, A major change in the status 
of INSTAT is necessary also for this reason. The moment of transition into the new 
status should be used for a major increase in the overall resources; afterwards, the 
5% rule (or whatever rule would be applicable at that moment) could apply again. 

183.  For  the  year  2000  and  2001,  INSTAT  has  benefited  from  temporary  extra 
resources  from  the  national  budget  for  the  purpose  of  the  population  census  to  a 
considerable extent. If this volume could be kept beyond 2001 for official statistics in 
general,  this  would  be  a  first  important  part  of  the  substantial  increase  mentioned 
above. 

184.  There  is  a  perception  that  the  present  national  budgetary  rules  prevent 
INSTAT  from  putting  international  funds  to  the  best  possible  use.  The  revised 
statistical  law  should  enable  funds  from  international  donors  to  be  used  for  regular 
staff insofar as they are engaged in projects to set up or revise a new statistics or a 
new  piece  of  infrastructure.  It  is  very  important  that  the  know-how  acquired  by 
participating  in  such  projects  remains  with  INSTAT  once  the  activity  becomes 
regular. 

185. 
In  general,  international  funds  should  not  be  used  to  finance  regular  data 
collection or data processing activities once they have successfully passed their first 
wave.  What  can  be  financed  are  all  type  of  investment  in  equipment  (hardware, 
software,  communication),  human  capital  (training,  participation  in  meetings  and 
courses  abroad),  activities  by  which  new  surveys  are  prepared,  tested  and 
introduced,  or  by  which  existing  surveys  are  adapted,  to  become  more  effective  in 
creating relevant information based on EU standards, and expertise type of work for 
developing  concepts,  strategies  or  carrying  out  assessments.  Furthermore, 
international  funds  can  be  used  for  regional  co-operation,  parts  of  large-scale 
operations  such  as  censuses  which  take  place  with  a  low  or  uncertain  frequency 
only, and surveys or other type of statistical activities required for answering specific 
information needs derived from non-statistical international obligations (e.g. from the 
future Stabilisation and Association Agreement with the EU).  

186.  When  data  collections are financed or co-financed by international donors, it 
should always be checked beforehand how they are in line with the priority national 
information needs, and whether this activity can be sustained once the funding from 
abroad  will  come  to  its  end.  The  last  item  is  also  valid  for  any  investment  into 
equipment  or  software,  where  maintenance  has  to  be  ensured  from  the  national 
budget afterwards. 

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187.  For non-regular activities such as projects for new surveys or databases in the 
set-up  phase,  the  statistical  law  should  open  the  possibility  of  multi-year  credits 
decided  at  the  same  time  as  the  statistical  programme  is  approved,  irrespective  of 
whether  this  activity  is  financed  by  national  or  international  funds  or  both.  The 
allocation of these credits by year should be in the competence of an INSTAT body, 
but  would  have  to  be  included  in  the  regular  budget.  This  possibility  would  also  be 
applicable to censuses decided on the base of special laws. 

3.6. Staffing, Staff Recruitment, and Training 
188.  The  total  number  of  INSTAT  regular  staff  is  145,  of  which  75  are  in  the 
regional  offices.  Temporary  staff,  including  staff  for  the  population  census,  is  not 
included in this figure. 80% are women, and almost everybody (135) has a university 
degree.  

189.  Due  to  the  small  number  of  staff  at  the  Tirana  headquarters,  some  persons 
have  responsibilities  in  more  than  one  subject  area,  or  for  administering  several 
surveys  either  in  parallel  or  by  rotating  regularly  from  one  survey  to  another  and 
back.  In  other  areas,  there  are  one  or  two  knowledgeable  persons  only.  INSTAT is 
therefore  very  vulnerable  to  losses  of  important  subject-matter  and  methodological 
know-how if such persons leave. 

INSTAT has a policy to take over temporary staff used successfully for ad hoc 

190. 
surveys once the survey is completed and job opportunities are present. 

191.  Wages  are  reported  to  be  lower  in  INSTAT  than  for  corresponding  jobs  in 
ministries,  sometimes  the  gap  is  as  high  as  50%.  This  has  an  obvious  effect  on 
fluctuation, which is high compared to other parts of the administration (10% per year 
are leaving), and on recruitment of qualified staff, which is very difficult especially in 
the IT area, in spite of the high level of unemployment in the country. 

192.  At the time of the second visit of the expert, a decision was about to be taken 
by  the  government  to  increase  the  wages  of  staff  in  the  civil  service  (i.e.  in  the 
ministries),  but  not  in  the  public  agencies  like  INSTAT  which  are  not  under  the  full 
control of a minister. If this proposal were to be implemented, it would further add to 
the feeling of discrimination. 

193.  Job  rotation  exists,  but  there  is  no  explicit  policy.  This  is  understandable  in 
view  of  the  multi-purpose  character  of  many  jobs  as  described  above.  Internal 
candidates have priority if they apply for a job at the same level in another unit, and 
also for jobs at the next higher level. 

194.  Most staff members can express themselves in at least one foreign language, 
be  it English, French or Italian. Interpretation had to be used only with few persons 
(in these cases, interpretation was provided by an INSTAT statistician). 

195.  New  staff  receive  first  a  contract  for one year only. They are sent to various 
departments  to  get  a  feeling  on  INSTAT  as  an  institution.  Furthermore,  there  is  a 
book of rule (part of the collection of internal regulations) which is given to everybody, 
and  which  does  not  only  contain  organisational  and  staff  issues,  but  also  ethical 
principles  and  rules  concerning  confidentiality.  Applicants  to  jobs  are  questioned 
about their knowledge of the statistical law. 

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196.  Decision  making  is  very  democratic,  and  preceded  by  transparent  and  open 
internal discussions aimed at reaching consensus. Contacts outside the hierarchy on 
professional  issues  are  frequent  and  encouraged  by  the  hierarchy.  These  are 
elements  which  favour  the  creation  of  a  corporate  culture  in  spite  of  the  negative 
incentives described above. 

197.  Staff is eager to learn about international standards, and thanks to the access 
to  UN  and  EUROSTAT  documents,  they  are  fully  aware  of  the  professional 
discussions at international level. They can personally attend international meetings 
only  when  there  is  funding  from  donors;  national  resources  do  nor  permit  missions 
abroad. 

198.  There is no in-house training programme on issues of official statistics or on 
statistical  methodology  outside  a  specific  data  collection  activity.  Training 
programmes  for  the  whole  administration,  e.g.  in  foreign  languages,  IT  or 
management, are at the very beginning. 

199.  Staff from regional offices (1 person per office) are trained in Tirana when a 
survey is introduced or changed. It is up to this person to train local temporary staff. 

200.  The  headquarters  of  INSTAT  is  located  at  the  third  floor  of  a  government 
building  in  Tirana  with  insufficient  space  and  insufficient  possibilities  of  controlling 
access of persons without legitimate reason to be inside the INSTAT premises. 

Assessment 

201.  One of the major challenges of the change process form INSTAT will be the 
increase  in  the  number  of  staff,  both  at  the  headquarters  in  a  reduced  number  of 
regional  offices.  Many  ministries  and  other  public  bodies  have  regional  offices  as 
well, which are frequently in the same building as INSTAT's regional office. Insofar as 
such  regional  offices  are  in  charge  of  collecting  data  from  mostly  public  sector 
respondent  units  for  purely  statistical  purposes,  it  is  proposed  that  they  be  merged 
with  INSTAT.  The  public  sector  reform  will  anyway  examine  the  regional  offices  of 
each  ministry;  should  there  be  a  reduction  in  their  number  or  staff,  some  of  this 
volume  should  be  reallocated  to  regional  offices  of  INSTAT.  This  would  have  the 
additional benefit of avoiding unemployment for some persons who otherwise would 
have great difficulties of finding jobs in their region. INSTAT should not be tempted, 
however,  to  take  over  data collection for administrative purposes: this would not be 
compatible with its mission. 

202.  For increasing the staff at INSTAT's Tirana headquarters, the government will 
have  to  explore  ways  of  similar reallocations of "statistical units" in other ministries, 
whose official number is 62(!). Only those public bodies should be left with statistical 
units  that,  after  a  careful  assessment,  are  willing  and  able  to  act  as  a  producer  of 
official  statistics  in  a  true  sense.  The  activities  of  all  other  units  presently  called 
statistical  should  be  examined  whether  they  involve  data  collection  for  purely 
statistical purposes (which should be transferred to INSTAT together with the staff) or 
data  transformation  or  analysis  for  statistical  purposes  or  decision-making.  A 
substantial  part  of  the  latter  (especially  special  tabulation  from  microdata)  could  be 
better  carried  out  at  INSTAT  as  one  of  its  service  functions,  leaving  to  the  ministry 
some  on  the  spot  quantitative  analysis  of  detailed,  but  aggregate  results  obtained 
from  INSTAT  for  internal  reports  to  the  minister,  and possible forecasting activities. 
As regards the collection of data for administrative purposes, this has to stay with the 
other public bodies, but the processing of microdata for statistical purposes, and the 

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dissemination  of  statistics,  can  be more professionally and more efficiently done by 
INSTAT once it will be better equipped. 

203. 
In  making  use  of  all  this  potential  of  rationalisation  by  reallocation,  the  staff 
number of INSTAT (headquarters and regional offices) can be increased significantly, 
if  there  is  a  willingness  to  act.  It  is  unlikely  that  this  potential  can  fill  the  gap 
completely,  however.  The  government  will  therefore  have  to  consider  allocating  a 
number  of  additional  jobs  to  INSTAT  that  are  not  compensated  by  decreases 
international 
elsewhere.  Strong  political  support,  and  endorsement 
organisations,  will  be  necessary  for  this  to  happen;  the  members  of  the  statistical 
council will have an important role to play in this respect. 

from 

204.  A second challenge that needs urgent redressing is the level of remuneration 
of  staff.  The  transition  to  a  new  status  of  INSTAT  with  the  revised  statistical  law 
should be used to redress the imbalance of working conditions between INSTAT and 
similar  jobs  in  ministries.  There  is  no  use  in  increasing  the  number  of  posts  in 
INSTAT  if  they  cannot  be  filled  with  professional  staff  who  stay  with  INSTAT  for  a 
sufficiently  long  time.  Parity  in wages is also a precondition for any transfer of staff 
from a ministry to INSTAT, be it at headquarters or at regional level. If the process of 
change  is  to  be  successful,  it  has  to  be  based  on  additional  human  capital  within 
INSTAT,  and  a  high  turnover  of  qualified  staff  is  incompatible  with  building  up 
sufficient expertise in official statistics, a type of know-how that cannot hardly found 
outside INSTAT, but has to be acquired by new staff while working there. 

205.  The  setting  up  of  a  new  INSTAT  with  a  substantially  higher  number  of  staff 
would also justify a prior outside expertise on organisation and management. A larger 
organisation  requires  a  higher  degree  of  formalisation  than  what  is  present  today 
within INSTAT, which, among other things, should also pave the way for an effective 
alleviation  of  the  burden  to  the  director  caused  by  being  involved  in  the 
implementation  at  operational  level  for  many  activities.  There  should  be  room  for 
some exceptions from government practice and regulations if this can be justified by 
the  specific  function  of  the  new  INSTAT,  and  is  endorsed  by  an  independent 
expertise. 

206. 
In  view  of  the  new  status,  INSTAT  should  build  up  the  capacity  for  training 
staff (and also frequent users of statistics in the government) about official statistics. 
A  training  programme  will  have  to  be  set  up  and  implemented  as  part  of  a  modern 
policy  of  human  resources,  this  is  another  element  which  will  further  enhance 
corporate culture and identity. Special training needs will emerge for person who are 
reallocated  from  other  government  institutions.  Language  and  IT  training  are 
essential as well, both for new and old staff. 

207.  A  another  important  practical  consideration  of  an  increased  INSTAT  is 
sufficient space for its headquarters. INSTAT should have a premise of its own that is 
if  ever  possible  not  shared  with  public  bodies  that  have  administrative  tasks,  and 
where physical access to INSTAT proper can be better controlled than now.   

3.7. Information Technology 
208.  The  IT  sector  has  a  size  of  5(!)  persons.  The  can  only  cope  with  the  most 
urgent needs. 

209.  Equipment  has  been  upgraded  every  time  there  was  a  big  survey  financed 
from international donors, or with specific PHARE money from EU. Since 1996, each 
working place is connected to a LAN and has modern office automation tools. These 

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tools  are  also  widely  used  for  statistical  production,  with  SPSS  and  Pagemaker 
added. There is no database software proper (Access is used in some areas). 

210.  There is an acute shortage of communication lines to and from INSTAT, both 
for  telephones,  Internet,  and  data  communication.  The  existing  lines  have  a  small 
bandwidth  and  are  unreliable.  As  an  example,  INSTAT  could  not  be  reached  by  e-
mail from 16 May to end of June. 

211.  The working conditions outlined in 3.6 have a particularly negative impact on 
IT staff. Most of them are young and relatively inexperienced. An IT expert in INSTAT 
is  paid  half  of  an  IT  expert  in  the  Customs  administration.  Once  an  IT  specialist  in 
INSTAT has gained experience, the tendency to leave is high. 

212.  The  premises  where  hardware  and  communication  infrastructure  is  installed 
are neither safe nor secure. 

213.  There are no resources to train the IT staff, e.g. in database software. 

Assessment 

214.  The IT is in need of substantial investment and fundamental reshape, in terms 
of communication to the outside, software for all stages of the statistical production 
process,  staff,  training  and  management.  The effect of this situation is that existing 
data are neither safe nor secure, nor protected from the integrity point of view, and 
that  new  statistical  activities  have  to  be  met  with  quick  fixes  as  ad  hoc  solutions  if 
they can be carried out at all from the IT point of view without funding from abroad. 
The  new  concept  of  INSTAT  suggested  in  this  report  cannot  be  made  operational 
even in a rudimentary form with the present inadequate IT.  

215. 
In  view  of  the  order  of  magnitude  of  the  problem,  it  is  suggested  to  have  a 
master plan developed by a NSI of another country, this plan should fix the IT policy 
for INSTAT and come up with a blueprint for gradual implementation and migration. 

3.8. Internal Monitoring of Performance 
216.  There is an annual evaluation of performance for everybody in INSTAT. This 
is a well established and a well functioning procedure. 

217.  There  are  no  established  procedures  to  evaluate  quality  of  products  or 
surveys  however.  Quality  discussions  take  place,  and  some  quality  parameters  are 
published as part of methodological information with products. 

218.  For activities which are funded or co-funded by international donors, external 
evaluation has taken place, notably for the population census 2001. INSTAT has also 
had  advice  form  international  experts  in  setting  up  important  statistics  like  CPI  or 
national accounts (the latter to be published next year for the years 1998 and 1999). 

Assessment 

In view of the difficult overall situation, the present level of monitoring seems 

219. 
about adequate. 

220.  Evaluation on how much key statistics like CPI or national accounts are in line 
with European standards will have to be made, however; INSTAT would very much 
welcome such initiatives. 

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3.9. External Accountability  
221.  There are no formal requirements to report on the fulfilment of the statistical 
programme  to  any  authority.  In  view  of  the  limited  scope  of  the  programme,  this 
would not be of much use anyway. 

222. 
In a wider sense of accountability, transparency of all methods and definitions 
is  an  essential  part  of  good  practice  and  therefore  explicitly  mentioned  in  the  UN 
Fundamental  Principles.  In  this  respect,  INSTAT  has  a  high  standard.  All  products 
contain  extensive  methodological  descriptions  of  all  statistics.  This  is  especially 
relevant for flagship publications like the statistical yearbook. 

Assessment 

223.  For  a  substantially  reshaped  statistical  programme  as  described  under  1.3, 
accountability  on  achievement  is  important  and  should  be  prescribed  by  the  law.  It 
may  be  considered  that  such  a  report  goes  to  Parliament,  since Parliament will not 
have  any  other  occasion  to  be  confronted  with  official  statistics  as  a  whole  except 
when deciding on the budget. 

224.  The  present  excellent  practice  of  openness  on  methods  could  be  further 
improved by cross-reference to other data collections, thus highlighting differences to 
similar concepts. 

4. Statistical Infrastructure 

4.1. Classifications 
INSTAT has introduced all EU classifications in their statistics: NACE Rev. 1, 
225. 
ISCO-COM, the Combined Nomenclature as far as it is covered by the Harmonised 
System, ISCED, CPA etc. The use of NACE Rev. 1 has been followed  not only for 
all official statistics, but (based on the decision by the government referred to in 1.2) 
also  for  administrative  purposes,  taxation  included,  and  by  the  chamber  of 
commerce. 

issue 

226.  The  only  outstanding 
the  NUTS  classification.  The  current 
administrative  division  of  the  country  is  in  12  prefectures,  and  36  districts,  but  this 
might change with the reform of the public sector. The current prefecture level could 
be  taken  as  NUTS  3  if  it  were  to  subsist.  The  two  options  for  NUTS  2  would  be  to 
leave the country undivided as for NUTS 1, or to have an aggregation of prefectures 
into 3 or 4 regions. 

is 

Assessment 

INSTAT is in charge of coding companies with respect to NACE Rev. 1. Since 
227. 
this code is also used for administrative purposes, it may affect a specific company, 
e.g.  with  respect  to  whether  or  not  it  is  subject  to  VAT,  or  which  VAT  rate  is 
applicable. This is a breach of statistical confidentiality if coding (and its updating) is 
at least partly based on information collected through statistical surveys (as opposed 
to  administrative  data  sources).  In  addition,  INSTAT  should  not  be  associated  in 
anyway with administrative decisions to the benefit or detriment of single companies, 
even  if  this  decision  is  made  on  the  basis  of  information  that  is  not  subject  to 
statistical confidentiality. This may lead to pressure for assigning codes that are not 
in line with the statistical requirements any more. 

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228.  While  it  is  certainly  efficient that coding of activity for both the administrative 
and the statistical business register (see B5) be concentrated in one place where this 
can be done most professionally, i.e. in INSTAT, it would be preferable to specify in a  
legal  act  concerning  the  administrative  business  register,  to  be  passed  by  the 
government  on  the  basis  of  other  legislation  than  the  statistical  law,  what  would  be 
the  rights  of  the  companies  concerned  with  respect  to  the  administrative  business 
register.  It  should  also  clearly  spelled  out  that  INSTAT's  only  role  in  keeping  this 
administrative register is the coding of activity, and that this be carried out only on the 
basis of administrative evidence. Any use of information from statistical surveys, and 
especially  from  a  future  economic  census,  cannot  be  used  for  the  administrative 
business  register,  which  is  the  main  reason  why  administrative  and  statistical 
business registers cannot be merged and will have to differ in practice. 

 [4.2. Registers: to be found under B5 and B7] 

B. Technical Part: Capacity of Producing Statistics in Various 
Areas 

1. Assessment of the Overall Capacity 

229.  The Albanian system of official statistics had to undergo a very difficult period 
when transition started. In addition to the conceptual changes, many of the existing 
reporting  channels  broke  down,  those  which  subsisted  were  partly  out  of  operation 
due  to  the  extremely  difficult  economic  situation  or  to  unrest.  This  caused  many 
series to be interrupted. 

230.  The result is that the overall capacity of the system to produce official statistics 
which are close to the standards of the EU across the board in a sustainable way is 
at  a low level. The major reason is the totally inadequate level of resources in staff 
and  finances  from  the  national  budget;  for  a  country  of  the  size  of  Albania,  staff 
should at least be doubled, and overall financial resources more than doubled (taken 
1999 as a basis for comparison, not the years 2000 and 2001 where the population 
census distorts the budget figures). 

231.  The difficult situation in Albania has not allowed INSTAT to build up a stable 
system  of  data  collection  with  private  companies,  with  private  farms  or  with 
households, which is capable of running several regular surveys in parallel smoothly 
and efficiently. This holds for the fieldwork as such, but also for the conceptual and IT 
resources required. Surveys have been set up on an ad hoc basis when international 
funds  were  available,  with  an  ad  hoc  organisation  at  each  occasion.  Few  of  this 
surveys have become regular, if so, the ad hoc type of set up has subsisted. 

232. 
It is therefore essential that priority is given to capacity building, rather than to 
add  new  ad  hoc  surveys  in  the  same  manner.  For  doing  so,  assistance  has  to  be 
given from outside for the transformation, but at the end this capacity should be put 
on a sustainable basis funded by national resources. Proposals in this respect have 
been made (see 2.7 and 3.5). 

233. 
It  is  particularly  important  to  upgrade  and  reshape  the  organisation  for 
collecting  data  with  respondents,  be  they  private  enterprises,  farms  or  households, 
and  to  give  INSTAT  sufficient  human  resources  to  prepare  the  conceptual  and  IT 
side for moving to an efficient system of interrelated surveys from the set of unrelated 

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ad hoc surveys today. This know-how has to remain with INSTAT as one of its key 
assets.  INSTAT  should  also  be  put  into  a  position  to  organise  censuses  from  the 
conceptual, organisational and logistic points of view with its own know-how, while at 
the  same  time  being  able  to  continue  the  production  of  statistics  through  other 
regular  data  collection.  In  view  of  the  considerable  importance  of  the  agricultural 
sector,  data  collection  with  agricultural  holdings  has  to  be  seen  as  one  pillar  of  the 
system to the same extent as data collection with households and with private non-
agricultural enterprises.  

234. 
It  is  suggested  to  ask  an  experienced  NSI  for  an  expertise  on  how  the 
organisation  of  a  system  for  data  collection  with  private  companies,  farms  and 
household is best set up in the special context of Albania. This expertise is urgent. It 
has  to  emphasise  organisational  and  managerial  issues  with  data  collection,  and 
should be closely co-ordinated with the two mandates suggested elsewhere, on IT at 
INSTAT,  and  on  the  internal  organisation  and  management  of  a  larger  INSTAT.  A 
part of such an expertise has been asked by INSTAT in the context of  assistance to 
the business register.     

235.  As  a  first  measure  capable  of  immediate  implementation,  it  is  suggested  to 
create an internal committee in INSTAT that deals with all surveys outside the public 
sector, i.e. surveys with households, private businesses and agricultural holdings, in 
an  interdisciplinary  way.  This  is  to  enhance  the  culture  of  such  instruments  being 
multi-purpose  tools  by  which  information  for  more  than  one  subject  area  can  be 
collected, and to provide a forum where bundling of needs from various subject areas 
take place. The other purpose is to submit proposals for organising data collection to 
the review of other knowledgeable persons in INSTAT, thus promoting good practice 
while  waiting  for  the  implementation  of  the  new  data  collection  strategy;  this  know-
how is not necessarily present within each unit and should therefore be shared at a 
corporate level. 

236. 
It  is  very  important  that  European  institutions  and  other  international  donors 
keep telling, to Albanian authorities at a political level, the significance and necessity 
for  a  system  of  official  statistics  in  a  European  country  being  endowed  with  a 
sufficient  capacity  for  data  collection,  processing  and  dissemination.  Albanian 
authorities are very receptive to advice from abroad, and for a public function that will 
have  difficulties  to  receive  the  necessary  support  for  being  upgraded  like  official 
statistics, stressing this international component at high level is crucial for advancing 
its cause.  

2. Capacity to Organise and Carry out Censuses 

237. 
In 1998, an agricultural census was carried out, the first after transition. This 
large-scale  data  collection  was  only  possible  thanks  to  technical  assistance  by  the 
Italian  ISTAT  and  EUROSTAT,  and  thanks  to  substantial  financial  assistance  from 
the Italian government. A special government act was the legal base for carrying out 
this census (see 1.2).   

238.  A  special  organisation  of  interviewers  and  controllers  was  set  up  for  this 
purpose,  supervised  by  a  multi-tier  structure  of  committees  at  state,  district  and 
municipal 
influence  on 
methodology).  There  was  a  separate  IT  structure,  developed  by  an  Italian  expert. 
The tables were prepared by INSTAT; the publication was printed in Italy. 

level  (in  charge  only  of  organisational 

issues,  no 

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239.  This  census  was  carried  out  successfully.  It  provided  the  first  structural 
information  since  transition  on  the  state  of  agriculture.  The  list  of  agricultural 
holdings, updated by information obtained locally, is used by INSTAT as a universe 
from  which  to  select  the  respondent  units  for  an  annual  survey  that  will  become 
operational as from December 2001. 

240.  With  respect  to  the  population  census  2001,  it  was  made  possible  only 
through  a  combined  effort  of  the  national  authorities  to  increase  INSTAT's  budget 
significantly  and  of  international  donors  to  provide  equipment,  expertise  and  a 
monitoring.  The  information  received  so  far  is  that  the  implementation  of  the  data 
collection was generally successful, but a lot of explanations had to be given on the 
use of the data, especially about excluding their use for fiscal purposes. The census 
law  is  described  in  1.2.  For  further  details  of  the  implementation,  the  report  of  the 
monitoring  committee  should  be  consulted.  As  regards  data  processing,  it  will  be 
carried out at a central place in Tirana (near INSTAT) in a premise rented from the 
Albanian  government,  but  where  a  lot  of  electric,  IT  and  other  equipment  will  first 
have to be installed for the work to begin. 

241.  The population census introduced a new population concept (de iure instead 
of de facto), which in future will be used as a standard. 

242.  First results (in terms of number of persons, household and dwellings on the 
basis of a simple count of questionnaire) are expected to be published in the middle 
of July 2001. If this deadline is kept, this is a remarkable achievement. 

Assessment 

243.  Even  when  INSTAT  is  put  on  a  new  basis,  censuses  will  remain  activities 
which  can  only  be  carried  out  if  financial  assistance  is  given  from  abroad.  This  is 
especially important for an economic census,  proposed under B5. 

244. 
In future, INSTAT should have the capacity to organise censuses, and to be 
seen as the responsible organisation in this respect, for all phases of the operation. 
Presently,  the  regular  staff  allocated  to  such  tasks  is  insufficient,  and  the 
organisational  capacity  suffers  accordingly,  with  the  consequence  that  senior 
management of INSTAT has to devote a disproportionate amount of its time to issues 
of  logistics  for  the  population  census.  Premises  where  additional  staff  works 
temporarily  for  the  data  entry  and  processing  should  be  identified  and  adequately 
prepared in time by the competent national authorities. 

245.  For  confidentiality  reasons,  it  is  important  that  INSTAT  does  not  share 
responsibility  with  other  central  public  bodies  such  as  the  ministry  of  finance  or  the 
ministry  of  agriculture.  Local  authorities  have  to  be  involved  for  practical  reasons. 
The  number  of  questions  at  the  occasion  of  the  population  census  is  an  indication 
that a lot of economic activities take place which are not captured by administrative 
reporting  (Albania  being  a  cash-based  economy),  and  which  people  would  not 
indicate if they perceive that confidentiality is not ensured.  

3. Capacity to Produce Annual Population Statistics after the Population 
Census 

246.  Vital  statistics  (births  and  deaths  for  the  purposes  of  this  assessment)  are 
back  to  a  good  quality  after  some  major  problems  in  the  transition  phase.  The 
present estimates for the total population are therefore on a rather weak basis, and 

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the  result  of  the  population  census  2001  will  be  the  new  benchmark  from  which  to 
start a much more reliable population statistics. 

247.  There is a law that change of residence within Albania should be reported to 
authorities, but this obligation is respected only to a very small extent. 

248.  There is no obligation to report emigration, so that no administrative source for 
this component exists. INSTAT has tried to use information from other countries (US, 
Canada  e.g.)  on  their  immigration,  but  was  not  successful  in  the  case  of  many  EU 
countries (where Albania is often subsumed under "other European"). There is a plan 
to compare cohorts (same year of birth) between the censuses of 1989 and 2001 to 
get a age-specific retrospective picture of migration (internal and external). For taking 
into account migration in the future annual population statistics, there is presently no 
other  strategy  than  using  these  findings  with  the  assumption  that  the  observations 
made for the period 1989 to 2001 will continue to be valid in the next ten years. 

Assessment 

249.  Annual population statistics by age, sex and region are one of the most basic 
outputs  of  a  statistical  system.  They  have  a  multi-purpose  character  as  inputs  into 
many  indicators  in  other  areas  (per  capita,  percentage  of  the  population)  and  for 
grossing  up  findings  from  household  sample  surveys,  including  those  which  are 
important for economic statistics such as the household budget survey. They are also 
essential  as  inputs  into  forecasting  for  planning  purposes,  e.g.  for  education  and 
health services. To have these figures accurate is of utmost importance therefore. 

250.  The  strategy  for  calculating  future  annual  population  statistics  is  not 
satisfactory.  The  period  between  1989  and  2001  was  a  period  of  fundamental 
change, and findings based on this period should not be extrapolated to the future, 
especially for an element like migration where the behaviour of persons adapts very 
quickly to a change in the economic and political situation. 

If  there  were  a  regular  annual  survey  with  households,  questions  on  both 
251. 
internal  and  external  migration  could  be  included,  and  the  results  from  this  source 
used  to  update  the  annual  population  figures.  This  is  a  fundamental  gap  in  the 
instruments of a statistical system, and should be remedied as soon as possible (also 
for covering other urgent needs concerning employment/unemployment). There is no 
other way to collect data on migration for a long time ahead. 

4. Capacity to Carry out Household Surveys 

252.  The following household surveys have been carried out since 1990: 
-  A  living  condition  survey  in  1993,  with  800  households  in  Tirana,  with  the  main 
purpose of providing the weights for the CPI; 
-  A living conditions survey in 1998, with 11500 rural and urban households, using 
questionnaire and technical assistance from INSEE; 
-  A household budget survey, carried out between December 1999 and November 
2000, in urban areas, where a diary of two weeks had to be completed in addition to 
being interviewed. 

253.  For  the  last  two  surveys,  selection  of  respondent  units  were  based  on  maps 
(area sampling). Response rate for the 1998 survey was 95%, and for the household 
budget survey 83%. 

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254.  The Living Standard Measurement Survey mentioned in 3.2 plans to use the 
population  census  2001  as  a  sampling  frame.  The  sample  size  foreseen  is  3600 
households, and the first wave of interviews is planned for March 2002. 

255.  There is some internal discussion of a strategy for the updating of the census 
list  of  dwellings,  available  in  the  form  of  detailed maps with buildings and dwellings 
indicated, as a frame for future household surveys 

Assessment 

256.  The  above  examples  show  that  household  surveys  have  been  driven  by 
initiatives from outside the country, and have been carried out with much know-how 
from outside. It has not resulted in a system with a capacity to carry out such surveys 
on a regular basis for national needs, and leading to data that are comparable over 
time. 

257.  As a first priority, urgent thought should be given on how to update the list of 
dwellings  from  the  census.  The  only  feasible  method  seems  to  be  in  using  the 
building  permits  that  serve  as  an  input  into  construction  statistics.  If  these  permits 
allow to distinguish between construction with and without dwellings, they should be 
used  for  this  purpose  (and  at  a  geographically  as  detailed  level as possible). If this 
were  not  feasible,  updating  would  have  to  involve  local  authorities  as  for  the  farm 
register, but this should be done only for those sectors of the country which would be 
included in a given household survey as first step in the stratification. 

258.  Some experience from other countries in the same region might be useful as a 
guide  to  set  up  a  first  level  of  a  system  of  household  surveys..  The  most  frequent 
pattern of household surveys is a system based on two regular surveys: an interview 
survey  centred  on  issues  of  employment/unemployment  (to  which  questions  on 
migration  can  be  added),  carried  out  either  annually  or  twice  per  year,  and  a 
household budget survey, as a  survey spread over a whole year and repeated every 
3 to 5 years, where interviews plus a diary of 2 weeks are combined like in the 2000 
survey in Albania, but covering the whole country )and not only urban areas). This is 
a  basic  structure  of  household  surveys  which  should  be  able  to  accommodate  the 
most  important  national  (and  international)  information  needs,  and  which  can  be 
adapted somewhat to take into account the specific situation and needs of a country. 
None of the surveys would have a panel component, however. 

259.  Both  surveys  are  important  not  only  for  labour  market  and  social  statistics; 
they  will  be  the  only  instrument  by  which  the  total  economy,  the  hidden  economy 
included, can be captured. They are therefore of utmost importance for the situation 
of  Albania.  In  meeting  with  persons  from  the  statistical  council  and  the  ministry  of 
finance,  the  expert  was  told  that  statistics  on  the  total  economy,  the  informal 
economy  included,  are  among  those  gaps  that  should  be  filled  with  the  highest 
priority. This can only be done if a labour force statistics indicates the total volume of 
labour  input,  which  could  then  serve  as  factor  to  gross  up  some  of  the  business 
surveys with incomplete coverage. 

260.  When setting up a set of household surveys with the objective to put them on 
a  regular  basis,  the  organisation  of  data  collection  cannot  be  ad  hoc.  Interviewers 
have to be trained, and it is important that as many of the interviewers can be reused 
when  surveys  are  repeated.  This  issue  of  organisation  of  data  collection  for 
household (and other) surveys should be the focus of the expertise mentioned under 

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B1.  It  is  likely  that  at  least  some  regional  offices  will  have  to  play  a  role  in  this 
respect, unlike what was the practice with the above household surveys.  

5. Capacity to Carry out Business Surveys 

261.  The  following  business  surveys  with  the  private  sector  are  presently  carried 
out by INSTAT: 
-  Annual structural business survey (industry, retail trade, construction, transport); 
-  Quarterly survey on turnover (retail trade); 
-  Consumer price data (monthly); 
-  Producer price data (in preparation, funded by IMF); 
-  Construction cost index (quarterly); 
-  Frequentation of hotels (annual) 
-  Road transport (annual). 
All other sources (e.g. wage index, production volume index) are limited to the state 
sector,  which  accounts  for  49%  of  employment  in  industry.  In  addition,  there  are 
some  administrative  sources  which  cover  the  private  sector  as  well  (external  trade; 
construction  permits;  fiscal  data  (VAT),  physical  indicators  for  some  modes  of 
transport). A panel survey on the demography of SMEs (DOSME) is currently carried 
out, funded by the EU. 

262.  Data collection is carried out via regional offices. They receive the names and 
addresses of the enterprises to be visited. Interviewers (temporary staff) are sent to 
the  site  of  the  enterprise  (very  often,  the  address  given  is  not  correct,  and  the 
enterprise  has  to  be  found  on  the  ground,  or  confirmation  that  it  is  not  active  any 
more has to be sought). The filled questionnaire is then sent to INSTAT headquarters 
for data entry and processing. 

263.  For selecting respondent units, INSTAT uses the list of legal entities from its 
own  business  register.  The  basic  source  for  updating    this  register  are  tax  records 
from  the  tax  administration  (mainly  VAT  tax).  In  order  to  get  the  important  size 
variable on number of employees, and in order to find out which units are still active, 
regional  offices  have  to  send  forms  concerning  births,  deaths,  and  physical 
movements of enterprises to INSTAT, where they are used for updating the business 
register. This register is at the level of legal units only; local units are not covered. 

264.  The  structural  business  survey  and  the  quarterly  retail  trade  survey  are 
exhaustive for enterprises in the register with more than 5 paid employees, a stratum 
with a probability sample of enterprises with 1 to 5 employees is added. The surveys 
for price statistics are selections on a non-random basis (8 outlets per region), as is 
the  case 
in  most  European  countries.  Registered  enterprises  without  paid 
employment  and  enterprises  with  no  registration  with  tax  authorities  (because  they 
are or claim to be below the turnover threshold of the VAT law) are not in the present 
register and therefore not in the sample as well. 

265.  These  surveys  are  mandatory  by  law  (they  are  part  of  the  statistical 
programme). The response rate is increasing and currently at 94.5% for the structural 
business  survey.  There  are  difficulties  in  getting  the  participation  of  foreign  owned 
companies. 

266.  Over  and  above  the  non-coverage  of  enterprises  not  registered  with  the  tax 
authorities,  the  register  does  not  cover  all  sectors  of  the  private  economy  either, 
especially in the service sector. This is the case for all financial institutions: some are 

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covered  in  the  banking  statistics,  but  for  monetary  and  banking  statistics  only,  and 
not for business statistics. 

267.  The  questionnaire  of  the  structural  business  survey  has  successfully  tried  to 
select  the  most  important  variables  from  the  present  EU  acquis.  However,  the 
questionnaire  looks  like  a  more  or  less  literal  translation  of  the  relevant  annexes  to 
the acquis, without any definitions or explanations given on the questionnaire itself. It 
is supposed that companies use the definitions of the law on accounting, but this law 
covers only part of the variables in the questionnaire. 

268. 
Insofar as other producers carry out surveys with private enterprises, such as 
the ministry of agriculture in the food industry, they have their own way of selecting 
respondents, but they use INSTAT's business register at least as a starting point. 

269.  Albania  does  not  take  part  in  the  current  round  of  PPP.  This  is  very  much 
regretted by INSTAT. 

Assessment 

270.  Unlike  the  situation  with  household  surveys,  there  is  at  least  a  core  of  one 
annual and one quarterly survey that deserve to be called regular business surveys 
on  a  sampling  basis.  For  the  structural  business  surveys,  there  are  some  doubts, 
however,  whether  interviewers  are  sufficiently  trained  to  explain  to  enterprises  the 
concepts in the questionnaire, some of which are certainly new to them.. 

271.  Closing the gap to the EU requirements gradually would lead to a substantially 
higher number of business surveys with probability samples for at least some strata. 
The present system of data collection, and of coverage of the universe, should first 
be put on a much more solid basis before expansion is carried out, with the possible 
exception  of  surveys  for  short-term  indicators  on  wages  and  production  where  the 
focus is more on changes over time than on levels. 

272.  As  a  first  step,  the  public  sector,  presently  covered  through  reporting  under 
the statistical programme, should be split into public enterprises with legal status on 
the  side,  and  the  general  administration  proper.  The  first  part  should  be  treated  as 
businesses  more  or  less  like  private  legal  entities,  receiving  more or less the same 
questionnaires, and grouped together for the purpose of economic statistics at both 
activity  and  overall  levels.  This  split  should  also  be  carried  over  to  the  present 
business register, which will have to be broadened to cover public enterprises. 

In  parallel,  the  expertise  proposed  for  the  organisation  and  management  of 
273. 
the data collection system under B1 should come up with proposals for a new system 
of  organising  data  collection  for  business  surveys,  with  a  view  to  increasing  its 
capacity  for  handling  parallel  short-term  and  annual  surveys  as  efficiently  as 
possible.  Training  of  interviewers  is  crucial,  given  that  most  of  the surveys are new 
and  deal  with  terms  and  concepts  with  which  not  all  companies  will  be  familiar.  As 
outlined under 2.5, other methods of transmission of data for repeated collection like 
mail should be worked out, tested, and if feasible, implemented, but this depends on 
a better quality of the addresses and the co-operation of the postal system (and local 
authorities) to report back to INSTAT if addresses are not correct. 

274.  There  is  no  good  system  of  business  surveys  without  a  good  statistical 
business  register.  The  present  register  is,  in  view  of  the  very  limited  resources 
available, a good start, but needs considerable investment before further surveys are 
added,  so  as  to  improve  both  the  selection  of  units  and  the  grossing  up  to  the 

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relevant  universe.  However,  a  statistical  business  register  which  is  fully  compliant 
with  EU  requirements  is  too  demanding  for  the  foreseeable  future  in  the  case  of 
Albania.  A  selection  of  the  most  important  requirements  will  have  to  be  made  for 
implementation in the next 5 years. 

275.  Given  the  lack  of  sources  on  the  total  economy,  it  is  suggested  to  have  an 
economic  census  covering  all  sectors  except  agriculture,  forestry,  fishing  and 
hunting, but including general administration. This should be the starting point for a 
set  of  interrelated  business  registers  as  outlined  below.  This  economic  census  can 
only be carried out with funding from abroad, but it would be highly desirable if this 
could take place in 2003, based on a government decision. 

276.  The  first  register  to  be  created  from  this  census  would  be  a register of legal 
units (public and private companies), with both the enterprise and the local unit level, 
with main activities at each level (the inclusion of secondary activities may be tested). 
This register would include all companies whether known to the tax authorities or not, 
and it is therefore necessary that any data transmission to administrative bodies, and 
especially  to  any  administrative  business  register  kept  elsewhere,  is  completely 
excluded.  The  updating  after  the  census  would  be  made  with  tax  data,  the 
continuation  of  the  forms  for  births,  deaths  and  movements  of  enterprises  in  an 
adapted form, survey data for those companies that are included in the samples, and 
inputs  from  regional  offices  and/or  the  postal  service  (and  for  public  enterprises 
additional  administrative  channels).  It  is  important  to  have  a  size  variable  for  each 
company  and  local  unit  in  terms  of  employment;  this  will  be  the  only  way  to  have 
employment  data  by  region  of  sufficient  quality.  The  most  important  aspect  of  this 
register is however the quality of the addresses of both headquarters and local units. 

277. The  second  register  to  be  created  from  the  economic  census  would  be  for 
unincorporated  enterprises.  Unlike  the  register  of  legal  entities,  it  is  not  realistic  to 
have  a  systematic  updating  of  such  a  list,  but  it  can  serve  as  frame  for  selecting 
samples in those cases where inclusion of unincorporated enterprises is necessary. 
Criteria will have to worked out for deciding for each survey whether they should be 
included; in general, they should be included in annual surveys, but not necessarily in 
all quarterly or even monthly surveys. Questionnaires would have to be simpler than 
for  legal  entities  (or  very  basic  questions  could  even  be  integrated  in  household 
surveys  if  a  breakdown  between  industry  and  services  is  sufficient).  The  only 
possible  source  for  updates  (very  partial  indeed)  are  tax  data  (in  the  case  an 
unincorporated  enterprise  is  really  known  to  authorities  other  than  INSTAT), 
household surveys where a household member reports to run a business, and feed-
back  from  or  about  units  that  have  been  selected  to  be  part  of  business  surveys. 
Exclusive us for statistical purposes is as important here as for legal entities. 

278.  The third register originating from the economic census deals with the general 
administration. It will have to include all local units; the updating should be organised 
in  co-operation  with  the  ministry  of  civil  administration,  and  local  governments.  It  is 
important that some key variables such as employment can also be produced for the 
administration,  via  mainly  administrative  sources  and  in  forms  of  surveys  with  local 
governments. 

279.  These  business  registers  should  have  an  explicit  legal  base  in  the  revised 
statistical  law,  since  unlike  other  microdata  files  at  INSTAT,  names  and  addresses 
are a permanent component of such registers. 

280.  The  first  surveys  to  be  added  to  the  existing two should be those necessary 
for producing the GDDS series according to international standards, i.e. wages and 

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production in the private sector. Concerning annual surveys, priority should be given 
to information required by national accounts. 

281. 
In  parallel  to  the  economic  census,  INSTAT  should  build  up  sufficient 
conceptual  know-how  to  prepare  the  methodology  and  definitions  for  business 
surveys.  Present  surveys  should  be  modified  and  discussed  with  economists  from 
national  accounts  and  with  important  users.  Furthermore,  the  business  community 
should  be  closely  associated  so  that  INSTAT  obtains  the  view  of  the  respondents 
and can build up the trust of respondents when the new system of business surveys 
is becoming operational. 

282.  Concerning  the  coding  of  activities  for  administrative  purposes  by  INSTAT, 
some  necessary  conditions  for  INSTAT  to  keep  this  activity  have  been  proposed 
under  4.1.  It  is  important  that  resources  for  this  non-statistical  task  performed  by 
INSTAT are paid by the authority whose responsibility it is to maintain and update the 
administrative register. 

6. Capacity to Produce Data on Public Sector Activities 

283.  Education and health statistics are both in the field of competence of INSTAT. 
Presently, only the public sector is covered, but without expenditure data. Reporting 
is based on the statistical programme. There is no R&D statistics. 

finance  statistics, 

284.  The Ministry of Finance is in charge of public finance statistics. It prepares a 
quarterly  publication  on  fiscal  statistics  of  the  government  (bilingual).  In  setting  up 
public 
from  very  detailed 
recommendations,  inputs  and  training  from  IMF.  The  statistical  unit  in  the  ministry 
has  2  persons;  it  is  part  of  the  macro-economic  department  which  is  also  an 
important  user  of  all  kind  of  statistics  across  the  board,  and  the  unit  where  the 
provisional GDP estimates are calculated. The ministry will clearly acknowledge the 
primacy of INSTAT's official GDP figures once they are released. 

the  ministry  has  benefited 

285.  National  accountants  from  INSTAT  had  difficulties  in  receiving  special 
tabulations on the public sector from the ministry. This is due to a rigid software used 
in public finance statistics following an advice of IMF. 

Assessment 

286.  For health and education statistics, the remarks made under 1.4. concerning 
access to individual records are entirely valid. INSTAT has no access beyond what is 
prescribed by the statistical programme, i.e. mainly aggregate data. 

287.  For  public  finance  statistics,  the  quality  of  the  publication  of  the  ministry  is 
remarkable. It tries to fulfil its role as responsible producer of official statistics in this 
area  professionally.  Three  more  aspects  would  have  to  be  added,  however,  for  the 
future:  a  capacity  to produce tabulations on requests, especially for INSTAT (which 
seems  to  be  mainly  a  question  of  IT);  and  a  capacity  and  willingness  to  implement 
the  new  IMF  manual  on  government  finance  statistics  and  the  new  COFOG 
classification,  and  a  capacity  and  willingness  to  collect  the  necessary  data  from 
regional and local governments once they are not any more under full central control, 
and to consolidate national and regional/local government finance statistics. 

288. 
It  is  also  recommended  that  regular  and  institutionalised  meetings  between 
INSTAT and the statistical unit of the ministry of finance take place at various levels. 

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7. Capacity to Produce Agricultural Statistics 

289.  Agricultural is of high importance to the Albanian society and economy: it still 
accounts for 75% of total employment. 

290.  There is one annual survey on livestock to be carried out by INSTAT as from 
December  2001,  as  a  sample  drawn  from  the  list  obtained  through  the  agricultural 
census. Financial help is received from Italy for this purpose. 

291.  The  ministry  of  food  and  agriculture  is  carrying  out  surveys  on  production  in 
agriculture, independently from INSTAT and outside the statistical law, using different 
methods and definitions. 

292.  Unlike  business  statistics,  agricultural statistics has had a successful census 
in 1998, from which emerged a kind or register of farms. 

Assessment 

293.  The  capacity  to  produce  agricultural  statistics  in  a  sustainable  way  is  not 
present. This is highly surprising given the weight of agriculture in the economy. All 
type of investments in data collection, conceptual preparation, and IT, mentioned for 
household  and  business  surveys,  apply  also  to  agricultural  surveys,  with  the 
exception of the existence of a register. 

294.  The expertise on management and organisation of the data collection system 
(B1)  should  treat  agricultural  surveys  as  a  pillar  of  at  least  equal  importance 
compared  to  household  surveys  or  surveys  with  non-agricultural  enterprises.  Once 
the new organisation is clear, more surveys have to be carried out, some of which on 
a more frequent basis than annual and the survey to be started in December put on a 
new conceptual basis. 

295. 
INSTAT  should  have  the  monopoly  of  carrying  out  surveys  with  private 
operators:  this  includes  private  agricultural  holdings.  The  surveys  conducted  by  the 
ministry  should  be  transferred  to  INSTAT,  but  be  funded  by  the  ministry.  INSTAT 
would introduce EU standards to these surveys, as well as bring them under the rule 
of  official  statistics.  It  would  also  have  to  eliminate  duplications  and  check  for 
possible mergers of surveys. 

296.  The way how the register of farms is updated is not entirely transparent. The 
corresponding  information  flows  from  local  governments  should  become  part of the 
statistical  programme,  since  they  involve,  unlike  other  reporting  from  public 
authorities to INSTAT, the transmission of names and addresses.  

297. 
It is suggested that international donors explore ways on how to broaden the 
present assistance in this area so as to end up in a system of interrelated surveys, 
based  on  an  updated statistical registers of agricultural holdings, that is best suited 
for the national needs, and which can be implemented gradually. 

8.  Capacity  to  Produce  Monetary,  Financial  and  Balance  of  Payments 
Statistics 

298.  The  Bank  of  Albania  is  the  producer  of  monetary,  financial  and  balance  of 
payment statistics. In addition, it has the role of focal point for the GDDS. 10 persons 
work in statistics, spread over 3 units. 

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299.  There is a monthly reporting system from commercial banks. Data collection is 
organised  by  physical  collection  of  data  through  staff  of  the  Bank;  all  commercial 
banks have their headquarters in the capital. 

300.  Article  27  of  the  Law  on  the  Bank  of  Albania  assigns  the  responsibility  of 
balance of payments to the Bank. It uses the term "compile the balance of payments 
as well as direct and co-ordinate the statistical system of balance of payments". Not 
only  banks  and  public  institutions,  but  also  juridical  and  physical  persons  can  be 
obliged under this article to give information to the Bank. There is no cross-reference 
to the statistical law. 

301.  The  first  BoP  was  published  in  1992.  Methodology  has  improved  since,  but 
major gaps still exist in trade of services, foreign direct investment, and remittances 
from abroad. 

302.  The Bank has tried to carry out surveys outside the banking area, e.g. on FDI 
with foreign companies. In spite of the explicit legal base mentioned above, response 
rates were very unsatisfactory. This is a sign of fear that this information be used for 
control purposes. 

303. 
In  future,  the  Bank  will  mandate  INSTAT  to  carry  out  surveys  like  FDI,  or 
surveys with tourists or transport companies necessary for trade in services. The co-
operation between INSTAT and the Bank is considered excellent by both sides. 

304.  The Bank has not been invited so far to meetings organised by EUROSTAT in 
the  area  of  balance  of  payments  statistics.  They  would  greatly  appreciate  to 
participate as observers, and to have access to the documents. 

Assessment 

305.  The way of mandating INSTAT to carry out surveys, and providing resources 
to INSTAT for doing so, is an example of how the part of data collection concerning 
specific  data  requests  by  public  bodies  should  be  organised  in  principle,  and 
deserves  high  praise.  Such  a  co-operation  has  to  be  based  on  a  written 
memorandum of understanding, in which it should be clearly spelt out that this data 
collection is part of official statistics and is governed by the Fundamental Principles. 
This excludes that INSTAT is reduced to the role of a physical collector of data from 
respondents, as was spelt out under 3.2.     

In order to be able to carry out such mandates as part of official statistics, and 
306. 
in order to be able to perform its role as co-ordinator of the whole statistical system 
under the revised law, INSTAT will have to acquire sufficient conceptual knowledge 
also  in  areas  where  responsibility  with  production  is  primarily  with  another  agency. 
Survey  on  FDI,  tourism  and  transport  would  then  be  handled  like  external  trade 
statistics: INSTAT would publish the results from this survey, after consulting with the 
Bank, while the Bank would use these results for inclusion in its PoB. 

307.  PoB  and  national  accounts  should  be  more  closely  co-ordinated,  in  order  to 
prevent that slightly different figures are published where this is not strictly required 
by the respective manuals. 

308.  When the statistical law undergoes the substantial revision mentioned earlier, 
the relationship of article 27 of the law on the Bank of Albania will have to be clarified 
in order to avoid possible overlaps or inconsistencies at a later stage. 

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           Global Assessments of the Western Balkan countries 

Global Assessment of the Croatian System of 
Official Statistics 
GAseminar/2002-9 
April 2002 

reflecting the situation of 17 July 2001 when the original assessment report 
was finalised 

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Table of Contents 

Preface 
Executive Summary 
A. Institutional Setting 

1. Legal Setting 

1.1. Statistical Law 
1.2. Other Legislation 
1.3. Statistical Council, Statistical Programme, Inter-Ministerial 
Consultations, Consultations with Users 
1.4. Protection of Independence 
1.5. Data Protection and Statistical Confidentiality 

2. National Statistical System 

2.1. Principles 
2.2. Structure of the System, Providers of Official Statistics, and 
Relationship between CBS and Other Providers 
2.4. Liaison with Research Institutes and Universities 
2.5. Liaison with the Business Community 
2.6. Product and Dissemination Policies 
2.7. Relations with the Central Government 
2.8. Relations with Local Governments 
2.10. Access to Administrative Records 

3. Description of the CBS 

3.1. Mission, Internal Organisation 
3.2. Planning, Programming and Priority Setting 
3.3. Monitoring Quality in all Activities 
3.5. Finance and Budgeting 
3.6. Staffing, Staff Recruitment and Training 
3.7. Information Technology 
3.8. Internal Monitoring of Performance 
3.9. External Accountability 

4. Statistical Infrastructure 
4.1.Classifications 

B. Technical Part: Capacity of Producing Statistics in Various Areas 

1. Assessment of the Overall Capacity 
2. Capacity to Organise and Carry out Censuses 
3. Capacity to Produce Annual Population Statistics after the Population 
Census 
4. Capacity to Carry out Household Surveys 
5. Capacity to Carry out Business Surveys 
6. Capacity to Produce Data on Public Sector Activities 
7. Capacity to Produce Agricultural Statistics 
8. Capacity to Produce Monetary, Financial and Balance of Payments 
Statistics 

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Preface 

The global assessment of the Croatian System of Official Statistics was conducted by 
Mr.  Heinrich  BRÜNGGER  from  the  Swiss  Federal  Statistical  Office  under  a 
contractual arrangement between this office and EUROSTAT. This assessment was 
to be focused on finding out about the present situation in the Statistical Office, in the 
statistical  system  as  a  whole  and  their  respective  institutional  environments 
(institutional  aspects),  and  on  the  capacity  of  the  statistical  system  and  its  main 
actors  to  provide,  in  a  sustainable  way,  timely,  accurate,  authoritative  and  relevant 
information to users (infrastructural aspects). A detailed analysis of specific statistics 
such  as  national  accounts  or  CPI  with  respect  to  their  compliance  with  EU 
requirements  was  not  part  of  the  mandate;  nevertheless,  the  report  includes  in  its 
Part  B  an  assessment  by  broad  subject  area  on  whether  the  basic  elements  to 
produce the output required by the EU are in place either today or in the near future. 

The  assessment  has  exploited  the  material  delivered  by  the  Central  Bureau  of 
Statistics of the Republic of Croatia (CBS) before the first mission took place, notably 
the  Law  on  National  Statistics,  the  Programme    of  Statistical  Surveys  2000  -  2002.  
The  expert  consulted  also  the  statistical  yearbook  with  its  concise  methodological 
descriptions for each subject area. Two missions took place (2 to 8 May and 5 to 8 
June 2001) in order to have in-depth discussions with the management and staff of 
the CBS as well as representatives from other producers of official statistics, to visit 
one of the regional offices (at Karlovac), and to be given additional material referred 
to in the report. The missions did not include any discussions with users outside the 
CBS.  The  final  version  has  been  agreed  by  the  director  general  of  the  CBS  on  29 
June 2001.  

The  expert  was  greatly  helped  in  his  task  by  the  staff  of  the  CBS,  who  did  an 
excellent  job  in  preparing  the  missions  and  organising  the  discussions,  which  have 
inevitably made considerable demands on the time of the management and of other 
staff.  Nearly 40 staff members from the CBS participated in the discussions willingly, 
actively and with good humour, in spite of an already heavy work load. Without their 
contributions, and without the on-the spot translation during most of the discussions, 
it  would  not  have  been  possible  to  carry  out  the  mandate  in  such  a  short  time. 
Special thanks therefore to all the people at the  CBS for the warm welcome and the 
help the expert received. 

The present version established for the Dubrovnik seminar differs from the original 
assessment report dated 17 July 2001 insofar that all annexes have been omitted, 
and that paragraphs in the main part of the report which contained references to 
these annexes haven been reformulated without any change in their substance. In 
addition, the executive summary was slightly expanded concerning part B of the 
report. 

Executive Summary 

1. 
The statistical system of the Republic of Croatia is composed of 11 actors at 
the  central  level,  plus  21  regional  statistical  offices,  which  are  administratively  not 
subordinated to the CBS. The Central Bureau of Statistics (CBS) is the major actor. 
Its  budget  (i.e.  without  regional  offices,  and  also  without  expenditure  for  the 
population  census)  accounted  for  0.074%  of  the  total  government  budget  in  2000, 
and it currently employs 396 permanent employees. The regional offices employ 270 

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persons altogether (the staff number of the other producers at the central level used 
for  official  statistics  is  unknown).  The  total  number  of  persons  dealing  with  official 
statistics in the Republic of Croatia is therefore likely to be more than 700, which, for 
a  country  with  a  population  of  4.38  million  inhabitants  would  be  adequate  as  total 
quantity  of  labour  input  if  it  were  organised  in  a  different  way.  The  fact  that  this 
volume  has  continued  to  be  available  for  official  statistics  even  at  very  difficult 
moments  for  the  country  during  the  last  decade  is  a  very  positive  element  of  the 
system.  

2. 
The  CBS  has  a  long  tradition  dating  back  to  the  Austro-Hungarian  empire. 
With independence of the Republic of Croatia in 1991, it was the first time acting as a 
National  Statistical  Office,  and  was  not  only  confronted  with  tasks  that  had  been 
centralised  in  Belgrade  in  the  period  of  the  former  Yugoslavia,  but  had  to  convert 
major  statistics  to  a  completely  new  administrative  environment  and  to  a  market 
economy. This transition had to be made at a time when some parts of the country 
were struck by war or unrest, or were not any more under the control of the Croatian 
authorities at certain moments. It is therefore a great achievement for the CBS as the 
focal point of the statistical system of Croatia to have been able not only to maintain 
their production throughout the period (for the territory under control), but to gradually 
adapt the data collections and the results to new classifications and definitions in line 
with EU or other international requirements, and in addition to introduce new surveys 
and new important results such as the consumer price index and national accounts. 
This  achievement  was  only  possible  through  the  full  commitment  and  the  high 
professional quality of the key staff in the CBS. 

3. 
The  overall  compliance  of  the  output  of  the  Croatian  statistical  system, 
assessed  against  the  requirements  of the EU statistical programme (legally binding 
and non-binding parts together), is constantly increasing, notably with respect to the 
legally  binding  (acquis)  part.  The  CBS  is  respecting  all  fundamental  principles  of 
official statistics scrupulously, without being very much supported in this behaviour by 
outside stakeholders. 

The  statistical  system  of  Croatia,  and  the  CBS  in  particular,  have  benefited 
4. 
only to a very small extent from international donors until now. All modifications and 
additions  to  the  statistical  output,  and  notably  the  population  census  carried  out  in 
April  2001,  have  been  funded  almost  entirely  from  the  government.  Furthermore, 
Croatia has not been able to participate in meetings organised by the EU at a regular 
basis since 1995, thus being cut off from the most important platform for exchanging 
experience with statisticians from other countries. These are factors which have to be 
taken  into  account  when  the  capacity  of  the  system  to  face  the  forthcoming 
challenges, which will include a much greater rapprochement to the EU as signalled 
by the negotiations on a Stability and Association Agreement, is assessed. 

5. 
In  spite  of  the  high  volume  of  production,  exemplified by the high number of 
surveys  and  the  extensive  publication  catalogue,  and  in  spite  of  significant 
improvements in individual statistics as a consequence of the use of EU standards, 
the system as a whole has a number of important weaknesses which it is now time to 
address in a co-ordinated way. These weaknesses, which are obstacles to enhance 
both  the  productivity  and  efficiency  of  the  system  and  the  status  of  its  major  actor, 
are the following: 
- 

Legal basis from 1994 in need of change in many respects; 
Insufficient  recognition  of  the  importance  of  the  statistical  system  for the 
- 
society and of the specific role of the CBS by the government; the CBS has 
no  spokesman  at  government  level,  and  has  very  little  political  or  media 
support; 

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-  Absence  of  a  longer-term  strategic  plan  for  the  development  of  the 
statistical system; 
-  Statistical Council foreseen in the law not operational until now; 
-  Contribution of regional offices in the present set-up insufficient to justify 
the staff allocation; 
-  Statistical  programme  to  be  adopted  in  detail  by  the  Parliament  without 
links  to  resources;  this  programme,  once  adopted,  is  a  very  rigid  plan  of 
itemised work that does not allow enough room for flexible adaptations, or for 
longer-term  or  horizontal  considerations.  The  present  statistical  programme 
covers the period 2000 to 2002; 
-  A prevailing practice of limiting the role of the CBS to the production and 
dissemination  of  figures  (with  methodological  explanations  and  statistical 
comments  added),  but  of  staying  clearly  away  from  more  complete  analysis 
and explanatory comments; 
-  A  policy  of  priority  setting  in  form  of  maintaining  existing  surveys  and 
existing series (with adaptations where necessary) as primary concern, and of 
adding new surveys and new activities only insofar as resources permit; 
-  As  a  consequence,  the  concentration  of  staff  resources  in  the  CBS  on 
data  collection  and  data  processing  (192  surveys!),  without  sufficient  time 
allowed  for  adding  value  to  the  results  or  for  regularly  checking  their 
relevance; 
-  Data collection system with private businesses spread to thinly over many 
uncoordinated  surveys;  in  its  present  form  of  operation,  it  cannot  handle 
complex  surveys.  There  is  no  statistical  business  register  which  could serve 
as a sampling frame; 
- 
-  Uncertainty  about  funding  of  large-scale  operations  like  the  population 
census until a very late moment; 
-  High  turnover  of  staff  because  of  general  working  conditions  in  the 
administration, of which some aspects have a particularly negative impact on 
the CBS staff;  
- 
-  No training programme in statistics for CBS staff. 

Insufficient capacity for producing reliable agricultural statistics;   

Insufficient IT infrastructure; 

6. 
As a consequence, it is difficult to speak of a "system" of official statistics that 
is effectively governed by some common principles and procedures in reality. It is not 
possible  for  the  CBS to carry out its role as standard setter and co-ordinator, since 
there is no higher-level support if a divergence of view with another producer cannot 
be  solved  by  consensus.  Neither  can  the  CBS  find  support  in  the  case  of  another 
agency denying access to administrative records with a potential for official statistics. 
Due  to  the  high  burden  caused  by  the  many  statistical  surveys,  the  CBS  has  also 
insufficient resources devoted to internal co-ordination in substance, be it for surveys, 
for  the  release  of results, or for a systematic quality control with relevance as main 
item. 

7. 
The  volume  of  activities,  and  of  outputs,  in  the  CBS  is  impressive,  but  it  is 
mainly  organised  as  stove-pipes  of  data  collection  activities  carried  out  in  parallel 
from  data  collection  to  the  publication.  The  work-load  caused  by  the  on-going 
activities of the programme is such that not enough capacity is left for development 
activities or cross-cutting issues. National accounts is the most important example to 
the  opposite.  The  population  census  as  a  major  operation  that  is  not  repeated 
annually  was  carried  out  successfully  in  April  2001,  but  only  by  bringing  the  rest  of 
the production almost to a complete standstill for one month. 

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Reviewing  output  summarily  area  by  area,  the  quality  of  annual  population 
8. 
statistics  has  been  negatively  affected  by  displacements  of  persons  caused  by  war 
and unrest that which could not be captured by administrative or statistical sources. 
The  results  of  the  census  have  been  able  to  quantify  the  gap  and  to  put  future 
population  statistics  on  a  solid  basis,  but  a  solution  has  to  be  found  to  monitor 
international  migration  in  future.  Two  households  surveys  are  carried  out  regularly, 
the labour force survey and the household budget survey, providing results of good 
quality  that  can  be  further  improved  once  the  sampling  frame  can  benefit  from  the 
population  census.  Health  statistics  suffers  from  being  spread  over  three  different 
producers.  

9. 
There  is  a  wide  range  of  business  surveys,  but  the  whole  system  of  data 
collection  in  this  area  should  be  looked  at  from  the  relevance,  duplication  and 
efficiency  point  of  view.  Few  surveys  in  this  area  use  stratified  probability  samples, 
mainly due to the lack of a statistical business register of good quality. Once this will 
be  available,  a  further  increase  in  coverage  and  other  quality  aspects  can  be 
expected.  The  system  of  business  statistics  should  also  be  reviewed  from  the 
efficiency  point  of  view  as  regards  the  data  collection  process  as  such,  especially 
with  respect  to  the  division  of  work  between  regional  offices  and  the  CBS.  
Agricultural  statistics  is  in  need  of  being  given  a  solid  basis  with  an  agricultural 
census, but the system of data collection in the private agricultural sector, presently 
based on estimators and not on statistical surveys, needs to be reshaped in parallel. 
National accounts aggregates exist according to the new SNA, some of which also at 
constant  prices  (even  with  double  deflation).  The  are  two  variants  of  a  consumer 
price  index,  plus  a  producer  price  index.  Other  short-term  economic  indicators 
concerning  the  real  sector  exist  as  well  and  are  produced  with  good  timeliness. 
Government finance statistics is produced by the ministry of finance on the basis of 
the cash principle only, and without any mentioning in the statistical programme. The 
area of monetary, financial and balance of payments statistics is well handled by the 
Central Bank. Croatia is able to fulfil the requirements of the Special Dissemination 
Standards of the IMF.  

In spite of these important achievements, the continuation of the present way 
10. 
of functioning risks to be the beginning of a downward spiral because of the structural 
weaknesses  of  the  CBS  and  of  the  statistical  system  as  a  whole.  Adding  on  new 
demands without being able to abandon certain activities in the present programme 
would  lock  the  CBS  into  a  growing  mismatch  between  the  pattern  of  activities  it  is 
supposed to do, including the development of strategic and horizontal activities, and 
the  insufficient  level  of  resources.  The  CBS  would  be  more  and  more  incapable  of 
fulfilling  its  production  and  dissemination  role,  and  of  investing  into  modernisation, 
with  the  consequence  of  official  statistics,  especially  surveys  addressed  to  private 
companies  and  households  which  today  are  almost  exclusively  concentrated  at  the 
CBS, being increasingly carried out by other public bodies or even contracted out to 
private operators, without ensuring that the rules of official statistics are adhered to. 
This  process  would  cause  a  loss  in  perceived  and  de  facto  status,  and  could  also 
undermine certain fundamental principles which have been de facto respected by the 
authorities until now, such as the professional independence of the CBS. There are 
signs  that  this  spiral  has  already  started  (recent  cut  in  salaries  for  a  substantial 
number of CBS staff; exclusion of the CBS from important inter-ministerial bodies). It 
is important to break this spiral now, and this necessity is clearly recognised by the 
senior management of the CBS. 

11. 
A first window of opportunity will be a forthcoming decision about the future of 
the regional statistical offices. This opportunity should be used for important changes 
in terms of the number of these offices, their relationship to the CBS, and their tasks. 

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The resources that will inevitably be freed through this restructuring should be given 
to  the  CBS  with  a  clear  mandate  to  use  them  for  what  should  be  called  a  change 
process. This process would result, among other things, in a change of the statistical 
law and in a new structure of, and new procedures for the adoption of, a multi-year 
statistical programme valid from 2004 onwards. The new statistical programme would 
be  based  on  a  master  strategic  plan,  and  the  essential  part  of  the  change  process 
would  be  to  set  up  this  master  plan  in  such  a  way  that  all  issues  mentioned  in  this 
report are addressed in an interrelated way. 

12. 
In order to be able to start and gradually implement this change process, the 
CBS  needs  expertise  and  funds  from  international  donors.  Additional  externally 
funded expertise is needed for: 

setting up a training programme; 

completely revising the statistical law; 

coaching  the  whole  process  of  change  and  the  setting  up  of  the  master 

starting  the  substantive  work  on  the  mater  strategic  plan  and  the  new 

- 
strategic plan; 
- 
-  working  out  an  efficient  internal  organisation  of  a  greater  CBS  and 
revising  internal  rules  of  procedures  and  decision-making  (management 
consultant); 
-  working out a scenario for implementing more efficient, CBS-wide IT-tools 
(IT expertise from a foreign NSI); 
- 
statistical programme. 
- 
-  working  out  a  concept  for  an  continuously  updated  statistical  business 
register in line with the EU requirements; 
-  working out a concept how data collection in line with EU requirements on 
structural business statistics can best be organised; 
establishing  a  concept  to  produce  regional  GDP  and  to  adapt  the  data 
- 
collection where necessary, following a requirement from the Stabilisation and 
Association Agreement with the EU.  
External funding may in addition to the above items of expertise be necessary 
for: 
- 

carrying out the agricultural census 
preparing and carrying out an economic census 
setting  up  of  a  statistical  business  register  with  the  economic  census  as 

- 
starting point; 
- 
-  modernising  IT  and  communication  (including  dissemination  tools  like 
output database and thematic mapping); 
- 
courses, in international projects and in regional co-operation. 

enabling  CBS  staff  to  participate  in  international  meetings,  in  TES 

carrying out a pilot for the structural business survey; 

- 

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A. Institutional Setting 

1. Legal Setting 

1.1. Statistical Law 
1. 
Official statistics in the Republic of Croatia is defined in the „Law on National 
Statistics  of  the  Republic  of  Croatia“  dated  July  1994  (hereafter  statistical  law).  It 
contains  47  articles.  It  enshrines  most  of  the  UN  Fundamental  Principles  of  Official 
Statistics  such  as  neutrality,  impartiality,  professional  independence  and  statistical 
confidentiality as governing principles with legal force. The statistical law provides for 
a statistical programme to be adopted by the Parliament. This programme  can cover 
one  or  more  years.  It  contains  all  statistical  surveys,  and  some  statistics  based  on 
administrative  data.  Only  population  censuses  and  “other  large-scale  statistical 
surveys”  shall  be  regulated  by  special  law  (but  are  nevertheless  included  in  the 
statistical programme). 

The law defines the Central Bureau of Statistics (CBS hereafter) as the body 
2. 
which carries out activities based on this law except for those defined in the statistical 
programme  as  being  in  the  competence  of  another  public  body,  but  is  does  not 
define  the  status  of  the  CBS.  The  law  lists  in  its  article  10  other  state  bodies, 
including  the  National  Bank  of  Croatia,  but  not  the  Ministry  of  Finance,  as  possible 
producers  of  official  statistics.  This  list  is  meant  to  be  exhaustive.  The  law  also 
contains some articles by which the CBS can set standards which are to be followed 
by all actors of the statistical system. 

3. 
As  a  further  category  of  actors,  the  statistical  law  mentions  the  20  county 
statistical  offices  and  the  statistical  office  of  the  municipality  of  Zagreb  (hereafter 
together  referred  to  as  regional  offices).  These  21  regional  offices  have  a  de  facto 
dual  subordination  (not  regulated  in  the  statistical  law  itself):  on  the  one  hand,  the 
CBS  can  define  what  they  have  to  do,  but  on  the  other  hand  their  formal  line  of 
reporting is to the prefect of the county or to the Mayor of Zagreb. 

Assessment 

4. 
Without  doubts,  the  statistical  law  from  1994,  together  with  the  tradition  of  a 
scientific and professional statistical service, has facilitated the transformation of the 
former  statistical  office  responsible  for  a  state  being  part  of  a  federation  so  as  to 
become  a  national  statistical  institute  in  a  market  economy,  and  contributed  to 
keeping  this  transition  outside  party  politics.  This  law  was  passed  in  a  rather  short 
time  to  replace  the  old  law  from  1972  at  a  moment  when  the  country  was  phased 
with  many  urgent  problems.  This  helps  to  explain  why  certain  features  of  the  old 
system were simply carried over to the new legal base. Time has come, however, to 
improve  the  law  in  those  aspects  that  are  mentioned  below,  which  will  lead  to  a 
complete  rewriting  of  the  law  rather  than  a  piecemeal  adaptation.  This  should  be 
done  as  a  part  of  a  transformation  process  of  the  statistical  system  with  sufficient 
time foreseen for discussion with stakeholders and for a public debate on the role of 
official statistics in a modern European state. 

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The  CBS  has  made  a  great  effort  to  transpose  the  principles  of  the  law  into 
5. 
practice for its own activities. Other producers, in spite of being mentioned explicitly 
in the statistical law, do not consider this law of any practical relevance for their own 
statistical activities over and above describing these activities in the respective part of 
the  statistical  programme  for  information  and  visibility  purposes.  The  CBS  has  not 
devoted any resources to monitor compliance of other producers with the statistical 
law,  and  were  it  do  so  and  had  it  discovered  any  infringement,  the  only  way  of 
resolving  them  would  have  been  bilateral  discussions  with  the  producer  concerned 
that results in a consensus. Since there is no statistical council in operation to which 
unresolved disputes concerning the statistical law could have been submitted for an 
authoritative  opinion  (see    1.3),  the  CBS  would  have  had  to  bring  such  an  issue  at 
the level of government, with the obvious risk of not finding any support at this level. 

In summary, the statistical law has shortcomings and gaps with respect to the 

purpose  of  official  statistics  as  information  not  only  for  government,  but  for  a 

6. 
following elements: 
- 
variety of users and the public at large; 
- 

role of the Statistical Council (see 1.3); 
status  of  the  CBS  and  its  director  in  relation  to  the  government  (gaps  remain 

- 
irrespective of other legislation being applicable for this aspect, see 2.2); 
- 

status and role of the regional offices; 
role,  content,  structure,  time-frame  and  procedure  of  adoption  of  the  statistical 

- 
programme (see  1.3); 
- 

explicit listing of the names of other statistical producers at the level of the law; 
obligations  of    other  producers  and  criteria  for  the  division  of  work  between  the 

- 
CBS and these other producers; 
obligations  of  public  bodies  which  are  responsible  for  important  administrative 
- 
records, but which do not transform such data themselves into official statistics and 
are therefore not listed as producer of official statistics, and the role of the CBS in this 
context; 
- 

access to administrative records (see 2.10); 
undefined notion of "statistical registers" in the law; 
scope  of  statistical  confidentiality  and  the  relationship  to  the  general  data 

- 

transmission  of  data  at  unit  level  from  statistical  registers  and  from  surveys  to 

- 
protection legislation; 
- 
researchers; 
- 

procedure and criteria for defining and releasing results of official statistics; 
possible sources for financing activities of official statistics, especially for those of  

penalty  provisions  for  refusal  to  respond  (procedure  defined  in  other  laws  too 

- 
the CBS, in addition to own budgetary funds of the CBS; 
- 
complicated). 
The  shortcomings  and  gaps  are  described  in  detail  in  the  respective  parts  of  the 
report 

In anticipation of the implementation of the new statistical law, policies, rules 
7. 
and procedures for ensuring a homogenous implementation of certain articles in the 
whole statistical system should be prepared in time so as to ensure that the new law 
will be applied effectively and in a homogenous way from the very beginning. 

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The following other texts on legislation concerning official statistics have been 

Law  on  the  census  of  population,  households  and  housing  units  dated  27  June 

1.2. Other Legislation 
8. 
reviewed: 
- 
2000; 
- 

Law on the protection of data confidentiality from 1996; 
Law on the National Bank from 2001. 

- 

9. 
The law on the population census 2001 does not contradict the statistical law. 
It  provides  one  exception  to  the  principle  of  statistical  confidentiality,  because  its 
article  9  allows  that  certain  variables  of  the  census  may  be  used  for  building  up  or 
updating local population registers at the level of counties or for the city of Zagreb. 

10. 
The recently revised law on the National Bank of Croatia contains an article 62 
on  statistics  (the  term  official  statistics  is  not  used).  There  is  no  reference  to  the 
statistical  law.  The  Bank  is  competent  to  collect  data  from  any  state  administration 
body,  from  banks,  and  from  other  legal  persons  for  the  purposes  of  the  law. 
Statistical  confidentiality  is  to  be  regulated  by  a  decision  of  the  Bank  (the  law  itself 
does  not  contain  any  substantive  guidelines  in  this  respect).  The  Bank  has  to  co-
operate with other state bodies in implementing this article. 

The  description  of  the  general  law  on  the  protection of data confidentiality is 

11. 
given under 1.5 

Assessment 

12. 
The exception in the census law concerning the administrative use of certain 
variables is in line with the "Recommendations of the Council of Europe concerning 
the  Protection  of  Personal  Data  Collected  and  Processed  for  Statistical  Purposes", 
since the possibility of a well defined administrative use of a limited set of variables is 
explicitly  stated in the law itself and was made known to the respondents when the 
data  collection  took  place.  The  variables  listed  are  not  sensitive,  so  this  exception 
should  not  have  any  influence  on  compliance  with  the  reporting  obligation.  The 
problem  may  lie  in  the  fact  that  it  was  not  decided,  at  the  moment  of  the  data 
collection,  which  counties  would  make  effective  use  of  this  possibility;  this  will  be 
decided  later  (and  the  probability  of  requests  from  counties  to  apply  this  clause  is 
considered  to  be  low).  In  the  spirit  of  the  UN  principles  and  the  Council  of  Europe 
recommendations, it would have been preferable if the decision on which counties do 
make use of this possibility had been made before respondents had to provide their 
information. 

13. 
The  article  concerning  statistics  in  the  law  on  the  National  Bank  of  Croatia 
seems  to  have  been  inserted  without  prior  consultation  with  the  CBS,  and  without 
checking  whether  it  is  compatible  with  the  statistical  law.  A  careful  analysis  reveals 
that  this  article  is  redundant  from  the  substantive  point  of  view,  given  that  the 
National Bank is explicitly mentioned in the statistical law and can carry out all types 
of surveys if they are included in the statistical programme. A possible interpretation 
why this article has been inserted might have been that the National Bank does not 
want to be subject to the statistical law or the statistical programme, but no indication 
was  given  to  confirm  this  assumption.  From  a purely legal point of view, this article 
offers the possibility that official statistics in the National Bank will not be governed by 
all  UN  Principles  of  official  statistics,  e.g.  with  respect  to  independence,  clear 
separation  between  data  collection  for  purely  statistical  purposes  and  those  for 

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transparency  and 
control  purposes,  statistical  confidentiality,  dissemination, 
especially  the  co-ordination  with  prior  approval  of  methodologies  by  the  CBS  as 
foreseen  in  the  statistical  law.  CBS  and  the  Bank  will  have  to  intensify  their  co-
operation  in  order  to  detect  possible  discrepancies  at  an  early  stage,  and  ways 
should be explored to clarify the relationship between these two legal texts when the 
statistical law will be revised (e.g. by inserting a cross-reference to the statistical law 
in the law on the National Bank). 

1.3. Statistical Council, Statistical Programme, Inter-ministerial Consultations, 
Consultations with Users 
14. 
The  statistical  law  provides  for  a  Council  as  an  advisory  body.  This  Council 
should consist of 12 members, appointed by the government, and be chaired by the 
CBS  director.  The  term  of  office  for  members  of  the  council  other  than  the  CBS 
director is 4 years. This council has not become operational, however, because the 
government  did  not  grant  any  additional funds for this purpose in the budget of the 
CBS until this year. 

15. 
In its present form, the statistical programme 2000 to 2002 is essentially a list 
of surveys carried out by the CBS and the 10 other producers. 240 surveys are listed, 
192 of which to be carried out by the CBS. The entries for each survey are detailed 
indeed, even giving the forms and dates of publication of the results. The publication 
programme, which exists as special publication, can therefore easily be derived from 
the  statistical  programme.  The  term  “survey”  includes  also  regular  transmission  of 
administrative  records  from  another  public  body  to  the  CBS,  e.g.  for  generating 
external  trade  statistics.  An  essential  item  for  each  survey  is  the  “relevant 
international standards” entry. The CBS part includes also some items which are not 
connected with data collection, such as GDP. 

The  period  2000  to  2002  was  the  first  programme  covering  more  than  one 
16. 
year;  before,  the  Parliament  adopted  annual  programmes.  The  reasons  given  for 
coming up with a three years programme are: the reduction of work load by avoiding 
simultaneous  work  on  carrying  out  the  population  census  and  on  preparing  a  new 
statistical  programme  in  2000  (for  2001)  and  in  2001  (for  2002),  and  the  need  for 
ensuring stability for the rest of the production during this period. Another reason was 
to mirror more closely the 5-year statistical programme of the EU. 

17. 
Statistical  programmes  are  prepared  in  a  very  democratic  way,  involving 
discussions  within  the  CBS  and  with  users  inside  and  outside  the  government  at 
various stages of the preparation. When it reaches government, all differences have 
been  sorted  out  beforehand.  When  the  government  discusses  the  statistical 
programme, the director of the CBS is present. The same holds for the subsequent 
discussion  in  Parliamentary  Committees  prior  to  the  formal  approval  by  the 
Parliament as such. 

18. 
The  statistical  programme  does  not  have  any  indication  on  resources. 
Resources  are  decided  separately  (with  the  notable  exception  of  the  population 
census,  based  on  a  special  law)  as  part  of  the  budgetary  process  for  the  whole 
government. For the CBS, budgetary allocations were sufficient in the first years after 
independence to carry out all programme items, but this has ceased to be the case 
since  1998.  The  statistical  programme  does  not  give  any  indication  on  priorities  for 
the case of insufficient resources. 

19.  When  the  programme  is  submitted  to  the  Parliament  for  adoption,  it  is 
accompanied  by  a  synthesis  as  an  explanatory  text.  For  legislative  reasons,  this 

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synthesis  cannot  be  part  of  the  programme  to  be  adopted;  it  is  therefore  neither 
published nor translated into English. 

20. 
A  longer  term  strategic  plan  for  official  statistics,  which  could  serve  as  an 
important  tool  in  setting  up  programmes  of  activities  and  deciding  about  priorities, 
does  not  exist,  whether  as  internal  document  in  the  CBS  nor  as  document  for 
discussions with stakeholders. 

The  CBS  carries  out  activities  outside  the  statistical  programme  in  terms  of 
21. 
“projects”  or  “pilots”,  with  funds  from  other  ministries  or  from  international  donors, 
based  on  article  14  of  the  statistical  law.  This  is  the  only  form  of  informal  “update” 
foreseen  within  the  three-year  period  of  the  current  programme.  If  such  activities 
were to become regular, however, prior inclusion in the statistical programme would 
be a prerequisite. 

22.  Concerning the statistical activities of other producers, the criteria for inclusion 
into  the  statistical  programme,  except  for  the  rare  cases  of  surveys  with  private 
companies or even with households, are not clear. It is left mainly to the initiative of 
each actor to decide which activities to include. The main reason for them to do so 
seems  to  be  history,  and  the  main  incentive  legitimacy  of  these  activities  in  the 
discussion on resource allocation. 

23. 
Except  for  verifying  the  completeness  of  the  information  received,  the  CBS 
does  not  question  activities  proposed  by  other  actors,  nor  try  to  detect  potential 
overlaps or to assess the risk of incoherent results or non-conformity with standards 
at this moment. 

24. 
There  are  no  high-level  inter-ministerial  groups  where  the  CBS  takes  part 
regularly outside the preparation of the statistical programme and the steering of the 
projects as described above. The CBS used to be represented in an important inter-
ministerial  body  checking  all  draft  legislation,  but  the  government  has  recently 
decided to reduce the size of this body at the detriment of the CBS. 

Assessment 

25.  While the present statistical programme is of some value for the management 
of  the  CBS  and  its  accountability  to  others,  it  is  inadequate  for  decision-makers  at 
government and Parliament levels for various reasons. This feeling is shared by the 
senior  management  of  the  CBS.  The  reasons  for  this  are  manifold:  no  link  to 
resources and therefore no basis for priority decisions, micro-management instead of 
focus on strategic issues, emphasis on inputs instead of outputs. 

26. 
The implicit policy of the CBS in adapting the statistical programme has been 
driven  by  the  main  motive  of  introducing  international  standards  while  at  the  same 
time ensuring continuity of series wherever possible, so as not to disappoint existing 
users  but  at  the  same  time  showing  that  international  comparability,  especially  with 
respect to EU standards, has been given a boost by official statistics of Croatia. This 
policy of a cautious, producer-driven preparation of the statistical programme of the 
CBS  has  had  the  good  effect  of  keeping  official  statistics  out  of  controversial 
discussion  about  party  politics,  but  at  the  same  time  official  statistics  has  been 
increasingly cut off from discussions about substantive policies which have an impact 
on  information  needs,  with  the  obvious  risk  of  a  gradual  loss  of  relevance.  This 
tendency  has  been  reinforced  by  the  fact  that  there  is  no  Statistical  Council  in 
operation which could act as a sounding board at high-level for ensuring relevance of 
production. It has to be added, however, that the quantitative culture in the rest of the 

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administration, i.e. preparing decisions on the basis of extensive use of quantitative 
material for ex-post evaluations, forecasting, ex-ante assessment of impacts or even 
cost-benefit  analysis,  has  no  tradition  yet  in  Croatia.  It  is  also  fair  to  say  that  user 
impact  on  the  statistical  activities  today  is  higher  that  in  the  first  five  years  after 
independence. 

27. 
Before coming up with a new structure of a statistical programme, and a new 
procedure for having it adopted, a broad discussion is necessary about the strategic 
options  for  official  statistics  as  such.  The  main  option  to  be  put  forward  strongly 
should be to enable the statistical system, and the CBS in particular, to increase the 
relevance of its production for informed decision-making in a democratic society and 
a  market  economy,  while  at  the  same  time  strictly  adhering  to  the  fundamental 
principles of official statistics other than relevance. The first result of such a debate 
should be a strategic master plan rather than a statistical programme, and some key 
elements  in  this  strategic  master  plan  would  have  to  be  the  general  principles 
governing  the  preparation,  adoption,  implementation  and  evaluation  of  a  multi-year 
statistical  programme,  based  on  identical  criteria  for  all  actors,  with  annual  update 
procedures.  The  outcome  of  this  process  should  not  be  pre-empted  here,  but  the 
major  rules  about  such  a  new  statistical  programme  would  have  to  be  fixed  in  a 
revised statistical law. 

28.  What  can  be  said  now  is  that  the  future  adoption  of  a  statistical  programme 
should  be  finally  settled  at  the  government  level,  and  the  part  presented  to  the 
government  for  adoption  should  focus  on  strategic  issues  (i.e.  the  strategic  master 
plan)  and  on  those  elements  which  may  require  government  legitimacy  for 
implementation such as surveys with response obligations on the one hand, or which 
are  necessary  for  the  external  accountability  of  the  statistical  system  on  the  other 
hand,  such  as  a  summary  description  of  outputs.  Furthermore,  the  adoption  of  the 
future statistical programme should include the allocation of the necessary resources 
(with the proviso of subsequent Parliament approval). The programme as approved 
by the government should refrain from fixing any details that do not fall into one of the 
above  categories,  notably  on  methodology  (which  have  to  be  left  to  the  statistical 
system to be decided) and on micro-management (which have to left to the heads of 
the  CBS  and  of  the  other  producers  of  official  statistics  to  be  decided  in  a  co-
ordinated way). When preparing the programme, the procedure should be such that 
issues  of  ensuring  relevance,  coherence  and  efficiency  (also  with  respect  to 
response-burden)  are  examined  not  only  for  each  element  in  isolation,  but  for  the 
system as a whole. 

29. 
The  new  statistical  programme  will  benefit  from  the  input  of  an  independent 
statistical council as advisory body. In order to be able to fulfil this role, it should not 
be  seen  as  an  instrument  of  the  CBS  however,  and  this  image  is  conveyed  by  the 
present  rule  in  the  statistical  law  stating  that  the  director  of  the  CBS  chairs  the 
council.  Various  options  for  the  role,  the  competencies,  the  composition  and  the 
procedure of appointment of the members will have to be evaluated in the course of 
the process of revising the law, once the more basic question about the future status 
of the CBS as such has been decided (see 1.4). In the mean-time, it is recommended 
to set up a statistical council as soon as possible under the present set of rules with 
the main objective of being a sounding board of external stakeholders for the director 
of the CBS for the change process related to the statistical system and for building up 
trust into official statistics from the part of stakeholders and the public at large. It is 
recommended to have high-level representatives from users of official statistics and 
representatives  from  media  as  members  of  the  Council;  the  discussion  with  the  10 
other agencies acting as producers would have to take place in a separate forum. 

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30.  Until  the  new  concept  of  the  statistical  programme  can  be  made  operational 
based  on  a  revised  statistical  law,  statistical  programmes  in  conformity  with  the 
present legal requirements will continue to be prepared and adopted. Since it is more 
important  to  prepare  the  future  of  the  statistical  system  as  described  above 
thoroughly,  the  setting  up  of  the  intermediary  statistical  programmes  should  be  as 
light  as  possible.  It  is  therefore  suggested  that  a  one  year  programme  for  the  year 
2003  be  set  up  along  the  same  lines  as  the  present  3-year  programme,  with 
incorporating  the  necessary  updates,  but  without  attempts  to  restructure  the  2003 
programme or make it more comparable for the activities of other producers. These 
steps  should  be  left  for  the  new  multi-year  programme  which  can  hopefully  be 
prepared  in  late  2002/first  half  of  2003  based  on  a  revised  legal  base  for  which  a 
political consensus should be established by the end of 2002 at the latest, and which 
should  come  into  legal  force  by  mid  2003  at  the  latest.  The  adoption  of  the  new 
programme by the government could then take place in the second half of 2003, but 
in  any  case  not  later  than  any  budget  decisions  for  the  year  2004  and  after  at 
government level, and it would take effect as from 1 January 2004 for a period to be 
determined covering between 3 and 5 years. 

31. 
It  is  very  important  that  the  CBS  be  readmitted  to  the  inter-ministerial 
committee  dealing  with  draft  legislation.  An  observer  role  would  be  sufficient.  The 
benefits would be twofold: as advance information on forthcoming information needs 
derived  from  new  legislation  (so-called  "antenna  function,  see  2.2), and as a check 
on whether new legislation is in line with the statistical law and the UN Fundamental 
Principles  (the  CBS  should  be  the  custodian  of  the  statistical  legislation).  The 
exclusion from this group is a serious impediment to keep the legislation on statistics 
applicable to all and respected by all; otherwise, the statistical legislation is likely to 
be a CBS law only.  

The  CBS  has  not  reported  any  political 

1.4. Protection of Independence 
the 
32. 
dissemination  of  results  (either 
time-wise),  or  concerning 
methodology. Management and staff of the CBS are aware of the importance of this 
principle. This cannot be said for the 10 other producers, however. 

interference  concerning 

in  substance  or 

33. 
According  to  the  Law  on  Public  Service,  the  general  director  of  the  CBS,  as 
well  as  the  deputy  director  and  the  assistant  directors,  are  appointed  by  the 
government, with the director having the right to propose his deputy and the assistant 
directors.  There  is  no  fixed  term  of  service,  but  all  these  positions  have  to  be 
explicitly confirmed by any new government. The general director of the CBS reports 
to  the  prime  minister;  he  has  the  same  hierarchical  level  as  a  minister,  but  not  the 
same  de  facto  status.  He  participates  twice  per  year  (plus  upon  request)  in 
government meetings. 

34.  Whereas the statistical activities of the National Bank are grouped together in 
an  organisational  unit  distinct  from  any  control  activities  by  the  National  Bank, 
organisational separation of statistical and unrelated activities is not ensured for the 9 
other producers. 

Assessment 

35. 
It  is  a  good  and  very  important  sign  for  the  respect  of  the  principle  of 
independence  by  all  governments  which  have  existed  since  the  adoption  of  the 
statistical  law  that  no  interference  has  occurred,  and  that  the  confirmation  of  the 
senior  management  of  the  CBS when the present government started did not pose 

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any  problem  (in  spite  of  a  high  number  of  top  level  changes  elsewhere  in  the 
administration).  The  legal  situation  with  respect  to  protection  of  professional 
independence, both for the CBS as institution as well as for its senior management, 
leaves to be desired however. When the statistical law is revised (which is silent on 
this issue in its present form), it is recommended that this be corrected. 

36. 
First,  the  law  should  clearly  establish  the  CBS  as  a  agency  that  is  a 
professionally  independent  organisation  and  is  subject  to  the  government  only  in 
terms  of  overall  resources,  the  statistical  programme  (what  it  should  do, but not on 
the how), and on priorities. 

37. 
Secondly, while it is standard practice that the general director of a statistical 
office  is  appointed  by  the  government,  some  criteria  might  be  included  in  the  law 
(recognised  scientific  and  professional  experience  in  the  area  of  statistics  or  in  a 
related  area)  to  prevent  partisan  non-expert  appointments.  Other  options  for  the 
appointment procedure might also be considered. 

38. 
Thirdly, it is crucial that the appointment is for a fixed term, independent of any 
change in the government during this term, even if this is not the standard for other 
top  level  posts  in  the  administration.  The  law  should  also  regulate  whether  the 
number of re-appointments is limited or not. 

39. 
Fourthly,  the  law  should  limit  the  reasons  for  dismissal  by  the  government 
within the term to very serious misconduct, or make dismissal subject to approval by 
the an independent authority (e.g. the President). 

40. 
Furthermore, serious thought should be given to the procedure for appointing 
the assistant directors. If the government has to play a role at all, it should be limited 
to rubber-stamp the proposal by the general director. Since the general director has 
to bear the full professional responsibility, it is necessary that as a corollary he or she 
should have the competence to decide on the next level of hierarchy when a vacancy 
occurs  or  a  new  post  has  to  be  filled,  even  if  this  is  not  the  rule  in  the  rest  of  the 
administration. Government appointment may be kept for the deputy, but the right of 
proposal  for  the  director  general  should  be  made  explicit  in  legal  terms  (the  same 
would hold for the right to propose the assistant directors should the appointment by 
government remain). 

41. 
As  regards  the  organisational  separation  of  statistics  in  other  agencies,  the 
statistical  law  should  make  this  a  prerequisite  for  being  included  in  the  future 
statistical  programme  as  producer  of  official  statistics.  As  a  consequence,  these 
agencies  should  not  be  listed  in  the  statistical  law,  but  only  in  the  statistical 
programme,  with  the  possible  exception  of  the  National  Bank  where  it  is  important 
that  the  applicability  of  the  statistical  law  is  not  decided  by  the  government  (from 
which the National Bank is independent), but by the Parliament. The inclusion in the 
programme would depend on whether each agency is able and willing to respect the 
obligations  of  acting  as  a  producer  of  official  statistics  with  respect  to  the  UN 
Fundamental  Principles,  and  mechanisms  would  have  to  be  set  up  to  monitor  how 
these obligations are implemented. In future the director of the CBS should be given 
a  say  in  the  nomination  of  heads  of  statistical  units  of  other  producers,  and  in  any 
reorganisation  measures  that  concerns  the  position  of  such  units  within  their 
agencies. 

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1.5. Data Protection and Statistical Confidentiality 
42. 
The  statistical  law  guarantees  statistical  confidentiality,  i.e.  the exclusive use 
for statistical purposes of individual data, but for natural persons only. The policy of 
the  CBS  is  to  observe  statistical  confidentiality  also  for  legal  entities  of  the  private 
sector.  All  staff,  and  beyond  this  all  persons  mandated  by  the  CBS  to  collect  data, 
are obliged to keep such data confidential. 

43.  Researchers can have access to microdata for statistical purposes: they have 
to hand in a written request to the CBS, and they are informed about their obligations 
before receiving the data, but they do not have to sign an explicit contract. 

44. 
The  statistical  law  includes  the  obligation  for  all  agencies  involved  in  data 
collection  to  indicate  to  the  respondent  unit  the  objective  of  the  data  collection  and 
the rights and duties of the respondents. 

45. 
There  is  a  general  law on data protection which has had no practical impact 
on  official  statistics  so  far.  It  has  more  to  do  with  the  definition  of  different types of 
secrets  than  with  the  protection  of  privacy.  It  is  currently  being  revised  in  order  to 
make it compatible with the EU directive. 

46.  Confidentiality  issues  in  official  statistics  have  not  been  raised  so  far  as 
obstacle  to  respond  to  statistical  surveys,  except  for  a  few  cases  in  the  population 
census (fear that census be used in the context of taxation) . 

Assessment 

47. 
The  articles  on  confidentiality  in  the  statistical  law  were  a  considerable 
improvement    over  the  previous  legislation,  but  they  have  certain  weaknesses  if 
compared to the EU regulation and to the standards of good practice in NSIs of other 
countries. They are as follows: 
It is not unambiguously stated that individual data cannot be transferred to other 
- 
parts  of  the  administration.  Individual  data  are  considered  an  “official”  secret,  but  a 
transfer to another part of the administration is not automatically considered to be a 
violation of an official secret. 
Individual data concerning legal persons of the private sector are not protected at 
- 
all. This is the most important difference in comparison to the EU regulation 1588/90. 
-  The article on the transmission of microdata to researchers mentions name and 
family  names,  residence,  age  and  sex.  This  article  is  likely  to  refer  to  a  former 
population register which could be used as sampling frame when researchers carried 
out their own data collections. Since this register does not exist any more, the article 
is  inadequate  for  transmitting  copies  of  microdata  from  CBS  household  surveys  (or 
from  the  population  census),  since  name  and  addresses  should  not  be  included  in 
such files. 
-  There is no obligation to separate identifiers from the relevant variables as soon 
as possible, and the request for transparency in the procedure when identifiers have 
to be kept as in the case of panel surveys or temporarily re-introduced into statistical 
microdata for the purpose of linkage is missing. 
-  The article on statistical registers is ambiguous and in any case not suited for a 
statistical  business  register  (which  also 
includes  natural  persons  acting  as 
unincorporated enterprises). 
-  On the other hand, the article prescribing that data be published only aggregately 
in all cases without exception is too rigid, e.g. for small area data. 

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Implementation  of  the  confidentiality  rules  in  dissemination  has  lead  to 
48. 
practical  problems  and insecurity about good practice, both for results derived from 
microdata  on  individuals  and  on  companies.  It  is  recommended  that  independently 
from the revision of the law, an internal book of rules be set up to fix good practice 
and to provide for mechanisms where border cases can be resolved. 

49. 
Although  companies  have  not  manifested  any  concern  about  not  being 
sufficiently  protected  so  far,  it  would  be  wrong  to  assume  that  this  would  continue 
indefinitely.  The  perception  of  confidentiality  by  these  respondents  cannot  be  taken 
for granted forever, and it is important to be seen as credible in this context. A major 
obstacle  in  this  respect  is  the  administrative  business  register  that  is  still  under  the 
responsibility  of  the  CBS.  It  is  very  important  that  the  CBS  is  seen  as  not  being 
associated with this register and the administrative use made of its data in an as near 
future as possible. 

50. 
Another major problem in credibility lies with the regional offices through which 
many  filled  forms  are  channelled  back  to  the  CBS.  Being  subject  to  the  county 
prefect, i.e. to the supervisor of good administration in a county, is not a good recipe 
for conveying the message that statistical data are only used for statistical purposes. 
It is therefore urgent that the issue of the status of these regional offices be solved, 
for both efficiency and confidentiality reasons. 

51. 
Lastly,  the  transmission  of  individual  data  from  survey  and  census  files  to 
researchers should only be made on the base of a contract signed by both parties. 
The right of using such data would have to be limited in time, and destruction of such 
data would have to be monitored. 

2. National Statistical System 

2.1. Principles 
The CBS and its staff are fully committed to the UN Fundamental Principles of 
52. 
Official Statistics, and they are strictly adhered to in practice. The only proviso is the 
lack of systematically confirming relevance of existing surveys from time to time. 

53.  Croatia  has  subscribed  to  the  IMF's  Special  Data  Dissemination  Standard  in 
1996.  where  these  principles  are  reinforced  and  in  certain  aspects  such  as 
dissemination even made stricter. The planned Stability and Association Agreement 
between  the  EU  and  Croatia  will,  in  its  article  on  statistics,  also  have  an  explicit 
reference to the UN Fundamental Principles. 

Assessment 

The  present  de  facto  practice  concerning  the  UN  Fundamental  Principles  is, 
54. 
as regards the CBS activities, up to EU standards. The open question is whether this 
practice can be established in such a way that any attempt from outside to impose to 
the CBS an infringement to one of the principles in the future would fail and therefore 
not be started at all. Doubts about the sustainability of this practice even in adverse 
circumstances are based on the following observations: 
-  The CBS has not given great visibility to its compliance with these principles, e.g. 
in  form  of  a  mission  statement;  there  has  not  been  any  debate  with  stakeholders, 
other  producers,  ministers  or  even  in  public  on  this  issue,  and  these  principles  are 
therefore not explicitly recognised outside the CBS as is the case for other countries. 

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-  The law, while mentioning some of the principles, is silent about the mechanisms 
to protect the CBS from undue interference (see 1.2.). 
-  The de facto status of the CBS has shown some set-backs recently; it is treated 
by the present government in the same way as any other, policy-oriented part of the 
administration, and its profile in the media is rather low. 
-  The  culture  of  a  non-partisan  approach  to  policy  issues  in  general  is  not  yet 
sufficiently  rooted  in  the  political  culture  of  this  young  state,  although  the  recent 
adoption  of  the census law by both government and opposition parties is a positive 
exception  in  this  respect.  There  is  the  latent  risk,  however,  that  whatever  domestic 
policy  is  actively  promoted  by  a  government  is  on  a  fragile  basis  should  the 
government change as a consequence of elections, and this may be applicable to the 
respect of the fundamental principles in official statistics and the status of the CBS in 
future  as  well.  This  is  the  major  reason  for  the  present  policy  of  relatively  low-key 
visibility of the CBS. 

55. 
It is important to realise that continuing this policy of reacting rather than being 
proactive  is  dangerous  in  the  medium  run  in  the  case  of  the  CBS,  in  spite  of  short 
term  benefits.  It  could  be  the  beginning  of  a  downward  spiral    that  starts  with  low 
visibility  in  the  public,  being  seen  as  increasingly  irrelevant,  cut  in  resources, 
reduction  of  services,  even  less  visibility  and  media  coverage  (or  only  negative 
coverage)  etc.  It  is  therefore  recommended  that  a  policy  of  change  be  started  as 
soon as possible, which contains most of the recommendations in other items of the 
report.  The  main  issues  that  require  this  change  process  should  be  brought  to  the 
attention  of  as  many  stakeholders  as  possible  and  to  the  media  in  particular,  but 
without  falling  into  the  trap  of  this  process  of  change  becoming  an  activity  which  is 
perceived  as  partisan  by  any  important  stakeholder.  Strict  adherence  to  the  UN 
Fundamental  Principles,  which  has  been  or  will  be  confirmed  by  Croatia  in  the 
international context three times (becoming member of UN and ECE; subscription of 
SDDS; and signature of the Stability and Association Agreement) should be used as 
the  major  guideline  for  ensuring  a  non-partisan  approach  to  this  change  project, 
given that international relations and the wish to become member of the EU as soon 
as possible seem to be based on a multi-party consensus. 

In addition to the CBS, article 8 of the statistical law lists the following bodies 

2.2. Structure of the System, Providers of Official Statistics, and Relationship 
between CBS and Other Providers 
56. 
as producers of official statistics: 
-  Ministry of the Interior 
-  Ministry of Justice 
-  Ministry of Public Administration 
-  Ministry of Labour and Social Welfare: Central Employment Office 
-  Central Weather Bureau 
-  The Pension Fund of the Republic of Croatia 
-  National Health Insurance Fund 
-  Health Care Institute 
-  National Bank of Croatia 
- 
Although the Ministry of Finance produces and disseminates statistics, it is not listed 
in the law, nor in the statistical programme 

Institute for Payment Transactions 

57.  With the notable exceptions of the National Bank (see  B8), these agencies do 
not  carry  out  surveys  with  companies  or  with  households,  but  produce  statistics  on 
the base of administrative records they manage on the base of other laws. This has 
allowed  the  CBS  to  keep  more  or  less  the  monopoly  for  business  and  household 

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surveys.  The  Central  Weather  Bureau  is  in  charge  of  some  primary  non-
administrative data collection through other forms than surveys. 

There is no information available about total staff or total budget for statistics 

58. 
within these 10 public bodies. 

59. 
Another  important  component  of  the  statistical  system  in  Croatia  are  the  21 
regional  offices.  They  are  mandated  by  the  CBS  to  carry  out  certain  tasks  in  data 
collection,  notably  the  distribution  of  forms  to  companies  and  the  collection  of  the 
forms  as  they  are  returned.  They  do  not  enter  data,  nor  have  they  any  role  in 
disseminating  CBS  products  or  as  a  service  centre  for  the  local  general  public. 
Altogether, they employ 270 persons in 2001. 

60. 
Administratively,  these  offices  are  not  part  of  the  CBS,  but  depend  form  the 
prefects of the 20 counties and of the Mayor of Zagreb. Counties and municipalities 
are presently funded from the central government, but this is likely to change as part 
of a major reform of the public sector. 10 regional offices perform statistical tasks for 
the county/city, and produce small booklets with data for their region. None of them is 
presently  involved  in  administrative  tasks  which  would  lead  to  a  conflict  of  interest 
with activities of official statistics. 

61. 
The expert visited the regional office of Karlovac. There are 5 persons working 
in  this  office,  which  has  4  subordinate  branches  in  smaller  cities  of  the  Karlovac 
county  where  altogether  6  other  persons  are  engaged.  Karlovac  is  among  those 
regional offices that are sufficiently equipped to produce their own regional data, on 
the request of the county prefect (not of the CBS). As regards exhaustive business 
surveys, the filled forms are transmitted to the CBS only for a sample of addresses; 
the rest is kept at Karlovac (together with a copy of the forms transmitted to Zagreb), 
and  if  there  is  a  regular  production  of  statistics  at  regional  level,  data  entry  on  an 
exhaustive  basis  is  made  in  selected  regional  offices  such  as  Karlovac,  but  not  for 
the  entire  territory.  Data  entry  and  processing  at  regional  offices  is  carried  out  with 
office automation tools. 

62. 
The statistical law attributes some competencies to the CBS as leader of the 
statistical system. Article 12 states that the CBS shall decide on the methodology for 
carrying  out  all  surveys  defined  by  the  programme,  with  article  13  specifying  that 
methodology includes definition of statistical units, definition of terms, nomenclatures, 
classifications and characteristics in a survey. Article 14 mentions recommendations 
of  the  CBS  in  the  case  of  surveys  carried  out  outside  the  statistical  programme. 
Article 17 states that the CBS shall approve the proposed methodology for keeping 
administrative  records  (reinforced  by  article  22).  Article  26  mentions  special 
regulations issued by the CBS for all statistical producers concerning the technology 
of organising data storage of statistical files. Finally, according to article 39, it is the 
CBS which is the main body entitled to provide foreign governments and international 
organisations with statistics about Croatia; other bodies can act in this capacity only 
with the explicit consent of the CBS. 

63. 
The degree of implementation of this "focal point" functions is presently rather 
weak. The major reasons is the absence of the statistical council as foreseen by the 
law,  as  a  forum  where  rules  implementing  the  above  articles  of  the  law  could  be 
discussed and endorsed before put into general practice across the system. Bilateral 
meetings between the CBS and 1 or 2 producers are the main place where the CBS 
meets with the other producers at central level, but the focus of such meetings is to 
define user needs relevant for the CBS production rather than the own production of 

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these units or the conditions under which their production takes place (e.g. in terms 
of the respect of certain principles like confidentiality). 

64. 
In particular, the CBS has not made any attempt to filter or harmonise from the 
substantive point of view the entries into the statistical programme proposed by other 
producers,  to  check  whether  duplications  arise  with  activities  of  the  CBS,  or  to 
examine whether international standards are followed. It is doubtful whether some of 
the activities listed in the programme under these other producers qualify as official 
statistics,  both  from  the  content  point  of  view  and  from  their  compliance  with 
fundamental  principles  (transparency  of  methods  e.g.).  The  same  policy  of  non-
interference by the CBS into the work of other producers is applicable for the phases 
of 
items,  dissemination  of  results,  and 
retrospective evaluation of the statistical programme. 

implementation  of 

the  programme 

65. 
Also  with  respect  to  transmission  of  data  to  international  organisations,  the 
respective article in the law is not applied to other producers. The justification given 
are  practices  established  before  the  statistical  law  became  effective.  But  even  for 
reporting  obligations  created  after  the statistical law came into force, the rule is not 
followed: an example is the reporting under the SDDS, where the focal point and co-
ordination role was taken by the National Bank. 

Assessment 

66. 
The  policy  of  non-interference  into  the  work  of  other  producers  has  lead  de 
facto to a split into two categories of producers: the CBS and the National Bank on 
the one side, which have been eager to change their production to the needs of the 
market  economy,  to  implement  international  standards  and  to  modernise  their  data 
processing and dissemination, and the 9 other producers on the other side, who have 
more or less continued their traditional production from before independence without 
major modifications or regard to the statistical law or the Fundamental Principles over 
and  above  the  inclusion  of  their  activities  in  the  statistical  programme  for  purely 
descriptive purposes. 

67. 
The  division  of  work  between  statistical  producers  has  not  changed  since 
independence, nor has it been examined whether it is still effective and efficient. The 
assignment of new activities to a specific producer has not been based on criteria or 
explicit  decisions,  but  the  fact  that  the  CBS  and  the  National  Bank  have  been  the 
only  agencies  capable  of  conducting  surveys  has  limited  the  damage.  Concerning 
dissemination (2.6), the lack of coherence and duplication is more of a concern. 

Since  the  present  practice  has  been  in  place  since  independence,  no  swift 
68. 
change  will  be  possible  before  the  statistical  law  is  changed  and  a  new  statistical 
programme on the basis of a revised law will be set up. This will be the opportunity to 
have a close look at the activities of other producers, and their willingness and ability 
to  perform  as  producers  of  official  statistics.  The  CBS  should  signal  from  now, 
however,  that  it  will  take  more  seriously  than  until  now  its  role  as  leader  of  the 
statistical system, by assigning this task to a unit in the organisation chart, changing 
the name of this unit so as this task becomes visible, and setting up a regular forum 
of all producers (including the de facto producers like the Ministry of Finance) distinct 
from the Council to prepare for the change of the law and the subsequent change of 
the statistical programme from this point of view. 

69. 
Two  other  fields  of  action  should  be  implemented  before  the  new  law  takes 
effect. The first concerns the status and role of regional offices. As long as they are 
funded  by  the  central  government,  it  may  be  easier  to  implement  such  changes 

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compared  to  a  situation  when  they  will  be  at  least  partially  funded  by  local  "own" 
resources.  In  view  of  the  very  limited  present  role,  and  in  view  of  the  need  of 
concentrating as much resources as possible for the change of the statistical system, 
it is proposed to restructure the regional offices as soon as possible in a more than 
marginal way. The number of regional offices should be reduced (so that each office 
has a critical mass to justify important investments in IT infrastructure), they should 
be  subordinated  in  all  aspects  to  the  general  director  of  the  CBS  and  therefore 
become part of the budget and staff of the CBS, and finally their role should shift from 
data  collection  to  providing  services  for  local  users.  Implementation  of  this  policy  is 
likely  to  lead  to  an  overall  reduction  of  staff  working  in  regional  offices,  and  to  a 
change of the profiles of permanent staff working in such offices. 

It is important to make sure that the reduction of staff at regional level will not 
70. 
be lost for official statistics, but be added to the budget of the CBS, but with only part 
of  this  amount  being  used  for  an  increase  in  permanent  staff  at  the  present  CBS, 
since  other  items  of  the  CBS  budget  may  be  in  greater  need  of  increase  (see  3.5. 
and  3.6).  This  increase  should  be  clearly  earmarked  for  the  change  process.  It  is 
important  that  the  present  window  of  opportunity  given  through  the  reform  of  the 
public sector be used for this important change, and that this is made clearly visible 
as  a  strengthening  of  the  system  of  official  statistics  to  become  more  productive 
without increasing the total number of staff working for official statistics. 

The  other  change  which  might  be 

71. 
to 
systematically concentrate the reporting to international organisations in the CBS in 
one  unit,  not  only  for  data  produced  by  the  CBS,  but  for  all  data.  This  will  be 
explained in more detail in the dissemination chapter (2.6). 

introduced  at  short  notice 

is 

[2.3. Official Statistics system; Providers of Official Statistics: Grouped 
together with 2.2] 

2.4. Liaison with Research Institutes and Universities 
Since independence, official statistics has included the research community in 
72. 
all  consultations  concerning  the  statistical  programme  from  a  user  point  of  view. 
Research  institutes  are  also  regular  clients  for  microdata  from  surveys.  Research 
institutes did not have enough staff to be included into the transformation programme 
of  the  official  statistics.  The  department  for  national  accounts  at  the  Economic 
Institute was established at the initiative of the CBS. In the past years, this institute 
was  mandated  with  activities  related  to  implementing  new  methodologies  in  official 
statistics such as for national accounts or the CPI. 

73. 
The  CBS  has  presently  a  practice  of  not  going  further  than  producing  facts 
(see under 2.6). Research institutes and universities are supposed to fill this gap, e.g. 
through  simulation  and model-building activities. (The statistical culture in ministries 
is not high, so that similar activities carried out there are an exception). The CBS is 
not  involved,  however,  in  such  type  of  analytical  activities  over  and  above  the 
transmission of either aggregate or micro-level data. 

Assessment 

74. 
As proposed under 2.6., the present practice of staying clearly away from all 
analytical  activities  should  be  given  up.  In  the  future,  the  CBS  should  devote 
resources to all types of analysis. This opens the door to a new field of possible co-
operation  with  the  research  community,  and  the  CBS  should  develop  a  clear  policy 
on what do to in-house, what part to contract out to research institutes, but where the 

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results  will  be  published  under  the  responsibility  of  the  CBS,  and  where  to  be 
involved  as  partner  or  observer  in  research  activities  the  results  of  which  will  be 
published under the  responsibility of a research body. Sufficient know-how inside the 
CBS should be built up to carry out such types of analytical work for all subject areas 
covered by the CBS, as well as for interdisciplinary studies. Persons engaged in such 
activities would benefit greatly from contacts with research and university as a kind of 
professional feed-back. 

The  same  type  of  policy  should  be  established  for  the  traditional  field  of 
75. 
analysis inside the CBS, the analysis of data quality. Whereas it is important to have 
the  necessary  human  capital  inside  the  CBS,  mandating  external  organisation  with 
such type of analysis is beneficial from time to time as a way to be transparent and 
show a high sense for accountability. 

76. 
The links between the CBS and the research community should be put on a 
more regular than ad hoc level, by e.g. organising new fora (one for economic; one 
for  social/demographic  statistics)  with  representatives  from  this  community,  and  by 
including representatives from the research community in the Statistical Council. 

2.5. Liaison with the Business Community 
77.  When compared to users form government and from the research community, 
there  is  not  any  similar  policy  within  the  CBS  to  associate  representatives  of  the 
business community systematically to the preparation of the statistical programme or 
to the implementation of a business survey. This is left to each production sector, and 
practice  is  varying.  Big  companies  are  becoming  more  important  as  users  of 
statistics, and the dissemination department has good relations to this group. 

The  CBS  considers  the  overall  response  burden  to  the  business  community 

78. 
as low, in spite of the high number of surveys. 

Assessment 

The  lack  of  systematic  and  institutional  links  to  the  business  community  is  a 
79. 
weakness  in  the  present  statistical  system,  and  should  be  remedied  as  soon  as 
possible, e.g. by setting up a new regular forum, by including representatives in the 
statistical  council,  and  most  importantly,  by  systematically  including  representatives 
from this community in discussions about the new statistical programme in as many 
subject areas as possible. 

It is important that the business community is not only seen as a potential user 
80. 
of results, but as an important provider of raw data. It should not be taken for granted 
that response rates will be high forever. Proactive measures to ensure goodwill are: 
associating systematically representatives from the relevant sectors of the economy 
when  surveys  are  prepared,  offering  help  for  companies  that  have  difficulties  with 
surveys (e.g. by a hot-line for telephone calls), good explanatory material distributed 
with each survey, including clear statements on confidentiality, providing a feed-back 
to  respondents  in  form  of  a  short  statistical  abstract  free  of  charge,  and  efforts  to 
make official statistics more visible in general.  Furthermore, each new questionnaire 
of a business survey (and each modified existing questionnaire) should be the object 
of a pilot test, and the results of such pilots be discussed with representatives of the 
business community before the final version is decided by the CBS. 

81.  Once  the  IT-situation  has  been  improved,  the  CBS  should  invest  into  more 
modern forms of receiving data from companies than on paper. 

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2.6. Product and Dissemination Policies 
82. 
The  various  products  of  the  CBS  contain  tables  and  graphs,  as  well  as 
extensive  methodological  descriptions.  There  is  a  publishing  programme,  derived 
from the statistical programme, for each year, indicating the date of release, the title, 
and the geographical break-down for which data are made available. Furthermore, it 
is  indicated  whether  the  publication  is  in  Croatian  language  only,  or  whether  it  is 
bilingual English/Croatian (which is the case for about 20%, but the English titles and 
the  description  of  the  publications  that  are  only  available  in  Croatian  are  given  in 
English in the publication programme). The whole list of publications for one year is 
impressive.  By  including  the  date  of  release,  it  serves  also  as  advance  release 
calendar for all subject areas (not only for the indicators of the SDDS).  An additional 
advance  release  calendar  for  SDDS  indicators  can  be  found  on  the  website  of  the 
CBS. 

The two flagship products, the statistical yearbook and the monthly statistical 

83. 
report, contain also data (and descriptions) from other producers. 

84. 
All publications since 1998 have been made systematically available not only 
in printed form, but also as electronic documents on diskette (statistical yearbook and 
monthly  statistical  report  also  on  CD).  The  publication  programme  is  also  available 
on the website of the CBS, together with a short description of the CBS, the statistical 
law,  some  basic  figures  for  each  subject  area,  and  some  information  on  the 
population  census  2001.  This  website  also  contains  links  to  websites  of  statistical 
organisations abroad. 

85. 
All  data  released  under  the  publications  programme  are  considered  official 
results,  based  on  article  38  of  the  statistical  law.  What  is  surprising  is  the  small 
number  of  publications  which  contain  results  broken  down  by  county  or  even 
municipality outside the population census, in spite of the fact that many surveys or 
administrative  records  from  which  these  results  are  calculated  are  exhaustive  and 
would  permit  in  principle  the  calculation  of  regional  break-downs  and  small  area 
statistics.  Users  are  referred  to  regional  offices  for  this  service,  but  as  it  has  been 
explained  under  2.2,  only  few  of  them  are  in  a  position  to  answer  to such requests 
efficiently. 

The CBS has a strict practice to limit its role to the presentation of facts, and 
86. 
to give the definitions and methodological backgrounds so that users can make good 
use  of  the  data.  The  CBS  has  deliberately  abstained  until  now  from  any  comment 
beyond  this  limit,  e.g.  by  highlighting  relationships,  explanatory  factors  from  other 
observations, implications etc. This is left to the user, including the media. The only 
exception is some comments on short-term indicators in industry. 

87. 
As a corollary of this policy, most figures are in the form of absolute figures, 
percentages of the table total, or indices/change to the previous period. There are not 
many  examples  of  indicators  where  numerator  and  denominator  are  taken  from 
different sources, which in many instances would allow more substantive comments 
than absolute figures and their variations over time. 

The  CBS  has  made  visible  its  new  emphasis  on  improving  dissemination  by 
88. 
creating  a  new  department 
Information  and 
in  1999  called 
Documentation".  In  the  same  division,  there  is  also  a  print  unit,  where  all  paper 
products (including forms) are printed. 

"Statistical 

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In the dissemination process, the CBS is strictly adhering to the fundamental 
89. 
principles  in  terms  of  simultaneous  release  to  all  users.  No  advance  information  is 
given to any outsider, with the possible exception of national accounts data which are 
discussed with experts from a research institute as an additional quality check before 
being released. 

90. 
As  a  novelty  in  Croatia,  the  new  dissemination  unit  has  started  a  user 
satisfaction survey by adding a questionnaire to the statistical yearbook. The results 
where positive, indicating a high level of satisfaction by users with the products of the 
CBS, with some useful comments added. 

91. 
There are regular products for media. Every week on Wednesday, there is a 
product  prepared  for  media  focusing  their  attention  on  one  particular  recent  finding 
(presently with short-term economic indicators only). These releases are available on 
Internet as well (in Croatian and English). Press conferences, where journalists and 
CBS staff meet, are used only at occasions other than the dissemination of results, 
e.g. for the population census. 

92. 
The perception by the CBS is that media are not so much interested in factual 
information, but more on issues which can be used as criticism against an authority 
or a well-known organisation, and for that reason do not give adequate  coverage to 
CBS  findings.  As  an  exception,  one  radio  channel  has  a  good  report  every  time  a 
new release is made by the CBS. 

As regards tailor-made services for additional tabulation, the policy of the CBS 
93. 
is to fulfil all demands which can be satisfied with existing microdata, irrespective of 
the additional workload caused and irrespective of who the user is. Another service is 
sending tables as photocopy by fax or (if they exist on diskette) by e-mail. 

94. 
In  terms  of  pricing,  all  government  institutions  and  local  governments  are 
entitled to one copy of a publication free of charge. Without compensation are tailor-
made  services  for  government  bodies  in  terms  of  additional  tabulation  or  tables  by 
fax or e-mail, except for some very few examples (see 3.5). All other users have to 
pay  for  all  types  of  products/services  A  series  of  subscriptions  exist  for  regular 
products. The price level for both publications and services is very low and does not 
cover the additional cost of dissemination. Everything on the website is free of charge 
for everybody. 

95. 
The  CBS  dissemination  unit  acts  as  the  one-stop  shop  for  CBS  data  and 
metadata for all users. It distributes the work internally, but avoids that users have to 
turn to different services of the CBS to receive the information they request. This unit 
also captures all requests directed to for further analysis. 

As  explained  under  2.2,  some  regional  offices  produces  their  own  booklets 

96. 
with regional data that are, except for census data, not produced by the CBS. 

97. 
A visit to the CBS library has shown that it is the custodian of a long history of 
statistical  reports,  dating  back  to  the  Austro-Hungarian  monarchy.  It  has  many 
international statistical publications and products from other countries for users, but it 
fails  to  have  a  systematic  collection  of  publications  from  other  national  producers 
such as the National Bank. Users from outside can ask for a specific publication, but 
there  is  no  easy  way  to  find  out  what  is  available in the library for an outsider. The 
premises  do  not  invite  to  consult  publications  on  the  spot,  nor  allow  they  easy 
browsing.  There  are  no  screens  available  by  which  visitors  can  access  information 
electronically.   

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Assessment 

98. 
The  creation  of  a  new  division  concerning  dissemination  has  brought  some 
important  improvements  in  dealing  with  users  and  their  requests  for  products  and 
services  as  the  main  contact  in  the  CBS.  The  publication  programme  gives  a  very 
good overview for users what they can obtain, to what price, and in which form. 

99.  Given that the CBS has proven that such a horizontal service is feasible and 
effective, it should extend its scope to cover all official statistics, and not only those 
from the CBS. Other producers should be encouraged to announce their publications 
so as to be included in the publications programme, and to systematically provide the 
CBS  dissemination  unit  with  copies  of  their  documents  in  electronic  format  (and  on 
paper  for  the  CBS  library).  This  would  allow  this  service  to  act  as  a  one-stop 
shopping  not  only  for  the  CBS,  but  for  the  statistical  system  as  a  whole.  Some  of 
these data from other producers are available at the CBS anyway for inclusion in the 
statistical yearbook and in the monthly statistical report. 

100.  Another  element  where  such  an  extension  to  the  whole  system  should  be 
carried out is the transmission of statistical results to international organisations. As 
is  the  case  for  requests  to  the  CBS  today,  all  requests  concerning  official  statistics 
from  other  producers  should  first  go  to  the  CBS  dissemination  unit,  which  would 
either fill them with published data and metadata that is already available at the CBS, 
or if this is not possible, forward them to the competent specialists in other agencies 
for completion. After completion, all transmission should be channelled back via this 
CBS  unit  as  well,  which  will  set  up  a  complete  register  of  such  transmissions.  The 
only exceptions are regular transmission of the same set of data by other producers, 
which can be made directly by other producers in their field of competence once it is 
fixed  which  published  official  data  would  be  used  for  this  purpose,  and  once  this 
direct  procedure  has  been  approved  by  the  dissemination  unit  of  the  CBS  as  is 
stated  in  the  statistical  law.  This  approval  has  to  be  renewed  when  the  request 
changes  in  content,  or  when  other  national  series  will  be  used.  When  a  request 
concerns more than one producer, the CBS dissemination unit should be in charge of  
ensuring the transmission of the overall package of data. In this context, the overall 
co-ordination  for  the  SDDS  reporting  should  come  back  to  the  CBS,  as  well  as  the 
corresponding role with respect to the WHO. 

101.  These positive remarks about dissemination as such being made, one major 
problem lies in the content of the products. The major gap is the lack of explanatory 
comments  beyond  methodology  and  definitions.  While  the  reasons  for  the  CBS  to 
fully 
have  been  extremely  cautious  so 
understandable  in  the  partisan  political  and  media  environment  of  the  country,  it  is 
important to realise that this cannot be a sustainable product policy for a future where 
the  CBS  wants  to  improve  its  status  and  become  a  state  body  which  is  visible  and 
relevant. 

to  comments  are 

far  with  respect 

102.  There  is  international  consensus  that  the  principle  of  impartiality  does  not 
allow a producer of official statistics to include any comment of a policy-prescriptive 
nature. There is a wide range of possible comments below this threshold, however, 
which  go  further  than  giving  methodological  information  on  definitions  and  survey 
methods, or tell the story of tables in words.  

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Indicating whether this change is positive, negative or ambivalent (if such a value 

This middle ground covers the following: 
-  Highlighting the most important finding of a new release; 
-  Using main indicators in each area to compare between regions or countries, or 
between groups, as well as over time if the denominator has changed as well; 
- 
judgement is broadly accepted e.g. through articles in the constitution); 
-  Relating the findings of a table to other tables and other sources; 
-  Distinguishing between statistical artefacts and true reflection of the reality; 
Indicating possible retrospective causes of a development or of differences if they 
- 
can be substantiated by facts (not necessarily from the same survey, and even not; 
necessarily  from  statistics).  It  is  especially  important  to  highlight  developments 
caused by unique events in order to tell the user that he should not extrapolate them 
to the future; 
-  Eliminating certain causes by simple and comprehensible quantitative techniques 
such as age-standardisation, seasonal adjustment etc; 
- 
been the case in the recent past; 
In  general,  warning  the  user  about  interpretations  for  which  the  data  are  not 
- 
robust enough or for which there is no factual evidence (methodological notes alone 
are not sufficient in this respect). 

Indicating  possible  impacts  on  other  indicators,  if  it  can  be  shown  that  this  has 

103.  The major benefit of gradually including such comments in all subject areas is 
increased relevance, and as a consequence increased visibility. Most users have to 
be  guided  in  what  statistical  results  mean,  and  the  agency  which  is  responsible  for 
producing the result is best placed to know the limits of interpretation and therefore to 
draft and publish this type of comments. There are cases where government services 
have  asked the CBS for additional explanation when new results are released. The 
policy  proposed  here  is  that  such  comments  are  prepared  regularly  in  advance  of 
such requests, disseminated with the release and made accessible to everybody and 
not only to government services. If a public debate starts about such comments, it is 
a positive sign of relevance, even if some government services would have preferred 
not to have seen an open debate. If during such a debate, erroneous interpretations 
were  to  be  made,  the  CBS  should  not  hesitate  to  use  the  right  of  public  correction 
guaranteed in the Fundamental Principles. 

104.  The  CBS  is  encouraged  to  gradually  prepare  this  change  in  policy  by 
formulating  a  clear  policy  (with  explicit  boundaries),  training  staff,  setting  up  a 
horizontal committee where such comments should be cleared, and by fixing the first 
areas  where  this  new  policy  would  be  implemented.  A  particularly  visible  example 
would  be  the  population  census,  since  it  produces  results  for  many  subject  areas. 
The population census has the additional advantage that its data collection has been 
highly publicised, so that its results will potentially find more attention than those from 
any  other  source.  In  any  case,  the  change  in  the  product  policy  should  be 
accompanied  by  active  promotion  activities  of  the  CBS  towards  media,  especially 
with the radio channel mentioned above, and be carried out in parallel to the general 
change  process  so  as  to  make  the  role  of  official  statistics  an  issue  of  media 
attention. Some thoughts should be given to the possible creation of a forum where 
the CBS meets regularly representatives from the media. 

105.  A  further  advantage  of  including  such  types  of  comments  is  the  staff 
motivation.  This  is  so  called  "value-added"  work  which  requires  high  professional 
skills,  combining  statistical  and  subject  matter  knowledge,  and  is  not  routine  work 
even if done regularly. If a statistical office cannot cover this part of highly visible and 
relevant  work,  it  risks  to  be  left  with  data  collection  and  data  processing,  types  of 
work  which  are  perceived  by  policy-makers  and  the  public  (and  by  staff)  as  much 

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more of a routine job, and which requires much less professional skills. Even if this 
perception is partially wrong, it can have a devastating impact in terms of importance, 
status,  resource  allocation  and  level  of  wages  in  a  statistical  office,  reinforcing  the 
downward spiral mentioned above. 

106.  Comments of the above type should also be added to the weekly releases of 
short-term  economic  indicators  beyond  industry.  This  is  an  important  form  of 
dissemination to the wider public, and all releases of new findings in any subject area 
should be accompanied by such a short document with the main tables, graphs and 
carefully  written,  but  substantive  comments.  Methodological  explanations  can  be 
added as a box which will remain the same over time  except when the methodology 
changes. These short documents should be available both on Internet and on paper 
free of charge. 

107.  The main tool for answering specific user requests by the dissemination unit is 
the  collection  of  two-dimensional  tables  in  electronic  (spreadsheet)  format.  As  long 
as the amount of detail published is limited, this may be good enough, but even when 
this  continues,  a  growing  number  of  years  may  soon  make  this  form  of  organising 
data  very  cumbersome.  It  is  therefore  recommended  to  start  a  project  designed  to 
create a truly multi-dimensional output database, where all these data are not stored 
in  forms  of  documents,  but  as  a  series  of  multi-dimensional  cubes  interrelated  by 
common metadata. It is proposed that such a project be started in close co-operation 
with a leading foreign NSI in this area. 

108.  An output database as proposed above would open the possibility to include 
many  break-downs  that  are  not  published  today,  especially  those  at  county  and 
municipal  level.  This  would  have  the  important  advantage  to  alleviate  much  of  the 
burden  of  today's  tailor-made  tabulations,  by  preparing  a  broader  set  of  tables 
regularly for the output database from which detailed results can be extracted easily 
on  the  request  of  a  specific  user.  An  output  database  would  also  change  the 
definition of official statistics from what is published on paper to what is contained in 
the output database. 

109.  An  important  issue  related  to  a  future  output  database  is  to  what  extent  it 
should  be  accessible  via  Internet,  and  which  should  be  the  conditions  of  access. 
More and more countries offer all results by Internet free of charge, provided the loss 
of  revenue  is  compensated  by  the  government  in  another  form.  In  any  case,  the 
basic absolute figures and indicators in each subject area should be available free of 
charge on Internet to everybody. 

110.  An  output  database  with  rich  content,  which  is  accessible  via  Internet,  will 
have consequences on other forms of dissemination and on tailor-made services. It 
will not be necessary any more to publish all data from the output database on paper 
and  on  diskette,  in  addition  to  having  them  accessible  on  Internet  as  part  of  a 
database  and,  for  the  major  results,  as  part  of  the  short  documents  available  on 
Internet and on paper at the time of release. Each additional product will have to be 
justified in terms of user needs, and priced in such a way as to cover the additional 
cost of manufacturing it. 

111. 
It  is  likely  that  additional  paper  products  will  be  more  issue-  than  survey-
oriented,  integrating  results  from  different  sources  on  the  same  issue  and 
accompanying  them  with  substantive  comments.  This  is  an  additional value that an 
output database in itself cannot provide. The present policy of each survey having its 
own product should only be kept for the short documents of the first release, but not 
necessarily  for  additional  products.  In  order  to  be  able  to  include  regional  break-

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downs  in  another  form  than  huge  tables,  the  CBS  should  acquire  the  capacity  to 
produce  thematic  maps.  High  volume  tables,  such  as  regional  breakdowns  from 
census or long time series, are not suited for paper products. If there is a need for an 
additional  product  in  addition  to  making  these  data  available  as  part  of  the  output 
database, the CD should be considered first. 

112.  An  additional  element  linked  to  an  output  database  is  the  coherence  and 
integrity  of  data,  especially  in  the  case  of  multiple  sources.  This  will  be  discussed 
under 3.3. 

113.  The future policy of handling tailor-made services should also be considerably 
simplified by an output database. Nevertheless, a policy of unlimited services of this 
type will not be sustainable, especially if these services are not charged. This would 
be an invitation for users equipped with modern IT not to use the Internet to access 
their data, but to ask for transmission in another form which requires resources from 
CBS  staff.  A  policy  on  services  should  be  formulated  which  takes  into  account  the 
relationships  between  the  various  forms  of  dissemination.  One  aspect  that  should 
deserve  more  attention  is  to  train  frequent  users  in  accessing  the  database  on 
Internet.  Only  occasional  users  would  be  eligible  for  receiving  extracts  from  the 
database  made  by  CBS  staff.  Requests  for  tabulations  that  cannot  be  found  in  the 
database would be free up to a certain limit only; beyond this limit, the client should 
have to pay the extra use of time of CBS staff.   

2.7. Relations with the Central Government 
114.  The CBS tries hard to find out about user needs of government services when 
revising  the  statistical  programme.  This  is  done  through  a  series  of  bilateral 
discussions. The CBS goes very far in servicing clients from government in terms of 
extra tabulations and extra explanations. 

115.  There are however few occasions for the senior management to carry out the 
"antenna"  function  of  a  statistical  system.  This  consists  of  being  present  as  an 
observer  in  important  high-level  inter-ministerial  policy  groups.  The  reasons  for  the 
CBS being included at high level are multiple: first to receive a very early information 
on future information needs as consequence of future changes in policies (the policy-
makers themselves are rarely aware of the impact on their decisions on information 
needs)  in  order  to  start  discuss  the  implications for the statistical system at a more 
technical  level,  leading  finally  to  a  modification  of  the  statistical  programme.  If  this 
cannot  take  place,  such  requests  risk  to  be  made  at  too  late  a  moment,  with  the 
consequence that the statistical system is considered to be ineffective or irrelevant. 

116.  Secondly,  through  being present in policy discussions at high level, the CBS 
representative  may  feed  the  forum  with  the  most  relevant  statistics  that  can  be 
produced  at  a  given  moment,  in  a  much  better  way  than  if  this  has to be mediated 
through  other  persons.  This  allows  the  CBS  to  show  the  usefulness  of  official 
statistics, which contributes to the status and to a positive perception. If this does not 
take  place,  aides  of  policy  makers  in  ministries  will  make  their  own  selection  of 
available data, combine them with other sources, and even modify the official results 
for preparing decisions by their ministers with the CBS being completely unaware of 
it.  This  will  have  the  effect  that  important  decisions  are  made  without  taking  the 
utmost  advantage  of  available  statistics.  The  effect  is  even  worse  if  the  statistical 
office does not have regular access to all government documents in order to check 
the statistics used therein; this is not the case for the CBS, however, but the CBS has 
no  capacity  for  a  systematic  check  of  all  documents  to  which  it  has  access  along 
these lines. 

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117.  As  an  example,  the  CBS  has  not  been  associated  in  the  drafting  of  the 
Stabilisation  and  Association  Agreement  with  the  EU.  Had  this  been  the  case,  it 
could have alerted the government on the implications of an article in this agreement 
that  asks  Croatia  to  come  up  with  regional  GDP  statistics  in  a  short  future;  this 
resource intensive operation has not been foreseen in the statistical programme.  

118.  With one exception, the figures of the CBS have not been openly questioned 
by government users. This exception refers to GDP figures, where the Deputy Prime 
Minister  published  his  own  version  after  the  CBS  had  released  its  estimates.  As  a 
result of the subsequent debate, the government decided that the CBS figures were 
to be the official ones. What is more frequent is that ministers use their own sources 
rather  than  CBS  figures  when  preparing  for  a  decision,  without  giving  any  reasons 
why the CBS figures are perceived as inadequate. 

119.  The  director  of  the  CBS  is  present  when  the  government  meets  on  the 
statistical programme and on the retrospective report about the achievements of the 
past  year.  He  meets  the  prime  minister  about  once  a  month,  but  access  to  other 
ministers,  including  the  minister  of  finance,  is  irregular.  When  horizontal  issues  are 
discussed  at  government  level,  notably  the  budget,  there  is  nobody  who  would feel 
committed to speak for or defend the specificity of the CBS. As a consequence, the 
CBS  has  recently  been  the  object  of  cuts  in  salaries,  and  horizontal  organisational 
measures  are  decided  without  examining  beforehand  whether  they  make  sense  for 
the CBS or not. 

Assessment 

120.  Although  the  CBS  tries  to  do  its  best  to  take  into  account  the  information 
needs of the central government, and provides many important services, this has not 
resulted  in  a  sufficient  understanding  of  the  role  of  official  statistics  and  the 
prerequisite for an effective functioning from the part of the central government. The 
CBS  is  de  facto  considered  as  a  body  which  cannot  contribute  to  decision-making, 
nor help to implement decisions which have been taken. Although a statistical office 
should  not  have  a  direct  voice  in  such  decisions,  its  role  as  preparing  essential 
factual information should deserve more credit and more attention at high level. 

121.  One reason why the CBS has de facto no spokesman at government level is 
that  reporting  of  the  director  general  is  split  between  the  Prime  Minister  (for  the 
statistical  programme)  and  the  Minister  of  Finance  (for  budget).  In  other  countries, 
reporting  is  either  to the Prime Minister or to a Minister in all matters going beyond 
the  professional  independence  of  a  statistical  office,  and  it  is  suggested  that  this 
solution be implemented for Croatia as well. Only in this way can one member of the 
government  feel  a  kind  of  responsibility  for  the  CBS.  This minister would also have 
the  right  to  make  a  proposal  to  the  government  concerning  the  appointment  of  the 
director  general  of  the  CBS.  When  choosing  the  Minister  to  which  the  CBS  should 
report  in  the  above  sense,  care  should  be  taken  to  select  a  Ministry  which  has 
information needs for a broad spectrum of subject areas; if a Ministry is chosen which 
has  very  detailed  information  needs,  but  concentrated  on  a  few  subject  areas  only, 
there  is  a  potential  conflict  of  interest  in  terms  of  priority  setting.  Ministers  with  the 
broadest use of statistics are either the Prime Minister or the Minister of Finance. 

122.  As a further step to strengthen relationships with the central government, the 
CBS  should  be  systematically  included  as  observer  in  all  inter-ministerial  policy 
groups, for the reason given above. This task should be shared between the general 
director,  the  deputy  director  and  the  assistant  directors  of  the  CBS.  If  this  can  be 

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achieved,  and  if  the  responsibility  at  government  level  for  the  CBS  can  be 
concentrated  on  one  minister  as  suggested  above,  it  would  not  be  necessary  any 
more  for  the  director  of  the  CBS  to  be  present  personally  when  the  government 
discusses  the  statistical programme. This presence reduces the commitment of the 
Minister  to  identify  with  this  programme,  and  could  also  lead  to  an  erroneous 
perception of the CBS director being part of the government. 

123. 
It  is  recommended  that  the  CBS  assigns  the  task  of systematically checking 
all government documents with respect to any statistics contained in such documents 
to one unit. If inclusion in inter-ministerial groups as above is realised, an important 
part of this job is already carried out by the CBS representatives in such groups. But 
there is a need for a horizontal check in addition. Such checks should be carried out 
at  an  as  early  stage  in  the  preparation  of  such  a  documents  as  possible,  so  as  to 
allow  the  CBS  to  "educate" the responsible ministry about the proper use of official 
statistics. It is important that the other parts of the administration see this role of the 
CBS as a service which is in their interest, and not as a bureaucratic control. This will 
also lead to a gradual increase of understanding what official statistics throughout the 
top levels of he administration. 

2.8. Relations with Local Governments 
124.  Except for the organisation of the population census, there are no regular or 
institutionalised  contacts  between  the  CBS  and  local  governments  (which  until  now 
have  been  funded  completely  from  the  budget  of  the  central  government).  Where 
counties  of  cities  are  in  need  of  statistical  work,  they  have  turned  to  the  regional 
statistical  offices  which,  from  an  administrative  point  of  view,  depend  on  them.  The 
CBS  is  not  involved  in  such  statistical  work  other  than  as  a  source  of  data  from 
censuses. 

125.  The situation is likely to change, however, with the reform of the public sector. 
Local  governments  at  various  levels  will  get  more  competencies,  and  their  role  as 
user of statistics is certain to increase. The statistical system will have to prepare an 
answer on how best to respond to this group of users in the future. 

Assessment 

In  its  present  form,  the  regional  offices  are  unlikely  to  deliver  effective 
126. 
statistical  services  for  local  governments.  The  way  the  production  of  regional  data 
outside censuses (and outside the few other cases where the statistical programme 
provides explicitly for regional output produced at national level) is left to the initiative 
and the capacity of each county, and the decentralised way such data are produced 
if  a  regional  office  is  equipped  to  carry  out  this  task,  is  highly  unsatisfactory,  both 
from  a  user  point  of  view  and  in  terms  of  the  efficiency  of  the  system  and  the 
coherence and accessibility of the results. It is therefore recommended that as part of 
the  restructuring  of  the  regional  offices,    production  of  regional  data  should  be 
centralised  at  the  CBS,  and  regional  data  should  be  produced,  where  the quality is 
sufficient,  for  the  entire  territory  of  the  country.  Only  in  this  way  can  be  made  sure 
that the results of the regions add up to the country total. A further advantage would 
be that duplication of data entry would come to an end. 

127.  The  main  future  role  of  regional  offices  should  be  to  serve  local  users,  of 
which local governments are the most important. For this function, they need to have 
access  to  the  whole  data  stock  of  the  CBS.  Until  the  necessary  infrastructure  is  in 
place, the CBS will have to take over the role of servicing local governments officially. 
A  first  step  would  be to produce publications (and diskettes) with regional data and 

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thematic maps, and to include more regional data on the website,. A second step is 
to assign the task of servicing this group of users to one unit (dissemination), so that 
local governments can be given the service of a one-stop contact in the CBS. When 
an output database as described in 2.6. will be operational and communication links 
will  be  improved,  the  regional  offices  can  start  functioning  as  local  antennas  for 
servicing  local  users  and  offering  a  physical  point  of  access  for  the  local  public 
(including a library and screens from which the output database can be accessed). 

[2.9. Relationship with Other Providers of Official Statistics: Grouped together 
with 2.2] 

2.10. Access to Administrative Records 
128.  The statistical law is somewhat contradictory with respect to the access of the 
CBS to administrative records in other parts of the administration. According to article 
15, such an access would have to be explicitly included in the statistical programme, 
otherwise  there  is  no  obligation  for  the  administrative  unit  to  grant  access.  On  the 
other hand, article 17 gives the CBS the power to issue standards for record keeping 
concerning administrative records which can be used as data sources for statistics. 
Article 22 goes even further; the CBS (and even other national statistical bodies) can 
require  holders  of  administrative  records  to  collect,  as  part  of  their  regular  data 
collection,  information  that  is  important  for  statistical  use,  but  only  of  secondary 
importance for the primary use. 

129.  De facto access to administrative records has been examined for the following 
sources:  customs  data  for  foreign  trade  statistics;  administrative  records  of  the 
Institute  of  Payments  Transaction;  data  from  the  Pension  Fund,  and  the  register  of 
unemployed from the Croatian Employment Bureau. 

130.  The  co-operation  between  the  Customs  office  and  the  CBS  in  foreign  trade 
statistics is excellent. CBS receives all raw data by the 5th of each month based on 
the single administrative document. The CBS is responsible for all data processing, 
including  data  entry  and  coding  This  activity  is  mentioned  in  the  statistical 
programme. 

131.  The Payment Agency, which is affiliated to the Central Bank has a huge stock 
of data concerning transactions of both private and public legal entities, since it still 
has  some  kind  of  monopoly  in  this  respect.  In  addition,  it  collects  also  all  accounts 
from  private  legal  entities  on  an  annual  basis,  for  statistical  purposes  only.  The  tax 
authorities  have  access  to  the  first  data set at the micro level; and the CBS for the 
second for the use in business statistics and in the business register. The Payment 
Agency  will  loose  the  monopoly  for  transactions  carried  out  by  private  legal entities 
(in  this  sector,  it  will  have  to  compete  with  commercial  banks  in  the  near  future), 
whereas the activity concerning transactions of public bodies will go to the Ministry of 
Finance. The future of the accounts data from the private legal persons is left in the 
vacuum  for  the  time  being;  for  the  CBS,  it  is  very  important  that  this  data  source 
continues to be available. 

132.  The  Pension  Fund  data  (compulsory  Pension  Fund  for  all  employees)  are 
used by the Pension Fund to produce employment statistics, which are transmitted to 
the  CBS  on  an  aggregate  level  for  adaptation  to  the  activity  nomenclature  and  for 
subsequent  publication.  The  CBS  has  not  asked  so  far  for  having  access  to  the 
microdata.  Earnings  data  from  this  source  are  considered  to  be  of  doubtful  quality 
and are therefore not used for official statistics. 

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133.  Concerning the registered unemployed, the Employment Bureau publishes the 
absolute  numbers,  whereas  the  CBS  publishes  unemployment  rates  with  the 
registered  unemployed  as  numerator  and  the  employment  of  legal  entities  from  its 
quarterly business survey  as denominator. The function of placement of registered 
unemployed  will  be  privatised  in  the  near  future;  the  impact  of  this  change  on  the 
availability and quality of the raw data are unclear at this moment. 

134. 
In  general,  CBS  staff  has  reported  difficulties  in  getting  enough  information 
from these agencies about data quality. Some, like the Health Insurance Fund, have 
even refused to transmit microdata, and have objected to a corresponding change in 
the statistical programme. The attitude in many agencies is that official statistics is a 
nuisance, and that in-house input required for statistics be kept to a minimum. 

Assessment 

135.  Both the legal and the de facto situation concerning access to administrative 
records and the division of work between holders of such records and the CBS are in 
need  of  improvement.  The  present  situation  is  not  transparent,  in  many  cases 
inefficient,  and  has  a  high  risk  to  come  up  with  contradictory  figures  from  different 
sources being published as official results. 

136. 
In  legal  terms,  the  revision  of  the  law  should  introduce  a  general  right  of 
accessing  administrative  data  records  for  the  CBS  for  statistical  purposes,  the 
updating  of  statistical  registers  included.  There  should  not  be  any  possibility  of 
objecting  such  transmission  of  data  (e.g.  by  requesting  that  they  are  explicitly 
included in the statistical programme, to which an agency can object). The only case 
where  government  approval  may  be  useful  for  legitimacy  is  when  identifiers  like 
names, addresses etc are included in the data to be transferred to the CBS. Such an 
article in the law would be more helpful than the present article on setting standards 
for keeping administrative records, which is very difficult to implement. 

137.  On  the  other  hand,  articles  17  and  22  of  the  present  law,  which  have  never 
been used in practice, should be dropped and replaced by an article that guarantees 
the CBS the right to be consulted before changes in administrative records and data 
collection are decided, or before new systems of administrative records or registers 
are created. It is important that the CBS can get its voice heard in time, but a decisive 
role  for  the  CBS  (or  any  other  statistical  body)  concerning  data to be collected and 
stored for administrative purposes goes too far. Such decisions (e.g. declaring NACE 
Rev.1 mandatory for all administrative records) will have to be made by government 
or the competent administrative body, and using other laws as main justification. Also 
from the confidentiality point of view, the CBS should not be seen in the public as an 
agency that pushes for more data to be collected for administrative purposes. 

follow  certain  rules,  notably  concerning 

138.  Statistics  generated  from  administrative  records  are  only  official  statistics  if 
transparency  of  methods  and 
they 
independence. In addition, they have to be more than simple counts of administrative 
activities or events. They should have a meaning for a socially relevant phenomenon; 
if  not,  they  cannot  be  considered  as  official  statistics,  even  if  the  methods  for 
calculating  the  results  are  perfectly  transparent.  This  requirement  excludes  that the 
CBS  publishes  aggregates  calculated  by  other  bodies  as  official  statistics  if  they 
cannot access the microdata in order to ensure that the rules of official statistics have 
been respected. 

139.  Two  major  possibilities  exist  for  the  relationship  between  a  holder  of 
administrative records and the CBS. The first is like the foreign trade case, where the 

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CBS is the responsible producer. Data entry can be done either by the administrative 
agency or the CBS, but all subsequent processing,  commenting and dissemination 
are entirely in the hand of the CBS. In this scenario, the CBS cannot give back any 
microdata  to  the  holder  of  administrative  records.  It  has  therefore  to  provide  good 
quality and efficient statistical services to this administrative body in order to convince 
this body that entrusting the CBS with the production and dissemination of statistics 
is  not  only  a  good  way  for  serving  official  statistics,  but  also  a  good  way  for  being 
served as a user of their own data. 

140.  The  second  possibility  is  that  the  administrative  agency  sets  up  a  statistical 
unit  and  acts  as  a  producer  of  official  statistics,  with  full  respect  of  all  fundamental 
principles of statistics, and with the CBS having the right to access all microdata for 
any checks or any additional tabulation and analysis it seems fit. Data dissemination 
can be either made by the first producer (with prior approval by the CBS, see below), 
or by the CBS on behalf of the first producer, but it is the first producer who bears the 
full  responsibility  as  a  producer  of  official  statistics.  If  a  holder  of    administrative 
records  is  reluctant  to  take  over  this  role  (because  it  has  obvious  resource 
implications),  the  CBS  has to fill the gap and act as a producer on the basis of the 
first solution outlined above. 

relevant  units  or 

transactions  are  outside 

141.  The  advantage  of  administrative  records  is  their  exhaustiveness  within  the 
scope  defined  by  the  relevant  rules.  The  disadvantage,  however,  is  that  the  scope 
defined  is  in  most  cases  smaller  that  the  scope  statisticians  would  like  to  see, 
because  some  statistically 
the 
administrative  scope.  The  boundaries  of  what  is  covered  by  administrative  records 
may change over time, and thus produce statistical artefacts. Furthermore, there may 
be problems of timeliness and updating. Whenever administrative data are used for 
official statistics, it is important to clearly define their role in the whole context of all 
data sources, especially in comparison to results obtained from statistical surveys. It 
is only the CBS which can carry out this delicate task, and this is the reason why the 
second  solution  mentioned  above  requires  a  prior  approval  from  the  CBS  about 
which results from an administrative source can be considered as official statistics. In 
the first solution, this decision is internal to the CBS, but it is important that it is made 
explicitly  and  in  an  organised  way.  This  essential  role  of  the  CBS  should  become 
visible in the revised law, where it should be explicitly stated that it is up to the CBS, 
and  not  to  any  other  body,  to  decide  which  are  official  results  when several figures 
are produced. 

142.  To illustrate this by an example: if employment and unemployment data exist 
from a labour force survey (which is statistically the most comprehensive concept) on 
an  annual  basis,  these  data  should  be  given  highest  visibility.  Data  from  other 
sources can fill the gap for quarterly or monthly data, or for breakdowns for which the 
sample size of the labour force survey is too small. In any case, the CBS should stop 
publishing  an  official  unemployment  rate  with 
the  present  numerators  and 
denominators;  it  should  use  the  labour  force  survey  rates  instead,  and  for  monthly 
figures  of  the  unemployed  only  the  absolute  figures  and  the  percentage  change  to 
previous  periods  should  be  released  as  official  statistics.  The  same  holds  for  the 
employment  figures  from the quarterly survey of legal entities, as long as coverage 
cannot be broadened to other types of enterprises. 

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3. Description of the CBS 

3.1. Mission, Internal Organisation 
143.  As mentioned earlier, there is no mission statement as such for the CBS. The 
website includes a short description of the activities, but it cannot be considered as a 
mission statement 

144.  The internal organisation was based on 10 divisions, 5 of them with production 
functions  in  broad  subject  areas,  and  5  with  supporting  functions.  It  was  valid  until 
early  June.  Each  division  is  sub-divided  into  3 to 7 units (departments). In addition, 
there  are  two  units  directly  subordinated  to  the  general  director,  one  of  which  is 
dealing with international relations. 

145.  There  is  traditionally  a  strong  emphasis  on  the  formal  organisation  and  the 
respect of the hierarchy. This is part of the administrative culture in Croatia. Each job 
has a very detailed job description. 

146.  The  major  decision-making  body  in  practice  is  the  board  of  the  general 
director,  the  deputy  director  and  the  assistant-directors.  It  meets  once  a  month  or 
more  frequently  if  necessary.  For  daily  decisions  at  corporate  level,  notably  with 
respect to finances, there is a smaller group (director general plus assistant director 
in charge of legal, finance, accountancy and general administration plus department 
heads for accountancy and procurement). 

147.  As  part  of  a  recent  decision  applicable  to  the  whole  administration,  all  units 
must  have  a  minimal  size  of  at  least  9  persons.  This  has  lead  to  the  necessity  of 
redrafting  the  organisation  chart  in  some  areas,  since  the  majority  of  the  present 
units  were  below  this  threshold.  In  the  new  organisation  chart,  the  number  of  
divisions  has  been  reduced  to  8  (4  production  and  4  support),  with  another 
production unit on agricultural statistics directly subordinated to the director general. 
This latter unit is meant to become a department of its own at the occasion of a later 
reorganisation. 

Assessment 

148.  The  present  structure  reflected  in  both  organisation  charts  requires  a  high 
degree  of  co-operation  between  divisions.  As  outlined  in  3.6,  this  seems  to  be  the 
case, in spite of the strong emphasis on hierarchy. Given that this works effectively, 
there is no substantive reasons why the organisation valid until June 2001 chart had 
to be changed. In addition, even the very recent chart will only last for a limited time, 
given that other important decisions (future of the regional offices) will have to made 
in the near future. 

149.  The following comments can be made concerning both organisation charts: 
Legal  and  personnel  issues  are  combined  in  the  same  unit.  As  an  effect,  the 
- 
legal  capacity  will  be  absorbed  by  legal  problems  related  to  personnel  issues,  and 
has  not  enough  time  for  statistical  and  data  protection  legislation  and  their 
implementation,  or  on  systematically  checking  draft  legislation  for  their  conformity 
with  the  statistical  law.  It  is  therefore  suggested  that  these  two  functions  be 
separated. 
-  There  is  no  unit  in  charge  of  issues  concerning  the  whole  statistical  system 
(except  for  the  two  publications  where  data from other producers are included, and 
for the unit on the statistical programme). In order to show that this function is taken 

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up  by  the  CBS,  one  unit  should  be  designed  to  be  in  charge  of  all  systemic  issues 
other than dissemination. This function might be combined with either legal issues or 
the statistical programme, but the systemic issues go beyond legal issues or formal 
checks  and  cover  a  lot  of  substantive  ground  as  well.  Unlike  the  old  organisation 
chart,  it  is  not  clear  in  the  new  one  which  unit  is  in  charge  of  the  statistical 
programme. 
-  Staff resources should be freed for the project of changing the statistical system 
(see below under 3.2). 

150.  The  possible  restructuring  of  the  regional  offices,  with  some  compensating 
increase of the CBS staff (and other parts of the budget), will have a more important 
effect  on  the  internal  organisation    At  this  occasion,    any  implications  from  a  new 
legal  base  on  the  internal  organisation  should  also  be  taken  into  account.  It  is 
proposed  that,  once  the  parameters  for  the  new  law  and  the  future  of  the  regional 
offices  are  clarified,  a  mandate  for  an  outside  expertise  on  organisation  and 
management  of  the  CBS  be  formulated  and  carried  out  as  the  main  basis  for 
deciding  on  this  issue  in  the  longer  term.  The  two  basic  options  for  organising  a 
statistical  office,  i.e.  by  subject  area  plus  support  functions,  or  by  stages  in  the 
production  process  (data  collection,  transformation,  dissemination,  plus  support 
functions), should be analysed carefully as part of this expertise. Such an expertise 
could  also  be  used  as  credible  argument  for  the  CBS  to  be  exempted  from  certain 
organisational measures imposed on the whole administration. 

3.2. Planning, Programming and Priority Setting 
151.  The main description of the planning and programming process is given under 
1.3. The present chapter deals with priority setting within the CBS. 

152.  With  the  exception  of  assistance  from  UK  and  Germany,  Croatia  has  not 
received  any  funding  from  international  donors  for  its  statistical  activities  until  now. 
The great majority of the activities of the statistical programme had to be funded from 
government  sources  only.  These  were  sufficient  to  carry  out  all  activities  of  the 
programme  until  1999  approximately,  but  this  has  not  been  the  case  since  and  is 
unlikely to be the case in the future. 

153.  Given that the statistical programme has legal force, the CBS feels obliged to 
carry  out  all  activities  of  the  programme  to  a  certain  degree  in  spite  of  insufficient 
funding, trying to adhere to all characteristics of each activity listed in the programme, 
including  the  deadlines.  In  doing  so,  compromises  had  to  be  made  on  aspects  not 
prescribed  in  the  programme,  such  as  the  production  of  detailed  break-downs,  the 
commenting,  and  sometimes  quality  and  documentation.  An  aspect  which  suffers 
particularly is the ex-post evaluation of surveys in terms of data quality, comparisons 
with  other  sources  and  relevance  for  users,  since  the  same  resources  have  to  be 
immediately  used  for  carrying  out  other  surveys.  Another  implication  was  a  lack  of 
resources  for  reflecting  about  horizontal  issues  not  explicitly  mentioned  in  the 
statistical programme such as the "focal point" role for other producers, the future of 
the statistical system and the revision of the law. 

154.  This  spirit  of  adhering  to  the  statistical  programme  is  not  only  felt  for  the 
implementation  of  a  given  programme,  but  also  when  setting  up  the  subsequent 
programme.  The  CBS  policy  has  been  not  to  propose  the  abolishment  of  existing 
surveys,  but  to  adapt  each  survey  to  international  standards (which may lead to an 
extension  of  the  coverage  or  the  content,  or  to  changes  in  definitions  and 
classifications used), and to introduce new surveys in addition to the existing stock of 
surveys  only  if  resources  could  be  freed  without  threats  to  the  content  of  existing 

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surveys. The reason for this policy was that dropping a survey would lead to a loss of 
information which is very difficult to compensate later.   

Assessment 

155. 
It is important that this implicit rather than explicit approach to priority setting 
be  broken  and  replaced  by  a  an  approach where dropping existing surveys are not 
only  a  theoretical  option,  and  where  changes  in  resource  allocation  can  be 
implemented  in  the  statistical  system  without  spreading  resources  too  thinly  over 
many activities. 

156.  As a first step, a temporary unit, directly subordinated to the general director, 
should  be  set  up  for  steering  the  change  project of the statistical system described 
above.  It  is  important  that  staff  is  used  for  this  purpose  with  enough  experience  in 
official  statistics.  The  gaps  they  leave  in  other  units  should  be  filled  with  the 
compensation to be expected from the restructuring of the regional offices. This unit 
would in the first instance have to set up the strategic master plan, but it would also 
have to co-ordinate the steps mentioned below concerning the setting of priorities for 
the new statistical programme. 

157.  Concerning the preparation of the new statistical programme from 2004, a list 
of key statistics and key indicators with multi-purpose use, indicating periodicity and 
major breakdowns strictly necessary for multi-purpose use, should be established, in 
terms  of  output  and  independently  of  any  consideration  about  surveys  or  sources. 
These  outputs,  together  with  infrastructure  and  horizontal  activities  such  as 
dissemination,  IT,  monitoring the system or the statistical business register listed in 
the strategic master plan, should in future have the highest priority and be save from 
any cuts in the case of insufficient resources. 

158.  Bilateral talks with main users of detailed statistics will be carried out in order 
to find out what they need and what use of the data they have made until now. These 
discussions should again focus on output, and not on ways of data collection. 

159.  Next,  both  categories  of  information  needs  (multi-purpose  and  specific)  will 
have  to  be  bundled  in  such  away  as  to  be  able  to  be  assigned  to  specific  data 
collection  activities,  be  they  statistical  surveys  or  administrative  records,  or  a 
combination of both. This is a complicated, iterative process. It should not take as a 
start the present set up of many parallel surveys, but try to come up with a reduced 
set of data collections with optimal bundling on information needs. 

160.  Cost will have to be estimated and allocated for each category of output, and 
between  items  of  the  second  category  of  outputs  for  each  major  client.  The  clients 
will be told that the implementation of their specific needs over and above the basic 
programme from 2004 onwards will depend on a co-funding from their own budget; if 
this will not come forth, the corresponding activity (and the corresponding parts of the 
data collection activities) will be dropped from the programme, as a clear difference 
to the policy followed until now. 

161.  For  the  period  up  to  the end of 2003, the surveys in the responsibility of the 
CBS  should  be  classified  into  whether  they  are  an  input,  either  directly  or  indirectly 
(e.g. via national accounts), to an output falling into the first category, or whether they 
lead exclusively to output falling into the second category. For the latter, no products 
should  be  prepared  any  more  except  a  database  with  aggregates.  At  the  date  of 
release  announced  in  the  statistical  programme,  a  simple  message  would  be 
disseminated that the results of this survey are available on request as service. The 

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main  client  of  these  data  should  be  given  a  copy  of  the  database  (checked  for 
confidentiality  problems)  so  that  he  does  not  have  to  turn  to  the  CBS  for  servicing 
any more. The publication programme for the years 2002 and 2003 would have to be 
changed in order to take into account the new dissemination policy by which not all 
surveys will result in paper publications any more as is the case until now. 

162.  Should, in spite of the additional resources given, and in spite of the reduction 
in  dissemination  for  certain  specific  surveys,  total  resources  still  be  insufficient  to 
carry  out  the  change  project  and  the  remaining  part  of  the  statistical  programme, 
major clients of the specific survey category should be approached with the message 
that  without  financial  contribution  from  their  side,  the  survey  they  are  interested  in 
may be in danger even before 2004. 

163.  Finally, the new statistical programme from 2004 onwards should have a clear 
link  to  resources.  Deciding  on  the  statistical  programme  would  also  mean  securing 
the resources for carrying out these activities, with the only proviso of changes to the 
budget in the Parliamentary debates, and with the exception of censuses which are 
the object of special laws (but which nevertheless should be included in the statistical 
programme). 

164.  A system of monitoring cost of each programme element in the new statistical 
programme  has  to  be  in  place  at  the  beginning  of  2004  at  the  latest.  Presently,  no 
such cost information exists. 

165.  A  strategy  for  activities  to  be  financed  from  international  donors  should  be 
worked  out  as  soon  as  possible.  As  a  general  rule,  such  funds  should  not  finance 
regular  activities  of  the  first  category  such  as  data  collection;  only  the  transition  or 
initial  set  up  cost,  or  other  investment  type  of  expenditure  in  areas  such  as  IT  or 
databases.  International  funds  can  also  be  used  for  data  collection  of  the  second 
type, if they are derived from an international obligation such as articles on specific 
projects in the forthcoming Stabilisation and Association Agreement with the EU. 

3.3. Monitoring Quality in all Activities 
166.  The  intrinsic  quality  culture  of  the  CBS  staff  is  very  high  and  has  a  long 
tradition. Response rates and accuracy is monitored in most cases, and results are 
checked  for "strange effects" before release. The same holds for response rates in 
surveys: if an important company is outstanding, the company is called several times 
by  telephone,  reminding  them  that  participation  is  mandatory  by  law.  Some  quality 
parameters are published. 

167.  The inclusion of logical checks for inconsistencies in the processing software 
acts  as  a  further  measure  of  quality  assurance.  In  some  instances,  the  Dutch 
software BLAISE is used. 

168.  Timeliness  as  one  important  parameter  is  very  good;  the  golden  rule  is 
respected in most cases. Dates of release are fixed in the statistical programme, and 
they  are  published  further  in  the  publication  programme  and  the  advance  release 
calendar on Internet. 

Assessment 

169.  Due  to  the  gap  between  statistical  programme  and  resources,  the  extent  of 
work  devoted  to  quality  management  has  suffered  somewhat  recently,  but  without 
any major impact on output and perception so far. More serious is the fact that it is 

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more or less left to each unit to do what is possible in terms of quality, and this may 
lead  in  the  future  to  very  diverging  quality  standards  between  subject  areas  and 
surveys. This divergence will be amplified through the fact that the IT used in some 
areas does not allow for logical checks to be built in (e.g. in agriculture, where this is 
made with office automation tools). It is therefore suggested that, as another element 
of the change project, explicit quality standards be fixed, and procedures be defined 
and  implemented  by  which  quality  will  be  monitored  in  a  roughly  homogenous  way 
across  the  office  (the  procedure  part  should  be  taken  up  in  the  management 
expertise).  Explicit  quality  standards  which  are  public  are  also  important  when  a 
release  deadline  cannot  be  kept  for  reasons  of  insufficient  quality;  otherwise,  the 
perception of political interference, disguised as quality issue, may be created. 

170.  One  aspect  in  the  quality  discussion  that  has  been  neglected  so  far  is  the 
consistency  of  figures  between  different  sources.  The  policy  that  each  survey  (or 
administrative  source  used  for  statistics)  has  to  come  up  with  its  own  product  has 
contributed  to  different  figures  being  released  by  the  CBS  on  the  same  topic.  The 
extensive methodological notes which accompany each release may explain, for the 
expert  user,  why  this  difference  exists,  this  is not enough for other users, however. 
As suggested in 2.10, in such cases the most comprehensive figure should be given 
most visibility and officially designated as the official result: additional sources should 
only be used either as provisional figures, or for official results of breakdowns which 
are  not  available  from  the  more  comprehensive  source  (with  some  comments 
explaining into what extent the distribution might differ between the two sources). The 
present  publications  should  be  examined  on  whether  they  contain  such  type  of 
incoherence, especially the two flagship publications and the key figures on Internet. 
Conceptual  differences  should  always be reflected in a different terminology; this is 
another element that is in need of being examined across various surveys and data 
collections (e.g. in the case of "employment"). 

[3.4.Organisation of Large-Scale Surveys: to be found under B2] 

3.5. Finance and Budgeting 
171.  The  budget  of  the  CBS  has  to  follow  the  general  rules  of  the  budget  for  the 
central government. It is divided into four categories; regular staff, purchase of goods 
and  services  (including  for  travel);  statistical  surveys  (i.e.  temporary  staff  in  form of 
interviewers,  enumerators  or  controllers),  and  investment  (e.g.  equipment).  The 
allocation of each of these categories to various statistical activities is determined by 
the general director. A maximum of 5% can be transferred from one budget category 
to  another  (except  for  the  first  category,  where  the  staff  number  and  the  level  of 
remuneration is completely fixed). 

172. 
In using its budgetary funds, the CBS has to submit to the minister of finance 
every month a detailed list if items for approval to be spent in the subsequent month. 
Once  approved,  this  turns  out  to  be  a  straightjacket  for  the  micro-management  of 
financial resources the implementation of which creates many small problems which 
require lot the attention of the general director. 

In addition to the regular budget, the CBS has two sources of funds: 

173. 
-  Receipts from the sales of products and services; the total sum is moderate (less 
than  4%  of  total  expenditure),  and  the  most  important  item  in  this  respect 
(approximately  half)  is  due  to  services  from  the  administrative  business  register 
which will soon be transferred to another body. 

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International  funds:  very  low  until  now.  This  source  can  be  used  for  financing 
- 
equipment,  foreign  experts,  purchase  of  goods  (including  travel)  and  even  for 
employing temporarily local experts under a special contract, but not for regular staff. 

174.  Transfers  of  credits  between  ministries  and  public  bodies  like  the  CBS  as 
payment for services are possible. The CBS has made use for extensive tabulation 
and analytical work in very few cases, but not for financing data collection activities. 

175.  Unused  credits  at  the  end  of  the  year  are  lost.  There  area  no  multi-annual 
credits where the allocation to single years can be determined by the director. 

176.  Whereas  the  absolute  level  of  expenditure  for  the  CBS  in  2000  has  shown 
some  increase  if  compared  to  1997,  in  relative  terms  (as  share  of  the  total 
government  budget),  its  share  in  2000  (0.074%)  has  seen  a  clear  decrease  as 
compared to 1997 (0.097%). Compared to 1999, the year 2000 shows an important 
decrease in expenditure that cannot be explained by activities which were planned to 
be reduced in 2000. 

Assessment 

177.  The  present  system  of  financing  and  budgeting  is  rather  traditional,  and  far 
away from concepts of new public management. It is unrealistic, however, to expect 
a profound change in the near future, since this would mean a change of the system 
for the whole administration. 

178.  When  revising  the  statistical  law,  thoughts  should  be  given  to  replace  the 
monthly  approval  by  the  ministry  of  finance  by  following  cost  for  items  of  the 
statistical programme month by month in a transparent way. This would diminish the 
burden of the director caused by trying to be in line with the monthly list of approved 
spending, while at the same time being effective and flexible. 

179.  The present budget seems to be somewhat unbalanced. The three categories 
other than permanent staff are small indeed, and this is a major obstacle in making 
improvements of a horizontal nature (because this requires investment). The budget 
item  for  temporary  staff  is  too  limited  for  carrying  large-scale  surveys  that  are  not 
repeated every year, such as the population census. 

180.  For non-regular activities such as projects for new surveys or databases in the 
set-up  phase,  the  statistical  law  should  open  the  possibility  of  multi-year  credits 
decided at the same time as the statistical programme is approved. The allocation of 
these credits by year should be in the competence of the director, but would have to 
be  included  in  the  regular  budget.  This  possibility  would    also  be  applicable  to 
censuses decided on the base of special laws. 

181.  The decrease in the relative share of total government expenditure compared 
to 1997, and the substantial decrease compared in both absolute and relative terms 
to  1999,  are  signs  that  the  recognition  of  the  importance  of  the  CBS  by  important 
decision-makers is at risk.  

3.6. Staffing, Staff Recruitment and Training 
182. 
In 2000, the CBS had 390 persons as regular staff. 77% are women, and 42% 
have a university degree. The average age is 41; there are relatively few people who 
are  close  to  retirement.  Contrary  to  the  overall  budget  allocation,  the  number  of 
permanent staff has shown an increase from its 1997 level (354). 

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183.  Fluctuation is higher than in other parts of the administration, due to a level of 
salaries which is perceived as discriminating against the CBS as compared to other 
parts  of  the  administration.  The  reason  for  this  apparent  discrimination  are  twofold: 
firstly, the general director of the CBS is ranked below its counterparts in the public 
sector,  which  causes  all  ranks  below  to  have  a  similar  gap  to  their  respective 
counterparts, and secondly, the system of coefficients used for ranking each job has 
been  changed  recently  to  the  disadvantage  of  staff  with  a  degree  in  statistics,  with 
the consequence that more than half of the CBS staff will see their salaries cut in the 
near  future.  A  further  sign  of  negative  incentives  are  the  relatively  high  rates  of 
absence for various reasons.  

184.  Recruitment of qualified staff to replace those who leave is affected negatively 
by  this  salary  structure  as  well.  In  addition,  there  is  a  regulation  by  which  priority 
should  be  given  to  employ  veterans  or  staff  made  redundant  in  other  parts  of  the 
public  sector;  as  a  consequence,  the  CBS  had  to  engage  staff  it  would  not  have 
recruited on purely professional criteria. If there is a gap between one person leaving 
a job and a new person taking it over, the CBS has the competence to hire temporary 
staff during this period, but normally the time is too short for such persons to become 
really effective. 

185.  Promotion  is  not  automatic  after  a  certain  number  of  years  of  service,  but 
dependent  on  merit  and  individual  appraisal.  It  is  furthermore  constrained  by  the 
limits of the overall budget for permanent staff. 

186.  50%  of  the  staff  are  able  to  express  themselves  in  English.  This  rate  will 
increase further, since knowledge of English is a must for new staff, and existing staff 
will  continue  to  attend  training  in  English.  However,  there  are  presently  not  enough 
opportunities to speak English for most of the staff, with the consequence that they 
do  not  feel  sufficiently  free  to  express  themselves  in  professional  meetings.  During 
the  visit  of  the  expert,  a  professional  interpreter  has  been  present  in  almost  all 
sessions,  and  most  of  the  CBS  staff  preferred  to  express  themselves  in  their 
language. 

187.  New staff is sent to various departments to get a feeling of what the CBS is. 
The  rest  is  on-the-job  training  at  the  post.  There  is  no  specific  training  programme 
organised  by  the  CBS  in  official  statistics,  and  there  are  no  texts  which  would 
translate  the  fundamental  principles  or  the  statistical  law  into  rules  of  behaviour  for 
staff. 

188.  There are good internal communication channels, mainly through Intranet. It is 
used  to  disseminate  methodologies,  international  documents  etc.  Everybody  has 
access  to  Internet;  because  of  the  very  limited  possibilities  to  attend  international 
meetings,  this  is  the  major  source  of  information  about  international  statistics  for 
many. There is a regular internal newsletter as well. 

189.  Due  to  the  general  culture of emphasising hierarchy, delegation of decisions 
about professional issues is limited. The behaviour is such that whenever there is a 
doubt,  the  superior  is  consulted  for  advice,  even  where  formally  this  would  not  be 
necessary. 

190.  Direct contacts between staff of different units for exchanging information on 
professional matters exist, mostly when support and subject matter units have to co-
operate on a project or for preparing a product or service, or when other subject area 
units  are  consulted  when  a  new  survey  is  started.  The  time  staff  can  devote  to 

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projects  of  other  units  is  limited,  however,  due  to  the  work  overload  caused  by  the 
statistical  programme.  The  division  of  responsibilities  between  support  and  subject 
area divisions is clearly laid down in internal rules. 

191.  Job  rotation  is  almost  completely  absent. It is considered inefficient because 
there is a phase of getting acquainted with the new job during which the person could 
be fully effective in his old job. 

192.  Staff from the CBS has up to now had very few opportunities to contact their 
counterparts  from  other  countries,  and  to  follow  international  training  courses.  The 
only  exception  for  the  latter  are  courses  organised  by  the  US  Bureau  of  Labour 
Statistics. TES courses have been closed to Croatia so far. Between 1995 and 1997, 
EUROSTAT  meetings  were  closed  to  participants  from  Croatia  as  well.  After  1997, 
the  CBS  has  received  some  invitations  to  EUROSTAT  meetings,  but  could 
participate only exceptionally because it is not eligible for travel cost to be reimbursed 
by  the  EU.  Meetings  organised  by  UN/ECE  (of  which  Croatia  is  a  member)  can  be 
attended only when there is some UN funded assistance. 

193.  The CBS is very interested in regional co-operation with NSIs from countries 
of  the  region.  It  has  bilateral  agreements  with  Slovenia  and  FYROM,  and  requests 
from  Bosnia  and  Herzegovina  and  from  Montenegro  to  sign  similar  agreements. 
Requests for technical assistance were received from the Kosovo administration. But 
study visits to neighbouring countries are a heavy financial burden for the CBS. 

Assessment 

194.  Quality and motivation of staff are a key factor for an effective statistical office, 
and  both  are  threatened  in  the  case  of  the  CBS  if  the  present  trend  continues.  An 
area where the situation is particularly serious is IT. Investing in new staff is always 
costly,  and  a  high  fluctuation  rate  is  a  serious  loss  of  human  capital  into  which  the 
organisation has invested. 

It is imperative that the CBS professional staff can benefit from the same level 
195. 
of  working  conditions  as  e.g.  professional  staff  from  the  Central  Weather  Agency. 
Whatever regulation has to be changed to achieve this, this should be done quickly. 
If no other solution is feasible at short notice, some articles in this respect would have 
to be included in the revised statistical law. 

196. 
It is also important to have some additional incentives for regular staff, in order 
to  pay  complements  to  basic  salaries.  Involvement  in  international,  regional  or 
bilateral work may be the only realistic possibility, and any administrative obstacles to 
use funds from international donors for regular staff working on such projects should 
be  removed  as  soon  as  possible.  The  CBS  should  also  work  out  a  clear  policy  for 
attending  international  meetings,  training  courses  set  up  by  the  EU  and  for 
implementing the bilateral agreements with neighbouring countries in anticipation of 
the possibility of receiving much more external funding. 

197.  Senior  management  should  be  encouraged  to  set  up  permanent  horizontal 
committees  with  executive  power,  e.g.  for  certain  aspects  of  dissemination such as 
comments,  confidentiality  issues,  or  preparing  questionnaires  for  surveys.  Only 
borderline cases should be given to the hierarchy for decision. This would reduce the 
burden  of  the  hierarchy  caused  by  insufficient  delegation,  and  foster  corporate 
culture and identification with other areas of the CBS among staff at the same time. 

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198.  Staff  should  be  encouraged  to  make  use  of  their  competency  in  making 
professional  decisions,  and  at  the  same  time  encouraged  to  discuss  professional 
issues  with  colleagues  who  can  contribute  in  substance,  and  not  only  with  their 
supervisor  or  members  of  the  same  unit.  A  book  of  rules  should  be  established  by 
which  the  impact  of  the  fundamental  principles  and  of  the  new  statistical  law  is 
explained. 

199.  Further  measures  should  wait  for  the  expertise  on  management  and 
organisation suggested under 3.1 

200.  A training programme on official statistics should be set up, for both new and 
existing staff. Regular language training organised for the whole administration may 
have  to  be  complemented  by  language  training  in  small  groups  for  key  staff  of  the 
CBS. 

3.7. Information Technology 
201.  Presently, the CBS has two platforms: an IBM mainframe with terminals, and 
a NT client/server network with PCs. Data entry and data processing is mainly done 
on  the  IBM  platform,  on  the  base  of  tailor-made  applications  for  each  survey 
produced in-house. The IT division, including the central unit in charge of data entry, 
has 109 persons (52 in data processing/data entry). It is by far the biggest of the 10 
divisions. 

202. 
In terms of tabulation and analysis, SAS is the most frequently used software, 
with  subsequent  treatment  of  the  tables  in  the  dissemination  unit  for  improving  the 
layout. Some subject areas are limited to tools which are part of the office automation 
package for both data entry and tabulation. 

203.  The  expert  was  given  an  example  of  a  very  user-friendly  application  for 
managing  a  survey  of  road  transport,  with  data  entry  and  logical  checks  built  in. 
Questionnaires are identified with bar-codes, and when a questionnaire is returned, 
this  is  immediately  registered  by  optical reading of the bar-code before entry of the 
variables  as  such  starts  This  application  runs  on  the  new  client-server  platform;  it 
was  built  up  with  the  assistance  of  the  UK.  Introduction  of  this  application  has 
allowed  the  unit  in  charge  to  reduce  the  number  of  staff  dealing  with  the 
administration  of  this  survey  considerably.  For  weighting  and  tabulation,  the 
microdata set is handed over to the methodology unit. 

204.  The expert was given a document entitled: Information System Development 
Strategy  of  the  CBS.  The  main  objective  in  this  paper  is  to  get  away  from  the  two 
parallel  platforms,  and  to  gradually  migrate  applications  from  the  mainframe  to  the 
client/server  environment.  It  mentions  also  the  move  to  database  technologies 
(absent  until  now  as  described  under  2.6),  and  makes  reference  to  the  Sundgren 
model.  Another  book,  which  exist  only  in  Croatian,  are  rules  to  be  observed  for 
developing new applications (or adapting existing ones). 

205.  The  budget  item  on  equipment  has  shown  a  decrease  in  recent  years.  This 
has also affected the IT equipment. Migration will therefor be a rather long process. 
Another  difficulty  already  mentioned  is  the  high  turnover  of  IT  specialists,  who  find 
more competitive jobs elsewhere. 

206.  Office automation is at good standard across the whole office. 

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207.  Whereas  IT  tools  for  charts  exist,  CBS  is  poorly  equipped  for  displaying 
statistics  in  the  form  of  thematic  maps.  This  is  of  special  importance  for  the 
dissemination of census results. 

208.  There is no outside access to any CBS data other than the limited amount of 
information available on the website. Regional offices are not connected to the CBS, 
either with respect to office automation, nor for exchange of data. 

Assessment 

209.  The  objective  mentioned  in  the  development  strategy  is  right,  and  the 
Sundgren  conceptual  model  is  a  good  choice,  but  the  ways  and  means  to  achieve 
these  objectives  are  not  spelt  out  in  a  way that a well managed process of change 
could be started. The implications of such a change go beyond IT, and this process 
cannot be left to IT only. Furthermore, the resource implications are nor estimated at 
all. The time frame given for some elements are far too optimistic. 

three  parts  of 

210.  More  operationally, 
the  statistical  process  should  be 
distinguished  for  the  future  IT  strategy.  Data  entry/data  processing  up  to  the  final 
micro  data;  tabulation/analysis  up  to  the  final  results;  transformation  of  final  results 
into products and their dissemination. Some recommendations on the last part have 
already been given under 2.6. 

211.  Most  of  the  present  IT  resources  go  into  data  entry/data  processing  on  the 
mainframe. It is very important to organise the migration from the mainframe in such 
a way that the IT side can be managed with a small number of persons. This requires 
flexibility  in  the  applications,  so  that  statisticians  can  incorporate  changes  in 
questionnaires,  or  changes  in  the  classifications/coding,  without  having  to  ask  IT 
specialists for adapting tailor-made programmes. It is equally important that there are 
uniform documentation rules for what statisticians do when entering data, editing and 
processing  them,  and  especially  for  the  final  microdata  which  are  the  result  of  this 
processing,  and  which  should  be  open  to  use  not  only  for  the  responsible  unit,  but 
under an authorisation procedure to be defined also for staff from other units. 

212.  The  present  example  in  the  transport  area  is  certainly  a  very  good  one,  but 
such  developments  in-house  for  other  surveys  do  not  seem  possible.  Other  areas 
can just dream of such solutions: they are either stuck with relatively rigid mainframe 
solutions,  or  they  have  built  up  something  on  their  own  in  the  client-server 
environment  by  simply  using  office  automation  tools.  The  latter  is  a  particularly 
frequent  solution  for  surveys  with  a  small  number  of  respondents.  The  number  of 
successful migrations to an application on the new platform that uses true production 
environment and not only office automation is therefore rather small up to now. This 
is also caused by a severe lack of qualified IT specialists. 

213.  Since  experience  has  been  gained  with  the  Blaise  software  from  the  Dutch 
CBS, it is recommended to ask the Dutch again for helping with setting up a model 
for this part of the new IT environment, and for how to manage the transition from the 
present situation. It would be economical to use their expertise to be advised also on 
the  other  parts  listed  above,  since  they  have  recently  developed  many  building 
blocks  for  a  modern  IT  environment  in  official  statistics.  Introducing  IT  tools  for 
managing surveys as in the case of the transport areas would free a number of posts 
that could be better used for other tasks within the CBS. 

214.  A  very  important  element  for  building  the  bridge  over  all  three  phases  of 
statistical work are metadata. Rules have to be established concerning metadata to 

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be  followed  by  all  statisticians,  concerning  both  micro-  and  aggregate  data,  and  on 
how various versions or variants of a classifications have to be managed. This should 
also  be  covered  by  the  same  expertise,  and  it  should  be  among  the  first  steps  of 
operational implementation, since all other steps are depending on it. 

215. 
In  view  of  opening  on-line  access  to  CBS  data  to  outside  users  as  part  of  a 
modern  dissemination  strategy,  the  capacity  of  the  communication  lines  should  be 
increased, and the present firewall should be upgraded so as protect micro-level and 
other confidential data from outside access while at the same time making access to 
the website and the output database from outside easier. 

3.8. Internal Monitoring of Performance 
216.  As mentioned in 3.6,  there is an annual appraisal for each person in the CBS. 
This is a well established and well functioning procedure. 

217.  The public sector reform has had an impact in terms of legislation by which it 
would be possible to introduce a performance-related component to the salary. This 
possibility has not found any implementation so far, and given the traditional culture 
in  the  administration,  it  is  doubtful  whether  any  use  will  be  made  at  all  of  this 
possibility. 

218. 
In terms of quality assessment of specific statistics, some parameters such as 
response rates are made public. The fact of carrying out satisfaction surveys of users 
of  a  certain  product  has  also  been  mentioned.  There  is  however  no  regular 
assessment  of  the  quality  of  an  output  by  using  a  checklist,  and  there  is  no 
institutionalised procedure for such a check. 

219.  So  far,  the  CBS  has  not  had  any  external  assessment  of  specific  statistics 
such as national accounts or CPI. The CBS would warmly welcome such evaluations 
by international experts. 

Assessment 

220.  As  part  of  the  overall  change  project,  checklists  and  procedures  for  quality 
management should be set up and gradually introduced as from 2004. 

It  is  highly  recommended  that  selected  key  statistics  be  the  object  of  an 

221. 
assessment by international experts, with national accounts as first priority. 

3.9. External Accountability 
222.  The  statistical  law  (article  18)  provides  for  an  annual  ex-post  report  on  the 
implementation  of  the  statistical  programme  to  be  submitted  to  the  Parliament. 
Beforehand,  this  report  is  submitted  to  the  government,  which  discusses  it  in  the 
presence of the director of the CBS. This is the major tool of external accountability 
concerning official statistics in Croatia. The report is accessible to the public. 

In a wider sense of accountability, transparency of all methods and definitions 
223. 
is  an  essential  part  of  good  practice  and  therefore  explicitly  mentioned  in  the  UN 
Fundamental  Principles.  In  this  respect,  the  CBS  has  a  very  high  standard.  All 
products  contain  extensive  methodological  descriptions  of  all  statistics.  This  is 
especially relevant for flagship publications like the statistical yearbook.. 

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Assessment 

224.  The  annual  ex-post  report  is  an  essential  tool  in  the  accountability  of  official 
statistics.  Its  content  could  be  improved,  however,  beyond  following  the  individual 
items  of  the  statistical  programme,  by  laying  more  emphasis  on  general  and 
horizontal issues. This would force the government, and the Parliament, to take note 
of possible threats to the system. 

225.  Should  in  future  the  statistical  programme  be  adopted  by  the  government 
instead  of  the  Parliament,  the annual ex-post report would be the only occasion for 
the  Parliament  to  discuss  substantive  issues  of  official  statistics.  It  is  therefore 
recommended  to  maintain  the  requirement  of  this  report  being  submitted  to  the 
Parliament (not for approval, but for taking note and discussion). 

226.  The present excellent practice of openness on methodologies could be further 
improved  by  cross-references  to  other  data  collections  when  a survey is described, 
and by making all this material accessible by Internet free of charge. 

4. Statistical Infrastructure 

4.1. Classifications 
227.  The  CBS  is  very  strict  in  the  respect  of  international  classifications.  NACE 
Rev. 1 has been declared mandatory by government decision for all official statistics 
with activity break-downs. Implementation has bot been completed with all producers 
outside the CBS. All other EU classifications are in use with the CBS, the Combined 
Nomenclature  with  respect  to  those  digits  which  are  identical  with  the  Harmonised 
System. 

228.  The only outstanding issue is the NUTS classification. The county level could 
be  used  as  NUTS  3,  but  there  is  presently  no  administrative  level  between  the 
country and the county levels. Such an intermediate level might be created with the 
reform of the public sector, but this has not yet been decided. 

[4.2. Registers; will be taken up under B4, B5 and B7] 

B. Technical Part: Capacity of Producing Statistics in Various 
Areas 

1. Assessment of the Overall Capacity 

229.  The  Croatian  system  of  official  statistics  had  a  very  difficult  period  after 
independence. At the same time when the public bodies for an independent country 
had  to  be  built  up,  parts  of  the  country  were  struck  by  war  and  unrest,  and  certain 
parts  of  the  national  territory  escaped  the  control  of  national  authorities  for  some 
years.  In  addition  with  the  transformation  to  the  market  economy,  this  situation 
caused  many  statistical  series  to  temporarily  loose  their  continuity,  with  the 
subsequent loss of comparability over time. 

230.  Once  the  control  over  the  whole  territory  was  re-established,  the  CBS  took 
great  care  to  restore  comparability  with statistics before independence, while at the 

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same  time  introducing  EU  classifications  and  standards.  The  policy  of  maintaining 
existing surveys wherever possible has been mentioned repeatedly, and this explains 
the relatively high number of surveys in the statistical programme. Managing all these 
surveys in parallel proves that the systems of data collection, from the organisation to 
the  field  work  and  to  the  data  processing,  is  capable  of producing a great range of 
statistics, although productivity gains are still possible. 

231.  With  192,  the  number  of  separate  surveys  is  on  the  high  side.  On  the  one 
hand,  it  proves  the  capacity  of  the  statistical  system  to  run  many  data  collection 
activities in parallel. On the other hand, a high number of separate surveys is prone 
to  the  risk  of  collecting  the  same  information  from  the  same  respondent  about  the 
same time period more than once, and the results from different surveys may be less 
easy  to  harmonise  or  even  integrate.  This  is  especially  the  case  with  business 
surveys.  It  is  therefore  suggested  that,  when  the  new  statistical  programme  will  be 
established,  each  survey  is  not  only  assessed,  as it is currently the case, one after 
the  other  for  possible  improvements  in  terms  of  user  needs,  respondent  burden, 
relevance  and  efficiency,  but  that  an  assessment  takes  place  for  categories  of 
surveys  grouped  together  from  the  point  of  view  of  a  possible  merger,  of  the  total 
response  burden  for  the  same  respondent  and  possible  duplications,  and  of 
coherence of the results. 

232.  The UK has funded a recent evaluation of the Croatian statistics with the EU 
statistical  programme  as  the  yardstick.  Compliance  with  EU  standards  has  been 
constantly improved, and this policy will be upheld by the CBS in the future, as from 
now on the explicit basis of the Stabilisation and Association Agreement. 

2. Capacity to Organise and Carry out Censuses 

233.  The  population  census  in  April  2001  has  been  carried  out  without  any  major 
problem  other  than  excessive  workload  for  CBS  staff.  The  key  preliminary  totals 
(resident population; households; dwellings) per county, municipality and settlement 
were  officially  released  end  of  May,  which  is  a  remarkable  achievement.  This  was 
due  to  the  excellent  preparation,  including  via  promotion  campaigns  in  the  media. 
The  organisational  capacity  of  the  CBS  was  stretched  to  its  limits,  with  most  of  the 
senior  staff  being  spread  over  the  country  for  approximately  two  months,  and  with 
production  for  annual  statistics  coming  to  a  virtual  halt  for  this  time  (with  obvious 
consequences on the timeliness of these results or the workload of the staff to catch 
up  in  these  areas).  In  addition,  there  was  a  long    phase  of  uncertainty  about  the 
financing. 

234.  Due  to  mainly  financial  problems,  no  other  censuses  have  been  carried  out 
since  independence (e.g. agricultural censuses). 

Assessment 

235.  For future censuses, it should be avoided that the rest of the production has to 
be  interrupted  or  delayed.  It  is  therefore  essential  that  censuses  are  included  in  a 
long-term  statistical  programme  with  the  resource  implications  clearly  spelt  out  as 
early as possible. In view of the present difficulties, the procedure of basing a census 
on  special  laws  to  be  approved  by the Parliament should be maintained, but only if 
passing  the  law  includes  the  securing  of  resources  at  the  same  time.  For  these 
reasons, the law on the agricultural census should be passed as soon as possible. 

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It is a good sign that the change of the population concept from a de iure to a 
236. 
de  facto  concept  which  will  be  implemented  with  the  population  census  has  found 
almost  unanimous  support  when  the  census  law  was  discussed,  since  this  will 
exclude many nationals who reside outside the country in a permanent way from the 
total population. This is a new base for the population statistics, and will require a lot 
of explanations when the first results will be released.   

3. Capacity to Produce Annual Population Statistics after the Population 
Census 

237.  Due  to  the  events  mentioned  earlier  after  independence,  the  current 
population estimates (not available on a regional level, but only for the country as a 
whole) are on a rather week basis. The figures from the 2001 population census will 
be the first good basis for a decade. They differ from the current estimates, not only 
because of the weakness of the present estimates, but also because of the change in 
the population concept. 

238.  Three  of  the  necessary  components  to  produce  current  population  statistics 
on an annual basis with the census as the starting point are in place: births, deaths, 
and internal migration. Everybody who changes residence in the country is required 
to register at the new place of residence, and this law is very well followed now. The 
ministry  of  the  Interior  is  in  charge  of  implementation,  and  provides  the  necessary 
data to the CBS. 

239.  The missing component is external migration, notably emigration. There is no 
legal  requirement  to  announce  a  departure  to  foreign  countries  to  any  authority. 
Since for many emigrants the length of stay abroad is uncertain, many of them prefer 
to keep registered in the case of early return home. 

240.  Concerning  immigration  of  non-nationals,  a  law  has  been  passed  which  will 
regulate the issue of work permits. This has not been implemented yet, but once this 
will be the case, this source is likely to be used in calculating the annual population 
updates. 

241.  The  present  practice  is  only  to take into account emigration and immigration 
which is announced to the authorities. It is evident that with this system, the annual 
estimates will have a tendency to be increasingly biased as time moves on. The next 
population census will only take place in 2011. 

Assessment 

242. 
It  is  recommended  to  include  in  the  labour  force  surveys  questions  on 
emigration and persons returning home from abroad. This is a matter of urgency in 
order to be able to have good estimates for all types of flows after the census date 
without any gaps in time. Tests should be made how the estimate for the emigration 
derived from this source can be allocated to counties (the sample size of the LFS is 
not  enough  to  have  regional  data).  Some  comparisons  with  migration  patterns  as 
shown in the population census may help in this respect. 

4. Capacity to Carry out Household Surveys 

243.  Household surveys on a sampling basis were a new feature to the CBS after 
independence. There are currently two such surveys: the labour force survey (LFS) 
with  a  sample  of  8500  households,  and  with  interviews  spread  over  6  months,  and 

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the household budget survey (HBS), with a sample of 4000 households spread over 
the whole year (divided in 26 periods of two weeks each). The response rate for the 
LFS is 84%, and for the HBS 82 %. 

244.  The  interviewers  used  are  either  permanent  staff  of  regional  offices,  or 
temporary staff hired by these offices. The CBS trains one person per regional office, 
who  is  supposed  to  train  all  staff  involved  at  his  or  her  regional  level  in  turn.  In 
addition, the CBS hires temporary staff as controllers. 

245.  Due  to  the  difficult  situation  after  independence,  the  previous  census  from 
1991  could  not  be  used  as  a  sampling  frame.  The  CBS  has  closed  this  gap  with  a 
rather ingenious method, by defining a selection of segments of settlements across 
the  country,  having  a  complete  census  of  dwellings  in  all  these  segments  which 
resulted  in  a  list  of  100'000  addresses,  and  using  this  list  as  a  sampling  frame.  In 
future, the list of the 2001 population census will be used, and it will be updated for 
new  dwellings  by  using  the  information  available  with  the  monopolist  provider  of 
electricity. 

Assessment 

246.  Provided that the access to the files of the electricity company by the CBS can 
be  put  on  a  safe  legal  basis  (which  is  not  the  case  presently;  this  data  flow  should 
therefore  be  mentioned  in  the  statistical  programme),  and  provided  this  company 
keeps its monopoly at least for private households, the future sampling frame seems 
to  be  of  a  sufficient  quality  for  official  statistics.  Scenarios  should  be  worked  out  in 
time, however, for the case of a full liberalisation of the electricity sector. 

247.  The  suppression  of  the  present  regional  office  proposed  elsewhere  would 
have some beneficial effects for the recruitment and training of interviewers, because 
this  could  be  done  centrally  and  in  a  homogeneous  way  for  the  whole  country.  It 
would  also  convey  more  confidence  of  respondents  about  their  information  being 
kept confidential. 

248. 
In view of the problem with unincorporated businesses in the area of business 
surveys  (see  below  B5),  household  surveys  are  the  only  way  to  fill  the  gap  until  a 
comprehensive  statistical  business  register  will  be  in  place.  In  order  to  render 
possible household surveys targeted to owners of unincorporated businesses outside 
agriculture,  it  is  suggested  to  extract  from  the  population  census  a  list  of  dwellings 
occupied  by  such  persons,  and  to  use  this  list  as  a  stop-gap  sampling  frame  to 
complement the existing business surveys. 

249.  A  similar  line  of  reasoning  is  valid  for  agricultural  holdings.  Since  presently 
there is no sampling frame for private agricultural holdings, and since the financing of 
the next agricultural census is not guaranteed, the population census should be used 
to  draw  up  a  list  of  farmers  for  use  as  a  sampling  frame  until  the  list  from  the 
agricultural census becomes available. This list would also be a safety measure for 
the worst case scenario of the agricultural census not being implemented at all. 

250.  Over and above the use of household surveys for  the LFS, the HBS, and for 
closing gaps in economic and agricultural statistics, household surveys have a high 
potential  of  being  used  in  other  areas  such  as  health,  education,  tourism,  transport 
etc. This can be carried out either by adding questions to existing household surveys, 
or  by  creating  additional  household  surveys  with  a  different  sample.  In  view  of  the 
new  structure  of  the  statistical  programme  as  from  2004,  information  needs  in  all 
subject  areas  should  be  collected  and  scrutinised  for  their  inclusion  in  household 

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surveys, so as to allow an efficient bundling of such needs into an interrelated set of 
household surveys. 

5. Capacity to Carry out Business Surveys 

251.  The  CBS  carries  out  a  high  number  of  business  surveys  in  industry  and  in 
services.  In  industry,  there  are  no  probability  samples.  Normally,  all  relevant  legal 
units  with  more  than  10  employees  are  covered  exhaustively  in  annual  statistics 
(more  than  20  for  monthly  and  quarterly  statistics  outside  prices).  The selection of 
units is made on the base of information from the tax administration. For the annual 
structural  business  survey  (limited  to  production  accounts  only),  all  legal  entities  in 
industry  and  services  are  included,  provided  they  are  active  in  terms  of  transaction 
according to the Payment Agency or the tax administration. 

In services, the branch with the highest number of businesses is retail trade. 
252. 
There  is  a  monthly  survey,  with  full  coverage  of  big  and  medium-sized  companies, 
and with a stratified probability sample of registered small legal entities. There are a 
high number of smaller surveys (ca. 50) in other parts of the service industry, e.g. in 
transport. 

253.  Although  all  surveys  are  mandatory,  some  surveys  have  a  response  rate  of 
70%  only.  Part  of  the  non-response  is  due  to  shifts  in  activity  of  companies  or 
cessation  of  activity  altogether  which  were  not  captured  in  the  address  list.  No  use 
has been made so far of the penalty provision in the statistical law against companies 
which refuse to comply. 

254.  Data  collection  is  normally  carried  out  by  regional  offices  sending  the  forms 
and  asking  companies  to  send  them  back  to  the  regional  office  concerned.  For  a 
predefined sample of units, regional offices keep one copy of the form and send the 
other  to  the  CBS,  where  data  entry  and  the  subsequent  steps  take  place.  For  the 
rest, the regional office keeps the forms and processes them for own production of 
regional data if it is sufficiently equipped to do so. 

the  annual  structural  business  survey  was 

255.  When 
the 
questionnaire,  although  reduced  to  the  production  account,  lead  to  substantial 
problems in data entry, coding and editing.  There was not sufficient time to train the 
staff for this new type of intricate questions. 

introduced, 

256.  Some  attempts  to  extend  the  coverage  to  unincorporated  businesses  have 
been made, notably in the service area. Information about the existence of such units 
is transmitted from the tax authority (VAT tax). Where such information exists, there 
are two results published: those for the legal entities, and those which include some 
unincorporated  enterprises.  Except  as  an  input  into  GDP,  no  extrapolation  of 
business  surveys  is  made  to  the  total  economy,  e.g.  by  using  the  total  number  of 
employed from the labour force survey. 

257.  The  CBS  currently  manages  an  administrative  business  register  of  legal 
entities. It cannot be used directly as sampling frame, because the CBS is not free to 
drop dormant units from this register. This register will be transferred away from the 
CBS, but no other public body has volunteered to host it until now. The government 
will  have  to  make  a  decision  not  only  on  the  principle  of  transferring  the 
administrative business register (this decision has been made), but also on who will 
take it over from the CBS. The CBS therefore uses administrative records from the 

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Payment Agency and from the tax authorities for its selection of units to be included 
in surveys, be it with or without a probability component. 

258.  There is a project of creating a statistical business register in the CBS, and a 
unit  has  been  created  in  the  organisation  chart.  The  work  up  to  now  has  been 
concentrated on examining all possible sources for building up and updating such a 
register, be they administrative or statistical. No operational solution has been found 
so far, however. 

259.  The  main  problem  is  in  the  unsystematic  nature  of  units  used  in  the  various 
sources.  Some  use  the  company  (legal  entity)  level,  some  use  the  local  unit  level, 
and  some  other  what  would  correspond  to  a  local  kind  of  activity  unit.  Merging 
information  based  on  such  a  variety  of  units,  without  knowing  how  a  company  is 
structured, is impossible. 

Assessment 

260. 
In spite of the impressive number of surveys carried out, and the impressive 
quantity of results produced by the CBS, the whole system of business surveys is not 
based  on  a  sufficiently  safe  ground  to  answer  the  present  and  future  information 
needs  in  a  market  economy.  This  holds  for  the  sampling  frame,  the  way  of  data 
collection,  and  the  transformation  into  official  results.  Furthermore,  the  present 
structure  of  unrelated  parallel  surveys  does  not  allow  sufficient  integration  and 
avoiding of overlaps, and it not sufficiently flexible to accommodate new information 
needs  in  any  other  way  than  adding  new  surveys  to  the  great  number  of  already 
existing ones. 

261.  A point of particular concern is the division of work between CBS and regional 
offices  concerning  data  entry  and  processing.  Some  of  the  data  obtained  from 
companies never get processed, and for some other units, data entry and processing 
is  done  in  parallel  at  national  and  regional  level,  with  subsequent  incoherence  of 
results. These functions should be completely centralised (see 2.8). 

262.  Concerning the statistical business register, the disparity of available sources 
are likely not to be a safe basis for building up a statistical business register with a 
homogenous starting point. It seems that the only way of having such a homogenous 
basis is an economic census. It is therefore suggested that an economic census be 
part  of  the  revised  statistical  programme  which  starts  in  2004.  Such  an  economic 
census should only be carried out, however, if the way how this basis is kept updated 
over time is determined and has been tested, both for legal and unincorporated units, 
and for both the enterprise and the local unit level. It is likely that this updating cannot 
be based on administrative sources only, and that additional statistical data collection 
will have to take place. It is suggested that the development of a suitable concept in 
this  respect  be  accompanied  by  an  expert  from  another  country  with  a  similar 
situation as regards the non-availability of reliable administrative sources. 

263.  The  statistical  programme  covering  the  years  from  2004  should  also  have  a 
completely  revised  set  of  business  surveys,  with  a  carefully  thought  bundling  of 
questions  and  a  reduced  number  of  surveys,  and  with  all  surveys, except for those 
on prices, being either exhaustive for a small population, a true probability sample, or 
a combination of exhaustive and sampling strata. This will have to be planned long in 
advance, and sufficient knowledge has to be acquired by the CBS to design such a 
new  system  of  business  surveys.  Information  needs  will  have  to  be  collected 
systematically  (including  those  derived  from  national  accounts),  translated  into 
operational terms and then assigned to the “best” way of data collection. 

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264. 
Interviewers and other staff involved in data collection should be better trained 
to  cope  with  the  issues  asked  in  the  respective  questionnaires,  and  to  be  able  to 
answer questions and queries from respondents. The use of more than one form of 
data transmission (mail) is likely to be necessary (electronic transmission). For price 
statistics, visits on the spot will still be necessary; the staff should be equipped with 
modern  means  of  capturing  the  data  and  transmitting  them  to  the  CBS.  This 
technique could be used in agricultural surveys. 

265.  The process of redesigning the whole system of business surveys should be 
carried  out  in  close  co-operation  with  representatives  from  the  business community 
(see  2.5).  Response  burden  should  be  taken  into  explicit  account  and  monitored 
regularly.  The  present  practice  of  the  same  company  having  to  report  to  different 
regional offices when it has local units in more than one county should be brought to 
an end. 

266.  The  only  measures  which  can  be  taken  before  the  new  system  wit  the 
statistical  business  register  will  be  operational  are  household  surveys  (see  B4)  and 
comparison of results from various sources, with the possibility of extrapolation to the 
total  economy  by  using  labour  force  survey  data  as  one  strong  option.  All  results 
should be scrutinised on whether they have the quality of results of official statistics 
in the way described for employment figures under 2.10. 

6. Capacity to Produce Data on Public Sector Activities 

267.  The  expert  tried  to  assess  the  capacity  of  producing  statistics  on  important 
public sector activities like education and health care, as well as on the public sector 
as a whole in terms of public finance statistics according to the new IMF manual. 

268.  The  CBS  is  in  charge  of  education  statistics.  It  does  not  encounter  any 
problems in obtaining the data from the various public bodies in this sector. Reporting 
about primary and secondary education level is only aggregate, however; there is no 
access  to  individual  files.  The  reporting  does  not  cover  expenditure.  Concerning 
R&D,  the  CBS  has  surveys  with  private  companies  and  with  universities,  but  no 
information on R&D carried out by government bodies. 

269.  The  situation  is  more  complex  in  the  health  area.  Official  statistics  is  split 
between  the  CBS,  the  Health  Insurance  Fund,  and  the  Institute of Public Health as 
the main provider of statistics about the health care system. This Institute also serves 
as the national focal point for the WHO for health indicators. It has not reflected on 
whether  the  indicators  it  transmits  to  the  WHO  are  official  statistics  in  terms  of  the 
statistical law or not. It has not been able either to include expenditure data, be they 
public  expenditure,  private  or  total.  Some overlaps in publishing mortality data exist 
between the CBS and the Institute, where the Institute codes the cause of death, but 
the CBS publishes the results. 

270.  The Ministry of Finance is the de facto producer of statistics on public finance 
and government debt. It is not mentioned either in the statistical programme, nor in 
the statistical law as a producer of official statistics. It issues a monthly bulletin. Much 
of the data processing is carried out in the Payment Agency, but at the request of the 
Ministry  of  Finance.  When  the  Payment  Agency  will  be  dissolved,  the  Ministry  of 
Finance will take over this processing work. 

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Assessment 

271.  Whereas  the  capacity  of  producing  educational  statistics  according  to  the 
rules of official statistics is satisfactory (with the important exception of expenditure), 
the  situations  in  health  and  public  finance  statistics  are  not.  It  is  less  a  question  of 
access to data created by the respective sectors of the public administration and the 
quantity  of  results  created  (here  with  the  exception  of  the  Health  Insurance  Fund, 
where the basic data could be used for statistics to a much greater extent),  but with 
respect to the standards of official statistics and the capacity to adapt to international 
standards. 

272.  The  problem  is  particularly  acute  in  the  area  of  public  finance,  where  a  new 
IMF  manual  with  new  concepts  (accrual  instead  of  cash)  and  new  classifications 
(COFOG)  should  be  implemented.  It  is  doubtful  whether  the  Ministry  of  Finance  is 
willing  and  capable  of  carrying  out  these  revisions,  and  of  organising  its  statistical 
activities,  now  spread  over  3  units,  in  a  way  which  is  compatible  with  the  UN 
Fundamental Principles. Since some indicators of public finance statistics are part of 
the  SDDS,  the  adherence  to  principles  like  simultaneous  dissemination  and 
professional independence have to be proven and not just assumed to be given. 

273.  As a first step, this area should be brought into the statistical programme as 
soon as possible. Since the Ministry of Finance is not mentioned in the statistical law, 
the only way of clarifying the legal situation in the short future will be to transfer the 
responsibility  in  this  area  to  the  CBS.  This  would  have  the  great  advantage  of 
ensuring that the principles are kept in this area, that results are produced not only 
for  public  finance  statistics  as  such,  but  for  national  accounts  and  for  expenditure 
components  in  areas  like  education,  health,  transport,  environment  etc,  which  are 
essential for increasing the relevance of indicators in these areas. 

274.  With respect to health statistics, the question of whether the Institute of Public 
Health is able and willing to act as a producer of official statistics in the true sense of 
the word should be clarified until the statistical programme starting with the year 2004 
will be set up. The implications of fulfilling this role in future must be clarified. If the 
Institute of Public Health is reluctant, the CBS would have to take over the production 
of  health  statistics  from  this  Institute.  The  Health  Insurance  Fund  should  not  be  a 
producer of official statistics in the future any more, but make its data accessible to 
the CBS for statistical purposes (making them accessible to the Institute would be a 
breach of statistical confidentiality, however). 

275.  One important aspect in deciding whether the Institute or the CBS should be 
the  main  producer  of  official  health  statistics  is  the  future  of  the  present  reporting 
system  of  health  care  institutions,  which  is  based  on  an  administrative  type  of 
reporting prescribed in another law. This type of reporting cannot be maintained for 
all  types  of units of health care providers if privately owned units will play a greater 
role in the health care system in the future. If private units were to gain in importance, 
data  collection  would  have  to  move  from  administrative  reporting  to  surveys  for 
purely statistical purposes, and the CBS would be the natural public body for carrying 
out  such  type  of  surveys.  The  CBS  should  in  any  case  take  over  the  overall  co-
ordination of this area, and the focal point role concerning transmission of statistics to 
international organisation, as is the case in other areas. 

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7. Capacity to Produce Agricultural Statistics 

276.  The present system of agricultural statistics is based on statistical surveys for 
state-owned  farms,  and  on  a  panel  of  private  farms  which  are  regularly  visited  by 
experts  who  are  neither  part  of  the  CBS  nor  part  of  regional  statistical  offices.  The 
CBS  is  in  charge,  however,  for  the  production  and  dissemination  of  agricultural 
statistics. The panel of private farms is of unknown representativeness (since there is 
no frame from which a sample could be drawn), and extrapolation of the results from 
this  panel  to  the  whole  territory  is  based  on  a  figure  of  535000  private  agricultural 
households in Croatia, derived from the combined population and agricultural census 
1991.  The  new  population  census  in  2001  will  allow  the  CBS  to  replace  this  figure 
with a more recent total which can be broken down by region, but there is no method 
so  far  by  which  this  total  can  be  updated  (the  Labour  Force  Survey  should  be 
examined for this purpose, at least at national level). 

277.  The  last  separate  agricultural  census  took  place  in  1964.  Since  then, 
population  and  agricultural  censuses  have  been  combined.  There  is  a  plan  for  an 
agricultural census to be carried out in autumn 2002 or spring 2003, but the funding 
is  very  uncertain.  An  agricultural  census  in  line  with  international  standards  is  a 
prerequisite  not  only  for  valid  structural  data,  but  also for setting up a farm register 
which can be used as a sampling frame for non exhaustive surveys. 

278.  The  IT  situation  in  the  agricultural  department  is  very  unsatisfactory.  Much 
data  entry  and  data  processing  work  is  done  with  office  automation  tools,  and  not 
with software where statistical data, while being shared by everybody in the unit, are 
nevertheless  protected  against  unintentional  false  manipulations  during  the  whole 
process as should be the case in official statistics. 

Assessment  

279. 
It  is  strongly  recommended  that  the  next  agricultural  census  be  eligible  for 
receiving  funds  from  international  donors,  so  that  it  can  be  carried  out  in  2002  or 
2003.  There  is  expert  advice  to  the  CBS  funded  by  Germany  in  this  area.  On  the 
base of this census, a register of agricultural holdings, covering both publicly owned 
and  private  farms,  should  be  set  up,  and  source  for  updating  this  register  between 
censuses should be identified. 

280.  As already suggested under B2, as a stop-gap measure, the list of agricultural 
households  from  the  population  census  2001  should  be  used  as  a  sampling  frame 
until the farm register is in operation. The present panel of farms should be continued 
for the time being, but be complemented by a true probability sample from this list of 
agricultural households in order to check accuracy and bias. 

281.  The  present  system  of  sending  "experts"  to  a  panel  of  farms  cannot  be 
expanded in such a way as to collect a volume of data in line with EU requirements. 
Since  the  usual  method  for  business  surveys  (mail)  is  unlikely  to  work  with  the 
agricultural population (but tests should be made from time to time), there does not 
seem to be any other way than using the same system as for household surveys, but 
with  a  set  of  regular  interviewers  who  can  be  specially  trained  for  agricultural 
surveys.  When  new  software  will  be introduced for data entry and data processing, 
agricultural statistics should be among the first to be migrated. 

282.  There  does  not  seem  to  be  any  national  need  for  agricultural  statistics  on  a 
more 
therefore 
recommended to prioritise the different items of the EU acquis in this area from the 

than  annual  basis  except 

frequent 

foreign 

trade. 

for 

is 

It 

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perspective  of  national  information  needs,  to  bundle  them  according  to  the  type  of 
farms  (or  of  other  business  units  such  as  food  processing)  from  which  the 
corresponding data have to be collected, and to design an interrelated set of annual 
samples  to  be  gradually  implemented  in  line  with  the  national  priorities.  Once  EU 
membership will be close, the periodicity of these annual surveys can be adapted to 
the requirements of the EU acquis which will be valid at that particular moment. 

8.  Capacity  to  Produce  Monetary,  Financial  and  Balance  of  Payments 
Statistics 

283.  The  National  Bank  of  Croatia  is  the  producer  of  official  statistics  in  these 
areas.  Concerning  financial  and  monetary  statistics,  the  major  source  are  monthly 
reports from commercial banks (with some banks using modern communication tools 
for reporting). Concerning balance of payments statistics, the National Bank uses an 
administrative  data  source  on  international  transactions  called  ITRS  (international 
transfer reporting system) and foreign trade statistics form the CBS; it also carries out 
statistical  surveys  with  companies  in  industry  and  non-financial services (on foreign 
direct investment and on transportation of goods and passengers) and has mandated 
an outside organisation (not the CBS) to carry out surveys on tourism at the border. 

284.  The statistical programme mentions also a survey on external debt carried out 
by  the  National  Bank  mentioning  legal  and  natural  persons  as  respondents.  This 
survey is a leftover from the former system, where such information was collected for 
the purposes of approval and not only for statistical purposes. 

285.  The article on statistics in the Law on the National Bank has been presented 
in  1.2.  In  addition,  there  is  an  article  in  the  law  on  foreign  exchange  by  which  the 
National Bank is in charge of balance of payments statistics. The surveys mentioned 
above  have  been  carried  out  on  this  latter  legal  basis,  and  not  on  the  basis  of  the 
statistical law. 

286.  The products of the National Bank in terms of publications are in two editions 
(Croatian and English); in addition, there is a website which contains some key data. 

Assessment 

287.  The statistical activities of the National Bank are in the hand of professionals 
who  are  well  acquainted  with  the  international  standards  in  this  area,  and  with 
statistics in general. 

288.  The comments on the relationship between the statistical law and the law on 
the  National  Bank  have  been  made  under  1.2.  With  respect  to  the  legal  basis  for 
balance of payments statistics, it can stay alongside with the statistical law under the 
condition  that  it  is  not  used  to  circumvent  some  articles  of  the  statistical  law  in  this 
area. Unfortunately, however, this has been the case in parts: the surveys carried out 
or  contracted  out  by  the  National  Bank  have  not  been  co-ordinated  before  with  the 
CBS, who should be the first address in carrying out surveys with businesses other 
than financial institutions, and with tourists. If both the CBS, as part of their service 
statistics,  and  the  National  Bank,  as  part  of  their  balance  of  payments  statistics, 
implement  parallel  surveys  with  the  overlapping  target  groups  of  businesses, 
duplications  are  probable,  and  the  results  likely  to  be  inconsistent.  It  is  suggested 
that statistical surveys should be carried out by the CBS for the National Bank, and it 
should  be  decided  together whether surveys can be merged, and if not, how better 
use can be made of possible synergies. The same holds for surveys with households 

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and tourists, which should be the exclusive prerogative of the CBS if they are used 
for  official  statistics.  An  example  where  household  surveys  (the  household  budget 
survey  in  particular)  could  be  a  better  source  for  an  important  item  in  the  BoP  are 
remittances from abroad. 

289. 
 CBS  and  the  statistical  unit  of  National  Bank  should  have  more  regular 
meetings  on  the  consistency  of  official  results  not  only  concerning  BoP,  but  also  in 
areas like foreign trade statistics and national accounts. Another area of regular co-
ordination should be about publications, so as to ensure that figures taken over from 
the other producer are strictly identical to the original release. 

290.  The  external  debt  survey  should  be  removed  from  the  statistical  programme 
as long as it serves control purposes. Once the administrative purpose does not exist 
any  more,  questions  about  debt  should  be  integrated  into  other  statistical  surveys, 
rather than the present survey be continued as statistical survey in its own right. 

291.  The two organisations should also examine for the ITRS data source together 
whether this source is still sufficiently adequate for official statistics in the future and 
what  would  be  possible  substitutes,  either  administrative  records  or  statistical 
surveys, for this source.  

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Global Assessment of the Yugoslav System of 
Official Statistics 
GAseminar/2002-10 
April 2002 

reflecting the situation of 5 March 2002 when the original assessment report 
was finalised 

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Table of Contents 

Preface 
Executive Summary 
A. Institutional Setting 

1. Legal Setting 

1.1. Statistical Law 
1.2. Other Legislation 
1.3. Statistical Council, Statistical Programme, Inter-Ministerial 
Consultations, Consultations with Users 
1.4. Protection of Independence 
1.5. Data Protection and Confidentiality 

2. Federal Statistical System 

2.1. Principles 
2.2. Structure of the System 
2.3. Liaison with Research Institutes and Universities 
2.4. Liaison with the Business Community 
2.5. Product and Dissemination Policies 
2.6. Relations with the Federal and Republic Governments 
2.7. Relations with Local Governments 
2.8. Access to Administrative Records 

3. Description of the FSO and the SOR 
3.1. Mission, Internal Organisation 
3.2. Planning, Programming and Priority Setting 
3.3. Monitoring Quality in all Activities 
3.4. Finance and Budgeting 
3.5. Staffing, Staff Recruitment and Training 
3.6. Information Technology 
3.7. Internal Monitoring of Performance 
3.8. External Accountability 

B. Technical Part: Capacity of Producing Statistics in Various Areas 

1. Assessment of the Overall Capacity 
2. Capacity to Organise and Carry out Censuses 
3. Capacity to Produce Annual Population Statistics after the Population 
Census 
4. Capacity to Carry out Household Surveys 
5. Capacity to Maintain Business Registers 
6. Capacity to Carry out Business Surveys and Short-term and Structural 
Economic Statistics including Price Statistics 
7. Capacity to Carry out Surveys of Agricultural Holdings and Related 
Agricultural Surveys 
8. Capacity to Produce National Accounts 
9. Capacity to Produce Data on Public Sector Activities 
10. Capacity to Produce Monetary, Financial and Balance of Payments 
Statistics 

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Preface 

The global assessment of the Yugoslav System of Official Statistics, a joint mandate 
by EUROSTAT and the United Nations Economic Commission for Europe (UNECE), 
was carried out by the following two experts: Mr. Jean-Etienne CHAPRON, Regional 
Adviser  on  Statistics,  UNECE,  and  Mr.  Heinrich  BRÜNGGER,  Swiss  Federal 
Statistical  Office,  who  worked  under  a  contractual  arrangement  between  this  office 
and EUROSTAT. This assessment was focused on describing and analysing, from a 
horizontal point of view, the present situation in the Federal Statistical Office (FSO), 
in  the  Statistical  Offices  of  the  Republic  of  Serbia  (SORS)  and  of  Montenegro 
(SORM) and in the statistical system as a whole, as well as their capacity to provide, 
in a sustainable way, timely, accurate, authoritative and relevant information to users. 
A  detailed  analysis  of specific statistics such as national accounts or CPI, including 
their  compliance  with  international  requirements  was  not  part  of  the  mandate; 
nevertheless, the report includes in its Part B an assessment by broad subject area 
on  whether  the  basic  elements  to  produce  key  statistics  according  to  international 
standards are in place either today or in the near future. 

The  assessment  has  exploited  the  material  available  at  ECE  and  EUROSTAT,  and 
the  detailed  methodological  descriptions  contained  in  the  Statistical  Yearbook  of 
Yugoslavia  published  by  the  FSO.  The  experts  were  also  given  a  great  range  of 
additional  material  prior  to  and  at  the  occasion  of  their  first  visit to FSO and SORS 
(12  to  16  November  2001),  notably  translations  of  statistical  and  other  legislation. 
The  experts'  first  visit  to  Belgrade  was  followed  by  a  visit  to  SORM  at  Podgorica 
(29/30 November), and by a second mission to Belgrade (29 January to 1 February 
2002)  for  discussions  on  a  draft  of  this  report  with  representatives  of  all  three 
statistical offices. The visits included sessions with representatives from the National 
Bank  of  Yugoslavia,  the  Federal  Ministry  of  Finance,  the  UNDP  office  in  Belgrade, 
and the Central Bank of Montenegro, as well as a visit to one of the regional offices 
of SORS (at Pancevo in the province of Vojvodina). The report was finally approved 
by  the  Deputy  Director  of  the  FSO,  on  behalf  of  all  three  statistical  offices,  on  5 
March 2002.        

The experts were greatly helped in their task by the staff of FSO, SORS and SORM, 
who  did  an  excellent  job  in  preparing  the  missions  and  organising  the  discussions, 
which  have  inevitably  made considerable demands on the time of the management 
and of other staff. 56 staff members from the three statistical offices participated in 
the discussions willingly, openly and actively, in spite of an already heavy work load. 
Without their contributions, and without the on-the-spot-translation for many sessions 
provided by staff from the statistical offices, it would not have been possible to carry 
out  the  mandate  in  such  a  short  time.  Special  thanks  therefore  to  all  the  people  at 
FSO,  SORS  and  SORM  for  the  warm  welcome,  the  hospitality  and  the  help  the 
experts received. 

The  present  version  established  for  the  Dubrovnik  seminar  differs  from  the  original 
assessment  report  dated  5  March  2002  only  insofar  that  all  annexes  have  been 
omitted,  and  that  paragraphs  in  the  main  part  of  the  report  which  contained 
references  to  these  annexes  haven  been  reformulated  without  any  change  in  their 
substance. 

Executive Summary 

1. 
The  former  Yugoslavia  had  a  well  functioning  system  of  official  statistics, 
composed of the Federal Statistical Office (FSO) in Belgrade, six statistical offices in 

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the  republics,  and  two  in  the  Serb  provinces  of  Vojvodina  and  Kosovo/Metohia. 
Among  the  republic  statistical  offices,  the  one  for  Serbia  (Statistical  Office  of  the 
Republic  of  Serbia  or  SORS)  was  the  biggest,  and  the  one  for  Montenegro 
(Statistical  Office  of  the  Republic  of  Montenegro  or  SORM)  the  smallest.  The  FSO 
was fully integrated into international co-operation, and Yugoslavia's bridge function 
between East and West helped statisticians to be familiar with a variety of statistical 
concepts and methods. 

The  present  Federal  Republic  of  Yugoslavia  is  composed  of  Serbia  and 
2. 
Montenegro,  with  the  three  statistical  offices  mentioned  above  acting  as  the  focal 
points in official statistics. SORS and SORM have, in addition to their headquarters in 
Belgrade  and  in  Podgorica,  14  (including  the  former  province  office  for  Vojvodina) 
respectively 7 regional departments, used for data collection and, in Serbia, for data 
entry. The City of Belgrade has an office of statistics and informatics that is not part 
of  the  SORS,  but  of  the  municipal  administration.  The  province  of  Kosovo  and 
Metohia,  by  international  law  part  of  Yugoslavia,  remains  outside  the  current  data 
collection activities of Yugoslav official statistics. 

3. 
From  1992  to  2000,  Yugoslavia  experienced  adverse  measures  of  the 
international community, including bans on commercial transactions and international 
contacts,  and  in  1999,  military  intervention  by  NATO.  Before  2000,  it  has  not 
experienced  the  type  of  transition  toward  pluralistic  democracies  and  market 
economies  that  other  countries  of  the  region,  including  former  Yugoslav  republics 
which  became  independent  in  the  beginning  of  the  1990s,  were  able  to  undertake. 
Yugoslavian  statistics  has  up  to  now,  except  for  a  small  number  of  relatively  minor 
contributions in recent time, not benefited from EU funds for statistics. These factors 
are  the  major  causes  why  today's  system  of  official  statistics  in  Yugoslavia  is 
relatively  far  away  from  being  able  to  cope  with  the  future  challenges,  and  is  in  a 
great  need  of  a  major  reshape.  Targeted  outside  assistance,  both  in  terms  of 
resources  and  know-how,  is  crucial  to  start  a  process  of  change  by  which  this  gap 
can be gradually closed. 

In  purely  quantitative  terms  of  staff  numbers,  the  size  of  approximately  900 
4. 
persons  working  in  official  statistics  (the  three  statistical  offices,  plus  the  statistics 
part  of  the  Belgrade  city  office,  plus  a  rough  estimate  for  other  producers),  a  level 
that has not changed much in the past decade except for SORS in 2000 and 2001, 
are a proof that the latter were able to upheld to a large extent the level of activities at 
the end of 1980s. This can also be demonstrated by the statistical programme, a list 
of surveys that, with some reductions that were the result of horizontal measures of 
downsizing in the government sectors, and few, but important amendments such as 
the introduction of a labour force surveys, is more or less the same as end of 1980s. 
The  strategy  chosen  to  keep  official  statistics  out  of  controversial  discussions  on 
politics and out of attention by leaders, through reference to a programme set up for 
the needs of the former Yugoslavia with a legitimacy of the past difficult to question, 
was certainly instrumental to this relatively successful strategy. In addition, it helped 
to ensure continuity of series and comparisons over time. 

5. 
With the opening up of Yugoslavia since 2000, and its gradual introduction of 
the  market  economy,  the  negative  aspects  of  this  strategy  start  now  to  become 
visible. They are as follows: 

-  Decrease in relevance: many traditional series, such as macro-economic 
aggregates  that  are  still  largely  based  on  the  MPS  system,  are  referring  to 
outdated  standards,  which  makes  their  relevance  to  present  users’  needs 
questionable.  Statistical  producers  have  avoided  to  ascertain  relevance  of 

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existing  series,  and  have  therefore  not  monitored  the  actual  use  of  their 
results. 
-  No network with users or respondents: there are no regular contacts with 
actual  or  potential  users,  in  the  governments,  in  the  research  or  in  the 
business communities, to assess present and forthcoming information needs 
and their changes, and to receive feed-back on present products. Neither do 
fora exist where the statistical offices can regularly meet with representatives 
from respondents, especially from the various sectors of economic operators. 
There  are  presently  no  statistical  councils  or  similar  committees  foreseen  in 
the statistical legislation that would be able to provide an informed advice with 
a high degree of legitimacy. 
-  Concentration  on  the  social  sector  (state  enterprises  and  co-operatives): 
the focus on exhaustive surveys in this sector leaves out the emerging private 
sector  for  many  important  economic  indicators.  The  exceptions  worth  to  be 
noted  are  price,  wholesale  and  retail  trade,  catering  trade,  and  agricultural 
statistics. 
Insufficient  spread  of  professional  know-how  in  modern  methods  of 
- 
statistical data collection and processing such as sampling, treatment of non-
response,  and  monitoring  of  quality,  which  had  only  rarely  been  used  in  the 
old system. 
Low  visibility  of  results:  dissemination  is  concentrated  on  announcing 
- 
results  as  foreseen  by  the  statistical  programme,  with  some  technical 
comments  on  definitions  and  sources,  in  a  routine  way.  No  explanatory  or 
analytical  comments  are  added,  and  the  lack  of  any  interpretation  of  results 
does not make visible potential relevance either. The attention of the media, 
especially for new results such as 1993 SNA national accounts aggregates or 
labour  force  survey  results,  or  for  new  forms  of  dissemination  such  as  the 
attractive  web-sites  FSO  and  SORS  have  opened  recently,  is  not  solicited 
actively enough. 
Low  status  of  the  statistical  offices:  both  to  governments  and  to  outside 
- 
users,  the  image  of  the  statistical  offices  portrayed  is  the  one  of  a  technical 
service executing routinely a programme for mainly governmental users, and 
not  as  a  an  agency  that  produces  authoritative,  relevant  and  unbiased 
information  that  are  accessible  to  everybody  in  a  proactive  way.  This  low 
status  is  also  underlined  by  the  fact  that  none  of  the  statistical  offices  is 
involved  as  observers  in  important  committees  preparing  decisions  for 
governments,  or  consulted  for  forthcoming  legislation.  Furthermore,  the 
formal  status  of  independent  government  agencies  leaves  them  without 
spokesman at ministerial level to defend their position. 
-  The  institutional  environment,  reflected  also  in  the  statistical  legislation, 
deprives  the  statistical  offices  of  being  able  to  act  proactively  and  in  an 
innovative way, and to manage their activities on the basis of clear priorities 
with  sufficient  ex-ante  knowledge  of  the  resource  implications.  The  present 
detailed  statistical  programme  is  not  instrumental  in  this  respect,  and  the 
concern with its implementation to the letter detracts the attention and scarce 
capacity of the senior management from more important strategic issues. 
-  There  is  no  distinction  made,  neither  in  the  statistical  legislation  nor  in 
practice,  between  statistical  surveys  proper  (data  collection  from  private 
households or businesses for exclusively statistical use, on the methodology 
of  which  statisticians  decide  autonomously  with  respect  to  all  phases)  and 
data collection that serves both administrative and statistical purposes (where 
for  statistics  and 
the  professional  autonomy  only  covers  processing 
dissemination of results). As a consequence, many statistical surveys proper 
are  made  unnecessarily  dependent  on  administrative  concepts  enshrined  in 

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other legislation, at the detriment of the ability to reflect relevant international 
concepts of official statistics. 
-  All  three  statistical  offices  are  in  charge  of  administrative  registers,  and 
one  of  them  carries  out  IT  activities  connected  to control purposes for other 
governmental  units  with  respect  to  additional  administrative  data.  Two 
statistical offices are, by law, part of "government information systems" which 
still  permit  an  unlimited  exchange  of  data  among  governmental  bodies, 
irrespective of the purpose, which is in obvious conflict with the confidentiality 
provisions of the statistical legislation. Although these laws seem not have to 
be invoked recently, their existence is an obstacle in gaining the confidence of 
respondents,  notably  from  private  businesses,  and  building  up  public 
credibility  as  an  impartial  institution  that  can  withstand  pressures  for 
withholding  or  biasing  statistical  results.  This  is  reinforced  by  the  lack  of  a 
clearly  visible  institutional  separation  between  official  statistics  and  other 
government  functions  that  are  in  a  potential  conflict  with  the  paradigms  of 
official statistics (such as the management of administrative registers for units 
subject to statistical confidentiality). 

6. 
Since the opening up of Yugoslavia in 2000, the three statistical offices have 
been  able  to  again  respect  the  essential  part  of  fundamental  principles  of  official 
statistics like independence and confidentiality in practice, in spite of the ambiguous 
legal situation. This important achievement has not been publicly announced so far, 
however. 

It is worth noticing one feature of the present system that is common to most 
7. 
parts of the administration: the complicated relationship between federal and republic 
legislation and institutions in a given area. Statistical laws exist in parallel at federal 
level  (from  1994),  and  at  republic  level  for  Serbia  (from  1992),  but  not  for 
Montenegro;  on  the  other  hand,  the  adoption  of  the  statistical  programme  2001  to 
2005 by the federal Parliament is mirrored by a parallel legal act in Montenegro (only 
for  2001,  at  government  and  not  at  Parliament  level),  but  not  at  all  in  Serbia.  The 
FSO is responsible to ensure uniform methodology (which de facto is established by 
consensus  between  the  directors  of  the  three  offices),  whereas  data  collection  and 
data entry are left to the statistical offices of the republics (SOR). Data processing is 
split  between  the  federal  and  the  republic  levels  with  arrangements  that  differ  from 
one  survey  to  another,  whereas  dissemination  is  taking  place  in  parallel  by  federal 
and republic statistical offices. 

8. 
The  parallelism  in  the  legal  frames  complicates  the  decision-making  about 
statistics  unnecessarily.  More  importantly,  because  the  statistical  programme  being 
de  facto  determined  at  the  federal  level,  the  main  users,  who  are  in  the 
administrations  of  the  republics,  and  the  main  providers  of  resources  (also  through 
republican  budgets),  have  only  an  indirect  influence  on  the  statistical  programme. 
Because  of  the  stability  of  the  programme  in  the  past  decade  this  may  not  have 
mattered too much, but for a more user-oriented modern approach to official statistics 
with  a  sufficient  degree  of  flexibility,  the  present  institutional  arrangements  are 
inadequate and therefore in need of being revised. Furthermore, the present ways of 
parallel  dissemination  of  results  can  lead  to  incoherence,  a  risk  that,  without 
appropriate arrangements, will rise with the increasing ability to use statistics from a 
growing community of users, with increasing media attention, with growing pressure 
on timeliness, and with a larger variety of channels of dissemination. 

9. 
Yugoslavia  is  on  the  way  to  carrying  out  the  population  census  (including 
some questions on agriculture), more or less in the same way as in 1991. The date 
was  April  2002  for  the  whole  Federation.  However,  the  government  of  Montenegro 

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has  just  decided  to  postpone  the  census  to  the  spring  of  2003.  The  Republic  of 
Serbia is not likely to postpone the census. If population censuses are conducted in 
2002 in Serbia, and in 2003 in Montenegro, this will strongly reduce the possibility of 
improving the quality of migration estimates between the two republics. Nevertheless, 
the capacity to organise and finance such a large scale data collection effectively is 
present in Serbia.  

the  capacity  should  be 

10. 
The same holds for the capacity to carry out a range of regular surveys with 
economic  actors  from  the  social  sector  (i.e.  state  enterprises  and  co-operatives) 
contained in the programme in both Serbia and Montenegro. With regard to sample 
surveys  with  households,  and  to  sample  surveys  with  businesses  or  agricultural 
holdings, 
frames, 
methodology, and fieldwork aspects. The same is true with elaborate constructs such 
as  national  accounts  according  to  the  United  Nations  standard  System  of  National 
Accounts  (1993  SNA),  which  are  not  yet  given  the  status  of  the  official  national 
accounts  of  Yugoslavia.  As  a  consequence,  there  is  still  a  serious  lack  of 
internationally  comparable  short-term  indicators,  and  of  comprehensive  annual 
indicators  of  the  economy,  that  is  greater  than  with  other  countries  that  used  to  be 
part of the former Yugoslavia.  

improved,  concerning  sampling 

regard 

The  above  description  of  the  situation  indicates  that  a  major  change  in  the 
11. 
paradigm  of  official  statistics,  and  in  the  structure  of  its  activities,  are  required  in 
Yugoslavia,  the  main  focus  of  which  should  be  a  much  higher  user-  and  output-
orientation  with  clear  priorities,  due 
to  efficient  and  co-ordinated 
implementation, and a decision-making process that gives those levels of the country 
that have to bear the majority of the cost burden an official say in the final adoption. 
The prerequisite for embarking on such a road is the development and adoption of a 
master  plan  with  milestones,  priorities  and  resources  indicated.  Its  preparation  and 
implementation  will  inevitably  mean  a  reallocation  of  existing  resources  away  from 
current activities to be set free for preparing the future, and an increase in resources 
for the two statistical offices of the republics. One of the items to be included in the 
master plan will be the revision of the statistical legislation, and the development and 
implementation  of  an  IT  strategy.  If  no  strong  action  is  taken  now,  official  statistics 
will  become  increasingly  irrelevant  for  important  users,  who will then try to get their 
needs covered by the way of financing statistical activities, including surveys, outside 
the framework of official statistics. 

12.  With  the  help  of  expertise  from  abroad,  such  a  master  plan  should  be 
developed  as  soon  as  possible  as  a  joint  strategic  action  of  the  three  statistical 
offices, conducted in close co-operation with other producers of key official statistics, 
especially the National Bank of Yugoslavia and the Central Bank of Montenegro, as 
well  as  the  Ministries  of  Finance  of  the  Federation  and  the  two  Republics.  This 
master plan should be submitted to the federal and republic governments, as well as 
to  the  federal  (and  if  republics  wish  to  their)  Parliament(s),  for  adoption  as  national 
commitment that will supersede the present programme (otherwise in force until the 
end  of  2005)  to  an  important  extent.  The  federal  government  should,  at  the  same 
time it is invited to adopt the master plan, be asked to participate in the IMF's General 
Data Dissemination System (GDDS) as a clear international commitment to develop 
its  system  of  official  statistics.  The  master  plan  would  ensure  that  the  many 
necessary steps to change the Yugoslav system of statistics will be made in coherent 
framework,  in  a  logical  sequence  with  clear  priorities,  in  taking  due  regard  of  the 
limited  absorption  capacity  and  resources,  and  in  associating  all  stakeholders.  All 
items  in  the  master  plan  will  be  relevant  for  official  statistics  whatever  the  general 
institutional  environment  in  Yugoslavia  as  regards  relationship  between  the  federal 
and  republic  levels  will  look  like  in  the  future.  The  way  some  of  the  items  will  be 

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implemented  once  the  master  plan  is  adopted  (such  as  the  new  statistical  law)  will 
however be clearly influenced by the shape of the future institutional framework. 

There  are  some  important  elements  that  can  and  should  be  started  without 

13. 
waiting for the formal adoption of master plan. They are as follows: 

-  Reviewing the present statistical programme to identify items that can be 
dropped,  i.e.  items  that  are  neither  necessary  for  the  GDDS  nor  serve 
presently an identified and legitimate use any longer; 
-  Preparing short-term solutions for the major bottlenecks in IT in a way that 
they can be later integrated in a future IT-strategy; 
-  Preparing a training programme for the staff of the three statistical offices 
with  respect  to  the  new  paradigms  of  official  statistics,  basic  concepts  of 
official  statistics  such  as  national  accounts,  statistical  methodology  such  as 
sampling, foreign languages (English) and IT; 
-  Preparing  the  outline  of  an  efficient  and  sustainable  system  of  data 
collection  for  the  GDDS  indicators  that  can  be  gradually  implemented  as 
rapidly  as  possible  once  the  master  plan  will  be  adopted  and  the  available 
resources known; 
-  Preparing and financing a much higher degree of participation of Yugoslav 
statisticians  in  relevant  groups  of  international and regional official statistics, 
with due regard to the priority needs for the Yugoslav statistical system, and 
enabling visits of Yugoslav statisticians to statistical offices in other countries 
from which a transfer of experience seems most relevant. 

Even though it is likely that some activities of the existing programme can be 
14. 
dropped without too much loss of relevant information, the volume of resources that 
can be put at the disposal for the change process in this way will not be sufficient to 
implement  the  master  plan,  let  alone  to  reach  the  level  of  full  compatibility  with  EU 
standards. The Yugoslav statisticians will have to be supported, in terms of financial 
resources and expertise, by donors from abroad, but national authorities will have to 
bring back the relative share of public expenditure for official statistics at least to the 
level of 2000 (0.17%) in a sustainable way. In 2001, this share dropped not so much 
because of a cut in global resources for statistical offices, but because of significant 
increases  of  total  government  expenditure  at  republic  level,  and  a  less  than 
proportional increase for the statistical offices of the republics (and even a cut in staff 
for the SORS). More activities in government tend to increase the demand for official 
statistics, and the statistical system is ill equipped presently to meet these demands. 
The gap is greatest for the SORM which today is far away, in terms of both staff, IT 
and  other  resources,  from  the  minimum  level  necessary  for  a  statistical  office  to 
produce  and  disseminate  relevant  key  statistics  for  an  open  economy  and  society. 
But also the SORS, in view of the high share of population and economic units it has 
to  cover  with  data  collections  that  will  have  to  be  reshaped  and  reoriented,  will  not 
only have to come back to its staff level of 1998 and raise the average skill level of its 
present staff, but increase its size and its budget further. In total, it is estimated that 
overall staff for official statistics will have to raised gradually by 50%. 

15. 
As stressed above, the master plan should cover the whole system of official 
statistics,  i.e.  with  including  that  part  of  the  production  which  is  presently  in  the 
competence of other producers than statistical offices or not mentioned at all in the 
current  programme.  The  most  important  areas  in  this  context  will  be  government 
finance statistics, monetary and balance of payments statistics, and certain indicators 
of health. The statistical programme at federal level currently lists the National Bank, 
the  Clearing  and  Payment  Service    (a  special  institution  under  the  National  Bank), 
and six federal ministries as producers of official statistics. The senior management 
of the statistical offices recognises the need for fundamental changes and observing 

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international  standards,  and  co-operation  between  the  three  statistical  offices  is 
excellent.  In  practice,  the  co-ordinated  monitoring  of  the  development  of  the 
statistical system does not extend, however, to other producers, who act more or less 
on  their  own,  with  their  proper  legal  basis,  and  with  few  considerations  given  to 
horizontal issues of official statistics like the fundamental principles. The capacity of 
upgrading statistics of other producers is even smaller. In the areas of competence of 
Central Banks it may be compromised by the monetary independence of Montenegro 
and the complete lack of co-operation between the statisticians of the National Bank 
of Yugoslavia and the Central Bank of Montenegro. In the present legal framework, 
statistical  offices  have  neither  a  mandate  to  co-ordinate  nor  any  instruments  or 
capacity at their disposal to follow the statistical production of other producers and to 
monitor whether this production is coherent and in line with international standards. 

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A. Institutional Setting 

1. Legal Setting 

legally  speaking,  defence, 

1.1. Statistical Law 
1. 
In order to obtain an understanding of the legal framework for official statistics 
in Yugoslavia, the legal framework of the Federation in general has to be presented 
first. Yugoslavia is a Federation with two Member States, the republics of Serbia and 
Montenegro,  governed  by  a  constitution  from  1992  where  the  few  competencies  at 
federal  level  are  listed  exhaustively.  The  subject  areas  in  exclusive  federal 
competence  are, 
foreign  affairs,  customs  and 
money/currency,  but  de  facto  Montenegro  has  unilaterally  adopted,  in  1998,  the 
Deutsch  Mark  as  its  official  currency  and  set  up  a  Monetary  Institute  of  its  own. 
Legally  speaking,  federal  legislation  in  these  four  areas  have  direct  applicability, 
whereas federal legislation in other areas, where competencies are shared between 
the  federal  level  and  the  republics,  are  not  directly  applicable  and  require,  for  their 
application  to  citizens,  economic  actors  and  public  bodies  at  the  republic  level, 
parallel  legislation  by  each  republic.  In  these  subject  areas  such  as  economics, 
finance,  labour,  social  security,  education,  health,  police,  environment,  federal 
ministries have few operational tasks and are in essence limited to co-ordination and 
international  relationships  (the  latter  not  being  operational  at  a subject area level in 
the  period  when  the  international  community  imposed  bans  and  restrictions  on 
Yugoslavia).  As  an  example,  the  federal  ministry  of  finance  has  a  staff  of  100 
persons  only.  Federal  competencies  in  such  areas  used  to  be  much  stronger,  but 
they were reduced considerably with the change of the constitution in 1974. Looking 
at the de facto situation today, Yugoslavia is better described as a confederation than 
as a federal state. 

2. 
The  present  statistical  law  at  federal  level  (the  literal  translation  of  its  title 
being  Law  on the System of Statistical Surveys) dates from 1994. It contains some 
basic  provisions  on  the  purpose  of  statistics  and  lists  the  principles  of  "objectivity, 
rationality,  experts  independence  and  political  neutrality".  As  competent  actors  of 
official statistics at federal level, it lists the National Bank of Yugoslavia, the federal 
organisation for payments operation (Clearing and Payment Service hereafter, which 
is  a  subsidiary  of  the  National  Bank  with  special  status),  and  "federal  bodies  and 
organisations", under which the FSO is subsumed without being explicitly mentioned 
anywhere  in  this  law.  The  law  provides  for  programmes  of  statistical  surveys  for 
periods  of  five  years to be decided by the Federal Parliament, with possible annual 
amendments. The law is silent about the division of work and competencies between 
the federal and the republic levels, except that decisions on methodology of statistical 
surveys are a federal competence, and that funds from the federal budgets will only 
be used for covering the costs of the federal institutions. De facto, most of the data 
collection and a big part of data entry and processing, as well as a substantial part of 
dissemination is carried out by SOR at their cost. The federal statistics law continues 
with  chapters  on  dissemination,  confidentiality  and  penalty  provisions,  but  no 
provisions about the co-ordination of federal producers can be found. 

3. 
This law finds a more or less exact parallel law at the level of the republic of 
Serbia  (no  translation  could  be  provided,  however).  Unlike  the  federal  law,  this  law 

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lists  the  producers  of  official  statistics,  notably  the  SORS.  In  Montenegro  however, 
the 1994 federal law has not yet been accompanied by a parallel law at the republic 
level; de facto the federal law is directly applied. There is a project for a statistical law 
in  Montenegro.  The  situation  is  somewhat  reversed  for  the  federal  programme  of 
statistical  surveys,  enacted  by  the  Federal  Parliament:  in  Serbia,  this  is  directly 
applicable,  whereas  Montenegro’s  government  has  passed  a 
legal  act  of 
implementation  at  republic  level.  In  addition  to  the  surveys  listed  in  the  federal 
programme,  there  are  some  surveys  limited  to  one  republic  both  in  Serbia  and 
Montenegro; these are not based on any specific decision by the Parliaments at the 
republic levels other than those concerning the budget. 

4. 
The FSO has developed a draft for a new federal statistics law, entitled "Law 
on  Official  Statistics".  It  is  based  on  the  model  statistical  law  developed  by 
EUROSTAT, and includes more precise statements, including some definitions, than 
the  1994  law presently in force. It adds notably a list of responsibilities of the FSO, 
including a co-ordinating role (but without being specific at the instruments), as well 
as  a  Statistical  Council  that  does  not  exist  in  the  present  environment.  Another 
important issue on which the present statistics law is silent is the appointment of the 
director of the FSO (by the government as in the current situation, but now for a fixed 
term  and  after  consultation  with  the  Statistical  Council).  No  additional  precision  is 
provided  by  this  draft  as  regards  the  relationship  in  official  statistics  between  the 
federal and the republic levels. 

Assessment 

5. 
The  legal  framework  for  official  statistics  presently  in  force.  i.e.  the  statistics 
law  and  the  other  relevant  legislation  (see  1.2),  is  puzzling  to  an  outside  observer. 
This  is  basically  for  two  reasons:  the  unclear  relationship  between  federal  and 
republic  legislation  on  one  side,  and  the  unclear  relationship  between  the  statistics 
and other relevant legislation on the other side. 

6. 
In  the  absence  of  clarification  for  the  first  issue,  which  would  require 
institutional  changes  at  a  much  higher  level,  there  is  not  much  that  can  be  done 
about the first reason for the lack of clarity. In all scenarios presently discussed, the 
two  republics  would  retain  a  substantial  number  of  legislative  and  executive 
competencies  of  their  own.  The  main  drawbacks  of  the  present  system  in  terms  of 
federal/republic relationships in official statistics are that it formally allocates decision-
making  about  official  statistics  concerning  programme  and  methodology  to  federal 
institutions which are not directly in interaction with the main users (who are and will 
most  probably  continue  to  be  at  the  republic  level,  especially  in  the  republic 
governments), nor have to finance the major part of the operation, nor are confronted 
with the respondents and the difficulties of the data collection. As other chapters of 
the  report  show,  preparing  these  decisions,  in  the  difficult  past  decade,  has  been 
driven by the various producers' attempts to continue, in the best possible way and 
without  raising  controversial  issues,  the  status  quo  as  reflected  in  a  statistical 
programme  and  in  the  methodologies  of  implementing  this  programme  which  have 
seen  few  changes  in  the  last  10  years  except  from  a  reduction  of  the  number  of 
surveys caused by a general cut in government expenditure. The flaws in a decision-
making  process  that  shows  a  built-in  stability  have  not  become  obvious  until  very 
recently  when  the  political  system  changed,  the  economy  began  to  open  up  and 
demands for new types of statistics started to emerge. 

7. 
Another  potential  disadvantage  of  the  present  general  institutional  set  up  is 
that  it  would  be  very  difficult  to  create  a  national  institute  for  statistics,  whose 
mandate would be to serve statistical information needs at federal, republic and local 

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level  at  the  same  time.  There  is  no  precedent  of  such  an  institution  in  Yugoslavia. 
Such  a  solution  would  make  it  possible  to  draw  the  maximum  benefit  of  synergies, 
e.g. concerning IT, sampling, national accounts, dissemination and other specialised 
skills  that  are  either  rare  or  very  expensive  to  build  up  and  maintain.  If  there  had 
been a precedent in another area, this assessment would certainly have given much 
more thought to a reshape of the Yugoslav statistical system along such lines. 

8. 
Independently  of  the  first  issue,  more  can  and  should  be  done  about  the 
second. A number of the statistical surveys of the present programme coincide with 
concepts  used  in  administrative  records.  Although  the  transmission  to  statistical 
offices  of  such  information  does  not  entail  a  later  use  for  non-statistical  (control) 
purposes  by  government  any  longer,  statisticians  have  not  yet  changed  the 
administrative definitions based in other legislation that determines many of the basic 
variables  contained  in  such  data  collections  and  the  statistical  population  to  be 
observed.  With  respect  to  breakdowns  and  classifications,  statisticians  have  been 
more successful in introducing international statistical standards such as NACE. The 
indirect  influence  of  other  legislation  on  official  statistics  is  therefore  still  unusually 
strong,  and  prevents  statisticians  from  making  a  more  professional  use  of  the 
instrument of data collection that should be free from such influences, i.e. statistical 
surveys in the sense of data collections for exclusively statistical use The impression 
of data collection based on administrative records or “evidences” is reinforced by the 
facts that a) the questions in the form appear in the Official Journal as legal act, that 
b) respondent units have to stamp and sign the filled forms before they return them to 
the  regional  office 
the 
accompanying  letters  to  respondents,  mention  the  purely  statistical  use  of  the  data 
collected explicitly. 

that  c)  neither  questionnaires,  nor 

in  charge,  and 

9. 
It  is  particularly  revealing  in  this  context  that  statistical  surveys,  based  on  a 
random  sample  of  respondent  units,  have  a  limited  role  in  the  current  statistical 
programme.  This  source  is  sometimes  not  considered,  by  users  and  by  some 
statisticians,  as  potentially  equivalent  or  in  certain  aspects  even potentially superior 
to statistics based on exhaustive coverage.  

10. 
The  statistical  legal  texts,  both  in  the  current  form  and  in  the  draft  of  a  new 
law,  do  not  introduce  the  distinction  between  statistical  surveys  and  the  use  of 
administrative  records  which  is  crucial  both  from  a  legal  and  substantive  point  of 
view: statistical surveys, in the usual sense of data collection for exclusively statistical 
use,  should  not  depend  on  non-statistical  legislation,  as  is  the  case  with 
administrative  data  sources,  and  statisticians  can  therefore  determine  or  at  least 
actively propose changes in concepts, definitions and other methodological aspects 
instead  of  passively  waiting  for  the  basis  of  administrative  data  collection  (e.g. 
accounting laws) being adapted before important new developments such as national 
accounts according to SNA can be pursued further. 

It  is  fair  to  say  that  the  present  statistics  law  as  such  would  not  have 
11. 
prevented forward-looking statisticians to make much greater use of proper statistical 
surveys;  it  is  rather  the  statistical  programme,  and  the  underlying  philosophy  of 
inertia  in  a  very  difficult  period,  including  resource-wise,  that  is  at  the  root  of  this 
situation. A modern statistical system has to make the best use of both types of data 
collections.  This  is  not  possible  in  the  present  framework,  neither  for  statistical 
surveys  nor  for  processing  administrative  data  sources  in  view  of  official  statistics. 
The  use  of  the  latter  implies  adjustments  of  basic  data  received  from  other 
government  bodies  with  a  view  to  come  closer  to  international  concepts,  but  the 
perception  among  statisticians  that  deviations  from  administrative  concepts  are  not 

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permissible also prevents this type of adjustments to be made as a routine part of the 
production process. 

12. 
The  proximity  of  the  present  concepts  in  statistical  surveys  to  non-statistical 
concepts based in other legislation has recently shown another risk: the risk that the 
relevant  Serb  legislation  changes  before  the  corresponding  mirror  changes  at  the 
federal  level  follow.  Serb  statisticians  are  confronted  with  the  requests  from  their 
authorities  to  come  up  with  the  indicators  reflecting  their  modified  legislation,  a 
request  which  cannot  be  met  with  the  unchanged  data  collections  based  on  the 
statistical programme. 

13. 
If the principles of official statistics such as the distinction between statistical 
surveys and administrative data sources are not very prominent in statistical offices, 
they are with a high probability virtually absent with the other producers. No attempt 
has  been  made  by  the  FSO,  due  to  the  lack  of  any  co-ordination  mandates  or 
instruments  specified  in  the  law,  to  monitor  whether  other  producers  are  complying 
not only with the statistical programme, but also with the provisions of the statistical 
law  concerning  e.g.  confidentiality  or  equal  access  of  users 
results. 
Representatives of the Clearing and Payment Service stated explicitly that, with the 
exception  of  the  articles  on  the  programme  of  surveys,  they  did  not  consider  the 
provision of the statistics law to be applicable to them for issues like dissemination or 
confidentiality,  but  that  they  use  instead  the  provisions  of  other,  non-statistical 
legislation.  The  National  Bank  of  Yugoslavia  and  the  Central  Bank  of  Montenegro 
base  their  statistical  activities  on  their  own  legislation,  which  is  silent  about  these 
issues. 

to 

14.  When raising with the SOR the issue of co-ordination with other producers at 
the  level  of  the  republics,  the  answer  given  was  that  co-ordination  is an exclusively 
federal obligation (for which there is no legal basis, however). No co-ordination takes 
place concerning official statistics between SOR and mirror institutions, insofar they 
exist  at  the  republic  level,  of  the  other  federal  institutions  listed as producers in the 
programme,  because  there  is  no  legal  mandate  either.  Like  for  the  FSO,  many 
federal  producers  use  mirror  institutions  at  republic  level  for  data  collection  proper 
and some processing.     

15. 
In addition, the present statistics law shows the following shortcomings: 
-  The  principle  of  relevance  is  not  explicitly  mentioned  in  the  present  law;  this 
omission is corrected in the draft of the new law. 
-  There  is  an  obligation  to  obtain  the  opinion  of  users  (art.  10)  about  the  draft 
statistical  programme,  the  preparation  of  the  programme  and  its  amendments.  The 
procedure in this respect, as well as the procedure for deciding on methodologies, is 
completely  left  to  the  discretion  of  the  producers.  The  important  "Conference  of 
Directors"  (see  below  2.2)  does  not  have  any  legal  basis  and  may  therefore  suffer 
from lack of legitimacy. The only, but important element added by the draft for a new 
law in this respect is the submission of the draft programme to the Statistical Council. 
-  There are no requirements, both in the old and in the draft new law, for producers 
to  separate  very  clearly  in  organisational  terms  statistical  and  administrative 
functions. 
-  The  only  mention  of  professional  independence  is  in  very  general  terms  as 
"expert independence"; however, there is no article applicable to the protection of the 
independence  of  the  institutions  producing  statistics.  In  the  new  draft,  these 
producers  are  given  explicit  independence  in  the  implementation  of  the  statistical 
programme,  without  the  necessary  qualification,  however,  that  this  may  not 
necessarily hold for the relationship among them. 

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-  There  is  an  apparent  contradiction  between  the  provisions  on  "data  obtained 
through  statistical  surveys  are  public"  (art.  9)  and  the  provisions  on  "information 
protection" (confidentiality, art. 24 to 28), at least as far as natural and legal persons 
of the private sector are concerned. This contradiction is solved in the draft for a new 
law. 
-  The  annual  changes  to  a  five-year  programme  can  only  be  initiated  by  other 
bodies than the producers (art. 13: "requests for changes have to be submitted to the 
competent  producer").  This  illustrates  the  purely  technical  role  in  which  statistical 
producers are seen, both in the old and in the draft new law. 
-  There  is  an  unlimited  obligation  to  exchange  available  information,  including 
individual  data,  between  producers  in  all  directions  (e.g.  also  from  the  FSO  to  the 
Clearing  and  Payment  Service  ).  Together  with  the  absence  of  separation  between 
statistical  and  administrative  tasks,  this  provision  is  in  conflict  with  statistical 
confidentiality. There is no equivalent of this provision in the draft for a new law: only 
the  FSO  can  ask  other  producers  to  transmit  data,  but  this  is  limited  to  aggregate 
data (which is not enough). 
-  Whereas  obligations  of  respondent  units  are  clearly  stated,  the  rights  are  not 
mentioned  (e.g.  right  to  be  informed  about  the  purpose  of  the  survey  and  the 
confidentiality rules that re applicable). This has been corrected in the draft for a new 
law. 
-  The  article  addressing  the  publication  of  statistical  results  by  various  agencies 
that  show  discrepancies  (art.  22)  is  not  clear.  The  new  draft  does  not  address  this 
issue. 
-  Art. 24, paragraph 2, states that individual information is an "official" secret. It is 
not  clear  whether  an official secret is an obstacle only against transmission to non-
official bodies, or to other parts of the administration as well. The new draft is much 
clearer on this. 
-  Art. 24, paragraph 3, gives all producers the right to declare any aggregate to be 
confidential,  "if  their  publishing  could  cause  bad  consequences  to  bodies  and 
organisations [the aggregates] refer to". Fortunately, this clause has been dropped in 
the draft for a new law. 
-  There are no provisions for giving individual information, under certain conditions, 
to researchers; the new draft closes this gap. 
-  There are no limits, both in the old and the draft new law, to non-statistical tasks 
that statistical offices can take over, and which may lead to a conflict of interest with 
the core task of producing and disseminating official statistics. 
-  There is no mention of statistical registers as important tools for official statistics, 
either in the old or in the draft new law. Administrative registers, of which statistical 
offices are in charge, are regulated by other legislation. Neither in law nor in practice 
is there any distinction between statistical and administrative registers. 
In listing the various components of statistics (collection, processing etc., art. 4), 
- 
no mention is made of analysis; this omission has been corrected in the draft for the 
new law.  

In  view  of  the  complex  institutional  situation  in  statistics,  and  of  the  many 
16. 
changes of important laws outside statistics that are likely to occur in the near future, 
it may be prudent not to rush the entry into force of a new statistics law. In spite of 
the clear improvements of this draft in comparison to the statistics law in force, more 
time  should  be  devoted  to  the  main  outstanding  issues,  i.e.  the  organisation  of  the 
statistical  system  and  the  clarification  of  the  decision-making  process,  and  to  a 
careful assessment and clarification of the relationship between the statistics law and 
other relevant (new or old) legislation, an issue not addressed by either the present 
or  the  draft  new  statistics  law.  This  latter  point  is  of  particular  importance  for  the 
relationship  between  the  statistics  act  and  the  law  on  the  information  system  of 
bodies and organisations of the Federal Republic of Yugoslavia (see 1.2). Parallel to 

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the  work  on  the  new  law,  material  should  be  compiled  that  allows  a  homogenous 
interpretation  of  its  articles,  and  especially  of  those  concerning  the  fundamental 
principles,  throughout  the  statistical  system  immediately  after  the  new  law  will have 
come into force. 

17. 
It  is  deliberately  left  open  in  this  report  whether  the  reference  to  "the  new 
statistical  law"  will  require  only  one  law  at  the  federal  law  or  three  laws  for  the 
Federation  and  both  republics.  If  the  latter  is  the  case,  the  future  laws  should  be 
complementary  in  substance  rather  than  mirror  legislation  repeating  the  same 
substance,  and  explicit  cross-reference  should  be  made  in  order  to  avoid 
unnecessary duplication. 

1.2. Other Legislation 
18. 
translation: 

The  following  other  texts  of  federal  legislation  were  available  in  an  English 

Law  on  the  census  of  population,  households  and  dwellings  in  the  year 

Law on the information system of bodies and organisations of the federal 

- 
2002; 
- 
republic of Yugoslavia (1998). 

19.  During  the  assessment  process,  it  was  not  possible for the FSO to translate 
other non-statistical legislation, notably concerning the registers for which the FSO is 
responsible, or regulating other types of evidences, in spite of the many references 
made  to  such  legislation  at  the  occasion  of  the  two  visits.  The  same  holds  for 
legislation at republic level, whether statistical or other. 

20. 
The  federal  census  law  is  very  explicit  on  the  variables  included  and  the 
obligations  of  the  respondents,  interviewers  and  instructors  in  the  process,  and  on 
the  division  of  responsibilities  between  various  federal  institutions.  It  also  provides 
sanctions  for  non-compliance.  Both  republics  have  passed  mirror  laws  on  the 
population  census,  where  the  organisation  of  the fieldwork and the flow of the data 
back  to  the  SOR  are  regulated.  In  these  laws,  it  is  specified  that  municipal  census 
committees will have to be set up to organise and monitor the census locally. At the 
last  moment,  two  more  variables  have  been  introduced,  but  by  government  decree 
rather than by amending the census law (art. 4) itself. 

21.  With respect to confidentiality, some data referring to persons are considered 
as  official  secret.  This  is  discussed  more  in  detail  under  1.5.  There  is  no  provision, 
however, that individual data may only be used for statistical purposes; on the other 
hand, there is not any explicit mention either that such data will be used for specific 
administrative  purposes,  i.e.  the  updating  of  registers.  For  all  variables,  except  for 
nationality (ethnicity) and religion, there is a response obligation. 

The  federal  law  on  the  information  system  is  very  much  reflecting  the  past. 
22. 
The public sector is one big user of data, and this law gives the authority to a ministry 
to  impose  the  sharing  of  data  between  bodies  and  organisations  of  the  republic  of 
Yugoslavia (i.e. beyond the government sector); the government will decide on which 
data  may  be  public  or  transmitted  to  bodies  outside  this  information  system.  As 
positive aspects, the law calls for uniform measures of data security and protection, 
and  asks  all  bodies  to  keep  catalogues  of  data.  In  spite  of  its  recent  date,  the 
provisions have remained without practical consequences for the FSO. 

23. 
The  republic  of  Serbia  has  a  law  on  its  public  bodies  and  organisations 
covering  the  same  issues,  but  reportedly  without  the  ambiguous  provisions  to  be 

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found  in  the  federal  law.  On  the  other  hand,  it  is  foreseen  that  the  SORS  will  be  a 
focal point in implementing this law, and become responsible for implementing data 
processing  and  communication  tasks  in  a  much  more  general  way.  This  is  also 
reflected in the name and the organisation chart of the SORS.  

24. 
The  National  Bank  of  Yugoslavia  bases  its  statistical  activities  on  articles  in 
two laws: the law on foreign currency operations (in revision) for balance of payments 
statistics,  and  the  banking  law  as  regards  monetary  and  financial  statistics.  In  both 
laws,  commercial  banks  (and  for  the  revised  version  of  the  first  law  also  other 
economic operators) would have to submit reports to the National Bank. There is no 
limitation to the statistical use of the information collected in this way. 

Assessment 

25. 
The  federal  census  law  clearly  gives  the  outside  reader  the  impression  of 
being a data collection for "evidences" rather than for statistical purposes. Other than 
in  the  context  of  the  name  FSO,  the  term  "statistics"  or  "statistical"  is  completely 
absent from the text, nor does the census law have a cross-reference to the statistics 
law.  

As a particular feature, all enterprises or other type of employers are obliged 
26. 
to  give  to  every  employee,  before  the  census  takes  place,  a  form  containing  data 
about  the  enterprise,  its  address  and  official  activity  code,  as  well  as  the  unique 
identification number of the employee and its occupation. The employee is supposed 
(but  not  legally  obliged)  to  give  this  information  to  the  enumerator.  This  is  likely  to 
lead  to  employment  data  covering  only  "official"  employment,  and  offers  few 
incentives  for  persons  to  report  unregistered  types  of  employment  or  to  correct 
outdated information, e.g. concerning occupation, on the form given by the employer. 

27.  Concerning the population concept, the 2002 census will allow results based 
on the traditional concept that includes all citizens abroad (thus allowing comparisons 
with previous censuses), as well as based on the new and internationally comparable 
concept based on the de facto residence (and its duration) in the country only. The 
law fails, however, to state which of the two concepts will be the basis for the official 
population figures (de facto, it will be those based on the international concept). The 
law  provides  for  preliminary  results  to  be  published  within  30  days  after  the 
conclusion of the fieldwork. 

28. 
The laws on the federal and republic information systems are clearly at odds 
with the principles of official statistics, notably with confidentiality and independence. 
By the great volumes of data, and the range of topics covered, the stock of individual 
data of statistical offices is a potentially rich source of individual information. There is 
no cross-reference in either law, so that the questions of primacy remains unsettled. 
If this source is not clearly and unambiguously excluded from any sharing with non-
statistical bodies, the claim of statistical confidentiality is total contradiction to reality, 
with  obvious  consequences  for  the  credibility.  The  situation  is  even  worse  if  the 
statistical office is to become a driving force in implementing such a law; it will then 
be  clearly  perceived,  like  before,  as  part  of  the  big  brother  conglomerate  the  main 
purpose of which is the control and surveillance of individual units of any kinds. 

29. 
It is very urgent that both federal and republic laws be amended to clarify this 
issue. A concrete proposal is made under 1.5. In the case of Serbia, the regulation 
that allocates any important implementation role to SORS should be amended so as 
to transfer it to another body, a proposal that seems to be in the pipeline already. 

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The  legal  situation  in  the  statistical  areas  that  are  in  the  competence  of  the 
30. 
National  Bank  is  not  transparent  for  several  reasons.  First,  the  adoption  of  the 
Deutsch Mark as currency of legal tender by the government of Montenegro, and the 
total  lack  of  co-operation  between  the  statisticians  of  the  two  Central  Banks  in 
for 
Belgrade  and  Podgorica  respectively,  do  not  offer  optimistic  prospects 
harmonised  statistics  for  the  whole  Federation in the areas of balance of payments 
and monetary/financial statistics, whatever the content of the federal laws will be. The 
statistical system, i.e. the three statistical offices, should offer their help in closing this 
gap as an intermediate step. 

31. 
Secondly,  the  lack  of  any  reference  to  the  statistical  legislation,  or  the 
statistical  programme,  in  the  relevant  legal  acts  of  the  two  central  banks  might  be 
interpreted  in  a  way  that  the  statistical  legislation  is  not  any  longer  applicable  to 
official statistics produced by them. This interpretation can be excluded for the time 
being,  but  the  awareness  of  the  statistical  legislation  and  of  the  fundamental 
principles  of  official  statistics  is  not  very  high  in  the  central  banks.  It  is  therefore 
recommended to clarify the relationship between the two bodies of legislation through 
the new statistical law. 

1.3. Statistical Council, Statistical Programme, Inter-ministerial Consultations, 
Consultations with Users 
32.  Only  the  draft  of  the  new  statistical  law  at  federal  level  provides  for  a 
Statistical  Council  as  an  advisory  body.  In  the  present  draft,  it  should  consist  of  33 
members,  with  9  members  representing  the  producers  at  federal  level,  and  6 
members representing the producers at republic level. User ministries/public bodies 
are  given  5  members  (at  federal)  and  4  members  (at  republic  level)  respectively. 
Professional  organisations,  science  and  research,  and  other  users  are  given  3 
members each. The members shall be appointed by the government on the proposal 
of  the  groups  they  represent  for  a period of four years. Any of its members can be 
elected chairperson by the Council. 

33. 

The functions foreseen for the Statistical Council are as follows: 
-  To  give  an  opinion  and  to  make  recommendations on the preparation of 
the draft programme; 
-  To  monitor,  evaluate  and  give  advice  about  the  implementation  of  the 
programme of statistical surveys; 
-  To  issue  recommendations  for  the  further  development  of  official 
statistics; 
-  To  comment  on  the  budgetary  situation  in relation to the implementation 
of the programme; 
-  To  give  an  opinion  on  the  proposal  for  the  nomination  of  the  Director  of 
the FSO. 

No co-ordination or arbitration roles are given to the Council. The work of the Council 
shall be public. 

34.  No  advisory  bodies  for  official  statistics  are  presently  in  place or foreseen at 
the republic level. 

35. 
In its present form, the statistical programme 2001 to 2005 lists 320 "surveys", 
of which 315 were carried out in 2000. The FSO was in charge of 199, the rest being 
shared  between  the  National  Bank  of  Yugoslavia  (13),  the  Clearing  and  Payment 
Service (20) and 6 other federal ministries or offices (the latter not being mentioned, 
as is the case for the FSO, in the statistics law, but only in the statistical programme). 
to  previous 
This  number 

the  present  programme  compared 

is  smaller 

in 

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programmes. In the draft for a new law, only the FSO in mentioned in the law itself, 
all other federal producers would be listed in the statistical programme legal act, but 
not in the law itself. 

As  mentioned  in  1.1,  the  term  survey  includes  all  types  of  data  collection, 
36. 
without clear distinction between statistical surveys in the narrow sense and files or 
aggregates  based  on  administrative  records.  In  addition,  it  also  includes  statistics 
based on combination of a variety of sources such as national accounts or balance of 
payments, as well as a number of research, pilot or innovation items, which may or 
may  not  involve  additional  data  collection.  The  statistical  programme  may therefore 
be  better  characterised  as  programme  of  all  statistical  activities  that  includes  all 
forms  of  data  collection.  Whatever  is  proposed  as  statistical  activity,  and  finds  the 
agreement of the various bodies involved, will be included in the programme. 

for 

the 

37. 
Article  12  of  the  statistics  law  prescribes  the  following  items  for  each 
programme  activity:  title,  code,  short  description  of  the  survey's  contents,  terms  of 
implementation,  obligations  of  the  federal  and  member  republic  bodies  that  are 
competent 
implementation,  provisions  on  who  is  the  data  provider 
(delimitation of respondent units) and in what terms they should be provided, as well 
as terms of publishing the first results of the survey. All activities with data collection 
imply  a  response  obligation,  but  this  has  never  been enforced by legal procedures. 
The  programme  of  statistical  surveys,  a  document  of  80  pages  in  the  original 
language, has only partially been translated into English. It is divided into 28 chapters 
(mainly subject areas). 

38. 
The  involvement  of  users,  prescribed  by  the  law,  in  the  preparation  of  the 
programme is essentially left for the SOR to organise. The reason is that the federal 
ministries,  with  the  possible  exception  of  the  customs,  are  not  important  users  of 
statistics today. The opinion of the National Bank, and of the Clearing and Payment 
Service , as users of statistics are supposed to be covered when the Conference of 
Directors,  essentially  a  group  of  producers,  discusses  the  draft  multi-annual 
programme. This conference is also the place where the opinions of the SOR, and of 
the users consulted by them, will be fed into the process. 

39. 
The  draft  programme,  established  by  the  Conference  of  Directors,  is 
distributed  by  the  SOR  to  a  number  of  users,  mainly  ministries  at  republic  level, 
organisations  like  the  Chamber  of  Commerce,  and  scientific  institutions.  The 
feedback  is  rather  low;  few  users  are  able  to  use  statistics  for  the  preparation  of 
decisions,  e.g.  through  developing  scenarios  and  model-building.  The  main  interest 
of  ministries  in  statistics  is  to  see  those  aggregates  produced,  i.e.  the  retail  price 
index,  by  which  the  size  of  payments  by  the  respective  governments  and  their 
adjustments over time are determined on the basis of specific laws and regulations, 
and these users are interested in a methodology that changes over time as little as 
possible. Only recently have some ministries in Serbia started to express needs for 
statistical  information  in  a  wider  sense,  mainly  as  a  consequence  of  requests  from 
foreign advisers and international organisations. 

40. 
The  final  draft  for  a  programme  of  statistical  surveys  is  submitted  to  the 
federal  government,  which  discusses  it  in  the  presence  of  the  director  of  the  FSO. 
Adoption  of  the  programme  is  the  responsibility  of  the  Federal  Parliament,  which 
constitutes  of  two  Chambers,  one  representing  the  republics  (but  not  through 
members  of  the  governments  of  the  republics).  The  present  programme  (2001  to 
2005) was formally adopted only in the second half of 2001, due to a heavy agenda 
for the Parliament. The same procedure is applicable to annual amendments, which 

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for additional items, according to the law, have to be based on a request from a user 
(which could be an international organisation as well). 

41. 
The  programme  of  surveys  has  no  link  to  resources,  which  are  determined 
through the annual budgetary processes at federal and republic level, with the latter 
having  to  provide  the  major  part  of  resources.  When  the  federal  government 
discusses resources for statistics, the director of the FSO is not present. Resources 
for the population census are decided separately from the other activities of the FSO 
and SOR. 

42. 
Additions to the federal programme at republic level are made, both in Serbia 
and in Montenegro. The implementation of the federal programme accounts for 90% 
of  the  cost  of  the  SORS,  whereas  in  Montenegro  there  is  only  one  seasonal  item 
(tourism)  added  to  the  federal  programme  by  the  SORM.  It  was  not  possible  to 
explore  the  nature  of  the  decision-making  processes  about  the  additional  items  of 
official statistics at republic level. 

43. 
In the beginning of 2001, the FSO has developed a first attempt (2 pages) of a 
master strategic plan in responding to a request from international organisations. No 
further input has since then been given to develop the draft to a strategic master plan 
with  priorities  and  explicit  links  to  the  current  programme,  nor  to  discuss  strategic 
issues  concerning  the  system  of  official  statistics  with  other  producers  or  important 
users on the basis of this draft. 

Together  with  the  Secretariat  for  Economic  Development,  the  SORM  has 
44. 
developed a partial master plan for IT and the introduction of national accounts (the 
content of which will be discussed under the corresponding chapters). This plan has 
been adopted by the government, but the resource situation for its implementation is 
left in the air. 

45.  Due to the lack of a substantive co-ordination mandate in the present law, and 
due to a lack of expertise in the relevant subject areas, the FSO does not question 
any  proposals by other federal producers concerning the statistical programme and 
its  implementation.  This  applies  both  to  the  question  whether  a  certain  item  falls 
under official statistics at all, and whether an item of official statistics may show some 
duplication with items of another producer. 

46.  Under  the  former  federal  government,  some  ministries  carried  out  statistical 
work  outside  the  statistical  programme,  because  they  either  did  not  trust  or  did  not 
like the results produced by the authorised producers, notably by the FSO. Under the 
new government, the number of such activities has decreased, mainly because of the 
resource  situation.  The  FSO  is  not  informed  systematically  about  such  activities 
before they take place. The situations is different in Serbia; here the SORS reports 
about  an  increasing  number  of  cases  where  ministries  go  for  "ad  hoc"  solutions  to 
cover their statistical information needs that cannot be met by today's programme of 
official statistics; frequently, the origin of such demands are with data requests from 
international or donor organisations addressed to ministries. 

It  is  the  opinion  of  the  FSO  that  certain  statistical  activities  should  remain 
47. 
outside  official  statistics,  notably  business  tendency  surveys,  market  research, 
opinion polls, and media use surveys. 

48.  Neither the FSO nor the SOR are involved regularly in the work of high-level 
ministerial  group  that  prepare  new  legislation,  international  negotiations  or  other 
relevant policy decisions that may have an impact on official statistics from either the 

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demand side or from the point of view of the future supply of administrative records. 
The  SORM  receives  all  draft  legislation  for  comments,  but  does  not  have  the 
resources to digest and react in the short time available. In Montenegro, there is in 
addition  an  inter-ministerial  working  group  on  the  introduction  of  national  accounts 
chaired by SORM. 

Assessment 

The above description of the situation indicates clearly that a major change in 
49. 
the paradigm of official statistics and its activities is required in Yugoslavia, the main 
focus  of  which  should  be  a  much  higher  user-  and  output-orientation  with  clear 
priorities,  due  regard  to  efficient  and  co-ordinated  implementation,  and  a  decision-
making process that gives those levels of the country that have to bear the majority 
of the cost burden an official say in the final adoption. The need for this major change 
is  clearly  seen  by  the  senior  management  of  all  three  statistical  offices.  The 
prerequisite  for  embarking  on  such  a  road  is  the  development  and  adoption  of  a 
master  plan  with  milestones,  priorities  and  resources  indicated.  Its  preparation  and 
implementation  will  inevitably  mean  a  reallocation  of  existing  staff  resources  away 
from  current  activities  to  be  set  free  for  preparing  the  future.  It  will  also  mean  the 
establishment of new fora where the FSO, the SOR and other producers discuss with 
users. 

50. 
The existing programme of statistical surveys, and even more so the spirit with 
which  it  is  prepared  (minimise  changes  so  as  to  get  the  programme  adopted  as  a 
routine  procedure  and  avoiding  discussions  on  relevance  of  long-established 
statistics)  and  implemented  (the  most  important  obligation  is  to  collect  the  data  in 
time,  not  to  produce  public  information,  and  cuts  are  mainly  at  the  detriment  of 
development  activities,  i.e.  of  investments  into  the  future),  is  definitely  not  the 
framework  that  allows  such  an  important  change  in  a  credible  and  visible  way.  It  is 
too  heavily  linked  to  the  past.  It  may  be  used  as  a  grid  for  identifying  those  items 
which  can  be  dropped  in  a  very  near  future  so  as  to  free  resources  for  the 
development  of  the  master  plan,  the  change  process  itself  and  the  many 
development  activities  this  process  will  have  to  encompass.  The  three  statistical 
offices should jointly establish such a list, based on their knowledge of the actual use 
of the results of each activity item by different categories of users. In order to save 
time, the items outside the fields of competence of the statistical offices should not be 
questioned at this stage. 

51.  With help from expertise from abroad, a master plan should be developed as 
soon  as  possible,  listing  priorities  for  investment  and  milestones.  This  master  plan 
should  be  submitted  to  the  federal  government  and  the  federal  Parliament  for 
adoption, since it will to a certain extent supersede the present programme. Whether 
the plan should also be submitted to the Parliaments at the republic level is an issue 
of legitimacy, visibility and speed, rather than one of legal necessity (in Montenegro, 
the  present  programme  was  only  adopted  by  the  government,  in  Serbia,  neither 
government  nor  Parliament  were  officially  involved  in  the  adoption  process).  The 
proposal to the federal government should also include the setting up of bodies that 
steer the process of change in the intermediate period until a new statistical law will 
be adopted later. The federal government should, at the same time it discusses the 
master plan, be asked to announce Yugoslavia's participation in the IMF's GDDS, to 
admit  the  FSO  as  observer  in  inter-ministerial  meetings  that  prepare  government 
decisions,  and  to  include  it,  to  the  same  degree  as  ministries,  in  any  consultation 
round on draft legislation. 

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At least the last two items above, concerning the positions of the SOR, should 
52. 
be mirrored by explicit decisions at the republic level. For the purpose of making the 
governments and Parliaments of the republic aware of the issues involved, it may be 
a good idea to present some other elements of the master plan to them as well for 
explicit  adoption.  In  the  case  of  Montenegro,  the  existing  master  plan  for  IT  and 
national accounts should be integrated, but which much more focus on implications 
for  data  collections,  operational  milestones,  financial  and  human resources, and on 
the  organisation  of  the  co-operation  between  the  relevant  public  bodies  in 
Montenegro. Otherwise, there is a great risk that the present plan will remain wishful 
thinking, in spite of its adoption by the government. 

53. 
The  development  of  such  a  master  plan,  and  its  follow-up,  would  greatly 
benefit  from  a  small  advisory  body  of  enlightened  key  users.  Ways  should  be 
explored  how  to  set  up  such  a  body  in  a  way  that  its  voice  is  heard  and  taken  into 
account. The members of this body would then have also the task to promote, in their 
respective  environments,  the  new  paradigms  of  official  statistics.  If  successful,  this 
body would also serve as a kind of predecessor for the Statistical Council that will be 
established  with  the  new  statistical  law,  but  which  will  preferably  have  a  smaller 
number  of  members  than  presently  envisaged  in  the  draft  for  a  new  law.  Also  the 
functions,  composition,  and  the  procedures  for  appointing  members  and  the 
chairperson  of  a  future  Statistical  Council  should  be  specified  after  careful 
consideration of the various options. 

54.  Great emphasis has been put in this assessment on the absolute need for a 
master  plan  and  its  implementation,  and  much  less  on  how  a  new  statistical 
programme  with  full  coverage  of  all  statistical  activities  might  look  like.  It  is 
recommended  that  a  new  statistical  programme  will  only  be  set  up  after  a  new 
statistical law has come into force, which in turn requires that the institutional issues 
mentioned  in  1.1  are  clarified  before.  Apart  from  the  lack  of  user  orientation  in  the 
present programme, the main disadvantage of the present procedure is the fact that 
those  who  have  to  contribute  most  to  financing  the  implementation,  i.e.  the 
governments  of  the  republics,  have  no  role  in  the  formal  adoption  process  of  the 
programme. As outlined above, this disjunction has not lead to major difficulties until 
now; the responsible institutions at republic level (government and Parliament) seem 
to  have  been  willing  so  far  to  make  available  the  resources  at  least  for  the  current 
activities.  To  simply  assume  that  this  will  continue  in  future  years  may  be 
overoptimistic;  if  republics  suddenly  were  to  question  a  programme  decided  at  the 
federal level and refuse to provide the full resources, the statistical system would be 
strongly  affected  and  may  even  be  blocked  altogether.  It  is  therefore  necessary  to 
propose,  with  the  new  statistical  law,  a  decision-making  process  concerning  the 
statistical  programme  that  makes  the  statistical  system  less  vulnerable  in  this 
respect. 

55. 
In  view  of  this,  and  considering  the  need  to  associate  to  the  adoption  of  the 
statistical programme the main users, who are to be found in the administrations at 
republic  level,  there  is  much  to  be  said  in  favour  of  future  statistical  programmes 
being adopted at the level of both republics in a synchronised process. For reasons 
of  flexibility,  it  would  be  preferable  to  have  a  final  adoption  at  the  level  of 
governments,  with  the  possibility  of  annual  amendments.  The  governments  should 
adopt  the  programme  with  knowing  the  resource  implications  (at  the  level  of  each 
republic)  for  each  item,  but  decisions  on  resources  would  have  to  follow  the  usual 
budgetary procedures, involving the respective Parliament. 

56. 
The  two  SOR  would  have  to  co-operate  closely  in  the  preparation  of  the 
programmes,  so  as  to  ensure  that  their  major  parts  (see  below)  are  identical.  The 

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FSO would have to steer this process as a facilitator, and make sure that additional 
information  needs  from  federal  institutions,  and  those  emerging  from  international 
obligations, will be covered. 

Some  additional  remarks  can  be  made  concerning  the  future  statistical 

57. 
programmes: 
-  The substantive part should be a master plan (a kind of successor plan to the first 
master  plan  described  above)  with  strategic  issues  and  challenges  as  described 
above. A full list of either outputs, activities or data collections (or a suitable mixture 
of  these  elements)  should  only  be  added  as  annex,  but  without  pre-empting 
methodological decisions that fall in the final competence of statisticians. 
-  The programmes adopted at the level of both republics, i.e. the master plans and 
the  annexes,  would  have  to  be  identical  to  80  to  90%,  the  rest  being  additional 
activities that are specific to one or the other republic. In this way, it is also clear that 
the latter are part of official statistics as well. 
-  The five-year period should be kept in principle, since it is also the duration of the 
statistical programmes of the EU. The years should be harmonised with the EU from 
2008  onwards,  i.e.  the  first  statistical  programmes  under  the  new  law  should  cover 
the period until the year 2007 included, even if this period were less than 5 years. 
-  The  possibility of annual amendments should be kept, but the final competence 
should  be  given  to  the  government  even  if  it  were  decided  that  the  adoption  of  the 
five-year programme were to remain with the Parliament. 
-  The  FSO  would  have  to  play  a  very  strong  role  in  the  preparation  of  the 
programmes  and  its  annual  amendments,  and  in  monitoring  its  implementation,  so 
that  results  of  those  activities  that  are  common  to  both  republics  are  not  only 
comparable,  but  strictly  additive  at  the  aggregate  level,  and  that  the  underlying 
microdata can be processed in conjunction. For this to be achieved, it is necessary to 
have  strict  standards  on  documentation  (metadata),  on  definitions,  classifications, 
coverage  and  accuracy  standards  and  on  formats  of  storage.  The  questionnaires 
used in the two republics need not to be 100% identical; each republic should be free 
to add questions for its own information needs if this does not have adverse effects 
on the response rate. 
-  The preparation of programmes would have to involve users and respondents in 
a  much  more  systematic  and  transparent  way  than  today;  appropriate  networks 
would have to be created on an ad hoc basis with the many more users who, by this 
point  in  time,  will  be  able  to  give  constructive  inputs  to  such  a  process.  In  cases 
where  users  from  outside the governments are addressed, it would be advisable to 
create such networks for the whole country, i.e. not split by republic. 
-  There  will  be  a  few  items  of  producing  outputs  at  federal  level  that  are 
independent,  i.e.  not  built  of  aggregates  at  the  level  of  republics.  External  trade 
statistics is an example today (but balance of payments and monetary statistics are 
not  as  long  as  Serbia  and  Montenegro  use  different  currencies).  For  the  sake  of 
completeness  of  the  statistical  programmes  for  users,  these  items  will  have  to  be 
added  to  the  programmes  as  pro  memoria  items,  but  not  for  adoption  at  republic 
level. 
-  The programmes should include provisions for development activities, which will 
not  have  to  be  adopted  in  detail  at  the  level  of  government  or  even  higher.  The 
responsibility  for  each  development  activity  should  be  assigned  to  one  of  the  three 
statistical  offices,  so  as  to  avoid  parallel  developments,  but  the  other  two  offices 
would have to be closely associated. 
-  Whatever  the  institutional  arrangements  will  look  like  in  future,  the  FSO  will 
remain responsible for a certain number of dissemination and infrastructure activities, 
which will have to be determined in greater detail when the new law will be prepared. 
Examples  are:  to  store  and  make  accessible  results  at  the  federal  level,  including 
their transmission to international organisations, and to advise federal bodies on the 

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proper use of statistics and servicing their needs. Another task will be the running of 
the  infrastructure  for  the  main  advisory  body,  the  Statistical  Council.  For  such  FSO 
activities  (including  those  related  to  independent  production),  no  procedure  of 
adopting  a  separate  federal  programme  of  statistical  activities  distinct  from  the 
budgetary process should be required. 
-  Those parts of the statistical programmes that are common to both republics, as 
well  as  the  federal  statistical  activities,  would  have  to  be  brought  to  the  Statistical 
Council for opinion. This Council should be a body with a legal basis at federal level 
and operate at this level. 
In order to keep this structure manageable, no agency at the federal level outside 
- 
the FSO should be considered as actor in the system of official statistics. At the level 
of republics, this may well be different (with the exception of statistical surveys which 
should  remain  the  prerogative  of  SOR).  The  place  of  the  National  Bank  (a  federal 
institution,  where  the  production  of  statistics  only  covers  one  republic  however)  will 
have to be considered as a special case. 

In  terms  of  deciding  whether  a  future  statistical  activity  should  be  inside  or 
58. 
outside official statistics, such decisions should not be based on the opinions of the 
responsible  producer  only.  Criteria  linked  to  the  fundamental  principles  of  official 
statistics  should  be  developed,  notably  concerning  relevance  and  the  impact  on 
credibility for the core tasks of official statistics. The Statistical Council should have 
an  opinion  on  controversial  items  when  discussing  the  draft  statistical  programme 
and draft amendments. Statistical activities outside official statistics, even in the form 
of statistical surveys, carried out or financed by public bodies, will appear from time 
to  time;  what  is  important  is  that  the  results  will  be  published  in  a  way  that  users 
clearly  see  the  difference  to  results  of  official  statistics,  and  that  they  do  not 
jeopardise  the  implementation  of  a  survey  for  official  statistics  that  is  addressed  to 
the same group of respondents at the same time. 

1.4. Protection of Independence 
59. 
The former federal government did not respect the independence of the FSO 
concerning  dissemination.  For  the  same  period,  the  situation  was  more  or  less  the 
same  at  the  level  of  the  republics.  Results  in  some  sensitive  areas  had  to  be 
"cleared" before being disseminated. 

The  situation  has  considerably  improved  with  the  new  federal  government. 
60. 
There  is  no  interference  into  either  methodology  or  dissemination  any  more. 
Nevertheless,  both  FSO  and  SOR  still  have  a  policy  to limit active dissemination of 
results  to  the  aggregates  indicated  in  the  statistical  programme,  and  accompany 
these results only with technical comments. 

61.  With respect to independence in methodology, the law (art. 5 and 6) is clear in 
assigning this competence to each producer. In reality, both major content, as well as 
the  delimitation  of  the  population  to  be  questioned,  are  heavily  influenced,  if  not 
determined,  by  other  non-statistical  legislation,  especially  laws  and  regulations 
concerning  the  allocation  of  public  funds  and  their  adjustment  over  time.  This 
impression  is  reinforced  by  the  requirement  that,  through  paragraph  3  of  article  5, 
such  decisions  have  to  be  published  as  legal  act  in  the  Official  Journal  of  the  FR 
Yugoslavia. As a consequence, all questions included in a survey that is part of the 
statistical programme are enumerated in such decrees. Statisticians are free to add 
breakdowns  to  the  questionnaires  that  are  not,  like  in  most  cases  the  regional 
dimension,  required  by  the  administrative  use  of  the  results.  Exhaustive  coverage 
within the population defined is the rule, and random sampling the exception.   

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The legal protection of the institutional independence of the statistical offices 
62. 
is  almost  completely  absent  in  the  present  statistics  law  at  federal  level  (and  most 
likely at the level of the republics as well). This law only talks about a vague principle 
of "expert independence", but does not address the issue of the relationship between 
the statistical office and the government. There are therefore no specific legal limits 
concerning  the  extent  to  which  the  governments  might  wish  to  interfere  in 
professional  decisions  of  the  statistical  offices,  although  no  instances  of  this  type 
have occurred recently.  

63. 
The  draft  for  a  new  statistics  law  is  more  explicit  in  stating  that  the  federal 
producers  "are  independent  when  implementing  the  programme  of  statistical 
surveys"  and  especially  by  a  paragraph  by  which  "state  organs  and  organisations, 
political parties and other legal and natural persons are obliged to respect the set of 
principles  of  official  statistics  and  not  to  influence  the  staff  of  the  producers  in  the 
performance  of  their  tasks".  Whether  such  an  article  could  be  invoked  and  stand 
against possible contradicting articles in other legislation, especially those of the law 
on the federal information system, remains open, however. 

64. 
The federal level, and both republics, have specified the statistical office to be 
"an independent government body" in their respective laws on the organisation of the 
government.  Independent  in  this  context  has  another  meaning  than  professional 
independence: not to be part of a ministry in organisational terms. The effect of this 
organisational feature on the status of the statistical offices will be analysed in more 
detail under 2.7. 

65.  One  important  institutional  aspect  of  the  protection  of  independence  is  the 
status  of  and  the  procedure for appointing the senior management of the statistical 
offices.  Both  at  federal  and  republic  level,  director,  deputy  director,  and  assistant 
directors are appointed by the respective governments, without the prior publication 
of  vacancies.  De  facto,  the  parties  that  form  the  government  have  the  right  to 
propose candidates for these posts. 

At  the  federal  level  and  in  Montenegro,  there  is  no  fixed  term  of  office  for 
66. 
these  posts.  De  facto,  a  new  government  has  the  right  (and  has  made  use  of  this 
right for at least half the senior management posts at federal level) to put an end to 
the term of the incumbents and to appoint new persons. The general legislation ruling 
these appointments in the respective administrations in general are fully applicable to 
statistical  offices;  no  special  rules  exist  that  might  offer  some  protection  of 
independence in this respect. In Serbia, however, senior managers of the SORS are 
appointed for a term of four years, and have not changed with the recent change in 
the  government,  although  the  selection  process  is  more or less the same as at the 
federal level. 

67. 
The draft for a new federal statistics law introduces a term of four years for the 
director of the FSO. More importantly, it tries to limit the possibilities of appointments 
on  purely  political  considerations  by  requiring  that  the  Statistical  Council  should 
express  an  opinion  about  a  proposal  for  nomination,  opinion  that  would  be  made 
public. 

68. 
As  regards  independence  from  pressure  of  public  bodies  other  than  the 
federal government, article 24, paragraph 3, of the present law is very problematic in 
this respect. It states that the producers at federal level "can proclaim as confidential 
results...if 
to  bodies  and 
organisations",  thus  obliging  the  FSO  to  second-guess,  or  to  directly  ask  the  prior 
opinion, about whether a result about a public body to which statistical confidentiality 

their  publishing  could  cause  bad  consequences 

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does not apply may cause bad consequences. If such a clause were to exist also in 
the  Serb  law  on  statistics,  the  SORS  would  be  in  a  similar  position  with  respect  to 
public bodies at the republic level. This paragraph is omitted from the draft of a new 
law. 

issue 

Another 

important 

institutional 

that  affects 

69. 
the  perception  of 
independence  by  users  and  the  public  is  the  extent  to  which  statistical  offices  are 
engaged in non-statistical activities, some of which might lead to conflict of interests 
with  the  perception  of  credibility  and  impartiality  a  statistical  office  must  provide,  or 
with  the  perception  of  the  statistical  office's  respect  of  confidentiality.  The  SOR  are 
responsible  for  keeping  administrative  registers  on  legal  entities  of  the  public  and 
private  sector,  of  entrepreneurs  (SORS  only),  and  of  territorial  units.  The  FSO 
processes  customs  data  not  only  for  its  own  external  trade  statistics,  but  also  for 
administrative purposes of the Customs Agency, and is potentially subject to having 
to execute any data processing assigned under the "Law on the information system" 
at  federal  level.  There  are  plans  to  use  the  relatively  powerful  IT  equipment  of  the 
SORS  for  other  governmental  non-statistical  needs;  this  has  even  caused  a  recent 
change  of  the  title  of  the  office  to  "Republic  Office  for  Informatics  and  Statistics" 
(which for reasons of simplicity will not be used in this report). There is a proposal to 
correct this decision in the near future, and to allocate the respective non-statistical 
tasks to another public entity.  

70. 
The city of Belgrade has a statistical office that is not part of the SORS. It is 
involved  in  the  data  collection  for  surveys  of  the  federal  statistical  programme  as 
regards  the  territory  of  Belgrade.  This  office  also  combines  statistical,  IT  and  other 
non-statistical  tasks,  the  latter  being  determined  by  the  city  government  and 
Parliament. 

Activities  of  official  statistics  with  other  producers  than  the  three  statistical 
71. 
offices  do  not  enjoy  any  legal  or  de  facto  protection  of  independence.  There  is  not 
even  a  requirement  that  activities  of  official  statistics  should  be  in  separate 
organisational  units,  and  de  facto,  statistical  activities  are  mixed  with  both  either 
administrative or other policy implementation functions. 

Assessment 

The tradition of official statistics being independent from political interference 
72. 
has been gradually eroded in the last decade. Only in the last two years, there has 
been  a  timid  swing  to  the  opposite,  but  this  does  not  seem  to  be  the  effect  of  a 
conscious strategy developed by statisticians and some key users who are aware of 
the importance of this issue.  No public debate, nor any discussion with senior policy 
makers,  about  the  role  of  official  statistics  in  a  democratic  state  with  a  market 
economy, and its implications for the institutional and legal framework, has occurred 
in  these  last  two  years.  Together  with  the  weak  legal  protection  of  independence, 
these recent gains are therefore on a very fragile basis, and serious thought has to 
be given to how the unsatisfactory situation can be improved. 

73. 
The first issue is to render statisticians themselves more proactive in their use 
of the competence to determine the methodologies of the statistical surveys, notably 
the content of the questionnaires, the definition of the target population, the selection 
of respondent units, and the grossing-up of the data collected to the target population 
(by any form of estimation technique). In making such decisions, statisticians have to 
put  the  priority  on  giving  an  unbiased  picture  of  the  reality,  by  using  international 
definitions  as  directly  as  possible.  Insofar  as  administrative  uses  deviate  from  the 
aggregates or indicators with the best coverage and timeliness in the above sense, 

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they should be compiled in addition to the main indicators, with clearly lower visibility. 
Today, the order of priority is rather the reverse, which seriously limits the possibility 
of adjusting existing data collections to international standards and definitions. 

The second issue is to organise events where the issue of official statistics as 
74. 
such (as opposed to statistical production in a given subject area), and the need for 
important changes, can be discussed with key users and with media being present. 
This is best done in conjunction with the development of the master plan, which will 
serve as proof that statisticians are ready to implement these changes if they find the 
necessary  support.  The  issue  of  independence  has  to  be  very  prominent  in  this 
debate  with  the  public,  since  it  is  (together  with  confidentiality)  the  key  element  to 
gain  non-partisan  credibility,  and  to  move  away  from  the  perception  of  statistical 
offices  as  auxiliary  technical  government  services  that  are  100%  government 
controlled  and  have  no  separate  identity.  This  external  discussion  has  to  be 
preceded  by  internal  discussions  with  the  objective  to  change  the  frame  of  mind  of 
statisticians towards the new paradigms. 

75. 
As third step, it is proposed that together with the master plan, changes of the 
legislation  that  regulates  the  appointment  of  key-level  civil  servants  at  federal  and 
republic levels are initiated so as to specify a distinct procedure for directors, deputy 
and assistant directors of statistical offices. This cannot wait until the new statistical 
law  will  enter  into  force.  While  they  continue  to  be  nominated  by  the  respective 
government, the specific rules may include the following: 

a  fixed  term  for  the  directors  and  the  deputy  directors  that  will  not  be 

- 
interrupted if the government changes, with the possibility of re-appointment; 
an  exhaustive  list  of  reasons  for  which  an  incumbent  can  be  dismissed 
- 
during  the  term  of  office  (reaching  maximum  age  if  applicable;  serious 
physical or mental disability; accused or convicted of serious crime); 
an obligation for the government to have an open competition based on a 
- 
published  vacancy  with  specified  skill  requirements,  among  which  proven 
experience in statistics; 
the  right  for  the  director  to  propose  to  the  government  the  assistant 
- 
directors  to  be  appointed  (and  dismissed;  assistant  directors  would  be 
appointed for an indefinite term until retirement age unless the director takes 
the initiative for their function to be terminated). 

At the same time, the legislation concerning the organisation of the respective 
76. 
administrations  should  be  amended.  It  is  important  to  specify  in  these  laws  what 
being  an  independent  government  institution  means  in  the  case  of  the  statistical 
office, i.e. that no public body can give orders to, or make pressure on, the statistical 
office  concerning  the  choice  of  methods  of  data  collection  and  processing,  and  the 
content  of  results  and  the  ways  they  are  disseminated.  This  will  serve  as  legal 
protection until a new statistics law will be created later on, where this protection will 
then  be  extended  to  all  producers.  Such  a  change  will  also  help  to  neutralise  the 
unfortunate paragraph 3 of article 24 in the statistics law, if accompanied by a clear 
policy in the statistical offices not to second-guess reactions of such bodies or even 
ask for their prior opinion.  

Legal  protection  is  only  the  prerequisite,  but  not  the  guarantee  that 
77. 
independence  is  observed  in  practice.  The  policy  of  the  director  is  crucial  in  this 
respect: it must be clear that any attempt from outside to interfere with professional 
issues through political or other forms of pressure will be rejected, if repeated brought 
to  the  government  level  (where  the  statistical  office  has  to  have  a  spokesman,  see 
2.7),  and  at  the  last  resort  brought  to  the  attention  of  the  public.  Once  a  statistical 
Council  is  in  place,  such  incidents  will  also  be  brought  to  its  attention.  All  staff  of 

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statistical offices must rely on being backed by their superiors if they reject attempts 
at interference addressed directly to them, and there has to be a uniform policy in this 
respect across all subject areas for all statistical offices. 

The  master  plan  should  also  outline  a  road  map  by  which  statistical  offices 
78. 
can get rid, in the foreseeable future, of the responsibility for administrative registers 
(with the possible exception of the register on territorial units which does not seem to 
give rise to a conflict of interest). Assigning identification numbers and activity codes 
that are used to determine the tax categories of businesses is in strong conflict with 
the  promise  made  to  businesses  from  the  private  sector  when  they  are  asked  to 
respond  for  statistical  surveys  that  their  information  will  only  be  used  for  statistical 
purposes. Instead, statistical offices should start to build up statistical registers as a 
combination of various (administrative and statistical) sources. 

79. 
The  conditions  under  which  a  statistical  office  can  carry  out  IT  services  for 
other public bodies that are related to their administrative functions will be discussed 
in 3.7. The present IT services by the FSO and SORS in relation to elections can be 
continued  without  any  risk  for  the  credibility  of  statistical  offices,  as  long  as  the 
responsibility  for  the  elections  results  as  such  lies  clearly  with  other  independent 
bodies.     

1.5. Data Protection and Confidentiality 
80. 
As  described  in  1.1,  all  individual  information  concerning  natural  and  legal 
persons is declared in the statistics law to be an official secret (art. 24, paragraph 2). 
In  addition,  article  25,  paragraph  1,  states  that  individual  information  on  personal, 
family, health and property situation is to be used exclusively for statistical purposes. 
Art. 26 continues that individual information on legal persons can be published if they 
have agreed. The subsequent articles give the responsibility to each federal producer 
to  implement  protection  measures,  notably  concerning  IT.  External  collaborators 
used  by  producers  will  have  to  sign  a  written  statement  on  confidentiality  and  data 
protection. 

81.  On  the  other  hand,  the  law  on  the  population  census  is  rather  short  on  this 
issue. It is somewhat contradictory to the statistics law insofar as "all data collected 
from persons relating to their personal, family, or property status, should be treated 
as official secret (in the statistics law, information on personal and property situation 
seem  to  be  better  protected  than  other  variables,  but  all  individual  information  is 
considered to be official secret, and not just the list given in the census law). 

Both  laws  do  not  seem  to  make  it  possible  to  give  individual  data  being  an 

82. 
official secret to researchers. 

83.  Whatever  the  legal  situation  may  be,  de  facto  all  three  statistical  offices  are 
strict  in  safeguarding  individual  information  concerning  natural  persons  or  private 
households. No microdata on natural persons are transmitted in any form to anybody 
else than, exceptionally, from the SOR to the FSO or vice versa. There is no transfer 
of  such  data  to  other  public  bodies  of  the  same  administration.  All  staff  in  the 
statistical offices, including the regional departments of the SOR, is fully aware of the 
importance of this issue.  

84. 
There  are  no  general  rules  when  names,  addresses,  or  personal  identity 
numbers  have  to  be  entered  together  with  the  statistical  variables  or  left  out  in  the 
data entry process, or whether they have to be stored separately from the statistical 
variables. 

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85. 
The  experts  were  assured  that  more  or  less  the  same  degree  of  protection 
holds for the population census data, in spite of the rather ambiguous legal situation. 
The  persons  in  the  local  census  committees,  who  will  see  the  filled  questionnaires 
before they are transmitted to the SORS, will have to work under great pressure to 
keep  the  deadlines  and  not  have  any  time  to  use  the  information  in  any  way. 
However,  it  seems  that  in  Serbia  personal  identity  numbers  are entered and stored 
together with the statistical variables, for purposes that have not been specified. 

86. 
The de facto situation is less clear concerning the treatment of individual data 
related to economic units, particularly as concerns legal units of the state and of the 
"social"  sector.  Selected  users,  and  some  bodies  like  the  Chamber  of  Commerce, 
can get access to individual data (or to aggregates irrespective of the number of units 
that  form  an  aggregate).  Microdata  files  on  economic  actors  normally  contain  the 
numbers  of  the  administrative  register,  which  are  public.  On  the  other  hand,  data 
from  the  various  "surveys"  in  the  programme  cannot  be used directly to update the 
administrative  register  of  legal  entities;  this  is  only  possible  through  a  formal 
administrative  procedure  that  requires  in  most  cases  a  request  from  the  entity 
concerned, i.e. its consent. 

87.  With respect to private sector economic units, SOR have reported difficulties 
in collecting data through statistical surveys because of fear that these data may be 
used  for  tax  purposes.  This  is  another  indication  that  statistical  offices  are  not 
perceived  as  being  effectively  separated  from  other  government  bodies  in  such  a 
way  that  information  given  to  statistical  offices  will  not  be  shared  within  the 
administration, a perception that is still based on past behaviour and legislation that 
is still in force such as the law on the federal information system.   

Individual  data  based  on  evidences  received  by  statistical  offices  from  other 
88. 
public  bodies,  and  used  for  compiling  statistics,  are  given  back  on  request  to  the 
providing public body for administrative purposes. Such bodies use statistical offices 
as  a  kind  of  data  warehouse,  or  even  data  entry  and  processing  facility,  for  their 
administrative  purposes,  since  they  lack  comparable  IT  equipment.  An  example  is 
customs  data  based  on  the  SAD.  In  the  case  of  the  SORS,  the  IT  department 
processes data for a publicly owned company (without making any use of these data 
for its own statistics). 

89. 
As regards aggregates composed of only a small number of units, there is no 
protection  when  the  statistical  programme  provides  for  results  to  be  published  at 
detailed  levels.  For  unpublished  results,  there  is  a  case-by-case  decision  whether 
and  to  whom  such  results  are  disseminated  on  request.  The  practice  seems  to  be 
rather  liberal  as  regards  dissemination  of  aggregates  of  economic  units  to  other 
public bodies. The FSO has issued an internal regulation on this issue. 

The  statistics  law  also  provides  for  aggregates  to  be  declared  confidential 
90. 
because they are either State or military secrets. Access is in these cases limited to a 
few  governmental  users.  An  internal  FSO  regulation  governs  this  aspect  at  federal 
level as well. 

91. 
The information given to respondents about rights and obligations is minimal. 
The letters accompanying the forms sent to respondents refer to the legal basis (item 
of the statistical programme), but without mentioning explicitly that data collection is 
for  statistical  purpose  only,  and  that  statistical  confidentiality  will  be  strictly  adhered 
to. In the standard message used for reminding units that failed to respond in time, a 
further reference to the sanction paragraph in the statistical law is added. 

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92. 

The IT aspects of confidentiality will be covered under 3.7 

Staff in statistical offices generally is of the opinion that the current practices 

93. 
with respect to confidentiality are sufficient. 

94. 
The  rules  and  practices  of  confidentiality  with  other  producers  than  the 
statistical offices could not be examined. The statistics law allows them to have their 
own rules. Since statistics and other functions are very closely linked, these are likely 
not  give  sufficient  regard  to  statistical  confidentiality.  The  FSO  has  no  authority  to 
monitor  their  behaviour,  nor  to  edict  rules  that  would  be  applicable  to  all  federal 
producers. 

95. 
There is no law on general data protection, comparable to the EU directive, at 
either  federal  or  republic  level.  The  law  on  the  federal  information  system  only 
regulates  data  security;  it  does  not  distinguish,  in  terms  of  protection,  between 
personal and other data. 

96. 
The draft for a new statistics law fills most of the open questions listed above, 
and  would  be  a  clear  step  forward  if  complemented  by  clear  interpretations  and  if 
applied to all producers. It does not contain any provision that names and addresses 
of respondent units should be deleted as soon as possible, or stored separately, nor 
any special provision for statistical registers. 

Assessment 

97. 
Since the perception of confidentiality is a key element for a modern statistical 
office,  it  is  recommended  to  put  more  emphasis  on  this  issue  and  to  develop, 
implement  and  make  public  some measures before the new statistics law will enter 
into  force.  Otherwise,  it  may  be  very  difficult  to  obtain  the  co-operation  of  privately 
owned  businesses  in  statistical  business  surveys,  an  instrument  which  will  become 
much  more  important  in  the  future  compared  to  now  because  of  the  growing 
importance  of  the  private  sector  and  the  completely  insufficient  coverage  of  this 
sector  in  the  present  programme.  The  current  practice,  and  especially  the  lack  of 
transparency to outsiders about it, is not sufficient from this perspective. 

The first measure would be the strict adherence to the one-way principle. This 
98. 
states that statistical offices can receive individual data concerning natural persons, 
or  legal  persons  of  the  private  sector,  from  other  public  bodies  for  their  tasks  of 
official statistics, but such a transmission should never occur in the reverse direction, 
the  only  exception  being  transmissions  between  the  statistical  offices  (transmission 
to  researchers  as  another  acceptable  possible  exception  are  excluded  under  the 
present  statistics  and  census  laws).  The  best  way  of  making  this  visible  would  be, 
before a new statistical law comes into force, by amending the federal and republic 
laws  on  the  information  system  in  such  a way that these laws are not applicable to 
data  collected  by  statistical  offices  under  the  statistics  and  population  census  acts. 
Another important element in this context is to set up a time-table for the transfer of 
the responsibilities of the administrative registers on legal units and shops, which will 
require some time and careful preparation if the quality of these registers (which is an 
important input for the statistical registers that statistical offices are maintaining) were 
to remain at today's level.  

99. 
The second measure would be a strict separation within each statistical office 
in  terms  both  of  the  organisation  chart  and  the  IT  aspects  of  data  processing  and 
access  to  individual  data,  between  the  responsibilities  for  administrative  registers 

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containing economic units, and official statistics proper, for the limited period until the 
responsibility  for  the  former  will  be  transferred  to  other  public  bodies.  The  one-way 
principle is applicable to the relationship between administrative registers and official 
statistics as well, and this should be made visible and implemented in a credible way. 

100.  The  third  measure  would  be  a  clear  policy  common  to  all  statistical  offices, 
especially  for  the  SOR,  concerning  the  entry  and  storing  of  names,  addresses  and 
personal identity numbers of natural persons, and of names, addresses and register 
numbers  of  legal  persons  or  other  economic  actors  of  the  private  sector  in  the 
context  of  statistical  microdata  files.  Outside  registers,  the  storage  of  names, 
addresses or numbers that can serve as direct identifiers, for longer than the editing 
and  checking  process of a survey, is only justified if the same units are questioned 
again  (panels),  or  if  a  matching  with  other  sources  of  individual  data  for  purely 
statistical  objectives  is  planned;  in  these  cases,  the  identifiers  should  be  kept 
separate from the statistical variables however. For the population census microdata 
files, all identity numbers should be deleted from the file as soon as possible, so as to 
exclude  any  possible  request  for  using  census  data  for  administrative  purposes  a 
posteriori. [The addresses of the dwellings may be kept as sampling frame for future 
household  surveys,  see  B4,  and  the  names,  addresses  and  personal  identity 
numbers  of  the  agricultural  households  for  a  new  statistical  register  of  private 
agricultural  holdings,  see  B7].  It  goes  without  saying  that  files  with  individual  data, 
even  if  identifiers  such  as  names  and  addresses  are  deleted,  still  have  to  be 
protected because of the risk of indirect identification. 

101.  The fourth measure is addressing the dissemination of aggregates composed 
of a small number of natural persons, private households, or private sector economic 
units (including agricultural holdings). The respective rules of the draft statistics law 
should be implemented by all three statistical offices as from now in a coherent way, 
i.e.  both  for  results  foreseen  in  the  statistical  programme  and  for  results  that  are 
available  on  request.  For  published  tables,  additional  aggregates  will  have  to  be 
suppressed  to  exclude  calculation  of  a  protected  figure  as  residual.  Unpublished 
aggregates should not be disseminated to anybody else than another statistical office 
if the confidentiality restrictions apply. If the confidentiality restrictions do not apply to 
an unpublished result requested by a user, a procedure to decide whether this result 
should  not  be  communicated  for  other  professional  reasons  (insufficient  accuracy; 
better figure available from another source) has to be put in place. 

102.  The fifth measure is to communicate clearly that statistical confidentiality does 
not apply to units that are state-owned, be the owner the federal state, a republic or a 
municipality.  A  decision  should  be  made,  on  the  basis  of  clear  criteria  to  be 
developed, which units of the social sector should be treated, from the confidentiality 
point  of  view,  like  private  sector  economic  units  and  which  like  state-owned  units. 
Privatised  entities  should  be  subject  to  statistical  confidentiality,  as  well  as  state-
owned economic actors that compete with privately owned businesses. On the other 
hand,  units  that  receive  subsidies  from  government  budgets,  or  where  the 
governments  have  to  cover  losses  and  deficits,  can  be  legitimately  exempt  from 
statistical confidentiality in order to increase transparency in the use of public funds.  

103.  State or military secret considerations may apply to certain aggregates, which 
do not fall under statistical confidentiality, but this should be clearly indicated in any 
tables  in  which  such  aggregates are suppressed (or where a total does not include 
components subject to State or military secrets). 

104.  All  these  measures  should  be  communicated  and  explained  internally  and 
externally  so  that  they  become  visible  to  respondents  and  users.  Internally, 

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procedures to monitor compliance will have to be set up. They should be identical for 
all  three  statistical  offices  (and,  with  the  adoption  of  a  new  statistical  law,  for  all 
producers  of  official  statistics).  Externally,  the  questionnaires  (or  the  accompanying 
letters) have to be much more explicit about the purposes of a statistical survey and 
the  confidentiality  issue.  The  present  way  of  informing  respondents  is  very  close  to 
collecting evidence type of information and does not treat respondents as important 
partners,  but  rather  as  receivers  of  governmental  orders.  Other  than  by  consulting 
the legal basis themselves, respondents cannot know the limits the statistical offices 
have  to  respect  in  the  use  of  the  information  given.  This  is  clearly  not  in  line  with 
good practice, nor with the relevant standards of the Council of Europe. 

105. 
It  is  very  important  that  statistical  offices  will  be  associated  when  a  general 
data  protection  legislation  that  is  in  line  with  the  EU  directive  (and  with  relevant 
resolutions of the Council of Europe) will be drafted at either federal or republic level. 
Such a law has to include some exceptions for the processing of individual data for 
the  purposes  of  official  statistics;  if  they  are  not  foreseen,  it  could  make  life  very 
difficult for statistical offices and inflict unnecessary cost upon them. 

2. Federal Statistical System 

2.1. Principles 
106.  The statistical system of the Federal Republic of Yugoslavia is currently ruled 
by the Federal Law on the System of Statistical Surveys, that dates from 1994 (see 
1.1  above).  This  law  makes  an  explicit  reference  to  the  principles  of  objectivity, 
rationality, experts’ independence, political neutrality, and confidentiality of individual 
information concerning natural and legal persons.  

107. 
In  practice,  it  is  clear  that  the  Federal  Statistical  Office,  as  well  as  the 
Statistical  Offices  of  the  Republics  of  Serbia  and  Montenegro  are  attaching  a great 
importance  to  the  preservation  of  the  confidentiality  of  individual  data  collected  for 
statistical purposes. With regard to the professional independence and the neutrality 
of official statistics, it appears that the dissemination of statistics is made without any 
interference of governmental authorities, at the Federal and the Republic level. Due 
to lack of time, this practice could not be checked with the other producers of official 
statistics. 

Assessment 

It  is  most  important  for  the  credibility  of  official  statistics  to  have  a  clear 
108. 
reference  to  basic  principles  of  professional  ethics  placed  at  the  beginning  of  the 
legal  framework  governing  official  statistics.  The  legal  setting  of  official  statistics  in 
Yugoslavia  has  been  already  discussed  in  chapter  A.1  above,  including  the 
protection of independence and the confidentiality of individual data. 

109. 
In addition to specific legal aspects, it is advisable that the new statistical law 
refers in its preamble to the Fundamental Principles of Official Statistics. Adopted by 
the  Economic  Commission  for  Europe  of  the  United  Nations  in  April  1992,  these 
Principles  have  been  recognised  of  universal  significance  by  the  Statistical 
Commission of the United Nations, that adopted them in April 1994. 

110.  Another important feature of principles is with relevance, expressed in implicit 
priorities  and  decisions  on  methodology.  Here,  the  basic  paradigm  has  to  move 

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towards  giving  clear  priority  and  prime  visibility  to  those  official  statistics  that 
correspond to international standards. 

2.2. Structure of the System 
111.  The  main  statistical  governmental  agencies  in  Yugoslavia  are  the  Federal 
Statistical Office (FSO), the Statistical Office of the Republic of Serbia (SORS), and 
the Statistical Office of the Republic of Montenegro (SORM). The government of the 
Republic of Serbia has recently changed the name of the SORS into Republic Office 
for  Informatics  and  Statistics.  This  change  means  that  SORS  is  also  in  charge  of 
Information  Technology  activities  that  are  not  related  to  statistics.  However,  it 
appears  that  this  new  mission  has  not  yet  been  concretely  developed.  For 
convenience,  the  acronym  SORS  will  continue  to  be  used  in  this  report  for  the 
statistical office of Serbia. 

112.  The federal statistical system of Yugoslavia also includes producers of official 
statistics  outside  the  FSO,  the  SORS,  and  the  SORM.  The  statistical  activities  of 
these  producers  are  listed  in  the  draft  Programme  of  Statistical  Surveys  over  the 
Period 2001-2005 that has been approved by the Federal Parliament. 

113.  The  Payments  Agency  of  the  National  Bank  of  Yugoslavia  is  in  charge  of 
clearing  and  payment  of  all  transactions  of  legal  entities in the Federation. All legal 
entities,  including  enterprises,  must  have  an  account  at  this  Agency,  through which 
their  domestic  payments  are  made.  The  Payments  Agency  is  able  to  produce  daily 
records  of  payments  made  by  legal  entities,  according  to  a  standard  accounting 
framework  that  is  in  compliance  with  the  Fourth  Directive  of  the  European 
Commission on enterprises accounting rules. This organisation is going to disappear. 
Starting  in  January  2002,  the  clearing  of  payments  of  legal  entities  will  be 
progressively transferred to the banking system, as it is usual in market economies. 

114.  The  National  Bank  of  Yugoslavia  is  also  responsible  for  money  and  banking 
statistics  and  balance  of  payments  statistics  for  the  Republic  of  Serbia.  Since  the 
Republic  of  Montenegro  has  adopted  the  Deutsch  Mark  –  the  Euro  from  1  January 
2002  -  as  national  currency,  the  newly  created  Central  Bank  of  Montenegro  is 
responsible  for  money  and  banking  statistics,  as  well  as  balance  of  payments 
statistics, in the Republic of Montenegro. 

115.  Other  producers  of  official  statistics  listed  in  the  official  programme  of 
statistical  surveys  are:  The  Ministries  of  Interior  of  the  Republics  of  Serbia  and 
Montenegro (registered vehicles; crossing of the state borders); the Federal Ministry 
of  Justice  (activity  of  general  and  appellate  courts);  the  Federal  Office  of  Labour 
Market  and  Migrations  (employment  and  unemployment);  the  Federal  Office  of 
Health  Protection  and  Improvement  (diseases);  the  Federal  Office  of  Social 
Insurance  (health  insurance;  pension  and  disability  insurance);  the  Federal  Hydro-
Meteorological Institute (climate; quality of air and water). 

116. 
In  principle,  the  FSO  is  responsible  for  the  methodology  of  official  statistics. 
However,  there  are  exceptions  for  money  and  banking  statistics  and  balance  of 
payment  statistics.  For  these  statistics,  the  National  Bank  of  Yugoslavia  and  the 
Central Bank of Montenegro are responsible for their own methodology that is based 
on international standards published by the International Monetary Fund. In the same 
way,  government  finance  statistics  are  compiled  by  the  Clearing  and  Payment 
Service,  following  the  standards  published  by  the  International  Monetary  Fund, 
without any involvement of the FSO. 

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117.  The  Statistical  Offices  of  Republics  (SORS  and  SORM)  participate  in  the 
definition of the methodology and are responsible for its implementation in the field. 
They  are  responsible  for  the  collection  of  data  and  individual  data  entry.  For  some 
statistics,  individual  data  are  then  forwarded  to  the  FSO  for  processing.  Once  data 
have  been  processed,  tabulation  and  dissemination  at  the  level  of  Republics  are 
carried  out  by  the  Statistical  Offices  of  Republics.  The  FSO  is  responsible  for 
tabulation  and  dissemination  of  data  at  the  Federal  level  only.  The  distribution  of 
work  is  the  same  for  other  producers  of  official  statistics.  The  National  Bank  of 
Yugoslavia,  and  the  Central  Bank  of  Montenegro,  produce  money  and  banking 
statistics and balance of payments statistics on their own. 

118.  This distribution of work and the number of bodies involved requires a strong 
co-ordination and monitoring of the whole process of production and dissemination of 
statistics.  This  is  the  role  of  the  monthly  Conference  of  Directors.  Directors  of  the 
FSO,  the  SORS,  and  of  the  SORM  meet  every  month  to  review  the  programme  of 
work,  approve  methodology  and  calendars,  and  monitor  the  work  in  progress.  The 
meetings  of  the  Conference  of  Directors  are  prepared  in  ad  hoc  meetings  of 
assistant-directors  of  the  FSO,  the  SORS,  and  the  SORM.  Formally,  the  heads  of 
statistical units of other producers are also members of the Conference of Directors, 
but their participation is very infrequent. 

119.  The  main  purpose  of  the  structure  of  the  statistical  system,  as  well  as  the 
distribution of work, is to preserve the complete statistical role of the statistical offices 
of  the  Republics.  It  is  considered  as  a  legacy  of  the  previous  system.  It  is  also 
strongly  linked  to  current  political  issues  on  which  statisticians  clearly  have  not  the 
leading role. 

Assessment 

120.  As  explained  in  Chapter  A  1  on  the  Legal  Setting  above,  the  decentralised 
structure of the official statistical system in Yugoslavia is closely linked to the political 
structure of the Federation. It is not only related to the federal structure itself. There 
are  countries  with  a  federal  structure  where  the  statistical  system  is  much  more 
centralised than in Yugoslavia, for instance Canada, and Australia. 

121.  Of course, it is not the role of this report to assess the political context of the 
official statistical system in Yugoslavia. At the same time, it seems possible to make 
two remarks that are based on purely technical considerations. 

122.  At first sight a positive assessment can be made when considering the way in 
which the complete statistical role of the three offices, namely the FSO, the SORS, 
and  the  SORM  has  been  so  far  completely  preserved.  The  merit  is  probably  to  be 
attributed to the work of the Conference of Directors and its subsidiary bodies, and to 
the  strong  commitment  to  public  service  demonstrated  by  staff  members  at  every 
level. The spirit of co-operation between the three statistical offices is excellent. 

123.  However, one has to consider the cost of this achievement. The maintenance 
of three parallel and mutually consistent systems of data dissemination is a potential 
source  of  difficulties  and  conflicts  between  the  federal  and  the  republic  levels.  At 
every  level,  there  are  not  enough  human,  financial  and  technological  resources  for 
carrying  out  the  official  programme  of  work.    The  benefit  of  the  preservation  of  the 
complete  statistical  role  of  the  three  offices  should  be  assessed,  therefore,  against 
the cost of this achievement. 

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124.  The  Conference  of  Directors  is  the  only  mechanism  by  which  co-ordination 
between  statistical  offices  takes  place.  However,  it  lacks  legitimacy,  since  it  is  not 
mentioned  in  the  statistical  law  (or  any  other  legal  text).  Furthermore,  the  almost 
complete lack of participation of other producers in this conference is an expression 
of  lack  of  interest  by  and  relevance  to  these  other  producers,  which  de  facto  act 
independently though formally part of the statistical system. 

2.3. Liaison with Research Institutes and Universities 
125.  There  are  good  relations  between  the  three  statistical  offices  and  the 
academic community, in Belgrade and Podgorica. Researchers can get tailored sets 
of  statistical  data  for  the  purpose  of  their  research.  In  general,  these  data  are 
provided free, subject to the decision of the Director. 

126.  Personal  links  exist  between  the  academic  community  of  Belgrade  and  the 
management team of  the FSO and the SORS. The Deputy Director of the FSO and 
the Director of the SORS are University Professors. The Statistical Society of Serbia 
also provides opportunities of contacts. 

127.  At the institutional level, the draft official statistical programme is distributed by 
SOR to scientific institutions in each Republic. The feed-back is reportedly rather low. 

Assessment 

128.  There  is  a  good  capacity  of  contact  and  exchange  between  the  statistical 
offices and the research and academic community. However, this depends more on 
private relations and bilateral contacts than on institutional links. The draft of the new 
statistical law makes provision for a statistical council where scientific institutions are 
represented (see part 1.3 above). This will improve the effectiveness of interlinkages 
between the research and academic community and the official statistical system. 

129.  Statistical  offices  should  be  encouraged  to  engage  in  other  forms  of  co-
operation  with  empirical  and  methodological  research,  e.g.  in  the  form  of  joint 
projects,  or  by  sub-contracting  parts  of  certain  development  project  to  research 
institutes. In this way, shortages of skills within statistical offices can be temporarily 
compensated. 

2.4. Liaison with the Business Community 
130. 
In the current situation the business community mainly appears as one of the 
most important providers of economic basic data. As it can be seen in the description 
of  statistical  tools  used  by  the  FSO  and  the  SOR  in  part  B  of  the  present  report, 
enterprises  are  in  direct  relations  with  statisticians,  especially  statisticians  of  SOR, 
through  the  business  registers  and  the  business  surveys.  This  liaison  is  very 
important  for  the  satisfactory  completion  of the statistical programme. However it is 
based  on  bilateral  relations  between  SOR  and  individual  enterprises,  and  probably 
rather enterprises of the social sector and privatised enterprises than newly created 
private enterprises. 

131.  Another  important  link  to  the  business  community  is  established  through  the 
preparation of the statistical programme. The draft programme is circulated to many 
institutions  and  organisations,  of  which  the  Chambers  of  Commerce.  It  seems  that 
the feed back from these institutions is rather low. 

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Assessment 

132.  The current liaison with the business community should be improved, in order 
to  get  more  advice  about  the  statistical  programme.  The  economic  structure  of 
the  development  of  private 
Yugoslavia 
enterprises.  It  is  the  opinion  of  FSO  and  SOR  that  the  new  private  enterprises  are 
less likely to respond to statistical surveys than the enterprises of the social sector. 

is  rapidly  changing,  especially  with 

133.  To maintain the quality of economic statistics, it is very important to establish a 
permanent  liaison  network  with  the  business  community.  The  dialogue  between 
statisticians  and  representative  bodies  of  the  business  community  (Chambers  of 
Commerce  and  other  existing  business  associations  and  groups)  should  not  be 
confined to the information on the statistical programme. A feed-back is needed on 
the  relevance  of  statistical  surveys,  as  well  as  the  statistical  reporting  burden  to 
enterprises. More information should be given on the protection of confidentiality, as 
a response to questions raised by the business community on this issue. 

134.  The  purpose  of  this  intensified  dialogue  is  to  create  a  better  confidence  of 
enterprises  with  respect  to  statistical  surveys.  The  draft  of  the  new  statistical  law 
provides for an advisory statistical council where professional organisations would be 
represented.  This  would  be  a  significant  progress  in  the  liaison  with  the  business 
community. One could expect a better confidence of enterprises, as well as a better 
relevance of questionnaires to internal information systems of enterprises, that would 
decrease the statistical reporting burden. 

2.5. Product and Dissemination Policies 
135.  The  official  Programme  of  Statistical  Surveys  contains  information  about 
which  results  will  be  published.  The  first  results are disseminated through so-called 
statistical releases (around 200 – 300 per year at the Federal and Republic levels). 
More  detailed  results  are  disseminated  later  in  ad  hoc  publications.  In  general,  the 
statistical  release  takes  place  two  or  three  days  after  the  deadline  for  production 
indicated in the official programme of statistical surveys. 

136. 
In the FSO, the data are first reviewed for clearance by the assistant-director 
in  charge  of  the  statistical  area  concerned.  They  are  then  forwarded  to  the 
dissemination  unit.  For  most  surveys  in  the  official  programme  it  is  agreed  that  the 
FSO releases first the federal results, except for monthly indicators that are released 
earlier by the SORS. The SORM is used to hold a press conference every month (on 
the 15) to release all newly produced statistical data. 

137.  At  the  Federal  and  the  Republic  levels  the  ministers  and  the  Parliament 
receive the releases only a few hours before the dissemination to the public. There is 
no possibility of political interference in the current political context. 

138.  Comments released with data are only of statistical nature, at the Federal and 
Republic level. It is a general policy not to make analytical comments of data. 

139.  Data dissemination practice is not identical among the three statistical offices. 
The  FSO  circulates  its  releases  to  authorities,  Statistical  Offices  of  Republics,  and 
the national press agency TANJUG for further dissemination to the media. Releases 
are simultaneously made available on the web site of the FSO. Twice a month, the 
FSO holds a press conference for the release of the price indices, and the index of 
production. There is no advance release calendar. Ad hoc publications provide more 
detailed  statistics.  In  addition,  non-published  tables  that  are  available  upon  request 

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are  indicated  in  the  publication.  The  Director  or  his  deputy  decide  in  each  case 
whether non-published material can be given to the requesting user, and whether it 
will be charged or not. In general, data requested by the scientific community or by 
the  government  are  not  charged.  For  requests  from  other  users,  the  price  is 
equivalent to the marginal cost, i.e., the cost of time spent by staff in preparing tables 
plus  the  cost  of  printing  or  copying  on  electronic  support.  In  addition  to  specialised 
publications,  the  FSO  publishes  a  Monthly  Review  of  Economic  Statistics,  an 
Economic  Trend  bulletin,  a  Statistical  Pocket  Book,  and  a  Statistical  Yearbook,  all 
four in Serb and in English, that are made available on the web site of the FSO, too. 
The  FSO  maintains  a  well-designed  web  site  in  Serb  and  in  English.  The  FSO  has 
also a library open to the public with room available for consultation of documents on 
the spot. 

140.  The  SORS  circulates  its  releases  to  authorities  of  the  Republic,  the  media, 
and  the  general  public.  In  the  latter  case,  this  is  made  through  the  web  site  of  the 
SORS,  which  is  available  in  Serb  and  in  English,  and  provides  clear  and  attractive 
information.  In  addition,  two  databases  are  accessible  on  industry  and  on  foreign 
trade. The SORS does not organise periodic press conferences. An advance release 
calendar  is  made  available  at  the  beginning  of  the  year.  There  are  numerous 
specialised publications. Non-published tables are often requested, especially by big 
enterprises.  They  are  given,  providing  that  confidentiality  of  individual  data  is 
preserved.  In  addition  to  specialised  publications,  the  SORS  publishes  a  Monthly 
Review and a Statistical Yearbook. The SORS has a library open to the public, with 
room available for consultation of documents on the spot. 

141.  The SORM holds a monthly press conference on newly produced statistics, as 
said  above.  It  publishes  a  Monthly  Bulletin  and  a  Yearbook.  Quarterly  and  annual 
statistics are disseminated to bodies and organisations that have manifested interest 
in  them.  Detailed  data  whose  publication  is  announced  in  the  official  statistical 
programme  are  available  upon  request.  There  is  currently  no  web  site, for financial 
reasons.  There  are  plans  for  opening  a  library  accessible  by  the  public,  with  room 
available for consultation of documents on the spot, but the major obstacle currently 
is the lack of space. 

142. The National Bank of Yugoslavia and the Central Bank of Montenegro have their 
specific  product  and  dissemination  policies,  without  co-ordination  with  the  statistical 
offices in their respective Republics. The National Bank of Yugoslavia, that de facto 
covers  the  Republic  of  Serbia  since  Montenegro  has  adopted  the Deutsch Mark as 
currency  of  legal  tender  in  December  2000,  produces  and  disseminates  monetary 
and  financial  statistics  on  a  monthly  basis.  The  dissemination  is  made  through  a 
monthly Bulletin (in Serb; the English version is published on a quarterly basis), and 
through  the  Bank’s  web  site.  The  balance  of  payments  is  produced  on  a  monthly 
basis and put on the web site of the Bank. It is also published in the annual Bulletin of 
the Bank. 

143.  The  Central  Bank  of  Montenegro  produces  and  disseminates  monetary, 
financial,  and  balance  of  payments  statistics  in  its  monthly  Bulletin.  Daily  indicators 
on liquidity, loans, and giro accounts of banks are also produced, but for internal use 
of the government only. 

Assessment 

144.  Republic and Federal Offices have product and dissemination policies that are 
clearly  independent  from  political  considerations.  In  addition  to  regular publications, 
efforts  are  made  to  meet  ad  hoc  requests  received  from  users.  With  the 

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generalisation of online access through Internet, and advance release calendars, the 
Yugoslav statistical offices are going to reach the level of most advanced countries in 
Central  and  Eastern  Europe.  To  improve  further  the  situation,  two  suggestions  can 
be made. 

145.  The  statistical  offices  should  abandon  the  policy  of  abstaining  from  any 
comments beyond the technical comments concerning definitions and characteristics 
of the sources. This limits relevance to users, especially non-experts users who are 
the  great  majority.  In  a  transition  phase  where  indicators  and  major  aggregates 
change  from  old  to  new  concepts,  the  comments  by  the  statistical  offices  have  to 
offer clear guidance concerning significance, major underlying factors (substantiated 
by  facts),  especially  unique  events  that  had  an  effect  in  the  period  concerned. 
Statistical  offices can go quite far in such comments, if they clearly stay away from 
any  policy-prescriptive  comments.  They  have  not  to  submit  the  drafts  of  these 
comments to non-statistical bodies. This would be incompatible with impartiality and 
professional independence. 

146.  Co-ordination  of  dissemination  between  the  three  statistical  offices  is  of 
tantamount importance, since any lack of it is immediately visible. The best solution 
would  be  of  course  that  new  results  be  simultaneously  released  for  Serbia, 
Montenegro,  and  the  Federation.  If  this  were  a  strict  rule,  timeliness  might  suffer 
unduly.  It  is  proposed  that  whenever  the  difference  in  timing  between  Serbia  and 
Montenegro  is  such  that  the  deadline  in  the  programme  (or  the  advance  release 
calendar)  cannot  be  respected  for  one  of  them,  and  by  consequence  for  the 
Federation, the Conference of Directors would give the green light to the first republic 
to  go  ahead  with  dissemination,  with  results  for  the  second  and  the  Federation 
coming  in  later.  If  deadlines  can  be  kept  by  both republics, a user-friendly policy of 
first release would be a unique joint action of the three offices together. After release, 
other products would continue to be produced by each office according to its needs, 
but with prior co-ordination of programmes so as to avoid unnecessary duplications. 

147. 
It  is  difficult  to  assess  the  current  product  and  dissemination  policies  of  the 
National Bank of Yugoslavia and the Central Bank of Montenegro. The monetary and 
banking system of Yugoslavia has been completely transformed over the past twelve 
months,  the  most  visible  outcome  of  which  was  the  creation  of  two  separate 
monetary  areas  within  the  Federation.  Nevertheless,  it  is  worth  noticing  that  both 
central  banks  are  now  disseminating  monetary,  financial,  and  balance  of  payments 
statistics on a monthly and annual basis with Bulletins and on the web, in a way that 
is close to the usual practice of central banks in other countries. 

2.6. Relations with the Federal and Republic Governments 
148.  The  Federal  Statistical  Office  is  a  federal  body  that  depends  on  the  federal 
government. In the same way, the Statistical Offices of Republics are republic bodies 
that depend on the government of their republic. However, none of them is reporting 
to a specific minister in its government. As a consequence, statistical offices have no 
“spokesman” at the government level.  

149.  Moreover,  as  pointed  out  in  1.3  above,  FSO  and  SOR  in  general  do  not 
participate  in  the  work  of  high-level  ministerial  group  that  prepare  new  laws, 
international negotiations, and other policy decisions that can have an impact on the 
supply  and/or  use  of  official  statistics.  There are two exceptions : (i) the Director of 
FSO attends the meeting of the federal government that prepares the federal law on 
the programme of statistical surveys; and (ii) the SORM receives all draft legislation 
for comments. 

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150.  The  federal  and  republic  governments,  as  users,  receive  for  comments  the 
programme  of  statistical  surveys.  They  also  receive  all  statistical  releases  of  FSO 
and SOR. In both cases the feedback is considered by statisticians as relatively low, 
being focused on the main macro-economic aggregates, and specific indicators used 
for  legal  indexation  purposes,  such  as  the  retail  trade  price  index.  However,  the 
SORS reports that the government of Serbia is expressing an increasing interest in 
statistics,  asking  more  questions  and  requesting  more  information  and  specific 
tabulations. 

Assessment 

151.  Without making the picture too dark, the organisational independence of FSO 
and  SOR  in  the  present  form  is  more  a  drawback  rather  than  an  advantage, 
especially  in  the  current  context  of  severe  budgetary  constraints  at  the  federal  and 
republic  levels.  When  it  comes  to  the  discussion  of  budget  at  ministerial  level,  the 
statistical office is more likely to be “sacrificed” than other governmental bodies that 
are depending on a minister sitting at the table. 

152.  The  same  is  true  with  legislation  and  other  policy  decisions  with  a  statistical 
impact,  except  that  it  is  not  here  a  question  of  budgetary  resources  but a technical 
issue  related  to  the  feasibility  and  relevance  of  statistical  actions  involved.  If 
statisticians have not a chance to see draft legislation with a statistical impact before 
it is adopted by the government and/or the parliament, there is risk that the new legal 
text  creates  unnecessary  burden  and  cost  for  the  national  community  as  a  whole. 
The situation is better, in principle, for the SORM, since it receives all draft legislation 
for comments. However, statisticians in Montenegro report that they have not enough 
human resources for digesting and reacting in the short time available. 

153.  The  good  news  is  that  ministries  in  Serbia  show  an  increasing  interest  in 
statistics.  It  provides  an  opportunity  of  dialogue  between  statisticians  and  their 
governmental users. It may ease the identification of the main needs of this kind of 
users, and therefore the improvement of relevance of official statistics. In the short or 
medium term, a network of users could be built in governmental areas, which would 
create  a  favourable  context  for  the  advocacy  of  sufficient  resources  for  official 
statistics.  At  the  same  time,  there  is  a  challenge  associated  to  this  opportunity.  An 
improved  relevance  of  statistics  to  new  governmental  needs  means  the  review  of 
coverage,  periodicity,  and  timeliness  of  some  statistics.  Here  again,  some  flexibility 
will  be  required  in  the  programme  of  statistical  surveys,  which  means  the 
prioritisation of actions and the development of a master plan. 

2.7. Relations with the Local Governments 
154.  On  the  basis  of  information  collected  by the experts, there are no significant 
local  governments.  Of  course, 
relations  between  official  statisticians  and 
municipalities are involved in some statistical actions that are not negligible at all. For 
instance,  municipalities  provide  the  basic information for vital statistics, and internal 
migrations  through  the  Ministry  of  Interior  (see  B.3  below).  They  also  provide  the 
basic information used for update of the central shops register in Serbia (see B.5.2 
below).  However,  in  this  part  of  the  report,  that  deals  with  relations  with  various 
communities  and  bodies  as  data  users,  local  governments  do  not  appear  as 
important stakeholders. 

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Assessment 

155. 
If  there  are  no  relations  with  the  local  governments,  it  is  advisable  to  create 
them.  Municipalities  should  not  be  regarded  by  statisticians  as  providers  of  basic 
information  only,  but  as  potential  users  of  statistics,  too.  SOR  already  compile  and 
publish  basic  economic,  demographic,  and  social  indicators  at  the  local  level.  FSO 
publishes  an  excerpt  of  these  local indicators in its yearbook. This provides a good 
starting  point  for  a  dialogue  between  SOR  and  local  governments.  This  dialogue 
could  be  organised,  resources  permitting,  using  the  network  of  regional  offices  of 
SOR in each republic. 

2.8. Access to Administrative Records 
156.  The  use  of  administrative  records in the statistical system of Yugoslavia is a 
well-established  tradition.  As  it  can  be  seen  in  Part  B  below,  several  statistical 
activities are conducted on the basis of administrative records. For instance, data on 
internal  migrations  are  using  administrative  records  of  the  republic  ministries  of 
interior.  Agricultural  statistics,  especially  estimates  of  private  crop  production  use 
cadastral data on land use. Custom administration produces foreign trade data from 
its  administrative  records  of  import  and  export  statements.  Data  on  registered  road 
vehicles and trailers, as well as data on road traffic accidents have been taken from 
the  federal  ministry  of  interior.  The  Agencies  of  Payments  of  the  National  Bank  of 
Yugoslavia  and  of  the  Central  Bank  of  Montenegro  provide  a  wealth  of  data  from 
their  records  of  domestic  payments  that  are  useful  for  compilation  of  national 
accounts, government finance statistics, etc. 

157.  The  use  of  administrative  records  is  not  always  easy  for  statisticians.  Some 
government  bodies  are  reluctant  to  give  access  to  their  files.  The  argument  of 
confidentiality  has  been  sporadically  used  in  the  recent  past.  It  seems  that  these 
difficulties have recently emerged. Examples can be found with the offices in charge 
of cadastral surveys or registration of road vehicles. 

Assessment 

158.  The use of administrative records by statisticians is useful because it reduces 
the  response  burden  of  households  and  enterprises,  as  well  as  the  cost  of  data 
collection. Therefore, the current practice of FSO and SOR is good.  

159.  One  major  issue  is  well  identified  by  the  management  of  FSO  and  SOR: 
administrative  records  are  primarily  built  for  law  enforcement  and  administrative 
purposes.  Their  conceptual  framework  is  not  necessarily  consistent  with  the 
definitions  and  concepts  used  in  statistics,  and  statisticians  cannot  expect  from 
administrative bodies concerned the adoption of purely statistical concepts in place of 
concepts  that  are  designed  for  the  primary  purpose  of  administrative  data  bases, 
especially  in  the  current  context  of  transition  in  the  legal  system  and  the  statistical 
system.  

160.  The  dialogue  with  government  bodies  who  are  managing  administrative 
records has to be further developed and strengthened, in order to find an agreement 
on the provision of data that is acceptable on both sides, including the share of work 
related  to  the  additional  processing  that  might  be  needed  for  adapting  data  to  the 
needs  of  statisticians.  The  revised  statistical  law  would  provide  a  convenient  legal 
background. The creation of Statistical Council would provide the appropriate forum 
for an enhanced dialogue between statisticians and administrative bodies. 

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in  A.1.2  above, 

the  conditions  under  which 
161.  As  already  pointed  out 
administrative  records  are  forwarded  to  FSO  and  SOR  for  statistical  use  have  to 
comply  with  the  “one  way”  principle,  with  regard  to  the  protection  of  confidentiality. 
Once  individual  administrative  records  have  been  forwarded  to  statistical  offices, 
processed  and  checked  again  other  statistical  data  by  these  offices,  in  order  to 
improve  their  reliability,  they  are  covered  by  the  principle  of  confidentiality  of 
individual  statistical  data.  The  administrative  body  of  origin  cannot  claim  from 
statistical offices the provision of processed individual data for its own administrative 
control  and  law  enforcement  purposes.  This  aspect  of  inter-administrative  relations 
should be made clear in any agreement between statistical offices and government 
bodies in charge of administrative records. 

3. Description of the FSO and the SOR 

3.1. Mission, Internal Organisation 
162.  The  organisation  chart  of  the  FSO  was  adjusted  recently  (after  the  most 
recent change of the political system) and shows three production departments, one 
department for IT and one department for general affairs. 

163.  The  organisation  chart  of  the  SORS  was  revised  when  the  SORS  recently 
became  the  Republic  Office  for  Information  and  Statistics.  In  its  present  form,  it  is 
somewhat misleading, since it provides for an extension of IT activities unrelated to 
statistics  which  has  not  materialised  so  far  (e.g.  units  5.1.  and  5.2).  Three  subject 
area  departments  are  for  production,  one  for  dissemination,  three  for  IT  and 
registers. Two departments regroup the 14 regional offices of SORS (of which 9 are 
in Central Serbia; but without the City of Belgrade, whose statistical office is not part 
of  the  SORS  structure,  and  5  in  Vojvodina;  the  latter  department  direction  being 
located  at  Novisad  at  the former statistical office of the province of Vojvodina), and 
one department is for general affairs. 

164.  The  SORM  is  organised  in  two  sectors  of  production  (economic  and 
population/labour  statistics  respectively),  subdivided  further  into  departments.    All 
horizontal  functions  are  in  departments  directly  sub-ordinate  to the director: one for 
the 7 regional offices (some of which have local executors, i.e. one-person offices, in 
other places), one for IT, and one for general affairs.  

165.  The  main  internal  decision-making  body  in  all  offices  is  composed  of  the 
director,  a  deputy  director  who  is  not  in  charge  of  any  department  or  sector  in 
addition (only in the FSO; the SORS deputy is vacant, and the SORM has no post of 
this  type),  and  the  assistant  directors  who  are  at  the  same  time  heads  of 
departments/sectors (5 in the FSO, 4 in the SORS, and 2 in the SORM called deputy 
directors). 

166.  There is a relatively strong emphasis on hierarchy. If a staff member is unclear 
about what to do in a given situation, he or she will turn to the superior. There are no 
official  internal  structures  across  departments  (e.g.  project  groups;  horizontal 
groups). 

167.  The  directors  of  the  offices  do  not  have  a  free  hand  in  how  their  office  is 
organised  within  the  limits  of  staff  and  budget  allocations.  Changes  in  the 
organisation charts have to be approved by a ministry, and whereas the allocation of 
the given number of posts per skill level to the different organisation units is formally 
in the hand of the director, there are some compulsory rules about the minimum size 

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of such units that limit the de facto degree of freedom considerably. The directors of 
SORS  and  SORM  are  not  free  either  to  decide  the  allocation  of  posts  between  the 
headquarters and the regional offices. 

168.  The  tasks  of  the  14  regional  offices  of  the  SORS  is  to  distribute  the 
questionnaires printed at the headquarters to the respondents, and to receive them 
back as well. For monthly surveys, data entry is carried out in these offices, and the 
data  files  are  then  sent  to  the  headquarters  via  the  public  communication  network. 
Data entry of less frequent surveys is centralised; the regional offices send the filled 
paper questionnaires by mail. The Novisad office, from which 4 other regional offices 
in Vojvodina depend, has some additional responsibilities. All data processing at the 
republic  level  is  centralised  in  Belgrade.  190  persons  are  working  in  these  regional 
offices (plus 65 in the statistics branch of the independent statistics and informatics 
office of the city of Belgrade, i.e. one third of the staff of the total city office). 

169.  The tasks of the SORM regional offices are relatively smaller than in Serbia, 
since there is no communication link to the headquarters. They distribute and collect 
the  questionnaires,  and  do  not  carry  out  any  data  entry.  32  persons  are  working  in 
the SORM regional offices. 

170.  Neither of the three statistical offices in Yugoslavia has a mission statement in 
a modern sense that could be used for external communication.  

Assessment 

171.  Organisation  charts  of  statistical  offices  differ  from  one  country  to  another. 
More  important  than  the  chart  as  such  is  the  clear  definition  of  responsibilities  and 
division of work, and of the procedures for working together across departments. The 
focus on the execution of the statistical programme clearly helps in the definition of 
tasks  of  each  unit,  and  of  each  person  within  units,  in a way that few overlap arise 
within each office (as regards the division of work between FSO and SOR, see 2.2). 

172.  The  fundamental  change  the  system  will  have  to  undergo  will  undoubtedly 
have  some  consequences  on  the  internal  organisation  of  statistical  offices,  but  it  is 
too early to speculate on them in detail now. Only some general ideas can be given: 
-  A  more  user-oriented  approach  will  require  a  less  rigid  programme,  and  a  less 
rigid  system  of  definition  of  jobs.  Senior  management  will  have  to  concentrate  on 
strategic  issues,  such  as  defining  policies  and  criteria  and  less  on  detailed 
professional and micro-management issues, which in turn requires more delegation 
of decisions to lower levels, or to horizontal groups.  
-  New procedures will have to be set up for staff from different departments to work 
together,  especially  for  innovative  activities.  Managers  are  not  necessarily  the  best 
experts  on  all  professional  issues,  so  that  complementary  forms  for  activating  the 
know-how in each office and for deciding on professional issues at lower level, based 
on clear policy statements and criteria established by the management, should be set 
up,  so  that  reverting  questions  of  implementation  to  the  superior  can  be  limited  to 
borderline cases (but this role could also be taken over by horizontal committees), to 
issues  that  may  lead  to  deviation  from  the  published  programme,  or  to  cases  the 
handling of which has a strategic significance for the policy in the whole office. Once 
the  staff  of  all  three  offices  is  connected  to  the  Internet,  one  could  also  think  of 
creating "virtual" professional groups across all three statistical offices. 
-  Professionally  independent  statistical  offices  should  be  free  in  deciding  on  their 
internal  organisation,  i.e.  on  how  to  allocate  the  given  number  of  staff  to  various 
units, without having to get approval from another body. 

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-  The  role  of  regional  offices  should  be  carefully  redefined  in  the  process  of 
change. For surveys carried out by mail, there is no reason for not using centralised 
mailing and collection of questionnaires within each republic, which will lead to a gain 
in efficiency and timeliness. Only for surveys where visits are necessary either from 
the outset (such as for price statistics or households surveys), or are frequently used 
as second-step solution when respondent units do not return forms by mail in time, a 
decentralised structure may have some advantages (at least in Serbia), but this has 
to be analysed in detail. In future, the main justification for having regional offices is 
unlikely to be in data collection, but in providing services to local users, especially to 
users  from  local  governments.  Since  the  use  of  statistics  at  this  level  is  rather  low, 
and  because  the  present  staff  of  regional  offices  have  not  been  involved  at  all  in 
dissemination (and in Montenegro not even linked by modern communication), it may 
turn  out  that  the  building  up  of  this  type  of  new  services  (with  the  appropriate 
upgrading of IT and communication) can be done more efficiently at the headquarters 
as well, with the possibility of leaving it to the initiative of big cities to create, like in 
the  city  of  Belgrade,  statistical  units  of  their  own  for  this  type  of  service.  Generally 
speaking, all these aspects are likely to lead to a reallocation of resources from the 
periphery  to  the  headquarters  or  to  a  smaller  number  of  regional  offices  at  an 
intermediate level (for which the present Novisad office is a good example), and this 
has  to  be  planned  sufficiently  ahead  given  the  social  implications  for  the  staff 
concerned. 
-  The  role  of  the  production  departments  should  be  redefined  so  as  to  become 
producers  of  information  about  a  given  subject  area,  and  not  merely  executors  of 
surveys  with  information  produced  only  from  each  source  separately.  All  data 
produced from a survey have to become corporate within each institute and shared 
between  SOR  and  FSO.  Procedures  should  be  set  up  to  decide,  in  cases  where 
more than one source is available for compiling results, about which figure(s) will be 
considered as official results. 
-  The three statistical offices will have to work together very closely. The set-up of 
joint groups with staff from all three offices, either as project group for a limited period 
of time, or as a permanent group, must be facilitated as much as possible. This will 
be  the  case,  the  more  similar  the  three  organisation  charts  and  the  management 
philosophies will be. 

173.  Once  the  future  division  of  work  between  the  federal  and  republic  levels  in 
official will be known in more detail, some simplifications in the internal organisation 
of  each  office  may  be  possible  for  activities  where  economies  of  scale  ask  for  a 
maximum  concentration.  If  it  were  possible  in  the  new  set-up  to  allocate  such  a 
function to one or two (instead of all three) offices only, with a mandate to serve the 
whole  statistical  system  (and  with  compensations  from  the  budgets  of  those  being 
served),  scarce  financial  resources  and  expertise  could  be  concentrated  instead  of 
being spread too thinly. Prime activities to be looked at under this aspect are the IT 
infrastructure  of  statistics,  notably  for  databases,  dissemination  and  statistical 
registers. 

174.  The following specific comments on the FSO organisation chart can be made 
in addition: 
-  The  sample  and  mathematics  function  is  allocated  to  the  social  statistics 
department.  This  is  a  horizontal  function  that  should  serve  economic  statistics,  and 
notably sample business surveys in the private sector, as well, and would therefore 
be  better  included  in  a  department  that  regroups  other  horizontal  functions  with  a 
legal  services,  quality  control  or 
considerable  statistical  content  (such  as 
dissemination).  
If  legal  services  are  part  of  a  general  affairs  department,  the  risk  is  that  its 
- 
capacity  will  be  mainly  used  for  legal  questions  about  staff,  organisation  and 

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in 

the  organisation  chart 

finances,  at  the  detriment  of  legal  issues  concerning  official  statistics  and 
confidentiality. 
-  No  place 
function  or 
responsibilities  going  beyond  the  FSO,  e.g.  the  setting  up  and  monitoring  of  the 
statistical  programme  and  of  the  compliance  with  fundamental  principles,  or 
international  affairs.  These  important  functions  should  be  visible  in  the  organisation 
chart of a federal statistical office, and could also be part of a horizontal department 
as suggested above. 

the  systemic 

includes 

175.  The organisation chart of the SORS has the advantage that dissemination is 
clearly visible as a horizontal function of its own. It is also positive that, as long as the 
responsibility for administrative registers is with the SORS, they are in a department 
from  data  collection  for  statistics.  The  main  disadvantage  of  the 
separate 
organisation chart is the clear visibility of the role of the SORS as a major player in 
the overall information system of the government, although these boxes are de facto 
empty.  It  has  been  shown  above  (see  1.4)  that  this  is  incompatible  with  official 
statistics,  and  this  should  be  made  clear  in  reality  and  in  the  organisation  chart  as 
soon  as  possible.  Furthermore,  a  unit  (or  units)  for  legal  affairs  and  co-ordination 
(including  co-ordination  with  other  producers  at  republic  level),  as  well  as  a  unit  for 
sampling  and  related  methodological  problems,  should  be  created  and  treated  as 
horizontal functions. 

176. 
It is suggested that the change process includes an expertise from outside on 
management and organisation, once the division of work between FSO and SOR will 
have been clarified. After this step, clear mission statements for the new role of the 
statistical offices can be developed in close co-operation between the three offices, 
to be used both for internal training and external communications. 

3.2. Planning, Programming and Priority Setting 
177.  The main description of the planning and programming process is given under 
1.3. The present chapter deals with priority setting by the statistical offices. 

If  resources  are  not  sufficient  for  implementing  the  whole  programme,  no 
178. 
explicit  adjustment  of  the  programme  is  made.  Statistical  producers  feel  bound  to 
execute  the  programme  as  fully  as  possible,  i.e.  that  no  regular  item  should  be 
dropped  completely,  except  in  situations  like  war  or  unrest.  Adjustments  are 
generally not made by postponing the data collection, but rather the processing and 
dissemination. Activities in the development chapter may, however, remain dormant 
for  several  years  for  lack  of  resources.  The  Conference  of  Directors  is,  to  a  large 
extent,  occupied  with  such  types  of  micro-management  issues  concerning  the 
implementation of the programme. 

179.  The  mismatch  between  programme  and  resources  can  be  seen  by  the 
reduction  of  the  number  of  surveys  over  the  year  in  the  consecutive  five-year 
programmes. The visible adaptation to the real situation is therefore made principally 
when a new programme is developed, but it is more a retroactive statement of facts 
to  a  real  situation  that  has  developed  already  during  the  implementation  of  the 
previous programme than a forward looking way of priority setting.  

180.  With the exception of the population census where the resource situation was 
still  unclear  in  Montenegro  (a  factor  that  was  certainly  taken  into  account  in  the 
decision to postpone the population census for a second time), there was no major 
complaint  about  a  mismatch  of  resources  for  carrying  out  the  regular  part  of  the 
present  programme.  The  complaints  about  insufficient  resources  are  much  more 

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aimed  at  the  level  of  expertise  of  staff  (including  training),  and  at  IT  investments, 
necessary to make the system fit for future challenges in an open society, i.e. about 
the resources required for initiating a sustainable transformation process. 

181.  Recently,  SORS  has  been  confronted  with  an  increasing  demand  from 
governmental  users,  in  many  cases  triggered  by  international  experts  who  advise 
them,  for  quick  estimates  of  statistics  in  line  with  international  concepts.  In  most 
cases,  the  results  could  not  be  produced  by  reprocessing  existing  data,  but  would 
have required a change in the data collection. 

Assessment 

182.  The  policy  of  all  statistical  offices  (FSO  and  SOR)  in  the  last  decade  was to 
avoid  explicit  priority  setting  between  items  of  the  statistical  programme,  e.g.  by 
trying  to  assess  aspects  like  relevance,  coverage,  timeliness  and  actual  use  and 
associating  cost.  It  has  also  been  shown  in  1.3  that  a  fundamental  change  to  this 
approach  has  to  take  in  from  of  establishing  a  master  plan  with  clear  priorities  and 
milestones  that  will  create  the  foundations  for  the  statistical  system  to  change 
fundamentally and the present list of surveys to be reassessed in terms of relevance 
for specific users and the society in general. 

183.  The issue of orientation for specific users is a difficult one in a country where 
most users are not aware of the potential of statistics about the economy and society 
for  preparing  decisions  (since  their  only  use  had  been  the  use  of  statistics  in 
implementing  policies  on  the  basis  of  administratively  defined  aggregates  and 
indicators  that  were  not  designed  to  give  an  unbiased  picture  of  the  real  situation), 
and  where  demand  from  the  private  sector  economy  is  still  week  due  to  its  limited 
size.  In  such  a  situation,  statistical  offices  have  to  put  themselves  into  the  feet  of 
these users, trying to anticipate what, in a context of informed decision-making, their 
future needs are likely to be, and to prioritise such needs.  

184. 
If there is no input from ministerial users to this issue, the experience of other 
countries  in  the  region  that  have  started  the  transition  process  earlier  might  be 
helpful, as well as advice from foreign experts. Irrespective of any explicit expression 
of needs for information, rather high priority should be given in the master plan to the 
implementation  of  a  key  set  of  basic  indicators  in  every  subject  area,  in  order  to 
honour  the  citizen's  right  of  information  about  the  situation  of  the  country.  Such 
indicators should be produced according to international standards, so as to enable 
the  highly  relevant  comparisons  with  other  countries.  The  list  of  basic  indicators  in 
the General Data Dissemination System of the IMF is an excellent starting point. 

185.  One  of  the  major  changes  in  looking  at  official  statistics  will  be  to determine 
and  prioritise  needs  in  terms  of  outputs  (information  about),  and  not  directly  as 
surveys  or  data  collections.  These  outputs  should  be  defined  as  indicators  or  other 
types  of  aggregates,  with  major  break-downs  (the  need  for  regional  break-downs 
should  be  examined  with  special  care,  given  their  impact  on  the  number  of 
respondent units and therefore cost), periodicity, timeliness, and if possible accuracy, 
for  all  subject  areas,  including  those  the  responsibility  of  which  are  allocated  to 
another  federal  producer.  Users  of  statistics  are  interested  in  outputs  and  their 
characteristics,  and  only  in  the  second  instance  in  the  source  of  data  and  the 
responsible  producer.  In  formulating  these  outputs,  the  present  programme  should 
not  serve  as  a  basis,  for  fear  of  leaning  too  much  towards  the  status  quo  at  the 
detriment  of  new  statistics  that  are  of  key  importance  in  a  market economy and an 
open  society,  but  which  will  take  some  time  to  implement.  The  major  difficulty  here 
may be with the lack of staff inside statistical offices that could be used for what is a 

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completely  new  approach  in  Yugoslavia;  regular  help  from  abroad  seems  to  be  a 
must in this phase. 

186.  Once  an  approximate list of outputs has bees set up, it is then necessary to 
identify  possible  administrative  sources  from  which  some  of  these  outputs  can  be 
generated  totally  or  partially,  and  assess  these  sources  in  terms  of  coverage, 
compliance with definitions and classifications, quality and timeliness of the outputs. 
The  same  holds  for  observation  data  as  source  for  some  environmental  indicators. 
What cannot be covered by any of these sources that lie outside of official statistics, 
has to be covered by statistical surveys as defined above with either households or 
businesses, i.e. by data collection fully determined by official statisticians. One of the 
major tasks of each statistical office is to bundle the information needs in such a way 
that  they  can  be  allocated  to  individual  statistical  surveys;  in  many  cases,  it  is 
efficient  to  combine  different  information  needs  in  one  survey  operation.  In  this 
process, due regard has to be given to response burden caused to businesses.  

It is very important that the statistical system shows quickly that it can adapt to 
187. 
the new needs for indicators with good coverage of the real world, since the demand 
is rapidly growing. If the statistical system fails to respond, governmental users may 
produce quick fixes of their own (or made by international experts), or even mandate 
statistical  surveys  outside  the  system  of  official  statistics,  and  without  the  statistical 
offices being involved. If the relevant new production is generated and disseminated 
outside  official  statistics,  the  image  of  an  outdated,  inert  system  of  official  statistics 
would  be  perpetuated  also  in  the  minds  of  governments,  and  the  prospects  for 
obtaining the resources required for the modernisation of the system may suffer and 
be directed away from official statistics towards such "ad hoc" activities instead. 

188.  Whenever  possible,  the  special  information  needs  used  for  allocating  public 
funds  according  to  existing  laws  should  be  handled  as  special  tabulation  compiled 
from data collected for the main purpose of official statistics, and only exceptionally 
give  rise  to  expanding  questionnaires  (or  the  number  of  respondent  units)  beyond 
what  is  required  for  measuring  the  situation  and  development  of  the  economy  and 
society;  in  the  latter  case,  it  would  be  legitimate  to  ask  the  requesting  agencies  to 
fund the cost of the extra data collection from their budget (which would also act as 
an incentive to change their respective laws in such a way that the allocation of funds 
could  be  based  on  aggregates  and  indicators  based  on  international  statistical 
concepts and used for general dissemination). 

189.  Once  the  most  suitable  data  collection  (or  in  many  cases  the  most  suitable 
combination  of  sources)  for  a  given  output  has  been  identified,  the  cost  of  the 
operation can be estimated, and priorities or timetables may have to be reassessed. 
The  major  difficulty  here  is  the  same  as  above;  the  lack  of  qualified  staff  to  do  the 
above in all subject areas with a sufficiently open frame of mind. In this work, intimate 
knowledge about data sources in the country is important; help from abroad may be 
used to develop a system of statistical surveys for businesses, agricultural holdings 
and  households,  which  more  or  less  have  to  be  developed  from  scratch,  under  the 
condition  that  this  key  skill  will  be  built  up  within  the  statistical  offices  and  that  the 
Yugoslav  statisticians  will  be  then  be  in  a  position  to  manage,  develop  and  adapt 
such a system on their own.  

190.  What is important in this process is that no new or ad hoc statistical survey are 
planned  and  carried  out  before  it  has  been  ensured  that  it  will  find  a  place  in  the 
future  framework  of  data  collections.  In  particular,  with the notable exception of the 
National  Bank  as  regards  possible  statistical  surveys  with  financial  institutions,  no 
new  or  ad  hoc  statistical  survey  should  be  carried  out  by  other  producers  than  the 

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FSO or the SOR before this framework is set up. For an efficient implementation of a 
system of surveys in a country of the size of Yugoslavia, it is advisable to specify, in 
the future statistical law, that statistical offices will be the only public institutions that 
can carry out statistical surveys for official statistics (with the same exception for the 
National  Bank  as  above).  Other  producers  will  still  have  the  possible  role  of 
producing statistics from their administrative records, or to combine different own and 
other sources for the production of aggregates like the balance of payments, if they 
are  willing  to  do  this  under  full  respect  of  the  fundamental  principles  of  official 
statistics and of the provisions of the future statistical law. 

3.3. Monitoring Quality in All Activities 
191.  The  major  quality  aspects  implicit  in  the  current  execution  of  the  statistical 
programme seem to be exhaustiveness of response and timeliness. Exhaustiveness 
is  interpreted  in  such  a  way  that,  if  there  is  a  global  or  item  non-response,  the 
missing  observations  are  substituted  by  either  taking  over  the  values  from  the  last 
period for the same respondent, or by substituting 0 or none in the case of item non-
response.  

192.  With  respect  to  timeliness,  the  deadlines of the statistical programme, which 
for  the  publication  of  the  results  are  mostly  in  line  with  the  “golden  rule”,  serve  as 
benchmarks to be achieved. For lack of resources, or for other major external events, 
it was not always possible to fully respect them. Replies from respondent units that 
arrive  too  late  are  in  some  cases  (when  the  results  are  presented  as  cumulative 
totals  since  the  beginning  of  the  year)  included  in  the  cumulative  total  of  the 
subsequent period. 

193.  Another  important  aspect  of  quality  checks  relates  to  verification  whether  a 
respondent unit selected for a given survey, but which does not respond, is still active 
or not (for further details, see B 5).  

194. 
It  seems  that  all  results  prescribed  by  the  programme  are  published 
irrespective of any quality checks at aggregate level subsequent to the collection and 
editing  phases.  For  surveys  with  exhaustive  coverage  target,  no  grossing-up,  i.e. 
extrapolation form the de facto number of respondents to the target population, takes 
place. This is tantamount not to use one standard method of implicit imputation, i.e. 
the  assignment  of  the  stratum  average  for  missing  item  or  unit  non-response. 
Furthermore, there is no comparison between the results of different sources where 
they  exist;  outside  national  accounts  and  agricultural  statistics  on  private  holdings, 
the  results  of  each  survey  are  compiled  and  disseminated  in  completely  separated 
processes.  In  the  case  of  sample  surveys  such  as  the  LFS,  no  indication  of  the 
variance (or confidence intervals) of the published figures is given. 

195.  As  regards  the  non-published  results  communicated  on  request  (mostly  to 
government  users),  it  is  not  clear  whether  quality  considerations,  or  systematic 
comparisons between different figures based on quality aspects, are included among 
the  criteria  used  in  deciding  on  whether  the  information  required  by  a  user  is 
transmitted  or  not,  and  on  which  figure  is  to  be  communicated  if  there  are  several 
options. 

196.  Another  element  of  quality  control  is  with  the  questionnaires  as  such.  As 
outlined elsewhere, many basic concepts of questionnaires are frequently not in line 
with international definitions, but respond to implementation needs laid down in other 
laws. No systematic check of the content of questionnaires is made from a horizontal 
point of view, once as survey is included in the statistical programme. 

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Assessment 

197.  For a modern concept of official statistics, the present almost exclusive focus 
on exhaustiveness is clearly inadequate, and the present treatment of non-response 
leads  to  a  high  risk  of  bias.  Item  non-response  should  be  entered  as  such  in  the 
microdata  files,  and  for  results  expressed  in  percentages,  the  "no  indication" 
percentage would have to be shown openly. Item non-response, and in some cases 
unit non-response (provided that the unit is still active and not only dormant), would 
have  to  be  taken  into  account  by  an  appropriate  system  of  weights  in  grossing  up 
absolute  figures  from  the  observed  units  to  the  target  population,  a  method  that 
would have to be introduced across the board. If major units such as big companies 
are not reporting, there is no way of substituting or grossing up, and the results have 
to  show  a  clear  warning  that  they  are  not  representative  of  the  intended  universe, 
and indicate the reason. 

198.  Statisticians  should  make  more  use  of  all  types  of  estimation  techniques  to 
come  out  with  relevant  results  in  time,  even  if  these  results  have  to  be qualified as 
provisional and corrected later on. The conditions for using estimation techniques in 
official statistics are that they are documented and made transparent, and that results 
can  be  calibrated  from  time  to  time  when  other,  more  complete  sources  become 
available.  More  use  of  estimation  techniques  and  provisional  results  would  greatly 
increase relevance. 

199.  As  part  of  the  change  process,  a  system  of  quality  control  based  on  clear 
criteria  should  be  developed  and  gradually  implemented  by  the  three  statistical 
offices  working  closely  together,  covering  all  phases  of  statistics,  not  only  data 
editing. Some examples: for data collection, non-response rates as such would have 
to  be  monitored  closely,  at  the  level  of  results,  monitoring  would  apply  to 
characteristics like accuracy and coherence (comparisons with other sources), and at 
the level of use, to media coverage and the frequency of requests for results. Staff 
would have to be trained accordingly. 

200. 
In  view  of  the  important  changes  the  system  of  data  collection  will  have  to 
undergo,  a  unit  responsible  for  systemic  quality  checks  of  questionnaires  (and  of 
survey designs) should be considered. This unit would have to give the "green light" 
before  a  questionnaire  can  go  out,  but  try  to  advise  production  units  as  early  as 
possible in the design process. It would check coherence with international standards 
and  between  surveys,  and,  for  important  new  questionnaires,  have  the  right  to 
request that the questionnaire be tested in a pilot before it is fully implemented. 

201.  The  way  quality  control  should  become  enshrined in the procedures and the 
organisation  of  the  statistical  offices  should  be  explicitly  included  in  the  above-
mentioned expertise on management and organisation.  

3.4. Finance and Budgeting 
202. 
If  the  population  census  is  excluded,  the  percentage  of  government 
expenditure going to statistics was 0.12% at the federal level, 0,17% for Serbia, and 
0.22%  for  Montenegro  in  2000.  As  a  weighted  average,  this  amounts  to  0,17%.  In 
absolute  terms,  the  budget  of  SORS  is  highest:  it  represented  a  share  of 47,1% of 
the total of the three statistical offices. The corresponding shares for the SORM and 
the  FSO  are  28.7%  and  24.2%  respectively.  In  general,  the  expenditure  figures  do 
not show unambiguously that the number of statistical activities had undergone some 
reductions.  This  is  better  reflected  in  the  decrease  of  the  number  of  surveys  than 

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through the absolute expenditure figures which are difficult to compare over time in 
real terms. As an example, the substantial increases in absolute terms from 2000 to 
2001 for the FSO and the SORS are due to a substantial nominal increase in salaries 
to  compensate  for  three  years  of  freeze  in  a  period  when price increases in Serbia 
amounted to 50%. 

203.  The  relative  shares  of  the  expenditure  for  statistics,  measured  by  the 
expenditure  of  the  three  statistical  offices,  has  shown  ups  and  downs  in  the  past  5 
years,  even  when  the  extra  funds  for  the  population  census  are  excluded  from  the 
2000  and  2001  figures  (which  matters  most  for  the  SORS).  The  single  peak  year 
1997  at  the  federal  level  was  explained  by  leasing  of  new  IT  equipment  (office 
automation).  In  Serbia,  the  change  from  2000  to  2001  is  revealing;  in  spite  of  a 
substantial increase for SORS, it was much less that for the Serb government as a 
whole,  a  differential  that  is  reflected  in  an  important  reduction  of  staff for SORS. In 
Montenegro,  where  expenditure  figures  have  only  been  asked  for  since  the 
introduction of the Deutsch Mark, i.e. since 2000, SORM has not been able either to 
benefit  from  a  substantial  increase  in  total  government  expenditure  between  2000 
and  2001,  with  a  sharp  decline  of  the  share  of  statistics  as  consequence.  The 
relatively constant staff number of SORM in the years before 2000 are an indication 
that  no  substantial  moves  in  resources  seem  to  have  occurred  before.  Concerning 
the FSO, it has managed to raise its budget from 2000 to 2001 both in absolute and 
relative terms, the share is now back at the level of 1998/99. 

204.  Statistical  Offices  have  to  follow  the  budgetary  rules  of  their  respective 
administrations,  which  are  quite  similar  in  the  three  administrative  environments. 
They  provide  for  a  rather  detailed  structure  of  the  budget  by  type  of  expenditure. 
Reallocation  between  budget  items  is  only  marginal.  No  carrying  over  of  unused 
credits  to  subsequent  years  is  possible.  The  population  census  has  a  separate 
budget that fixes a lump-sum amount without further details for each calendar year. 

205.  There are no legal obstacles that would prevent financing certain surveys (or 
equipment)  by  funds  from  other  public  bodies,  or  from  international  donors,  but  no 
use has been made so far of this possibility at the federal level, and at the republic 
level  only  for  equipment.  EU  funds  have  been  used  to  allow  participation  in 
international meetings and training courses, for both FSO and SOR staff. 

206.  With  the  notable  exception  of  the  census,  there  is  no  accounting  system  in 
place that shows cost, notably staff cost, allocated to either statistical activities of the 
programme  or  to  output  categories.  For  the  FSO,  the  possibility  to  generate  such 
information is supposed to exist, but there has not been any request so far. 

207.  The budget allocations for the purchase of goods are considered too low by all 
statistical offices. This has been a serious obstacle to upgrading their IT equipment 
and  software.  With  respect  to  services,  no  outsourcing  of  any  activity  to  private 
contractors or research institutes takes place, precisely for this reason. Even with a 
budget increase, mandating private companies for developing software would be too 
expensive compared to in-house development. 

208.  There  are  neither  staff  nor  expenditure  figures  available  related  to  official 
statistics by other producers than the three statistical offices. 

Assessment 

209.  Whereas the percentage of expenditure for official statistics is about the same 
as  for  some  other  republics  of  former  Yugoslavia,  there  seems  to  be  a  certain 

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imbalance  in  its  composition  insofar  as  investments  in  the  broadest  sense 
(equipment,  training,  innovations) have been neglected so as to be able to execute 
the current activities of the programme. To the contrary of most other countries of the 
region,  Yugoslavia  was  not  only  ineligible  for  EU  funds  in  statistics,  but  was  also 
banned from international meetings and exchanges due to the embargo. This is likely 
to have caused more damage to official statistics than the general reduction of public 
expenditure in real terms. 

In  order  to  implement  the  master  plan  mentioned  earlier,  substantial 
210. 
reallocation of the budgets of the statistical offices will be necessary, but it will not be 
possible  to  make  Yugoslav  statistics  fit  for  EU  requirements  in  this  way  only. 
Substantial  financial  assistance  and  expertise  from  abroad  is  required  in  the 
beginning  and  should  be  given  on  the  condition  that  the  respective  governments 
(federal and republic) agree to the sustainability of these investments, i.e. that after 
an  inception  phase,  the  activity  concerned  would  be  carried  over  into  a  regular 
activity of official statistics and fully financed by federal and/or republic budgets.  

211. 
It goes without saying that the master plan to be set up should have full details 
of  the  required  resources;  the  availability of financial resources, both nationally and 
from  international  donors,  will  determine  to a great extent the speed with which the 
various elements can be implemented. When the financing from international donors 
will ultimately come to an end, it would be an illusion to believe that sustainability of a 
statistical  system,  which  meets  the  complex  range  of  EU  requirements,  can  be 
achieved with the present level of national resources, however. 

212. 
In  view  of  the  different  tasks  of  the  statistical  offices  at  federal  and  republic 
level, and in view of the different size of the two republics, the resource situation from 
the overall budget point of view is particularly unsatisfactory for the SORS, with less 
than  50%  of  the  total  expenditure  of  the  three  statistical  offices,  but  in  charge  of  
producing  and  disseminating  official  statistics  for  the  republic  that  makes  up  more 
than  90%  of  the  population  and  of  economic  units  in  Yugoslavia.  Furthermore,  the 
substantial  increase  in  the  total  expenditure  of  the  government  between  2000  and 
2001 implies more activities in other parts of the administration, which are very likely 
to  lead  to  increase  demand  for  statistics  that  can  only  be  met  with  additional 
resources. Instead, SORS was forced to cut the number of posts.   

If one looks at the staff figures of the three statistical offices, the situation with 
213. 
respect to the mismatch between tasks and ability to respond to them is also critical 
in  Montenegro,  a  fact  which  is  disguised  in the expenditure figures by the relatively 
higher level of salaries when converted to Yugoslav dinars at the exchange rate (the 
SORM share in expenditure is 28.7%, as opposed to a staff share in the total of the 
three offices of 13.5%). As member of a federation, the government of Montenegro 
must be made aware of the fact that it cannot fulfil even the minimum of information 
needs of a modern state entity with the present level of skills and resources, and that 
investing  in  information  gathering  (of  which  official  statistics  is  one  important 
component) is inevitable for governments in modern societies. Official statistics has a 
strong  component  of  economies  of  scale,  which  means  that  small  republics  or 
countries  have  to  spend  relatively  more  to  achieve  the  same  level  of  production  in 
official statistics than larger territorial units. The following chapter (3.6) will go more 
into possible ways of achieving this ambitious objective. 

It is a matter of concern that neither SORS nor SORM have been able to keep 
214. 
the  share  of  government  expenditure  for  their  offices  at  the  level  of  2000  when  a 
substantial  increase  in  total  budgets  occurred  in  2001.  This  is  another  sign  of  low 

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impact  and  visibility,  and  of  difficulties  of  getting  sufficient  attention  for  official 
statistics when the allocation of resources is decided.   

215.  All  three  statistical  offices  should  co-operate  in  order  to  set  up  a  cost-
accounting  system  that  allows  cost,  including  staff  cost,  to  be  allocated  to  items  of 
the statistical programme. The systems should be identical so that cost at federal and 
republic  level  can  easily  be  added.  These  figures  should  become  part  of  the 
management  information  for  the  three  statistical  offices  and  be  taken  into  account 
when priorities are set and programmes and master plans developed and amended. 

216.  Efficient management and professional independence are on a weak basis if 
the director of a statistical office is prevented from allocating the given resources in 
the  best  possible  way  to  the  various  activities  and  inputs  through  a  too  detailed 
budget  that  prescribes  individual  types  of  expenditure.  This  is  especially  important 
during  the  change  process.  Exemptions  from these detailed budgeting rules should 
therefore  be  included  in  the  master  plan  submitted  to  the  respective  governments, 
paired  by  a  modern  system  of  controlling  and  full  ex-post  accountability  and 
justifications  on  the  use  that  was  made  of  the  resources  given  to  the  statistical 
system.  In  particular,  a  director  should  be  free  in  deciding  between  using  in-house 
resources or, in the case of bottlenecks, reverting to outsourcing, on the sole basis of 
comparisons between the benefits and costs of both options. 

217. 
It  was  suggested  earlier  that  some  of  the  current  activities  of  the  statistical 
programme be dropped to the benefit of preparing and implementing the master plan. 
If  a  government  ministry  were  to  insist  that  a  specialised  survey  of  which  it  is  the 
main  user,  but  which  the  statistical  offices  propose  for  discontinuation,  be 
maintained,  the  hitherto  unused  possibility  of  totally  or  partially  financing  surveys 
from other budgets (i.e. from the budget of the user ministry in this case) could offer a 
way  out.  The  willingness  to  pay  for  the  main  user  would  be  tested.  The  full 
responsibility of production and dissemination would remain with the FSO and SOR, 
and  the  activities  concerned  would  figure  in  the  statistical  programme  under  FSO, 
irrespective of whether they are financed from other sources than FSO/SOR budgets.  

218.  As  mentioned  at  several  instances,  a  statistical  office  should  have  the  legal 
possibility  and  autonomy  to  receive  and  to  manage  funds  from  other  budgets  for 
specific  statistical  activities,  i.e.  from  other  bodies  of  the  same  administration,  from 
statistical  offices  (and  other  bodies)  of  other  administrations  within  Yugoslavia,  and 
from  donors  abroad,  in  addition  to  and  separately  from  their  regular  budget.  Full 
transparency for what and how such funds are used should be ensured, also towards 
the ministry of finance. 

219. 
If in future receipts from the sales of statistical products and services to users 
were to increase, statistical offices should receive the legal right to use these funds 
as a contribution to covering the cost of such activities. This is of special importance 
for covering the extra cost induced by requests for special tabulation and analysis by 
specific users, since otherwise the capacity to render such services may either be too 
restricted,  or  they  may  be  carried  out  at  the  detriment  of  regular  production  or  of 
development activities. 

3.5. Staffing, Staff Recruitment, and Training 
220.  Overall staff resources in the three statistical offices (plus the statistics branch 
of the City of Belgrade office) amount to approximately 750 persons (year 2000). The 
composition  was  as  follows:  218  worked  in  the  FSO,  377  in  the  SORS,  93  in  the 
SORM,  and  approximately  65  in  the  City  of  Belgrade  office.  If  a  rough  estimate  for 

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other  producers  is  added  (with  persons  both  at  the  federal  and  republic  level),  the 
grand total is likely to be around 900 for official statistics in the Federal Republic of 
Yugoslavia  (less  those  who,  while  being  part  of  statistical  offices,  work  for 
administrative  registers  and 
is 
comparatively small). 

to  statistics,  but 

their  number 

IT  unrelated 

221.  The staff salaries are too low to allow living from this source of income alone 
for  most  categories  of  staff  in  Belgrade.  At  the  federal  level  and  in  Montenegro, 
wages  of  FSO  staff  are  the  same  as  for  jobs  at  comparable  skill  level  in  federal 
ministries, whereas in Serbia, salaries in the SORS, in spite of the recent increase, 
are still slightly lower than in ministries (and also if compared to those of the FSO). If 
converted  to  dinars  at  the  exchange  rate,  the  salaries  in  Montenegro  are 
considerably higher than in Belgrade.  

222. 
It is evident that the pay level affects the attractiveness of the statistical offices 
for those skills where there is a strong demand from the private sector, notably for IT 
experts and economists with good knowledge of market economies. For such skills, 
only  young  university  graduates  may  be  interested  in  starting  their  professional 
career in a statistical office, but there is a high risk that they leave for a better-paid 
job  in  the  private  sector.  All  three  offices  complained  that  in  the  last  10  years  they 
had lost a number of key experts they were unable to replace. 

223.  For  the  FSO,  the  gender  structure  shows  much  less  emphasis  on  women 
(33%) than in statistical offices of other countries of the region, whereas this share is 
much  closer  to,  but  still  lower  than,  the  level  of  other  countries  for  the  two  SOR 
(66%).  Women  are  underrepresented  at  the  senior  management  levels  in  all  three 
offices. In terms of age structure, there is a concentration, especially for professional 
staff, in SOR (less so for the FSO) with persons who have many years of services. 
The average number of years of services is also very high (22) for SORM. 

224.  Most  of  the  professionals  with  a  certain seniority  in  official  statistics  are  fully 
committed  to  the  cause  of  official  statistics  and  show  a  high  degree  of  corporate 
identity  with  the  institution  they  work  in.  In  spite  of  the  past  decade,  they  remain 
motivated to bring Yugoslav statistics back to at least the level and official recognition 
it  enjoyed  before  the  former  Yugoslavia  started  to  disintegrate.  The  insight  that  the 
new  system  of  pluralistic  democracy  and  market  economics  needs  a  system  of 
official statistics, and statistical series, which are in many aspects different from the 
1980s is slowly, but steadily getting ground. 

225.  There is a huge deficit in training that is mentioned by all senior management 
in the three offices. No training programmes exist, for lack of resources. The need for 
training  is  felt  in  all  relevant  areas:  statistical  methods  (especially  sampling  and 
national  accounts),  principles  of  official  statistics,  IT,  management,  and  language 
skills (with English as first priority).  

226.  The  generation  of  statisticians  who  had  experienced  the  pre-1990  period  in 
their offices with a well working statistical system in the former Yugoslavia had seen 
their  networks  and  contacts  cut,  with  an  inability  to  be  informed  about  the  recent 
developments during the last decade, and with few opportunities to practice foreign 
languages.  The  possibility  to  access  international  documents,  and  material  from 
other countries, via Internet, is a very recent one and not available to all staff. 

227.  Staff in regional offices of SORS and SORM is even less likely to receive any 
form of knowledge improvements than their colleagues in the headquarters or in the 

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FSO. There are rather few meetings between headquarters and regional offices, also 
due to a lack of funds for domestic travel.  

228.  The percentage of staff with active knowledge of English is estimated at 20% 
for  the  FSO,  and  at  7.5%  for  the SORS. Very few staff members in the SORM are 
able  to  express  themselves  in  English  (or  in  another  foreign  non-Slavic  language). 
About  twice  as  many  persons  have  a  passive  knowledge  of  English  which  was 
unused during the last decade, but which could be re-activated through training and 
sufficient opportunities to practice.    

229.  With  the  exception  of  the  senior  management,  staffs  are  recruited  at  a 
relatively low level, subsequent to vacancies being published. In the FSO, everybody 
has  to  pass  an  examination  after  his  or  her  first  year  of  service  (probatory  period). 
When posts at more senior level become vacant, they are normally filled by internal 
promotion,  which  has  to  be  approved  by  another  ministry.  Delaying  such  approvals 
(as  well  as  approvals  for  publishing  vacancies)  is  often  used  as  a  hidden  way  for 
saving,  which  explains  why  certain  posts  in  the  organisation  charts  are  not  filled  at 
all. There are only a limited number of cases of job rotations outside the promotions 
mentioned above (e.g. a transfer from SORS to FSO). 

Assessment 

230.  From  a  purely  quantitative  point  of  view,  a  statistical  system  with 
approximately  900  persons  is  a  solid  basis.  If  hypothetically  all  statistical  activities 
could be grouped in one national statistical office, a solution that would clearly show 
the highest synergy, it is estimated that Yugoslavia would need around 1100 official 
statisticians,  working  in  a  modern  institutional  and  technological  environment,  to 
produce  the  full  set  of  statistics  presently  required  by  EU.  Taking  into  account  that 
Serbia  and  Montenegro  will  have  to  build  up  and  sustain,  independently  of  the way 
the relationship between republics and the federal level will look like in future, almost 
fully fledged statistical systems of their own, able to produce almost the full range of 
EU  statistics  for  their  respective  territories  and  to  disseminate  them  to  users  in 
various forms, the estimates increase to 1050 for Serbia, and 250 for Montenegro, to 
which  a  staff  number  for  the  FSO  has  to  be  added  which  is  difficult  to  estimate 
presently,  but  which  is  unlikely  to  be  more  than  150.  From  this  perspective,  the 
present staff level in official statistics should be gradually increased to a level that is 
approximately 50% higher.   

231.  However, the problem is not so much the quantity as the staff structure by skill 
level  and  institution,  and  within  SORS  and  SORM,  between  headquarters  and 
regional offices. A huge effort of training the staff that is present now and that has the 
necessary flexibility and open mind to turn training into better work, and of the staff 
that  will  be  newly  recruited  at  lower  level  (mostly  university  graduates)  in  the  near 
future, has to be set up as a matter of urgency. As far as training in statistics proper 
is  concerned,  this  will  inevitably  use  some  of  the  time  of  key  staff  who  is  also 
supposed to steer the change process in many other aspects. 

232.  The first and priority measure in training, to be started before any longer-term 
plan  is  established,  should  be  training  in  English.  Without  this  knowledge, 
professional  staff  cannot  access  some  of  the  most  important  documents  in  their 
subject  area,  and  cannot  exchange  experience  with  their  counterparts  in  countries 
outside the former Yugoslavia. As a complement to the increase of language skills, a 
system  of  regular  co-operation  with  those  countries  of  the  region  should  be 
established where there is no significant language barrier. Yugoslav official statistics 
can  benefit  from  the  experience of these countries, which have started transition to 

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open  societies  and  market  economies  earlier.  Both  measures  will  not  be  possible, 
however, without funding from abroad. 

233.  For  any  newly  recruited  person  for  a  professional  job,  ability  to  read  and  to 
speak  English  should  become  a  prerequisite  that  is  tested  before  an  offer  for 
employment is made. The language training programme will have to concentrate on 
professional staff that is already present in statistical offices. 

234.  The  new  set  up  of  official  statistics  is  likely  to  see  the  following  structural 
changes regarding staff: 

-  From  lower  qualified,  predetermined  type  of  work  to  more  conceptual  or 
user-oriented work in a multidisciplinary context that requires a broad mix of 
skills; 
-  From  regional  offices  to  headquarters  of  SORS  and  SORM  (or  to 
intermediate forms of regional offices); 
-  From other producers to statistical offices; 
-  From FSO to SOR. 

Whether jobs will be transferred with or without incumbents depends on the abilities 
of the persons concerned, and their willingness to change. It has to be expected that 
this  will  not  be  possible  in  all  circumstances,  and  that  there  is  a  number of present 
staff members for whom solutions outside official statistics will have to be found. 

235.  The order of magnitude of the change is greatest for the SORM. A substantial 
quantitative  and  qualitative  upgrading  is  necessary,  so  that  it  will  amount  to  a 
complete  reshape  of  the  office.  In  addition,  the  local  labour  market  of  persons  with 
the necessary skills is limited, unless there will be persons from FSO or SORS who 
are prepared to join the SORM. The size of the increase is such that it comes close 
to  be  out  of  possible  scope  even  for  authorities  well  intended  to  official  statistics. 
More  innovative  forms  of  solving  the  SORM  problem  will  have  to  be  explored 
therefore. 

236. 
In order to maximise economies of scale, and in order to avoid the set-up of 
parallel  infrastructure  and  skills  in  SORM  that  is  not absolutely necessary either for 
dealing  with  respondents  or  users  in  Montenegro,  it  should  be  seriously  examined 
whether  some  of  the  infrastructure  activities,  notably  with  respect  to  IT  and 
methodological development, cannot be outsourced to one of the other two statistical 
offices (against compensation). In addition, some of the staff of the SORM would be 
associated full time to specific activities taking place in the FSO or SORS for a fixed 
period:  examples  are  development  projects,  or  even  some  permanent  activities  in 
special subject areas where grouping skills from all three offices into a competence 
centre leads to synergies.  

237.  SORM  is  not  the  only  statistical  office  where  an  increase  in  staff  should  be 
included in the master plan from the very beginning. In view of the large territory to 
cover with new types of official statistics and data collections, an increase in size for 
SORS  seems  inevitable,  even  when  the  first  steps  will  be  the  reallocation  and 
upgrading  of  existing  staff.  An  increase  in  budget  will  also  be  necessary  from  the 
beginning for items like equipment, training etc., and for the higher average skill level 
of  the  staff  that  will  inevitably  have  some  bearing  on  the  average  salaries.  Unlike 
SORM, SORS can start from a size and an organisational structure that will allow a 
stepwise increase without reshaping fundamentally the structure. 

238.  A  certain  part  of  the  staff  increase  in  SOR,  to  be  determined  once  the  new 
division  of  work  between  the  federal  and  the  republic  levels  will  be  known  in detail, 
are  likely  to  be  implemented  in  the  context  of  shifting  tasks  from  FSO  to  SOR.  But 

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this source of new staff for SOR cannot in itself provide them with all the resources 
required  for  their  future  roles  in  a  system of official statistics; a net increase will be 
required in addition.  

239.  Once  the  master  plan  has  been  agreed  by  governments,  this  decision  will 
make  work  in  statistical  offices  more  attractive  for  young  university  graduates  and 
key specialists like those for IT. They will be confronted will challenging work with the 
possibilities of international exchange, and in view of the generation gap, with good 
prospects  for  promotion.  This  should  compensate  to  a  certain  extent  for  lower  pay 
level compared to the private sector, but the salaries in statistical offices have to be, 
for comparable skills, at least at the same level as for ministries. Where this is not yet 
the  case,  the  master  plan  should  include  an  explicit  item  for  correcting  this  type  of 
discrimination. 

240. 
In the future system of official statistics, more attention should be paid to job 
rotation within and between statistical offices. Such changes should be encouraged, 
e.g. as a factor that increases the chance of promotion. Posts at higher level should 
not be filled exclusively with persons from the same statistical office, but also include 
the  possibility  of  a  transfer  of  experienced  persons  from  one  of  the  other  two 
statistical  offices,  from  universities  or  from  ministries  once  the  latter  will  have 
developed a "quantitative culture". 

241.  Another  aspect  to  be  taken  up  in  the  master  plan  is  premises.  The  present 
premises  of  SORM  and  SORS  will  not  be  sufficient  for  the  future  size  of  the 
headquarters of these offices, even if some form of regional offices were to remain. 
The  ideal  of  a  "virtual"  national  statistical  institute  could  be  approximated  closest  if 
the headquarters of FSO and SORS could share the same building (or two adjacent 
buildings). This would allow the development of a joint culture of official statistics, and 
be most efficient in terms of IT communication infrastructure and security aspects. 

3.6. Information Technology 
242.  At  the  federal  level,  the  FSO  is  using  both  a  mainframe-based  system  and 
individual PCs. There is a well-established tradition of using information technologies 
(IT) for data production and dissemination. 

243.  The department for Statistical Information System consists of around 50 staff 
members. The equipment includes a mainframe IBM S/390, connected to dedicated 
application  servers  (Economic  statistics,  Social  statistics,  National  accounts, 
Publications,  Information  technology,  General  affairs  and  planning).  The  statistical 
offices  of  Republics  are  also  connected  to  the  mainframe  of  the  FSO.  The  IT 
equipment also consists of around 200 IBM PCs connected via Token ring LAN. 

244.  Software  used  by  the  mainframe  are  MVS,  PL/1,  FORTRAN,  COBOL,  and 
DB2. PCs use Windows 95, 98, and NT, as well as LINUX. SAS is used for statistical 
applications, too. 

245.  Non-statistical  governmental  bodies  are  also  connected  to  the  mainframe  of 
the  FSO  for  non-statistical  applications,  because  the  FSO  has  one  of  the  most 
powerful  IT  systems  in  the  federal  government.  Connections  already  exist  with  the 
main federal buildings of the federal government, the federal Chamber of Commerce, 
the  federal  Ministry  of  Foreign  Affairs,  the  federal  Standardisation  Office,  and  the 
computer centre of the University of Belgrade. Extensions of these connections are 
being  considered  by  the  government.  The  IBM  RACF  system  is  used  for  the 
protection of access by non-authorised users to statistical data. 

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246.  The  FSO  is  starting  a  co-operation  with  Sweden  on  IT  strategy.  This  co-
operation  is  welcome  because  hardware  and software need to be updated as soon 
as possible. Furthermore, it appears that 50% of all statistical activities conducted at 
the FSO are processed on PCs without any central storage, or even are not using IT 
at all. 

247.  As  explained  above  the  SORS  has  a  direct  permanent  connection  to  the 
mainframe  of  the  FSO.  There  are  also  connections  with  regional  branches  of  the 
SORS. Non-statistical bodies are connected to the mainframe of the SORS, such as 
the Chamber of Commerce of Serbia, all ministries of the Republic, universities, and 
the  national  airlines  JAT  (in  the  latter  case  the  SORS  mainframe  is  used  as  a 
computer  centre  without  any  statistical  dimension,  as  a  service  paid  by  JAT).  The 
SORS  has  also  three  internal  PC  networks  (one  per  floor  of  the  SORS  building). 
These networks are old and modern PCs cannot be connected. 

248.  Both hardware and software used by the SORS are old. The budgetary cuts, 
and the resulting decrease in well skilled staff in the IT departments have reached a 
level where the risk of a complete breakdown of the mainframe is not to be excluded. 
In  addition,  there  is  some  anarchy  in  the  software  used  on  PCs.  A  census  of  all 
software  used  on  PCs  is  being  launched  internally.  An  improvement  is  expected  to 
take place on the latter point. 

249.  The IT equipment of the statistical office of the Republic of Montenegro is very 
poor. The SORM has developed a plan for the development of modern IT resources, 
with  experts  from  the  University  of  Podgorica.  This  plan  has  been  approved  by  the 
government of the Republic. However, the funding of the first phase of this plan is still 
on hold. The SORM as a permanent access to the mainframe of the FSO, and can 
run some applications on the mainframe of the SORS, but this is not considered as 
sufficient. 

Assessment 

250.  The situation at the federal and Republics levels with regard to IT has become 
worse and worse over the last ten years. Both equipment and software are outdated. 
To  restore  the  capacity  of  the  three  statistical  offices  at  the  relative  level  that  had 
been reached at the end of the eighties require a significant investment that has to be 
organised in the framework of an IT master plan. Given the necessary co-operation 
between FSO and statistical offices of Republics in carrying out their mission, such a 
master  plan  should  cover  the  three  offices.  The  co-operation  with  Sweden  that has 
been initiated at the federal level is very promising, and should involve the Republic 
level. Clearly, the corresponding financial effort is the major obstacle on the road to a 
modern  IT  environment  for  the  statistical  system  of  Yugoslavia.  The  prominent 
position of the FSO as a provider of computing services to the government and some 
big  non-governmental  bodies  might  provide  a  useful  leverage  for  getting  the 
commitment of governmental budgetary bodies and the actual provision of funds. Of 
course, as often stated in the present report, this to be conducted in bearing in mind 
the need for very strong barriers (« firewalls ») between statistical and non-statistical 
uses of IT resources. Modern technologies allow to set up these security tools. 

3.7. Internal Monitoring of Performance 
251.  There  is  a  no  regular  appraisal  for  each  staff  member  in  the  FSO  or  SOR 
except  for  the  examination  after  the  one-year  probatory  period  for  newly  recruited 
staff. 

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252.  So far, Yugoslavia has not had any external assessment of specific statistics 
such as national accounts or CPI. The FSO would warmly welcome such evaluations 
by international experts. 

Assessment 

253. 
In  addition  to  the  recommendations  under  3.3  on  quality,  it  is  suggested  to 
introduce in all three statistical offices, as part of the new staff policies, a regular (i.e. 
annual)  appraisal  of  each  staff  member  and  organisational  unit,  against  objectives 
that  have  specified  the  year  before,  based  on  the  future  master plan and statistical 
programmes. The three statistical offices should co-operate very closely in setting up 
this system. 

254. 
It is highly recommended that selected key statistics that are part of the GDDS 
become the object of an independent in-depth assessment by international experts at 
points  in  time  that  will  have  to  be  determined  later.  CPI  and  national  accounts  are 
first  priority  candidates  for  such  reviews.  Progress  can  be  monitored  by  repeating 
such external assessments from time to time  

3.8. External Accountability 
255.  The  statistical  law  (article  16)  provides  for  an  annual  ex-post  report  on  the 
implementation  of  the  statistical  programme  to  be  submitted  to  the  Federal 
Parliament.  A  similar  provision  can  be  found  in  the  draft  of  the  new  statistical  law. 
This report is first discussed at the level of the federal government (with the presence 
of the FSO director). It is the major tool of external accountability concerning official 
statistics at the federal level. No parallels at republic level exist. 

In a wider sense of accountability, transparency of all methods and definitions 
256. 
is  an  essential  part  of  good  practice  and  therefore  explicitly  mentioned  in  the  UN 
Fundamental Principles. In this respect, the FSO publications have a good standard. 
All  products  contain  extensive  methodological  descriptions  of  all  sources  and 
definitions.  This  is  especially  relevant  for  flagship  publications  like  the  statistical 
yearbook.  Metadata  are  rather  short,  however,  concerning  significant  aspects  of 
results other than definitions, e.g. accuracy and de facto coverage. 

Assessment 

257.  The  annual  ex-post  report  is  an  essential  tool  in  the  accountability  of  official 
statistics. Due to the lack of a translation, it was not possible to assess its content in 
some  detail.  The  impression  given  is  that  it  has  become  a  routine  that  has  not 
caused  any  discussion  in  substance  either  at  government  or  Parliament  level.  No 
overview on resources seems to be given in this report. 

258.  The  content  could  be  improved  beyond  following  the  individual  items  of  the 
statistical  programme,  by  laying  more  emphasis  on  general  and  horizontal  issues 
such  as  those  laid  down  in  the  future  master  plan,  and  on  resources.  This  would 
focus  the  attention  of  the  government  away  from  unnecessary  details  to  major 
issues. 

259.  Should in future the statistical programme be adopted by the governments of 
the republics as suggested in 1.3, the annual ex-post reports would be addressed in 
the  first  step  to  the  governments  of  the  republics.  Since  Parliaments  may  not  be 
involved  in  the  adoption  of  the  future  statistical  programmes  any  more,  it  is 

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recommended to maintain the requirement of this ex-post reports being submitted to 
the  respective  Parliaments  (not  for  approval,  but  for  taking  note,  discussion  and 
possible  initiatives  addressed  to  the  government  for  taking  certain  types  of  action, 
this being the only opportunity of Parliaments to discuss substantive issues of official 
statistics). The reporting to federal authorities would have to be redefined in line with 
their  role  in  the  statistical  activities.  All  reporting  of  this  type  should  be  given  for 
opinion to the Statistical Council before submitted to political authorities; the opinion 
of the Council will be known to the governments when they discuss the report. Once 
adopted,  the  reports  (and  the  opinions  of  the  Council)  would  be  made  publicly 
available. 

260.  The  present  good  FSO  practice  of  openness  on  methodologies  could  be 
further  improved  by  including  accuracy (for sample surveys) and de facto coverage 
statements (e.g. response rates), by cross-references to other data collections when 
a  survey  is  described,  and  by  letting  know  all  users  that  all  this  material  can  be 
obtained free of charge if it is too voluminous to be included with the dissemination of 
results.  FSO  and  SOR  should  have  the  same  standards  of  transparency  in  this 
respect. 

B. Technical Part: Capacity of Producing Statistics in Various 
Areas 

1. Assessment of the Overall Capacity 

261.  Yugoslavia  has  experienced  over  the  past  decade  a  very  difficult  situation. 
The statistical system, as other official structures, has been affected by this situation 
in  its  overall  capacity  of  producing  statistics  in  various  areas.  The  economic  crisis 
and  the  budgetary  restrictions  have  obliged  to  reduce  or  to  cancel  many  statistical 
activities.  The  separation 
international  community  has  prevented 
statisticians  to  participate  in  the  development  and  update  of  international  statistical 
standards, as well as the exchange of experience with other European statisticians. 
Against  this  background,  the  statistical  system  of  Yugoslavia  is  facing  since  a  few 
years  the  challenge  of  the  transition  to  a  pluralist  political  system  and  a  market-
oriented  economy.  This  environment  has  damaged  the  overall  capacity  of  the 
Yugoslav statistical system of producing statistics in various areas. 

from 

the 

the  capacity  of  producing  economic  statistics  within  an 

262.  However,  there  is  still  a  capacity  of  conducting  censuses  such  as  the 
forthcoming  population  census  in  2002,  and  to  set  up  and  manage  an  important 
labour force household survey. One can add that the implementation of the European 
standard  classification  of  economic  activities  NACE  Rev.1  is  in  progress,  which  will 
give 
internationally 
comparable  framework,  as  soon  as  this  implementation  is  completed  in  the  whole 
statistical  system,  including  business  registers.  The  Yugoslav statistical system has 
also the capacity to conduct exhaustive economic surveys on the social sector (i.e., 
state, co-operatives, and mixed sectors), and to compile and disseminate short-term 
as well as structural indicators related to this sector. 

263.  On  the  other  side,  there  is  a  strong  need  for  improving,  or  restoring,  the 
statistical  capacity  of  the  Yugoslav  statistical  system  in  a  number  of  areas.  With 
regard to standards and conceptual frameworks, the implementation of the European 
standard classification of products CPA should be launched, in order to complement 
the  implementation  of  the  NACE  Rev.1.  The  implementation  process  of  the  new 

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world-wide  standard  of  national  accounts  1993  SNA  should  be  speeded  up  and 
somewhat reoriented, in order to abandon the outdated system of national accounts 
MPS as soon as possible. With regard to the actual coverage of social and economic 
areas,  there  are  shortcomings  in  annual  population  statistics  and  household 
consumption  surveys.  In  the  economic  area  the  capacity  of  describing  the  growing 
private sector is not sufficient (with the remarkable exceptions of retail trade activities 
and  consumer  prices),  which  will  quickly  raise  serious  problems  of  reliability  for  a 
number  of  economic  indicators.  With  regard  to  statistical  technologies,  sampling 
techniques,  treatment  of  non-responses,  and  quality  monitoring  should  be  more 
widely used, especially in the economic area. 

2. Capacity to Organise and Carry out Censuses 

264.  The  division  of  work  between  FSO  and  SOR  for  the  population  census  is 
clear: the FSO has established the methodological basis (variables, definitions etc.) 
and will disseminate results at the level of the Federation. The FSO is not involved at 
all  in  the  fieldwork,  which  is  in  the  exclusive  responsibility  of  SORS  and  SORM 
respectively (with the FSO not having any formal role). Data entry is exclusively, and 
data  editing  to  a  large  extent,  carried  out  at  republic  level,  with  some  additional 
checks  at  federal  level  once  the  final  microdata  are  transmitted  from  the  SOR  to 
FSO. SOR will also disseminate detailed results at various geographical levels. 

265.  The above division of work has obvious implications on the cost. Only 4% of 
the total cost will be borne by the federal budget, the major part being financed by the 
republic level, especially by Serbia. 

266.  The target date for the census will be 31 March, midnight. The fieldwork takes 
place  between  1  and  15  April  2002;  it  will  not  include  Kosovo  and  Metohia.  First 
results  in  terms  of  a  headcount  of  persons,  household  and  dwellings  based  on  the 
manually controlled paper questionnaires will have be available by 30 days from the 
conclusion of the field work, i.e. by 15 May. 

267.  A new element will have an impact on the timing of the census. Due to local 
elections  that  are  scheduled  to  take  place  in  Montenegro  in  the  same  period,  the 
Montenegrin  authorities  have  announced  the  postponement  of  their  census  to  the 
spring  of  2003.  The  census  was  already  postponed  from  April  2001  to  April  2002 
because of elections at republic level in Montenegro close to the original date. Serbia 
is  determined  to  carry  out  the  census  as  planned  in  2002,  whereas  the  new  date 
proposed in Montenegro would be spring 2003. 

268.  SORS has developed a manual of 80 pages for the local census committees. 
It  will  organise  courses  to  instruct  the  local  instructors,  and  set  up  a  call-centre  for 
both the public and the responsible persons at local level. The written material will be 
taken over more or less entirely by SORM. 

269.  Unlike  for  the  last  census  in  1991,  no  use  of  optical  reading  will  be  made, 
since  Yugoslavia  was  barred  from  obtaining  this  type  of  equipment  for  such  a  long 
time that the lifting of the ban came too late for the originally planned census date of 
2001.  The  SORS  will  install  in  its  regional  offices  120  to  150  PCs  for  two  shifts  of 
temporary  staff  who  enter  and  code  the  variables.  SORM  will  have  two  shifts  of 30 
persons,  to  be  installed  centrally  in  another  building  in  Podgorica,  and  a  tender  for 
the corresponding IT equipment is about to be finalised (for the financing, EU funds 
will  be  used).  Decentralised  data  entry  and  editing  will  last  6  months in the case of 
Serbia.  The  final  editing  and  the  tabulation  will  be  carried  out  on  the  SORS 

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mainframe  for  Serbia.  Results  based  on  this  process  will  start  to  become  available 
from February 2003 onwards. 

270.  An  information campaign for the population, using various media, was set to 
start at Christmas 2001, in which SORS and FSO would be active.  

271.  The  list  of  variables  is  more  or  less  identical  to  those  asked  in  1991,  which 
follows the recommendations of the UN/ECE. This list includes questions normally to 
be found in an agricultural census on area, crops and livestock. Yugoslavia has in the 
last  three  decades  combined  population  and  agricultural  censuses,  and  because 
there is a great demand for statistics about the mainly privatised agricultural sector, 
and  in  view  of  the  low  probability  of  getting  resources  for  a  separate  agricultural 
census, it was decided to continue with this combination as before. 

272. 
In  the  questionnaire,  there  are  special  questions  for  citizens  of  the  former 
Yugoslavia who have been displaced, since 1991, through war and unrest and will be 
present on the territory covered by the census at the census date. 

273.  For  the  Yugoslav  citizens  with  residence  outside  the  country,  and  who  are 
registered  with  a  Yugoslav  embassy,  the  census  will  be  carried  out  via  these 
embassies.  For  the  armed  forces,  the  census  will  be  carried  out  by  the  ministry  of 
defence. Special procedures are foreseen for persons in collective households. 

274.  Staff in both FSO and SORS is rather optimistic to have done everything that 
is  necessary  for  a  successful  census.  A  pilot  census  was  carried  out  in  1999.  The 
major problem that was mentioned is again a lack of qualified IT staff. 

275.  Two months before the target date, it was decided to introduce two additional 
questions  on  religion  (without  response  obligation)  and  on  republican  citizenship 
(Serbia or Montenegro). The census legislation at federal level, and in the republic of 
Serbia,  had  to  be  amended  in  a  very  short  time,  and  the  questionnaires  that  had 
already  been  printed  and  distributed  to  the  local  census  committees  in  Serbia  will 
have to be produced for a second time. 

276.  The data entry foresees that the names and addresses of persons will not be 
captured, but their personal identity numbers. 

277.  Another  complement  at  the  last  moment  that  is  welcome  in  this  case  is  that 
SORS  will  provide  the  questionnaire  in  languages  of  minorities  (including  Albanian 
for  municipalities 
teams  of 
enumerators will be formed in areas with minority languages. 

in  Southern  Serbia),  and 

that  mixed-language 

Assessment 

278.  The approach to the organisation of the census 2002 is very much based on 
the  one  for  the  last  census  in  1991.  Many  key  persons  from  this  last  census  are 
again  responsible  this  time,  and  this  is  the  main  reason  why  no  major  problem  is 
anticipated for 2002. 

279. 
In spite of the new situation Yugoslavia faces in 2002 as compared to 1991, 
no consultation of potential users concerning their information needs took place. As a 
short cut to such a consultation, the list of variables from the last census was taken 
over. With a wide consultation in time, the two questions that had to be introduced at 
the very last moment might have been identified sufficiently early. 

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280.  There  are  some  additional  measures  for  the  information  campaign  in 
comparison  to  1991.  However,  the  co-ordination  of  efforts,  and  the  definition  of the 
respective  roles  between  FSO  and  SOR  in  this  campaign,  do  not  seem  to  be 
sufficiently defined. Since the census is the most visible activity of official statistics to 
the public at large, it would be a pity if the messages given in the public would not be 
strictly identical in content, or be perceived as unnecessarily duplicative. 

281.  The  public  perception  aspect  is  particularly  sensitive  because  the  role  of 
official statistics is about to change in the country. Even if issues like confidentiality or 
government  intrusion  in  privacy  have  not  been  voiced  last  time,  nor  in  the 
deliberations  on  the  present  census  law,  it  would  be  risky  not  to  be  prepared  in 
advance  to  react  to  critics  raised  from  the  public,  both  from  the  point  of  view  of 
content  and  organisation.  Furthermore,  since  the  census  law  does  not  give  the 
impression that the census excludes the use of the individual data for administrative 
purposes  (see  the  discussion  under  A1.2),  it  is  the  more  important  that  the 
information  campaign  stresses  this  crucial  difference  to  the  last  census.  The 
impression received so far is that this aspect may not have been taken into sufficient 
consideration,  thus  giving  away  a  unique  opportunity  of  visibility  to  explain  the  new 
role of official statistics, and the new limits in the use of individual data, in the context 
of the census. 

282.  The potential of using the census campaign for making the new paradigms of 
official  statistics  better  known  have  been  given  a  set-back  by  the  two  latest 
developments,  i.e.  the  second  postponing  of  the  date  in  Montenegro,  and  the 
introduction of two additional questions at a too late stage in the process. Especially 
the  latter  reflects  badly  both  on  the  ability  of  the  statistical  system  to  identify  user 
needs,  and  on  the  ability  to  oppose  to  pressures  from  outside  on  the  content  of 
questionnaires that threaten to jeopardise an operation already on track. 

283.  As  regards  Serbia,  the  organisation  of  the  fieldwork,  and  the  preparation  on 
the IT side, are sufficiently well prepared and advanced. In Montenegro however, the 
situation is less optimistic: the very recent change in the originally agreed time-table 
because of elections, although this coincidence was known long in advance, is not a 
good  sign  for  the  organisational  capacity  of  the  administration  in  general.  If  this 
decision  had  not  been  made,  the  degree  of  preparation  in  Montenegro,  notably 
concerning software, would have to be qualified as insufficient. 

284.  Another  issue  that  remains  open  is  the  ability  to  create  easily,  i.e.  without 
heavy programming, additional tabulation not foreseen in the publication or tabulation 
programme,  e.g.  at  the  request  of  a  ministry.  This  is  an  issue  connected  to  the  IT 
infrastructure  in  general,  especially  the  software  environment.  Even  when  such 
requests did not occur in the last decade, it would be prudent to assume that there 
will be persons with a more quantitative approach to decision making in ministries, or 
other users with the same skills, who will address such requests to FSO or SOR in 
the near future. A lack of capacity in this respect would not only shed doubt on the 
important  funds  invested  into  the  census,  but  also  be  opposite  to  advancing  the 
perception that statistical offices are at the forefront of the change in the public sector 
towards more user-friendliness. 

285.  The personal ID-number should be deleted from the files as soon as the last 
checks  on  completeness  and  accuracy  have  been  carried  out.  This  is  an  important 
safeguard against any request for using census data for non-statistical purposes that 
may  be  addressed  to  statistical  offices  at  a  later  stage.  On  the  other  hand,  serious 
thought should be given to capture the names and addresses of those persons that 
fill  in  the  additional  form  on  agriculture,  so  as  to  create  a  register  of  private 

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agricultural  holdings  from  the  population  census  that  must,  however,  be  limited  to 
exclusively statistical use. This is a unique opportunity to fill an important gap in the 
statistical  infrastructure,  the  next  one  being  an  agricultural  census  that  may  remain 
wishful thinking for quite some time. (On proposals how to update such a statistical 
register of private agricultural holdings, see B7.) 

286.  Generally, whereas the present census seems to be well prepared, there are 
some  doubts  whether  the  same  approach  is  likely  to  be  effective  for  future  large-
scale  operations.  Once  Yugoslavia  will  have  progressed  in  its  transition  to  a 
pluralistic  society  and  market  economy,  some  features  of  the  present  organisation, 
notably  the  appearance  of  data  collection  for  statistics  combined  with  collection  for 
administrative  purposes,  the  obligations  for  employers  to  fill  in  forms  for  their 
employees,  the  information  campaign,  and  possibly  the  selection,  instruction  and 
control  of  enumerators  at  local  level,  will  have  to  be  reassessed  and  re-specified. 
This would also have consequences for a future census law. 

287.  Yugoslavia  seems  to  be  ill  prepared  to  conduct  other  censuses  than  a 
population census. In the medium term, a proper agricultural census will have to be 
prepared  and  carried  out  according  to  EU  and  FAO  specifications  in  view  of  the 
importance  of  the  agricultural  sector,  and  in  view of the explicit objective of coming 
closer  to  the  EU.  The  solution  of  including  some  questions  on  agriculture  in  the 
present  population  census  is  a  good  intermediate  solution,  but  no  permanent 
substitute.  Expertise  from  abroad  will  be  required.  The  same  holds  for  all  possible 
forms of an economic census, should the need occur. 

3. Capacity to Produce Annual Population Statistics after the Population 
census 

288.  Since  the  last  census  in  1991,  annual  population  statistics  have  been 
estimated  by  adding  births  and  subtracting  deaths  in  each  republic  to  the  figures 
based  on  the  prevailing  population  concept  of  permanent  residence.  As  regards 
international  migrations,  only  those  from  and  to  former  republics  of  Yugoslavia  are 
recorded,  insofar  official  registration  as  either  regular  change  of  residence,  or  as 
displaced person, has occurred. 

289.  For  internal  migrations  within  each  republic,  the  administrative  records  from 
the ministries of internal affairs leave a lot to be desired, so that only a breakdown of 
the annual population of Serbia into three regions is available. The situation has been 
aggravated by the Kosovo crisis: the last available year for population estimates for 
Kosovo  and  Metohia  is  1997,  and  this  figure  has  been  taken  over  by  Yugoslav 
statistics without change for the subsequent years. Displaced persons from Kosovo 
to  other  parts  of  Yugoslavia  are  therefore  implicitly  still  included  under  Kosovo  and 
Metohia rather than with other parts of the country. 

290.  There is no breakdown by age group for the estimated annual population after 
the last census year. 

291.  This  situation  will  change  when  the  2002  census  results  become  available. 
The  population  concept  for  the  annual  estimates  will  then  be  based  on  the 
international concept, and the basis from 2002 will exclude all citizens living abroad, 
or having been away from Yugoslavia (without Kosovo/Metohia) for 1 year or more, 
and  include  all  foreigners  or  displaced  persons,  whatever  their  legal  status,  if  they 
fulfil the relevant criterion at the time of the census. The results of vital statistics will 
have  to  be  adapted  to  this  concept  as  well,  which  should  not  be  a  problem.  No 

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solution is prepared, however, for a better capturing of both international and internal 
migration subsequent to 2002. Some of the estimates prior to 2002 can be adjusted 
retrospectively  by  using  the  question  in  the  census  2002  on  previous  places  of 
residence. 

292.  Since  Kosovo  and  Metohia  cannot  be  included  in  the  Yugoslav  population 
census 2002, and given that no parallel population census is planned in this territory 
in  the  near  future,  there  is  no  way  to  include  up-to  date  figures  for  this  part  of 
Yugoslavia  in  the  future  annual  population  statistics  (nor  in  any  other  official 
statistics). This will have consequences for vital and migration statistics as well. 

Assessment 

293.  The capacity to produce reliable annual population statistics after the census 
2002/2003  is  insufficient.  Annual  population  by  age  group,  sex,  citizenship,  and  by 
region at an as detailed level as possible, is one of the basic and most widely used 
outputs  of  a  statistical  system.  Any  planning  of  infrastructure  or  public  services  will 
have  to  use,  as  one  important  parameter,  such  data.  The  overall  aggregate  is 
essential as denominator for a wide range of indicators such as GDP per capita, and 
any bias in the denominator can distort indicators and their development over time to 
the same extent as biases for the numerator. 

international  migration, 

294.  Concerning 
to  be  an  adequate 
administrative  source  only  for  the  movements  of  foreigners  with  official  status  of 
residence.  There  is  no  solution,  however,  to  cover,  in  a  representative  way,  cross-
border movements of nationals, and possible movements back of displaced persons 
to their original countries, in this way. 

there  seems 

295.  For internal migration, there is an obligation to register, and the ministries of 
the interior in each republic collect these evidences from the local authorities. These 
data  flows  are  judged  as  not  comprehensive  and  timely  enough  by  the  SOR.  It  is 
recommended  that  negotiations  with  these  ministries  be  started  so  as  include  this 
data  flow  into  the  statistical  programme  as  a  matter  of  urgency,  and  to  make  the 
necessary  specifications  more  precise  and  in  this  way  more  binding.  There  is  no 
other realistic way to cover internal migration, and without data on internal migration, 
no  regional  annual  population  estimates  can  be  produced.  Annual  population 
estimates at regional level are also necessary for grossing up the results of regionally 
stratified household sample surveys to the overall population, especially if there is no 
updated  sampling  frame  of  either  dwellings  or  persons  available.  Internal  migration 
statistics  would  also  be  necessary  to  reconcile  the  different  dates  of  the  population 
census in Serbia and Montenegro. 

296. 
If no satisfactory statistics on international migration of Yugoslav citizens can 
be compiled on the basis of administrative records, the gap will have to be closed by 
other  sources.  One  of  them  is  the  use  of  immigration  statistics  from  the  main 
countries  of  destination,  and  the  other  the  inclusion  of  questions  on  international 
migration in the only regular household survey, i.e. the labour force survey, provided 
that  the  future  sampling  frame  for  this  survey  has  a  sufficient  coverage  of  all 
households,  especially  concerning  displaced  persons.  The  first  is  unlikely  to  give  a 
full account of de facto migration, especially concerning the future return of displaced 
persons.  Furthermore,  the  statistics  of  the  countries  of  destination  would  have  to 
separate between immigration from Kosovo (normally subsumed under Yugoslavia). 
Both options (considering the present sample size of the labour force survey for the 
second option) could only provide results at the national level. 

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If approximate solutions cannot be found quickly, the good quality basis of the 
297. 
2002 census will soon become obsolete over time due to the increasing openness of 
the  country.  A  solution  that  would  only  start  to  be  come  operational  in  2004  e.g. 
would face the problem of the need for a retrospective estimate of migration flows for 
the years since the census date and the starting year of the new scheme of updating, 
and the shorter this period, the more accurate these estimates will be. In any case, 
approximate  solutions  are  preferable  than  not  making  any  adjustment  for  certain 
flows at all. 

298. 
It  is  highly  recommended  that  estimates  of  the  annual  population  by  age 
groups be established, even if not all underlying sources can be broken down by age. 
The  census  2002  can  be  analysed  for  the  age  structure  of  retrospective  migration, 
and this structure might be used to break down future overall migration totals by age. 

4. Capacity to Carry out Household Surveys 

299.  The  Yugoslav  system  of  official  statistics  has  two  samples  surveys  with 
households: the labour force survey (LFS), introduced in 1994 as a pilot, and regular 
as from 1995, and the household budget survey (Survey of Personal Consumption, 
SPC for short), which has a long tradition.  

300.  With  some  changes  in  the  month  (October  since  1997),  the  LFS  has  been 
carried out every year since 1995. The latest occurrence included 4400 households 
(700  of  which  in  Montenegro).  Whereas  the  sampling  frame  (see  below)  and  the 
questionnaire (taken over more or less from neighbouring countries) are decided by 
the  FSO,  the  fieldwork  is  carried  out  by  the  SOR.  Exceptionally,  the  SOR  are  not 
involved in compiling results at all; the FSO is responsible for the weighting scheme 
to  be  applied  to  the  microdata.  There  is  no  sufficient  knowledge  about  sampling 
methodology  in  SOR  to  allow  them  to  compile  results  on  their  own.  The  basic data 
entry is carried out by SOR, whereas coding and processing is with the FSO. 

301.  The LFS is based on a two-stage sample, using as a first stage a selection of 
enumeration  circles  from  the  population  census  1991,  classified  by  three  types  of 
settlement  (urban;  rural;  mixed).  Both  the  sampling  frame  (list  of  names)  and  the 
figures  used  for  determining  the  weights  in  the  grossing-up  process  are  from  the 
1991 census. There is an approximate 50% over sampling of names to have enough 
substitutes  for  any  reason  of  non-achieved  interview;  the  part  due  to  true  non-
response  (as  opposed  to  persons  having  moved  away  from  their  1991  residence 
e.g.) is unknown. 

302.  Dissemination  of  results  is  de  facto  only  through  the  FSO,  but  not  with  the 
same  visibility  as  for  the  results  from  exhaustive  surveys  with  legal  entities.  The 
results  are  disseminated  on  their  own,  i.e.  without  comparison  to  other  sources  of 
employment  or  unemployment.  There  has  not  been  any  reaction  by  ministries  or 
other  policy  users,  nor  from  the  media;  only  the  research  community  (as  well  as 
international  organisations)  have  shown  interest  in  using  the  results.  The  national 
accounts department in the FSO does not use results from the LFS (but makes some 
use of the results of the household budget survey). 

303.  Selection  and  control  of  interviewers  is  a  SOR  responsibility.  Payments  for 
interviewers are low, and the incentives for SOR to ensure a sufficient level of quality 
is not as high as with other surveys due to the almost complete lack of dissemination 
or internal use by SOR. 

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304.  Concerning the sample after the 2002 census, it is planned to apply the same 
method until the subsequent census. No updating of the sampling frame is foreseen. 

305.  The  household  budget  survey  (Survey  on  Personal  Consumption  SPC)  is  a 
quarterly data collection with a long tradition, but the major part of results is published 
on an annual basis. 2350 households (of which 313 in Montenegro) are interviewed 
retrospectively each quarter (about 100 questions), allocated to three socio-economic 
categories: agricultural, non-agricultural, and mixed.  

306.  The  methods  of  sampling  (two-stage  stratification),  and  the  sampling  frame 
used are very close to the methods in the LFS, with the important distinction that the 
LFS  sample  is  renewed  completely  every  year  (at  least  from  now  on),  whereas  for 
the  SPC  only  one  third  of  the  sample  is  renewed  every  year,  which  causes  a 
household  to  be  interviewed  for  12  consecutive  quarters.  Statistical  offices  cannot 
hand out anything to the participating households in cash or in kind. This leads to a 
high number of households that have to be asked for their consent to participate until 
the above number of interviews is completed, i.e. to a high degree of over sampling. 

307.  The SPC is the major data source not only for personal consumption as such, 
bur for the weights of one of the price indices (consumer price index), food balances 
(there are many details on quantities of food, including own consumption by farmers), 
income  of  households,  and  poverty.  The  normal  degree  of  visibility  is  given  to  the 
results  from  the  SPC  in  dissemination.  It  is  only  a  minor  data  source  for  national 
accounts (see reasons below). 

Assessment 

308.  Given the very difficult situation of the country in the past decade, and given 
the limited number of innovations in this period, it is a remarkable achievement that it 
was possible for the FSO to set up, implement and maintain a labour force survey as 
a  regular  activity.  The  reasons  that  were  behind  this  decision  to  introduce  a 
completely  new  data  collection  instrument  are  not  clear  however;  in  any  case,  they 
do not seem to lie with requests from national users. 

309. 
In  spite  of  this  welcome  improvement,  the  above  description  underlines  the 
relatively  low  weight  of  household  surveys  as  a  reliable  source  for official statistics, 
with not enough attention and resources allocated to guarantee a sustained capacity 
to carry out at least these two surveys, but with a minimal quality compared to other 
countries. Households surveys are of high relevance not only for labour market and 
social statistics, but for economic statistics as well, since it is the only way by which 
official  statistics  can  approximate  the  total  economy  (i.e.  including  those  parts  that 
are  hidden  in  the  sense  that  they  escape  administrative  records  or  business 
surveys).  In  order  to  raise  the  capacity  to  carry  out  household  surveys,  the  first 
prerequisite 
their 
importance, and start to actively promote them. 

themselves  become  convinced  of 

the  statisticians 

that 

is 

310.  As  a  first  step  in  this  respect,  the  dissemination  of  the  results  of  the  LFS 
should be given much higher visibility, e.g. through press conferences like for short-
term  indicators.  Comments  should  be  much  less  technical  than  focusing  on  the 
significance of results, and stressing that the LFS is the only comprehensive source 
of both employment and unemployment data. Other sources have an auxiliary role at 
best, providing more frequent data, or breakdowns the LFS cannot show because of 
the limitations of the sample size. 

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311.  As a second step, SOR have to become much more involved in the LFS than 
until  now.  The  major  potential  of  user  for  decision-making  are  at  the  republic  level, 
and  the  users  will  only  start  to  show  interest  if  they  can  turn  to  the  SOR  for 
explanation  and  further tabulation. In order to be able to respond, SOR need much 
more knowledge about the methodology, notably the sampling. This know-how has to 
be  built  up  as  a  matter  of  urgency.  The  change  to  the  census  2002  as  a  sampling 
frame might be an opportunity to shift the responsibility for determining the size and 
the structure of the sample, for selecting the households from the sampling frame, for 
determining  the  weighting  scheme  within  each  republic,  and  for  compiling  and 
disseminating the results at the republic level, to the SOR, as it is the case for other 
statistics.  The  FSO  would  continue  to  be  responsible  for  determining  the  minimum 
questionnaire  and  the  minimum  accuracy  requirements  for  the  results  of  each 
republic.  The  SOR  would  then  have  the  possibility  to  add  questions  for  their  own 
information  needs  (provided  they  do  not  affect  negatively  the  federally  determined 
core), or to increase the sample size beyond the minimum required for the federally 
determined accuracy level. 

312.  On  the  other  side,  SOR  would  have  to  considerably  improve  the  selection, 
training and control of the interviewers, as well as to improve the information of the 
respondents  when  they  are  contacted.  For  complicated  questionnaires  like  the LFS 
(and  even  more  so  for  the  SPC),  there  is  a  certain  temptation  that  interviewers 
"invent" answers if no contact can be made, or if there is an explicit refusal. Control 
mechanisms  on  a  sampling  basis  are  therefore  necessary,  and  the  reasons  why 
interviews with the priority households cannot be realised and have to be replaced by 
substitute  addresses  should  be  documented  so  that  a representative response rate 
can be calculated as a basic quality indicator. 

313.  Concerning  the sampling frame, the two-stage process should be continued, 
but  SOR  should  try  to  do  more  about  updating  the  sampling  frames  in  those 
enumeration  circles  that  they  have  selected  in  the  first  stage.  Updating  a  list  of 
dwellings  is  easier  than  updating  a  nominal  list  of  persons;  it  is  therefore 
recommended that the selection in the second stage be based, subsequently to the 
census 2002, on a list of dwellings or households at a given address, rather than on 
a list of names of persons. 

314. 
It goes without saying that as long as the labour force survey remains annual, 
the  sample  should  be  completely  redrawn  every  year.  It  is  too  early  to  include  a 
deliberate panel component in the LFS. 

315.  The  other  households  survey,  the  SPC,  needs  a  complete  revision  in  all 
aspects, using European methodology. This is urgent as well, especially if a revised 
consumer  price  index  should  become  the  major  price  index  as  it  is  the  case  in  all 
other European countries (see B.6.2 below), and for poverty indicators. The weights 
in 
to  be  of  undoubted 
representativeness  for  the  consumption  of  private  households,  which  is  impossible 
without  a  good  quality  household  budget  survey  carried  out  by  well  trained 
interviewers.  The  methodological  knowledge  that  has  to  be  built  up  in  the  SOR  for 
the LFS can be used for the revision of the SPC as well. 

the  base  year  of  such  a  new  price 

index  have 

316.  The present SPC has the following shortcomings that should be corrected with 
the revision: 

-  The  sample  size  is  to  low,  given  the  detailed  breakdowns  of  results  that 
are required. 
-  The  method  of  relying  on  the  respondents'  memories  for  a  retrospective 
period of 3 months will inevitably lead to severe biases. This method should 

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be  replaced  by  a  combination  of  diary  (for  frequently  consumed  items)  and 
interviews (for less frequent purchases), with a diary covering a period of one 
month at the maximum. 
-  The  same  household  should  only  have  one  period  of  participation.  The 
sample should be big enough so that it can be spread over the whole year. 
-  Even  if  not  repeated,  willingness  to  co-operate  in  a  diary  exercise  (as 
opposed  to  a  normal  interview  like  in  the  LFS)  will  have  to  be  supported  by 
material incentives in form of handouts in cash or in kind at the end. 

317.  The  food  part  of  the  questionnaire  should  be  reviewed  and  limited  to  the 
information needs required by the consumer price index, the national accounts, and 
poverty-related  indicators.  On  the  other  hand,  more  attention  should  be  given  to 
services and transfers. 

318.  The  reason  why  national  accounts,  for  the  final  consumption  of  private 
households  aggregate,  have  relied  so  far  more  on  producer  and  trade  based 
statistics  rather  than  on  the  SPC,  is  related  to  the  biases  and  comparative  lack  of 
accuracy  as  described  above.  Compared  to  business  surveys,  more  accurate 
households  budget  surveys  have  the  advantage  of  better  covering  the  whole 
economy (including purchases from the informal sector), and of not being blurred by 
unknown shares of intermediate consumption.  

319. 
In  view  of  the  scarcity  of  the  resources,  they  should  be  concentrated  on  the 
revision  of  these  two  major  household  surveys  as  outlined  above.  No  other 
household surveys as part of official statistics should be carried out until these tasks 
have  been  accomplished  successfully.  Proposals  for  separate  households  surveys 
from  donors  should  be  carefully  evaluated  whether  they  are  sustainable  later,  i.e. 
whether  they  will  not  face  the  risk  of  being  ad  hoc  surveys  unlikely  to  be  repeated 
later as part of the national programme financed by national resources. 

5. Capacity to Maintain Business Registers 

320.  The administrative business registers in Yugoslavia are managed by SOR and 
FSO.  They  are  located  in  the  mainframe  of  the  IT  system  of  FSO.  Three  registers 
exist: the classified units (legal units) register, the shops (small enterprises) register, 
and the territorial units register.  

5.1. Legal Units Register 
321.  When a new enterprise-type legal unit is created, it has first to be registered 
by  the  economic  court  of  the  location  of  the  new  enterprise.  The  new  enterprise 
forwards the registration act with a statistical form it has filled in to the local branch of 
the  SOR  concerned.  The  SOR  defines  the  main  economic  activity  of  the  new  legal 
unit  and  gives  an  identification  code.  This  identification  code  is  compulsory  for  the 
opening of a bank account and transactions through the national Agency of Payment.  

322.  This  procedure  is  used  for  all  legal  units,  except  for  the  following  ones,  for 
which the first step of registration does not pass through the economic court: (i) State 
agencies declare themselves to the SOR and the Clearing and Payment Service;(ii) 
Non-governmental  organisations  (NGOs)  are  declared  through  the  Ministry  of 
Interior;  (iii)  Political  organisations  are  declared  through  the  Ministry  of  Justice;(iv) 
National branches of foreign enterprises are declared through the Ministry of Foreign 
Affairs. 

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323.  All  economic  activities  are  covered.  All  legal  units  are  covered,  except  units 
with a military status. 

324. 
Information  recorded  in  the  legal  units  administrative  register  covers  the 
identification number, name of the unit, type of ownership, capital origin, location, giro 
account number, legal form, main economic activity, size, and name of the manager. 

325. 
If  an  enterprise-type  legal  unit  has  several  local  units,  that  are  not  separate 
legal units, these units can be registered as such, with a special code linking them to 
their  mother  enterprise.  In  the  same  way,  if  a  legal  unit  is  controlled  by  a  holding 
corporation, the identification number of the holding corporation is recorded.  

326.  When  a  legal  unit  disappears,  its  “death”  has  to  be  declared  first  to  the 
economic court of its location (or any other agency listed in paragraph 321 above for 
specific  legal  units).  This  information  is  then  forwarded  to  the  SOR  that  drops  the 
“dead” legal unit from the administrative register. The procedure is very slow, mainly 
because  the  information  coming  from  economic  courts  is  not  computerised. 
Furthermore, a large part of non-active enterprises have not been liquidated, and are 
kept for some reason as “empty shells” by their owners. 

327.  The  administrative  legal  units  register  is  used  for  statistical  purposes.  As  a 
matter  of  fact,  satellite  registers  are  created  and  managed  by  SOR  for  statistical 
purposes.  They  are  updated  at  the  same  time  as  the  administrative  register.  In 
general, updates are made upon request by registered units. For instance, the main 
economic  activity  code  cannot  be  changed  unless  the  registered  unit  makes  the 
request, and only upon decision made by a committee consisting of representatives 
of the SOR and the Clearing and Payment Service. 

328.  Satellite  statistical  legal  units  registers  can  also  incorporate  additional 
information that has not (or not yet) been notified by economic courts. For instance, if 
an  enterprise-type  legal  unit  does  not  return  the  monthly  statistical  form  for  three 
consecutive  months,  it  is  considered  as  non-active.  The  Clearing  and  Payment 
Service  of  the  National  Bank  of  Yugoslavia,  that  records  all  payments  made  and 
received  by  all  legal  units,  also  provides  information  on  legal  units  for  which  no 
payments  have  been  recorded.  In  addition,  the  tax  administration  provides 
information  on  legal  units  that  have  returned  empty  tax  statements.  A  non-active 
enterprise-type legal unit is not taken in the corresponding statistical surveys, but it is 
not  dropped  from  the  administrative  register  until  the  economic  court  notifies  the 
liquidation  of  the  unit.  In  Serbia,  about  two  thirds  of  registered  legal  units  are 
considered as non-active. In Montenegro, there is no information on the proportion of 
registered legal units that are not active. 

329.  The administrative legal units register is public, and copies are delivered upon 
request. The satellite statistical legal units registers are for internal use by FSO and 
SOR only. 

330.  The main challenges currently faced by FSO and SOR are related to the form 
of  legal  units  and  the  economic  activity  classification.  New  laws  have  just  been 
passed by the Serb and Montenegrin Parliaments on the definition of legal forms of 
enterprises, in order to better reflect the change in the economic structure, including 
the  development  of  the  private  sector.  In  addition,  the  official  classification  of 
economic activities used for statistical and administrative purposes should be based 
by  law  on  the  European  standard  NACE  Rev.1,  in  principle  from  the  beginning  of 
2001.  Both  changes  are  being progressively implemented in the legal units register 
by  SOR.  They  are  not  yet  completed.  The  administrative  nature  of  the  legal  units 

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register  is  slowing  down  the  implementation  process,  because  the  changes  in 
classifications  used  in  the  administrative  register  requires  reclassification  and  re-
registration of legal units by economic courts.  In order to go ahead, the statisticians 
have introduced the new activity code as additional information, while keeping the old 
activity code in the administrative register. 

Assessment 

331.  The legal units register is a cornerstone of the statistical system. It provides an 
image  of  the  whole  universe  of  legal  units  involved  in  the  process  of  production. 
Together with the central shops register that is described below it is the reference for 
all  enterprise  surveys,  exhaustive  as  well  as  sample  surveys.  The  management  of 
FSO and SOR is well aware of these facts, and significant efforts are devoted to the 
maintenance and adaptation of the legal units register. 

332.  However, the development of the private sector in Yugoslavia raises a number 
of issues with regard to the quality of information recorded in the register. The main 
issue is related to the increasing number of births and deaths of private corporations. 
While there is an incentive to register a new corporation, i.e., the opening of a bank 
account,  there  is  no  visible  incentive  to  report  the  interruption  of  activity  of  a 
corporation  to  the  economic  court,  unless  the  formal  procedure  of  liquidation  is 
initiated. The large proportion of legal units that are identified by statisticians as non-
active  units  in  Serbia  is  related  to  this  issue.  It  would  be  useful  to  have  the  same 
information in Montenegro. In both Republics, the statistical treatment of non-active 
legal  units  should  be  given  a  high  level  of  priority,  because  of  the  expected 
development  of  the  private  sector,  and  also  in  view  of  the  development  of  sample 
surveys on enterprises. 

333.  The enforcement of laws on the legal forms of enterprises, and on the official 
classification of economic activities has been described above. This new legislation is 
welcome.  However,  it  appears  that  the  concrete  implementation  of  the  new 
classifications  in  the  legal  units  register  is  not  meeting  the  official  deadline.  Here 
again,  a  high  level  of  priority  should  be  attributed  to  the  completion  of  the 
implementation of the new classifications. The reclassification for statistical purposes 
that has been made in Serbia is a good solution in the short term, providing that it is 
used  for  all  economic  statistics.  However,  it  is  not  a  sustainable  solution  in  the 
medium/long term.  

5.2. Central Shops Register 
334.  The  central  shops  register  exists  only  in  Serbia,  since1994.  It  covers  in 
principle  all  unincorporated  enterprises.  It  is  maintained  by  the  SORS  on  its  own 
mainframe.  

335.  The basic source of information is municipalities. Individual entrepreneurs are 
obliged  by  law  to  register  with  their  municipality,  and  to  notify  any  change  to  their 
municipality.  Municipalities  notify  updates  to  SORS  every  two  weeks.  The  SORS 
gives the identification number and activity code to the newly created shops.  

336. 
Information recorded in the central shops register covers location(s) and type 
of  shop,  main  economic  activity,  name  and  address  of  owner,  type  and  date  of 
changes.  The  delay  of  notification  by  municipalities  to  SORS  is  actually  very  long. 
The identification of owner is missing for about 30% of registered shops. 

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337.  Similarly to the legal units register, the central shops register is moving to the 
European  standard  classification  of  economic  activities  NACE  Rev.1.  The 
implementation  of  the  new classification seems to meet the same difficulties as the 
implementation  process  in  the  legal  units  register,  especially  with  regard  to  the 
deadlines stipulated by the law on the new classification of economic activities. 

Assessment 

338.  The role of the central shops register as a cornerstone of the statistical system 
can be described in the same way as it is done about the legal units register in part 
5.1 above. With regard to part 5.1, one can put more emphasis here on the use of 
this register for the identification of informal activities. One should also stress that the 
development of unincorporated enterprises is a significant part of the development of 
the whole private sector. As in many other countries, unincorporated enterprises are 
less covered by business registers than corporations. 

339.  The  first  assessment  is  that  a  business  register  covering  unincorporated 
enterprises should be set up in Montenegro, as it is already in Serbia. In the absence 
of  that  kind  of  register,  it  is  not  possible  to  have  a  good  view  of  the  economy  in 
Montenegro, especially in this period of transition. 

340. 
In  Serbia,  the  current  central  shops  register  is  based  on  information  coming 
from  municipalities.  As  explained  above,  this  is  a  source  of  delay  in  registering  of 
new unincorporated enterprises, and dropping of dead enterprises from the register. 
A  proactive  approach  of  municipalities,  using  the  network  of  regional  offices  of  the 
SORS,  should  be  organised. The purpose of this approach would be to identify the 
main  reasons  of  late  reporting  by  municipalities,  and  to  define  jointly  with 
municipalities  possible  improvements  in  the  procedure  of  reporting.  Given  the 
number of municipalities in Serbia and the limited resources of the SORS, especially 
at the regional level, it would be advisable to start with a sample of municipalities that 
could be considered as representative with regard to the type (urban/rural), the size 
(small/large), and the geographical location. 

341.  The  implementation  of  the  new  classification  of  economic  activities  in  the 
central shops register has to be completed as son as possible. Which is said in part 
5.1 above about the legal units register is also valid in the case of the central shops 
register. 

5.3. Territorial Units Register 
342.  The  register  of  territorial  units  has  been  created  in  1988.  It  is  maintained  by 
SOR. It covers public bodies, including communities. The basic information is coming 
from cadastral surveys and the ministry of local government.  

Information  recorded  in  the  territorial  units  register  covers  the  type  of  unit, 
343. 
municipality,  street,  and  house  number.  There  are  several  problems  with  regard  to 
addresses,  such  as  the  absence  of  street  name  and/or  house  number.  All  surveys 
have their own list of addresses. 

344.  The  classification  of  territorial  units  used  in  the  territorial  units  register  does 
not comply with the European standard NUTS. FSO and SOR do not plan so far to 
adopt NUTS. 

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Assessment 

345.  The territorial units register is not considered as a very reliable one by SOR. 
The  existence  of  specific  lists  of  addresses  for  every  survey  is  a  source  of 
inconsistency  for  the  statistical  system.  Additional  efforts  should  be  made  by 
statisticians at the appropriate level to improve the relations with offices in charge of 
cadastres.  

346.  The  FSO,  together  with  SOR,  should  consider  the  implementation  of  the 
European classification of territorial units NUTS. Difficulties of implementation should 
be discussed with Eurostat. 

6. Capacity to Carry out Business Surveys and Short-term and Structural 
Economic Statistics, including Price Statistics 

6.1. Business Surveys and Related Short-term and Structural Statistics 
347.  Business  surveys  cover  industry,  construction,  trade,  catering  trade  and 
tourism,  transport  and  communications.  The basic data source consists of monthly, 
quarterly,  and  annual  statistical  reports  returned  by  enterprises  to  the  regional 
agencies of the Statistical Offices of Republics, centralised and partly processed by 
SOR,  and  forwarded  to  the  FSO  for  final  processing.  In  principle,  all  enterprises  of 
the  social  sector  (state,  co-operative,  and  mixed  sectors)  are  covered  by  surveys. 
The  private  sector  is  only  partly  covered.  Furthermore,  statisticians  are  concerned 
about  the  low  rate  of  response  of  private  enterprises  covered  by  surveys.  The 
classification of economic activities is now referring to the European standard NACE 
Rev.1.  The  classification  of  products  is  still  different  from  the international standard 
classifications, specifically the European standard CPA. To have a better view of the 
situation  it  is  necessary  to  separately  consider  the  major  activities.  Below  are  the 
specific features of business statistics for industry, construction, and trade. 

Industry:  Following  the  change  of  classification  of  activities,  statistics  on 
348. 
industry  now  cover,  in  terms  of  NACE  Rev.1,  (i)  mining  and  quarrying;  (ii) 
manufacturing  industry;  and  (iii)  electricity,  gas,  and  water  supply.  Industrial 
enterprises  from  the  social  sector  are  covered,  as  well  as  former  social  sector 
enterprises  that  have  been  privatised.  Other  private  enterprises  are  not  covered. 
Parts of non-industrial social and privatised enterprises that are performing industrial 
activities are also covered. Monthly surveys provide detailed information on industrial 
production,  consumption  of  raw  materials,  consumption  of  electricity  and  fuel,  and 
workers involved in the industrial process. Monthly indices of industrial production are 
derived  from  these  data,  as  well  as  numbers  of  industrial  workers,  and  indices  of 
labour productivity. Annual surveys provide information on power equipment, on the 
use of industrial capacities, on balances of generation and consumption of electricity, 
on production and administrative workers. 

349.  Construction:  Statistics  on  construction  cover  all  constructions,  including 
buildings,  on  which  construction  and  handicrafts  work  were  performed  during  the 
period of reference. Own-account construction performed by individuals is estimated. 
Construction enterprises from the social sector return monthly, quarterly, semestral, 
and annual reports to the statistical offices of Republics; there is a plan to extend this 
survey  to  cover  companies  of  the  private  sector  as  well.  This  survey  allows  to 
produce data on the volume of construction works (that is, value at constant prices of 
1994);  construction  infrastructure  completed,  including  industrial  buildings;  number 

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and  price  of  dwellings  completed;  construction  works  abroad;  consumption  of 
building and working material by construction units. 

350.  Wholesale  and  retail  trade:  Statistics  on  domestic  wholesale  and  retail  trade 
cover all social, i.e., state, co-operative, and mixed enterprises. Trade units of non-
trade social enterprises are also covered. Monthly, quarterly, and annual reports are 
returned to the statistical offices of Republics. Since 1992, private trade enterprises 
are covered by a sample survey. Private trade enterprises return only annual reports. 
Statistics  provide  monthly  data  on  the  turnover  of  goods  for  the  social  sector,  in 
current  value,  for  retail  and  wholesale  trade.  Volume  data  on  the  turnover  of  retail 
trade are derived from current value data using the monthly retail trade price index. 
On  an  annual  basis,  statistics  provide  data  on  turnover  for  the  social  and  private 
sectors, number of shops, number of workers, current value of turnover by modalities 
of payment in retail trade, etc. 

351.  Catering trade and tourism: Statistics cover all social, i.e., state, co-operative, 
and  mixed  enterprises.  Catering  trade  units of non-catering trade social enterprises 
are also covered. Quarterly and annual reports are returned to the statistical offices 
of Republics. Since 1994, private catering trade enterprises are covered by a sample 
survey. Statistics provide data on the type of catering trade, turnover, and number of 
employees. Monthly statistics provide data on the number of arrivals and nights, as 
well as data on the number of rooms and beds. They are based on statistical reports 
returned by social and private enterprises. 

transport  cover  social 
352.  Transport  and  communications:  Statistics  on 
enterprises. There is a plan to extend coverage to private enterprises, mainly present 
in road transport, and to use sampling techniques  based on registration files of road 
vehicles  taken  from  the  Ministry  of  Interior.  Statistics  provide  monthly  and  annual 
data  on  the  number  and  carrying  capacity  of  transport  equipment,  number  of 
passenger-kilometres  and  ton-kilometres,  number  of  employees,  etc.  Statistics  on 
post  and  telecommunications  activities  are  based  on  data  provided  by  public 
enterprises concerned in Serbia and Montenegro. 

Assessment 

353.  The  system  of  business  surveys  in  Yugoslavia  covers  a  wide  range  of  non-
agricultural  activities  and  provides  a  large  number  of  detailed  data  on  monthly, 
quarterly,  and  annual  basis.  However,  the  change  in  the  economic  structure  of  the 
country,  especially  the  rapid  development  of  the  private  sector,  raises  a  number  of 
still unsolved problems.  

354. 
In industry, only social and privatised enterprises are covered, and the newly 
created  private  enterprises  are  not  covered.  In  construction,  it  is  not  clear how well  
private  enterprises  will  be  covered  with  the  planned  extension  of  the  survey.  It  is 
good, but not sufficient, to estimate the own-account construction work performed by 
individuals. It is to be noticed that sampling techniques used for wholesale and retail 
trade,  catering,  and  in  future  also  transport,  provide data on activities in the private 
sector. 

355.  There is also a problem with the response rate of private enterprises that are 
in principle covered by business surveys. It appears that this response rate is much 
lower than the one of social enterprises. This fact may reflect a lack of confidence of 
new  private  enterprises  in  the  statistical  system,  especially  with  regard  to  the 
protection of confidentiality of individual data. 

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356.  To solve these problems, a first action should be to improve the coverage of 
business registers. Recommendations have been made in parts 5.1 and 5.2 above. 
In  the  specific  case  of  industry,  the  coverage  of  the  surveys  should  no  longer  be 
restricted  to  social  enterprises  and  former  social  enterprises  that  have  been 
privatised. 

357.  The  non-response  issue  in  the  private  sector  should  be  addressed  in  two 
ways.  A  first  action  would  be  to  develop  the  contacts  between  statisticians  and 
private enterprises, including business associations. It is necessary to explain again 
and  again  that  statistics  are  independent  from  political  forces  and  governmental 
bodies  such  as  the  tax  administration,  and  that  individual  data  provided  by 
enterprises will be kept strictly confidential by statisticians. This should not be a one-
shot action. The contact with the private business world has to be a permanent and 
institutionalised task of statisticians at every level, federal, republican, and regional. 

358.  A  second  action  would  be  to  establish,  and  to  periodically  update,  a  sound 
methodology for the statistical treatment of non-responses. It seems that the principle 
of exhaustiveness that is still prevailing in business surveys (except for private trade, 
catering  trade,  and  transport  enterprises)  has  not  yet  been  associated  to  the 
development of such a methodology so far. 

359.  From  a  more  general  point  of  view,  the  relevance  of  the  principle  of 
exhaustiveness that seems to largely govern the system of business surveys should 
be reconsidered. The rapid growth of the private sector in the economy, especially in 
small  enterprises,  raises  the  question  of  the  development  of  sample  surveys  on 
enterprises, as it is already made with the private sector in trade, catering trade, and 
transport  activities.  Two  advantages  can  be  highlighted:  (i)  the  reduction  of  the 
statistical burden on enterprises; the excessive statistical burden is often advocated 
by  private  enterprises  in  many  countries  as  a  reason  for  non-response,  or  poor 
quality  of  response to surveys; (ii) the reduction of the cost of business surveys for 
statistical offices. To be fair, one drawback has to be mentioned: the level of detail of 
disseminated data is lower than with exhaustive surveys. However, one can wonder 
whether  the  current  surveys  can  provide  very  detailed  data  with  a  reasonable 
reliability, given the poor coverage, or the absence of coverage of private enterprises 
in the context of a rapidly growing private sector. 

360.  With regard to classifications, the delay in implementing the new classification 
of economic activities that is complying with the European standard NACE Rev.1 has 
been overcome by statisticians through an internal reclassification of enterprises (see 
part  5  above).  This  commendable  achievement  should  be  complemented  with  the 
implementation  of  the  European  standard  classification  of  products  CPA,  which  is 
articulated  to  the  UN  world  standard  classification  of  products  CPC,  and  to  the 
European  standard  classification  of  activities  NACE  Rev.1.  The  reference  to  CPA 
would  increase  the  comparability  of  Yugoslav  data  with  data  from  other  European 
countries. It would also increase the interlinkages between data by activity and data 
by product, which may be useful for analytical work. 

6.2. Price Indices 
361.  The  FSO  and  SOR  compile  and  publish  indices  of  producers’  prices, 
wholesale and retail trade prices, and consumer prices. This chapter is focusing on 
the consumer price index, which is the most widely used price index in all countries. 
The retail price index will be also described because of its specific institutional use in 
Yugoslavia. 

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362.  The  monthly  consumer  price  index  is  based  on  the  prices  of  around  400 
products that are used for personal consumption, and that are produced or traded in 
Yugoslavia.  The  list  of  products  is  reviewed  annually  by  experts  from  the  FSO  and 
the SOR. Elementary prices are collected in urban areas. The weighting structure at 
the aggregated level is based on the structure of the consumption of non-agricultural 
households, which is derived from the household survey on personal consumption of 
the previous year (this survey is described in part B.4 above). 

363.  The  collection  of  prices  is  carried  out  by  the regional offices of SOR. Towns 
where  the collection takes place are selected to be representative of the regions of 
the  Republic.  In  every  town,  prices  are  collected  in  the  three  to  five  shops  with  the 
highest turnover once a month, in the most important green markets twice a month 
on agricultural products, and in enterprises that deliver non-traded consumer goods 
(electricity,  heating,  etc.)  and  services  once  a  month.  The  selection  of  shops, 
markets,  and  delivering  enterprises  is  carried  out  by  the  regional  office  concerned, 
and is revised every three to four years. 

364.  For every elementary product, an average price is computed at the level of the 
town as a simple arithmetic mean of prices collected for this product in the sample of 
shops,  green  markets,  and  delivering  enterprises.  Average  prices  in  towns  are 
aggregated at the level of the region using the turnover of shops, green markets, and 
delivering  enterprises  related  to  this  product  as  weights.  Price  indices  are  then 
aggregated  at  the  levels  of  the  region,  the  Republic,  and  the  Federation,  using  the 
structure  of  consumption  expenditure  of  households  in  the  household  survey  on 
personal consumption as weighting structure. 

365.  Data entry and first quality controls are carried out by regional offices of SOR. 
Processing, including the main quality controls are carried out by SOR. 

366.  When  an  elementary  product  is  no  longer  sold  by  a  shop,  market,  or 
enterprise, the price collector selects the most similar product to continue the series 
of  elementary  prices.  When  a  new  product  appears,  its  elementary  prices  are 
collected but not immediately included in the index. The price series is observed over 
one  year,  and  the  final  decision  on  how  to  include  it  in  the  index  is  taken  by  the 
annual  meeting  of  FSO  and  SOR  that  reviews  the  list  of  products  covered  by  the 
consumer price index. 

367.  The  monthly  retail  price  index  covers  products  sold  in retail trade shops and 
green markets, plus some selected services (arts and crafts, public utilities, cultural, 
transport,  mail,  and  telecommunication  services).  The  coverage  of  the  retail  trade 
price index is therefore different from the coverage of the consumer price index. The 
collection of prices of elementary products is the same as the one conducted for the 
compilation of the consumer price index. The aggregation is carried out in the same 
way  as  the  consumer  price  index,  with  the  important  difference  that  the  weighting 
structure is derived from the turnover of retail trade, green markets, and producers of 
services.  The  statistical  source  for  the  turnover  is  the  business  surveys  covering 
these  enterprises.  The  methodology  used  for  disappeared  products  and  new 
products is the same as the one used in the compilation of the consumer price index. 

Assessment 

368.  The consumer price index is in most countries one of the short-term indicators 
that are widely used by analysts, economic actors and policy makers. It is taken as 
the best indicator of inflation. The retail price index, when and where it is available, is 
currently  less  used  for  this  purpose.  This  is  based  on  theoretical  considerations. 

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International  organisations  are  generally  referring  to  the  consumer  price  index  for 
international harmonisation purposes: the International Labour Office (ILO), Eurostat, 
OECD, UNECE, IMF, are promoting the development of consumer price indices, and 
co-operate  in  the  revision  of  the  ILO  international  Manual  on  the  compilation  of 
consumer price indices. 

369. 
In principle, therefore, it would be advisable to devote more resources to the 
compilation and the dissemination of the consumer price index, and to decrease the 
importance  attached  to  the  compilation  and  the  dissemination  of  the  retail  price 
index. Both indices are close together but the weighting structure, and above all the 
list of products covered are different enough to cause significant discrepancies in the 
short  term.  Many  users,  who  are  not  well  aware  of  statistical  and  conceptual 
refinements  may  confuse  both  indices  and,  looking  at  their  discrepancies,  may 
question their reliability or even their integrity. 

370.  However, the government of Serbia is using the retail price index for indexing 
some payments. This use is stipulated by law. The retail price index itself is defined 
in a very precise way by a law. It is not likely that statisticians of Serbia can quickly 
convince  their  government  to  change  the  laws  and  to  refer  to  the  consumer  price 
index  whenever  it  is  appropriate.  In  any  way,  it  is  not  recommended  to  have  the 
methodology  of  the  consumer  price  index  defined  by  the  law.  It  would  make 
excessively  difficult  to  update  the  methodology  when  necessary.  In  the  reverse,  it 
would  make  easy  to  alter  the  consumer  price  index  for  reasons  that  would  not  be 
statistically sound. 

371.  What  is  advisable  is  to  clearly  give  the  prominence  to  the  consumer  price 
index  in  Republic  and  Federal  publications.  Significant  differences  with  figures 
coming  from  the  retail  price  index  should  be  pointed  out  and  explained  with  more 
emphasis than it is currently done. 

372.  With regard to the compilation of the consumer price index, the restriction of 
coverage to domestically produced and traded products should be abandoned. There 
are no good conceptual reasons for this restriction, since the point of view is the one 
of  the  consumers.  It  also  seems  that  there  is  a  limited  know-how  about  what  to  do 
when  a  product  disappears,  or  when  a  new  product  appears,  and  how  to  adjust 
prices for changes in quality. This limited know-how should be improved through the 
participation of staff in training courses organised by international organisations such 
as  Eurostat  or  the  IMF,  as  well  as  the  participation  in  international  expert  group 
meetings organised by ILO, Eurostat, UNECE, OECD, etc. 

373.  The reference to international recommendations, especially by the ILO, would 
bring a useful input to the update of the Yugoslav methodology. It has to be signalled 
that  the  ILO  Manual  on  the  compilation  of  consumer  price  indices  is  being  revised, 
under the auspices of an international technical expert group. It is also advisable to 
be aware of the work developed by Eurostat on the European harmonised consumer 
price  index  with  member  countries  of  the  European  Union  and  the  EU  candidate 
countries. The European work is coherent with the world-wide work. 

7.  Capacity  to  Carry  Out  Surveys  of  Agricultural  Holdings  and  Related 
Agricultural Surveys 

374.  No agricultural census has been conducted since 1969. Data on type of land 
and  livestock  in  agricultural  holdings  have  been  collected  with  the  population 

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censuses  in  1971,  1981,  and  1991.  It  is  planned  to  do  the  same  with  the  2002 
population census. 

375.  Annual  statistics  on  agriculture  are  based  on  three  different  approaches:  (i) 
reports returned by agricultural public enterprises and co-operatives engaged in crop 
production  and  livestock  breeding;  (ii)  sample  surveys  for  livestock  breeding  by 
agricultural  households;  (iii)  estimates by experts for crop production by agricultural 
households.  Given  the  structure  of  the  agricultural  sector  in  Yugoslavia,  experts’ 
estimates  cover  almost  50%  of  the  total  volume  of  agricultural  production.  Sample 
surveys cover around one third of the same volume. Reports from the social sector 
cover the rest. 

376.  Experts’  estimates  of  private  agricultural  households’  crop  production  are 
carried out on an exhaustive basis. They are conducted by a network of around 1600 
(1250  in  Serbia  except  Kosovo  and  Metohia)  statistical  estimators,  who  are 
agricultural experts or advanced agricultural producers, and have received a special 
training.  They  estimate  crop  production  for  about  5300  (3850  in  Serbia  except 
Kosovo  and  Metohia)  estimate  areas  consisting  each  of  one  or  more  cadastral 
communes.  Estimate  areas  are  defined  by  SOR  using  cadastral  data  on  land  use 
and  type  of  ownership.  Experts’  estimates  are  based  on  visits  of  estimate  areas, 
available  data  on  seeds,  fuel,  fertilisers,  and  knowledge  of  local  conditions.  The 
methodology is defined by FSO and SOR. The regional offices of SOR collect data 
from experts. Republics fund the network of experts. 

377.  Annual  sample  surveys  on  livestock  in  private  farms  collect  data  on  number 
and  turnover  of  livestock,  as  well  as  production  of  milk,  eggs,  honey,  and  wool.  In 
Serbia  (except  Kosovo  and  Metohia),  the  size  of  the  sample  has  been  reduced  to 
10% of the planned size from 1998. In Montenegro, the sample selected in 1993 is 
still in use. 

378.  Data on crop production and livestock in the social sector (public enterprises 
and co-operatives) are collected with regular annual reports, based on accountancy 
records. They are collected on an exhaustive basis. 

Assessment 

379.  The  absence  of  a  regular  agricultural  census  that  would  comply  with  the 
recommendations  of  the  FAO  and  the  European  Union,  is  very  damageable  to  the 
reliability of agricultural statistics. As stated above in chapter B.2 on the capacity to 
organise  and  carry  out  censuses,  the  solution  of  including  some  questions  on 
agriculture  in  the  2002  population  census  is  a  good  intermediate  solution,  but  no 
permanent  substitute.  For  instance,  this  will  not  provide  a  sufficiently  reliable 
sampling base for surveys. Expertise from abroad will be required. 

380.  The main source of concern is the almost complete absence of quality checks 
of  current  annual  estimates,  especially  with  crop  production  in  private  farms.  It  is 
important  to  remember  that  the  latter  covers  approximately  85%  of  cultivable  area 
and  50%  of  the  total  volume  of  agricultural  production.  In  the  absence  of  other 
surveys,  the  current cross-checks with data on agricultural products purchased and 
processed by the agro-food industry, as well as data on green markets and foreign 
trade, have to be continued and strengthened as far as possible. 

381.  The second source of concern relates to the severe cuts of the sample used in 
Serbia  for  the  collection  of  data  on  livestock  in  private  holdings,  since  1998.  The 
reliability  of  corresponding  data  has  obviously  decreased.  Questions on livestock in 

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the 2002 population census will provide some useful benchmark data for data quality 
check. 

8. Capacity to Produce National Accounts 

382.  National  accounts  provide  a  unique  coherent overview of the situation of the 
national  economy  and  its  changes  over  time.  They  are  much  used  by  analysts and 
policy  makers  in  the  country  and  abroad,  including  neighbour  countries,  market 
traders, and international organisations. Standards and guidelines for the compilation 
of  national  accounts  have  been  established  and  updated  at  the  international  level 
since fifty years. Until the late eighties two major standards existed. The UN System 
of  National  Accounts  (SNA)  was  mainly  used  in  countries  with  a  market  economy. 
The  Material  Product  System  (MPS),  also  known  as  the  system  of  Balances  of  the 
National Economy, was mainly used in countries with centrally planned economy.  

383.  A  major  change  took  place  in  the  past  decade.  The  economic  and  political 
changes in countries with formerly centrally planned economy led these countries to 
move  from  the  MPS  to  the  SNA  as  the  system  of  reference  for  their  national 
accounts. The current version of the SNA, 1993 SNA, and its European version, the 
ESA 1995, have been now adopted by nearly all countries in the world that compile 
national accounts. 

384.  Yugoslavia has started to move from the MPS to the 1993 SNA in the second 
half of 1994. The current system of national accounts in Yugoslavia consists of two 
parts: (i) a comprehensive set of macroeconomic accounts at the Federal, Republic, 
and  regional  levels  according  to  the  MPS;  and  (ii)  an  experimental  set  of  selected 
macroeconomic accounts at the Federal and Republic levels, according to the 1993 
SNA. 

385.  Both  MPS  and  SNA  accounts  are  compiled  on  an  annual  basis.  MPS 
aggregates related to the supply and use of products are compiled at current prices, 
and  at  constant  prices  of  1994.  SNA  aggregates  related  to  the  supply  and  use  of 
products are compiled only at current prices.  

386.  MPS  accounts  cover  all  major  tables  and  accounts  recommended  by  MPS 
standards, and are published by the FSO and simultaneously by SOR over the past 
twenty  years.  SNA  accounts  cover  the  complete  set  of  accounts  for  the  national 
economy  and  for  the  major  institutional  sectors  in  the  national  economy  that  are 
recommended in the 1993 SNA, and are published by the FSO over the years 1997 
to 1999. 

387.  The compilation of national accounts is carried out by FSO and SOR in close 
co-operation.  All  tables  related  to  economic  activity  are  now  compiled  according  to 
the  new  classification  of  economic  activities  that  refers  to  the  European  standard 
NACE Rev.1. 

Assessment 

388.  The  compilation  of  national  accounts  makes  use  of  all  available  statistics 
produced  at  the  Federal,  Republic,  and  regional  levels.  Many  crosschecks  are 
conducted, in order to make the national accounts internally coherent. This is a right 
approach. The movement from MPS to SNA is welcome. This movement represents 
for statisticians a significant effort that is commendable.  

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389.  An equivalent effort is required from domestic users of national accounts, who 
are  used  to  the  former  MPS  system.  For  instance,  the  major  indicator  of  macro-
economic  performance  of  the  whole  economy  has  almost  the  same  name  in  both 
systems:  Gross  Domestic  (Material)  Product  according  to  MPS,  Gross  Domestic 
Product according to SNA. But both aggregates are conceptually very different. In the 
2001  statistical  yearbook  of  Yugoslavia,  the  Gross  Domestic  Product  is  higher  by 
20%  than  the  Gross  Domestic  (Material)  Product  for  the  year  1999.  This  explains 
why  targeted  presentations,  seminars,  ad  hoc  workshops  on  the  new  national 
accounts should be organised by FSO and SOR for all categories of users, macro-
economic  analysts,  policy  makers,  and  academics.  This 
the 
effectiveness of the implementation of the new system. 

is  crucial 

for 

390.  With regard to priorities, the implementation of the 1993 SNA should include 
as  soon  as  possible  the  compilation  at  constant  prices  of  the  Gross  Domestic 
Product  and  the  other  aggregates  related  to  production.  The  change  in  the  Gross 
Domestic Product at constant prices is the most used indicator of economic growth. 
As  long  as  this  indicator  is  not  disseminated,  users  are  likely  to  think  that  the 
Yugoslav  system  of  national  accounts  is  still  basically  the  old  MPS,  and  they  are 
likely  to  think  that  macro-economic  indicators  produced  in  Yugoslavia  are  outdated 
and irrelevant. It is not a question of available data. There is already raw material in 
basic statistics compiled by FSO and SOR that would allow to produce a preliminary 
estimate of the Gross Domestic Product at constant prices. 

391.  Another  priority  is  to  improve  the  estimates  of  informal  activities  in  the 
compilation of the Gross Domestic Product, at current and constant prices. This is a 
difficult  but  necessary  task,  especially  in  the  new  system  1993  SNA,  that  covers 
many  service  activities  where  the  informal  sector  is  probably  growing  since  the 
beginning of the economic transition. 

9. Capacity to Produce Data on Public Sector Activities 

392.  Education  statistics  is  based  on  a  long-established  tradition  of  schools  and 
similar public institutions reporting, on an annual basis, to SOR, who are in charge of 
data  entry,  processing  and  tabulation.  The  FSO  is  responsible  for  defining  the 
content of the forms, and at the end for the aggregation of the results from the two 
republics.  This  activity  is  more  or  less  a  routine  process  without  any  perceived 
problems. No expenditure data are collected. 

393.  R&D  statistics  (including  expenditure)  are  collected  by  the  FSO  from  public 
research institutions (university faculties and specialised institutions), as well as from 
research units with enterprises, in the same way. 

394.  The  responsibilities  in  the  area  of  health  statistics  are  divided  between  the 
FSO  (mortality  and  causes of death) and the Federal Institute for Health Protection 
(health  institutions  in  the  public  sector,  except  for  expenditure).  The  latter  collects 
data  from  health  institutions  such  as  hospitals  or  doctors  in  the  public  health  care 
system  via  the  republic  institutes  for  health  protection.  SOR  are  not  involved,  and 
have no regular contacts to the republic health institution in charge of statistics. The 
private sector in health services that is starting to develop is not covered. 

395.  The  official  producer  of  government  finance  statistics  is  the  Clearing  and 
Payment  Service  (see  2.2).  The  published  output  of  the  Clearing  and  Payment 
Service concerning government finance statistics is very limited. The corresponding 

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chapter in the statistical yearbook, entitled "social activities and public consumption" 
has  been  prepared  mostly  by  the  FSO  and  is  focused  on  the  public  sector  outside 
governments, called "social activities", i.e. an exhaustive coverage of legal entities in 
this area. The two tables in this chapter concerning the receipts and expenditure of 
the  various  governments,  based  on  information  published  in  the  official  gazette  on 
the  one  hand  and  from  the  Clearing  and  Payment  Service  on  the  other,  are  totally 
incompatible. No information about purposes of government expenditure is provided. 

396.  The statistical unit of the Clearing and Payment Service does not seem to be 
aware  of  the  new  (and  old)  IMF  manual  of  government  finance  statistics,  nor  the 
COFOG  classifications.  Their  approach  is  mainly  determined  by  considerations  of 
treasury and clearinghouse functions, i.e. by the cash principle. 

Assessment 

397.  The  chapter  on  education  in  the  statistical  yearbook  is  a  good  example  for 
demonstrating  the  traditional  approach  to  official  statistics  still  prevailing  in 
Yugoslavia. Only absolute figures (e.g. the absolute number of pupils and teachers), 
but  no  indicators  (pupil/teacher  ratio)  are  given.  Indicators  combing  education 
statistics with other sources (e.g. enrolment rates) are absent (this may be because 
of non-reliable estimates of the population by age group). No estimate whatsoever is 
given on expenditure in this chapter; this is included in the chapter on social activities 
(see above the paragraph on government finance statistics). 

398.  The same holds for the chapter on public health in the statistical yearbook. It 
is revealing for the more institutional than subject-oriented approach that the causes 
of  death  statistics  are  included  in  the  population  rather  than  in  the  public  health 
chapter. 

399.  The FSO does not consider itself to have a co-ordination role in this area, nor 
does it feel responsible for how new demands might be introduced into the statistical 
programme  if  they  arise,  e.g.  concerning  health  expenditure  or  health-related 
behaviour.  It  would  not  object  to  the  health  institute  taking  the  lead  for  a  health 
survey  with  the  population,  or  for  statistical  business  surveys  with  private  sector 
entities, should the need arise, although there can be no doubt that this institute has 
absolutely no experience in either type of data collection. Even if the capacity of the 
FSO in both areas is clearly too low, it is the only public body that has proven so far 
that it can carry out, through the SOR, surveys for exclusively statistical purposes on 
a non-exhaustive basis, and the knowledge for this type of data collection, limited as 
it is today, is only present in statistical offices. The statistical offices should therefore 
be  more  assertive  in  this  respect,  they  are  also  more  experienced  in  dissemination 
and public access to results than other producers. The co-ordination role would also 
include  that  FSO  monitors  whether  statistics  produced  by  the  heath  institute  follow 
international standards. 

400.  Government  finance  statistics  as  part  of  official  statistics  seems  to  be 
nobody's  de  facto  responsibility.  This  gap  has  to  be  addressed  as  a  matter  of 
urgency, since the GDDS includes indicators in this area. The Clearing and Payment 
Service    is  clearly  not  prepared  to  implement  international  standards  in  this  area. 
Based  on  its  knowledge  in  national  accounts,  the  FSO  and  the  SOR  are  in  a 
relatively  better  position  to  do  so,  although  additional  resources  and  expertise  from 
abroad would be necessary. There are no problems for either of them in accessing 
the  basic  data  of  the  Clearing  and  Payment  Service.  Assigning  the  responsibility  in 
this  area  to  statistical  offices  would  include  responsibility  for  the  co-ordination 
aspects  (e.g.  concerning  the  definition,  compilation  and  dissemination  of  important 

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indicators).  It  is  recommended  to  explicitly  address  this  issue  as  part  of  the  next 
update of the statistical programme, and to install a small group, under the leadership 
of the FSO, including the SOR, the Clearing and Payment Service , the Ministries of 
Finance, and any other authority important as a source of data, with the mandate to 
assist  the  statistical  offices  in  developing  and  implementing  a  government  finance 
statistics according to international standards. 

10.  Capacity  to  Produce  Monetary,  Financial,  and  Balance  of  Payments 
Statistics 

10.1. Monetary and Financial Statistics 
401.  The banking system in Yugoslavia is currently experiencing a major structural 
change  that  has  a  direct  impact  on  the  coverage  and  reliability  of  corresponding 
statistics. The period of isolation and international sanctions has damaged a number 
of  banks:  out  of  the  59  commercial  banks  registered  by  the  National  Bank  of 
Yugoslavia,  37  have  de  facto  interrupted  their  commercial  activities  and  are  under 
the regime of judiciary administration (some of them since several years), and 4 have 
been  closed  by  the  Yugoslav  authorities  at  the  beginning  of  2002.  Since  2000, 
Montenegro  has  officially  adopted  the  Deutsch  Mark  (now  the  Euro)  as  currency  of 
legal  tender,  and  has  created  its  own  Central  Bank.  Therefore,  Serbia  and 
Montenegro have to be separately considered with regard to their statistical capacity 
in the monetary and financial area. 

402. 
In  Serbia,  the  National  Bank  of  Yugoslavia  collects  monetary  and  financial 
statistics from commercial banks. The legal basis consists of the law on commercial 
banks  and  the  law  on  the  National  Bank  of  Yugoslavia,  that  obliges  the  banks  to 
transfer to the National Bank the data it needs for carrying out its duties. In practice, 
the collection of data from banks is difficult and often delayed. In Kosovo, two out of 
the  three  registered  banks  provide  data  to  the  National  Bank  of  Yugoslavia.  With 
regard  to  the  third,  non-responding,  bank  the  most  recent  data  it  provided  to  the 
National  Bank,  related  to  1999,  are  repeated in subsequent years, in order to keep 
the global statistics balanced. 

403.  Monetary  and  financial  statistics  are  disseminated  by  the  National  Bank  of 
Yugoslavia in its monthly Bulletin (in Serb) and quarterly Bulletin (in English), as well 
as on its web site. 

404. 
In  Montenegro,  the  Central  Bank  of  Montenegro  collects  data  from  the  22 
registered  banks.  The  legal  basis  is  the  law  on  the  Central  Bank  of  Montenegro, 
which  obliges  banks  to  provide  the  Central Bank with the data it needs for carrying 
out its duties.  

the  Central  Bank  of 
financial  statistics  elaborated  by 
405.  Monetary  and 
Montenegro have not yet been disclosed. They are currently kept for internal use by 
the Central Bank and the government of Montenegro. 

406.  The  National/Central  Banks  of  Yugoslavia  and  Montenegro  have  not 
institutionalised  relations  with  the  Federal  and  Republic  Statistical  Offices.  For 
instance, they are not participating in the conference of directors that addresses, and 
decides on questions related to the statistical system of Yugoslavia. 

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Assessment 

407.  Given the context, all efforts made by the National Bank of Yugoslavia and the 
Central  Bank  of  Montenegro  to  compile  money  and  banking  statistics  are 
commendable. In both institutions there is a need for training and for additional staff 
in order to become more acquainted with international standards and to improve the 
quality of data.  

408.  The co-operation between both Banks and the Federal and Republic statistical 
offices should be developed. The minimum would be to exchange information about 
programmes of work and conceptual frameworks used. There are fields of common 
interest,  such  as  national  accounts,  households’  consumption  expenditure  and 
credits,  etc.  The  National  Bank  of  Yugoslavia  and  the  Central  Bank  of  Montenegro 
should be associated to the Conference of Directors of the three statistical offices. 

10.2. Balance of Payments Statistics 
409.  Balance of payments statistics are separately compiled by the National Bank 
of Yugoslavia and the Central Bank of Montenegro since the adoption of the Deutsch 
Mark as currency of legal tender by Montenegro. The balance of payments compiled 
by  the  National  Bank  of  Yugoslavia  covers  transactions  abroad  of  resident  units  in 
Serbia  (except  Kosovo  and  Metohia).  It  is  compiled  in  Yugoslav  Dinars.  The  legal 
basis is the law on foreign currency operations. The balance of payments compiled 
by  the  Central  Bank  of  Montenegro  covers  transactions  abroad  of  resident  units  in 
Montenegro.  It  is  compiled  in  Deutsch  Mark  (in  Euro  from  the  beginning  of  2002). 
The legal basis is the law on the Central Bank of Montenegro. 

410.  The  National  Bank of Yugoslavia collects data on settlements abroad mainly 
from  banks  and  other  financial  intermediaries.  Data  are  first  centralised  by  the 
regional  branches  of  Belgrade  and  Novi  Sad,  then  forwarded  to  headquarters  in 
Belgrade. As an exception to this general rule, data on imports and exports of goods 
are taken from custom statistics compiled by the Federal Custom Agency. 

411. 
In  principle,  data  reported  by  banks  and  data  taken  from  custom  statistics 
cannot be simply put together within the balance of payments because their valuation 
systems and their time of recording systems are different. An adjustment is made for 
the  difference  of  time  of  recording;  no  adjustment  is  made  for  the  difference  of 
valuation.  

412.  There  is  a  specific  problem  related  to  the  recording  of  movements  of  goods 
between Serbia and Montenegro. The National Bank of Yugoslavia does not estimate 
these  movements.  This  is  creating  an  internal  discrepancy  within  the  balance  of 
payments  because  the  counterparts  of  these  movements  (trade  credits  or  cash 
transfers) are taken in the data reported by banks. 

413.  The National Bank of Yugoslavia compiles balance of payments statistics on a 
monthly  basis.  For  a  given  month,  data  are  available  at  the  end  of  the  following 
month,  on  a  cumulative  basis;  they  are  released  to  the  government  and  put  on  the 
web site of the National Bank. The balance of payments statistics are also published 
in the annual bulletin of the National Bank of Yugoslavia  

414.  The  current  conceptual  framework  does  not  comply  with  the  world-wide  IMF 
standard  Balance  of  Payments  Manual  /  Fifth  Edition  (1993).  The  National  Bank  of 

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Yugoslavia  plans  to  move  to  the  IMF  standard  when  the  new  law  on  the  National 
Bank is approved by the Parliament, hopefully by the end of June 2002. 

415.  Similarly to the National Bank of Yugoslavia, the Central Bank of Montenegro 
collects data on settlements abroad from banks and other financial intermediaries. It 
also  uses  custom  statistics  for  imports  and  exports  of  goods.  However,  it  does  not 
make  any  adjustment  for  differences  of  time  of  recording  nor  for  differences  of 
valuation between data from banks and data from customs. 

416.  Statisticians  of  the  Central  Bank  of  Montenegro  estimate  the  movements  of 
goods between Serbia and Montenegro on the basis of tax statements that are made 
by traders on the occasion of such movements. 

417.  Balance  of  payments  statistics  of  Montenegro  are  compiled  on  a  monthly 
basis. They are released to the government of the Republic of Montenegro and put 
on the web site of the Central Bank. Statisticians of the Central bank of Montenegro 
report that their balance of payments statistics comply with the IMF standard. 

Assessment 

418.  A  large  part  of,  if  not  all  comments  made  above  on  monetary  and  banking 
statistics  can  be  repeated  on  balance  of  payments  statistics.  In  a  very  challenging 
context, efforts made in both national/central banks are commendable. Training and 
additional  staff  are  needed  to  build  balance  of  payments  statistics  that  are  reliable, 
consistent, and in good compliance with IMF standards. 

419.  A special effort should be devoted to the improvement of co-operation with the 
three  Federal  and  Republic  statistical  offices.  The  common  field  of  interest  is  here 
more important than with monetary and banking statistics. Issues raised by the use of 
custom  statistics,  for  instance,  should  be  addressed  in  a  co-ordinated  way.  From  a 
broader  point  of  view,  it  is  crucial  for  policy-makers  to  have  a  consistent  set  of 
indicators on economic growth, investment and saving, money, and external balance. 
This requirement can be met only through a sustained co-ordination of efforts made 
by all statistical bodies concerned. 

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Global Assessment of the Macedonian System 
of Official Statistics 
GAseminar/2002-11 
April 2002 

reflecting the situation of 16 July 2001 when the original assessment report 
was finalised 

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Table of Contents 

Preface 
Executive Summary 
A. Institutional Setting 

1. Legal Setting 

1.1. Statistical Law 
1.2. Other Legislation 
1.3. Statistical Council, Statistical Programme, Inter-Ministerial 
Consultations, Consultations with Users 
1.4. Protection of Independence 
1.5. Data Protection and Statistical Confidentiality 

2. National Statistical System 

2.1. Principles 
2.2. Structure of the System, Providers of Official Statistics, and 
Relationship between SSO and Other Providers 
2.4. Liaison with Research Institutes and Universities 
2.5. Liaison with the Business Community 
2.6. Product and Dissemination Policies 
2.7. Relations with the Central Government 
2.8. Relationships with the  Local Governments 
2.10. Access to Administrative Records 

3. Description of the SSO 

3.1. Mission, Internal Organisation (including Regional Offices) 
3.2. Planning, Programming and Priority Setting 
3.3. Monitoring Quality in all Activities 
3.5. Finance and Budgeting 
3.6. Staffing, Staff Recruitment and Training 
3.7. Information Technology 
3.8. Internal Monitoring of Performance 
3.9. External Accountability 

4. Statistical Infrastructure 
4.1. Classifications 

B. Technical Part: Capacity of Producing Statistics in Various Areas 

1. Assessment of the Overall Capacity 
2. Capacity to Organise and Carry out Censuses 
3. Capacity to Produce Annual Population Statistics after the Population 
Census 
4. Capacity to Carry out Household Surveys 
5. Capacity to Carry out Business Surveys 
6. Capacity to Produce Data on Public Sector Activities 
7. Capacity to Produce Agricultural Statistics 
8. Capacity to Produce Monetary, Financial and Balance of Payments 
Statistics 

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Preface 

The  global  assessment  of  the  Macedonian  System  of  Official  Statistics  was 
conducted  by  Mr.  Heinrich  BRÜNGGER  from  the  Swiss  Federal  Statistical  Office 
under  a  contractual  arrangement  between  this  office  and  EUROSTAT.  This 
assessment  was  to  be  focused  on  finding  out  about  the  present  situation  in  the 
Statistical Office, in the statistical system as a whole and their respective institutional 
environments (institutional aspects), and on the capacity of the statistical system and 
its  main  actors  to  provide,  in  a  sustainable  way,  timely,  accurate,  authoritative  and 
relevant information to users (infrastructural aspects). A detailed analysis of specific 
statistics such as national accounts or CPI with respect to their compliance with EU 
requirements  was  not  part  of  the  mandate;  nevertheless,  the  report  includes  in  its 
Part  B  an  assessment  by  broad  subject  area  on  whether  the  basic  elements  to 
produce the output required by the EU are in place either today or in the near future. 

The assessment has exploited the material delivered by EUROSTAT's Unit A-5 and 
by  the  State  Statistical  Office  of  the  Republic  of  Macedonia  (SSO)  before  the  first 
mission took place, notably the State Statistics Act, the Statistical Programme 1998 - 
2002,  the  strategic  master  plan  and  the  statistical  yearbook  in  its  CD-ROM  version 
with its concise methodological descriptions for each subject area. Two missions took 
place (19 to 23 March and 23 to 27 April 2001) in order to have in-depth discussions 
with  the  management  and  staff  of  the  SSO  as  well  as  representatives  from  other 
producers of official statistics, to visit three of SSO's regional offices and to be given 
additional  material  referred  to  in  the  report.  The  missions  did  not  include  any 
discussions with users outside the SSO. After these missions, but before the report 
was  finalised,  a  change  in  the  post  of  the  director  of  the  SSO  took  place;  the  draft 
final report was discussed with the new director. She approved the report on 9 July 
2001   

The expert was greatly helped in his task by the SSO's staff, who did an excellent job 
in  preparing  the  missions  and  organising  the  discussions,  which  have  inevitably 
made  considerable  demands  on  the  time  of  the  management  and  of  other  staff.  
Nearly  47  staff  members  from  the  SSO  participated  in  the  discussions  willingly, 
actively and with good humour, in spite of a already heavy work load, and in spite of 
the  exceptional  situation  in  the  country  during  the  first  visit.  Without  their 
contributions,  and  without  the  on-the  spot  translation  during  many  discussions,  it 
would not have been possible to carry out the mandate in such a short time. Special 
thanks therefore to all the people at the SSO for the warm welcome and the help the 
expert received. 

The  present  version  established  for  the  Dubrovnik  seminar  differs  from  the  original 
assessment  report  dated  16  July  2001  insofar  that  all  annexes  have  been  omitted, 
and  that  paragraphs  in  the  main  part  of  the  report  which  contained  references  to 
these  annexes  haven  been  reformulated  without  any  change  in  their  substance.  In 
addition,  the  executive  summary  was  slightly  expanded  concerning  part  B  of  the 
report. 

Executive Summary 

1. 
The  Macedonian  system  of  official  statistics  is  composed  of  10  actors.  The 
Statistical  Office  of  the  Republic  of  Macedonia  (State  Statistical  Office  or  SSO 
hereafter)  is  the  major  actor.  In  addition,  according  to  the  current  statistical 
programme, there are 9 other bodies authorised to carry out statistical work qualified 
as  official,  the  most  important  of  these  other  authorised  bodies  being  the  National 

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Bank of the Republic of Macedonia (National Bank hereafter). The budget of the SSO 
accounts  for  0.191%  of  the  total  government  budget  in  2000.  The  staff  of  the  SSO 
comprises  263  persons  in  2001;  the  corresponding  figures  for  the  other  producers 
are not available. The system can be qualified as relatively centralised. 

2. 
The SSO has a long tradition. Macedonia was the first among the republics of 
the former Yugoslavia to set up a statistical office after the second world war. Unlike 
countries from the Warsaw pact, the statistical system of the former Yugoslavia was 
known  for  the  high  quality  and  comprehensiveness  of  its  demographic  and  social 
statistics and its close links to science and research at universities. In the period of 
this  republic  gaining  independence  in  1991,  the  SSO  has  always  maintained  its 
production without any major interruption, and has since then made a great effort in 
transforming its methods and output to the requirements of the new situation, notably 
through  building  up  economic  statistics  for  an  open  market  economy  and  national 
accounts according to the most recent international standards. 

The statistical system has a modern legal base in the Act on State Statistics 
3. 
from  1997.  Specific  laws  are  required  for  censuses.  Statistical  activities  have  to  be 
based  on  a  five-year  programme  adopted  by  the  government,  which  is  updated 
annually.  All  SSO  items  of  the  statistical  programme  are  each  year  scrutinised  for 
relevance  in  terms  of  users  needs,  compliance  with  the  EU  acquis  and  potential  of 
rationalisation  (e.g.  replacing  total  coverage  by  samples).  In  parallel,  the  SSO  has 
developed a comprehensive strategic master plan for the period 1999 to 2005, which 
will  be  gradually  carried  over  into  the  next  annual  update  of  the  present  multi-year 
programme  and  be  the  basis  for  establishing  the  next  5-year  statistical  programme 
(2003 to 2007). 

4. 
The statistical law enshrines the essence of the UN Fundamental Principles of 
Official Statistics in a legally binding way. The activities of the SSO are carried out in 
strict compliance with these principles. 

5. 
The  SSO  is  a  professionally  sound  and  tightly  managed  organisation, with a 
highly  skilled  staff  fully  committed  to  the  cause  of  official  statistics  in  spite  of  low 
salaries compared to other parts of the administration and to some private sectors. In 
terms of programming its activities and the use of IT, it is well ahead of other parts of 
the  national  administration, which will undergo an IMF-inspired overhaul in the near 
future.  This  model  status  is  recognised  by  exempting  the  SSO,  as  one  of  very  few 
public  bodies,  from  staff  cuts,  and  by  the  possibility  to  use  receipts  from  sales  and 
services,  and  funds  from  international  organisations,  for  financing  items  of  the 
statistical  programme.  The  SSO  has  implemented  most  of  the  recommendations 
from a EU-funded management expertise in 1998. 

6. 
The director of the SSO is appointed by the government. She has the rank of 
a minister, but is not a member of the government. She reports to the government via 
the  prime  minister.  The SSO is well respected from the public and from all parts of 
the government as the body for producing and disseminating authoritative data. 

7. 
The SSO carries out a wide range of surveys (290 in 2001, of which 66% are 
addressed  to  economic  agents)  and  has  access  to  administrative  data,  e.g.  for 
external  trade  statistics  and  for  fiscal  data  from  the  Public  Revenue  Office.  Areas 
outside  the  responsibility  of  the  SSO  include  monetary,  financial  and  balance  of 
payments  statistics  (National  Bank),  health  statistics  other  than  mortality,  public 
finance,  and  most  of  environment  statistics.  The  SSO  is  responsible  for  national 
accounts, and has to verify all statistics included in government documents as well as 
all  data  transmitted  to  international  organisations.  Presently,  the  SSO  is  also  in 

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charge  with  tasks  outside  official  statistics  which  are  of  an  administrative  nature  in 
connection  with  registers;  the  most  important  of  this  administrative  tasks  is  the 
administrative  register  of  business  entities.  These  tasks  will  be  transferred  to  other 
bodies in the near future.  

8. 
The  SSO  has  a  high  degree  of  knowledge  about  methodology  of  official 
statistics  and  international  standards,  notably  concerning  the  EU  acquis.    It is keen 
on  regional  co-operation  and  willing  to  share  its  experience  with  other  countries  of 
the region. 

9. 
The capacity to produce relevant, timely and accurate statistics is at the level 
of  an  average  EU  member  country  in  demographic,  economic  and  those  areas  of 
social  statistics  for  which  the  SSO  is  responsible.  The  SSO  is  proud  to  be  in 
compliance  with  an  increasing  number  of  EU  requirements  (EU  acquis  and  non-
binding  requirements  according  to  the  EU  statistical  programme),  including  difficult 
items such as PRODCOM. It is the explicit strategic goal of the SSO to continue with 
this  adaptation  process,  so  that  the  statistical  obligations  of  the  Stabilisation  and 
Association  Agreement  between  the  EU  and  FYROM  signed  in  April  2001  can  be 
complied  with  without  any  difficulty.  By  2006,  full  compliance  with  EU  requirements 
should be accomplished according to the master plan. 

10.  Concerning the major subject areas, annual population statistics is negatively 
affected  by  a  lack  of  data  on  international  migrations  since  the  last  census.  A  new 
population  census  was  planned  to  take  place  in  spring  2001,  but  had  to  be 
postponed for reasons of unrest in certain parts of the country; it is very important for 
the  statistical  system  as  a  whole,  i.e.  for  population  statistics,  for  improving  the 
sampling  frame  for  household  surveys,  and  for  many  other  areas  such  as  labour 
force and agricultural statistics, that a population census can take place in conditions 
that  enable  representative  results  to  be  generated  which  can  serve  as  benchmark 
data.  There  are  two  household  surveys,  the  labour  force  survey and the household 
budget survey, which in normal circumstances are carried out on a regular basis, the 
latter  survey  is  undergoing  a  profound  revision  of  methodology  to  bring  it  closer  in 
line with EU standards. Health statistics is negatively affected by the responsibilities 
being spread over three producers.  

11. 
There  is  a  wide  range  of  business  surveys,  but  the  whole  system  of  data 
collection  in  this  area  should  be  looked  at  from  the  relevance,  duplication  and 
methodological  point  of  view.  Few  surveys  in  this  area  use  stratified  probability 
samples,  mainly  due  to  the  lack  of  a  statistical  business  register  of  good  quality 
including  site  variables.  Once  this  will  be  available,  a  further  increase  in  coverage, 
other quality aspects and efficiency can be expected. Agricultural statistics is in need 
of being given a solid basis with an agricultural census, but the system of annual and 
more  frequent  data  collection  in  the  private  agricultural  sector,  presently  based  on 
estimators and not on statistical surveys, needs to be reshaped in parallel. National 
accounts aggregates, and also a good number of integrated accounts as such, exist, 
some  of  which  also  at  constant  prices.  There  are  two  variants  of  a  consumer  price 
index, plus a producer price index. Other short-term economic indicators in the real 
sector  exist,  but  their  methodology  is  in  need  of  coming  closer  to  EU  standards. 
Government finance statistics is only covered as part of national accounts. The area 
of  monetary,  financial  and  balance  of  payments  statistics  is  well  handled  by  the 
Central Bank.     

12. 
The SSO has a high degree of flexibility in adjusting surveys and outputs, and 
in reallocating staff and financial resources to programme items, which should allow 
the  management  of  the  SSO  to  modernise  production  from  this  point  of  view. 

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However,  the  resource  situation  is  not  satisfactory;  and  the priorities outlined in the 
master  plan  cannot  be  implemented  over  and  above  continuing  the  volume  of  the 
present  statistical  programme.  It  is  therefore  necessary  to  review  present  regular 
activities  in  terms  of  relevance  in  covering  user  needs  and  contributing  to  the 
transition  to  EU  standards;  those  activities  with  low  relevance  and  low  potential  for 
future requirements will have to be dropped or scaled down in order to free resources 
for  the  new  priority  activities,  and  for  some  hitherto  neglected  horizontal  functions. 
But funds freed from reallocations of this kind will not be sufficient in themselves to 
enable the SSO to accomplish its ambitious objectives; without additional funds, both 
nationally  and,  in  the  start-up  phase  of  some  new  activities,  from  abroad,  the  time-
table will have to be stretched. 

13.  One  horizontal  aspect  that  needs  to  be  improved  is  the  content  of  products. 
They  lack  explanatory  and  analytical  comments  that  could  help  non-expert  user  to 
grasp  the  significance  of  the  results.  In  a  modern  media  society,  publishing  tables 
and  methodological  notes  concerning  definitions  and  sources  is  not  enough, 
statistical offices have to do more to convey the meaning of their work to users and to 
the  media  in  particular.  It  is  important  for  their  visibility  and  status  that  statistical 
offices can be seen as being able to provide this added value provided by intelligent 
comments  by  themselves,  and  staff  has  to  be  trained  accordingly.  In  this  respect, 
products should also contain more indicators and not only absolute values. 

14. 
There  are  some  other  SSO  activities  which  need  to  be  strengthened,  not  so 
much because of the inability to cope with needs expressed by users today, but for 
preparing  the  system  in  time  for  future  challenges,  notably  the  full  compliance  with 
the EU requirements, and of the growing user needs in a modern information society. 
The main items are as follows: 

(cid:1)(cid:2) Access  to  an  increasing  amount  of  official  statistics  through  a  database 

accessible to all via Internet;  

(cid:1)(cid:2) Setting up of a statistical business register designed to become the backbone 
of  business  surveys  and  to  achieve  full  compliance  with  the  relevant  EU 
regulation; 
(cid:1)(cid:2)
Introduction of a cost-accounting system at the level of programme items; 
(cid:1)(cid:2) Establishing  a  sample  frame  for  household  surveys  which  can  be  updated 

easily between the censuses 2001 and 2011. 

15. 
Furthermore, the SSO has to fill the prerogatives granted by the statistical law 
as leader of the statistical system with substance, through acting proactively, setting 
standards and controlling whether they are complied with by other producers. If the 
need arises, it should not hesitate to take initiatives with respect to areas of statistics 
outside  its  present  field  of  action,  in  order  to  ensure  that  all  producers  of  official 
statistics  work  on  the  basis  of  the  same  principles  and  use  the  same  terminology. 
The SSO should make sure that all areas of official statistics get a sufficient level of 
attention,  and  that  users  perceive  official  statistics  as  a  category  of  authoritative 
source  from  various  producers,  but  which  follow  the  same  common  rules  and 
standards that are clearly distinct from other categories of information. 

Another  area  of  priority  action  where  the  SSO  interacts  with  other  public 
16. 
bodies is the implementation of the article in the statistical law concerning the access 
to administrative data for statistical purposes. Access is denied in practice because 
the  other  public  bodies  request  symmetrical  access  to  the  SSO’s  microdata,  which 
would be a clear breach of statistical confidentiality. Progress in this area is therefore 
dependent  on  putting  on  paper  and  promoting  the  SSO’s  clear  policy  on  statistical 
confidentiality  in  data  collection,  processing,  storage  and  dissemination,  and 

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explaining  the  asymmetric  character  concerning  data  flows  between  the  SSO  and 
other public bodies (so called one-way principle). 

A. Institutional Setting 

1. Legal Setting 

1.1. Statistical Law 
Macedonian  official  statistics  is  defined  in  the  "Act  on  State  Statistics" 
1. 
published  in  the  "Gazette  of  the  Republic  of  Macedonia"  No.  54,  1997  (hereafter 
Statistical  Law).  The  statistical  law  has  62  articles.  It  is  easily  accessible  in 
Macedonian and English through the website of the State Statistical Office. The law 
translates  the  UN  Fundamental  Principles  of  Official  Statistics  (which  form  also  the 
basis  for  the  EU's  Council  Regulation  322/97  on  Community  Statistics  and  are 
mentioned as well in article 285 of the Amsterdam Treaty) into binding legal force; it 
is  especially  strict  with  respect  to  statistical  confidentiality.  Among  the  actors  of 
official  statistics,  the  Statistical  Office  of  the  Republic  of  Macedonia  (or  State 
Statistical Office, SSO, for short) is the only one explicitly mentioned, and its duties 
and competencies are listed in detail. The law provides for a multi-year programme of 
official statistics to be enacted by the government, in which all data collection carried 
out for statistical activities, as well as all output relevant activities of official statistics 
such as national accounts, which are not directly linked to data collection, have to be 
listed.  The  only  exception  are  the  census  of  population,  households  and  dwellings 
(originally to be carried out in May 2001, but postponed) and the agricultural census, 
which  in  addition  to  being  mentioned  in  the  multi-year  programme  require  separate 
laws. The statistical programme also includes activities of official statistics carried out 
by  "other  authorised  bodies"  than  the  SSO,  but  these  bodies  are  nominally 
mentioned in the statistical programme only and not at the level of the statistical law 
itself (which allows for flexibility in this respect).  The statistical law stipulates that the 
SSO "shall be an expert and independent administrative organisation". 

Assessment  

2. 
After a careful analysis of the statistical law, it can be stated that it is fully up to 
the standard of modern statistical legislation on official statistics in a democracy with 
an open market economy. With its 62 articles, it is rather detailed, but without being 
too  rigid  as  to  prevent  flexible  adaptation  of  the  statistical  activities  to  new 
requirements. The only element where the law is rather short is the status of the SSO 
within  the  administration  (but  this  is  taken  up  to  some  degree  in  the  law  on  the 
organisation  and  operation  of  the  state  administration  bodies,  see  below  under 
chapter 1.2), and the institutional protection of independence. The SSO is very strict 
in implementing the spirit of the law for its own activities. There are signs, however, 
that  this  does  not  necessarily  hold  for  other  authorised  producers.  For  this  reason, 
the SSO plans to carry out an evaluation of the degree of implementation of the law 
in  the  second  half  of  2001,  especially  as  regards  the  capacity  of  these  other 
authorised bodies to act as producers of official statistics and the delimitation of the 
scope  of  official  statistics  and  the  respective  areas of competence. On the basis of 
the  present  assessment,  it  is  to  be  expected,  however,  that  the  necessary 
adaptations  can  be  solved  at  the  level  of  the  implementation  of  the  statistical  law 

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(through the next 5-year programme e.g.) and are unlikely to require a formal change 
of the law itself in the near future. 

1.2. Other Legislation 
3. 

(cid:1)(cid:2)

(cid:1)(cid:2)

(cid:1)(cid:2)

(cid:1)(cid:2)

Further laws that are relevant for official statistics examined are the following:  
"Law  on  2001  Census  on  Population,  Households  and  Dwellings  in  the 
Republic  of  Macedonia"  (  Official  Gazette  of  Republic  of  Macedonia  no. 
16/2001);        
"Law on the Organisation and Operation of the State Administration Bodies", 
(Official Gazette of Republic of Macedonia no.58/2000); 
"Personal  Data  Protection  Law"  (Official  Gazette  of  Republic  of  Macedonia 
no.12/1994) 
"The  National  Bank  of  Macedonia  Act"  (1992  with  various  subsequent 
amendments). 

There is some lower level legislation enacted by the government.  These acts, 
4. 
after  they  have  been  proposed  by  the  SSO,  are  adopted  by  the  government. 
Examples are:  

(cid:1)(cid:2) Statistical Surveys Program for the period 1998-2002 ( Official Gazette of R. 

of Macedonia no.64/97)  

(cid:1)(cid:2) National  Classification  of  Activities-  NACE  Rev.1  (  Official  Gazette  of  R.  of 

Macedonia no.7/98).  

The  census  law  is  in  certain  aspects  very  detailed,  both  in  terms  of  content 
5. 
and organisation, but this can be explained by the change in the population concept 
that  was  introduced  with  the  census  in  1994,  and  the  significance  of  the  results  as 
regards the population broken down by ethnicity. Confidentiality is very strict: census 
data  cannot  be  used  for  updating  administrative  registers  (only  for  the  statistical 
registers  kept  by  the  SSO).  Data  collection  will  be  done  by  carefully  selected  and 
instructed  interviewers,  who  have  to  show  their  authorisation.  The  list  of  variables 
included follows the UN/ECE recommendations. There are ambitious deadlines in the 
law for publishing the results. The law provides for a State Census Committee for all 
organisational issues (methodological issues will be discussed  in the same body as 
for other official statistics, the Statistical Council [see below under 1.3.]) 

The law on the organisation and operation of the state administration bodies 
6. 
gives some more details about the status of the SSO as compared to other bodies of 
the  administration.  It  lists  the  SSO  as  "Administrative  Organisation",  which  are 
defined  as  bodies  "established  to  perform  specific  tasks  that  call  for  application  of 
expert  methods  and  related  administrative  tasks".  The  SSO  is  endowed  with  the 
capacity of a legal entity. The same status is given only to the State Archive and the 
Agency  in  charge  of  land  surveying,  which  helps  to  make  the  expert  professional, 
non-political nature of the SSO clearly visible. 

The  situation  with  respect  to  the  legislation  on  data  confidentiality  in  general 

7. 
will be presented and discussed in 1.5.   

The National Bank Act does not mention statistics in the context of the tasks 
8. 
of  the  National  Bank.  The  statistical  activities  of  the  National  Bank  are  therefore 
exclusively based on the statistical law and the statistical programme. 

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Assessment 

The census law does not show any discrepancy in substance in comparison to 

9. 
the statistical law, nor to the UN Fundamental Principles. 

10. 
The  law  on  the  organisation  and  operation  of  state  administration  bodies 
clarifies the status of the SSO to some extent. However, there is no article in this law 
either  that  protects  the  SSO  from  political  interference  by  limiting  the  instruction 
power of the superior body (government) other than by ensuring that this power has 
to be exercised within the limits of the substantive laws. The public sector as a whole 
will  undergo  important  structural  changes  in  the  near  future  as  a  result  of  an  IMF-
inspired comprehensive  reform which has started this year, which is likely to make 
changes of this law necessary. This should be taken as an opportunity to improve the 
institutional safety net concerning the SSO (see 1.4). 

1.3.  Statistical  Council, Statistical Programme, Inter-ministerial Consultations, 
Consultations with Users 
11. 
The  statistics  law  specifies  that  the  multi-year  programme  has  to  cover  five 
years, with annual updates. This structure has been taken over from the time of the 
former Yugoslavia, but with the important change that the adoption of the programme 
and  its  annual  updates  is  the  task  of  the  government  and  not  any  more  of  the 
Parliament.  The  present  five-year  programme  covers  the  years  1998-2002,  it  was 
adopted by the government in 1997, i.e. shortly after the statistical law became legal 
force. It has been updated once, and the update for the year 2002 is in preparation. 

12. 
In its present form, the statistical programme is mainly a list of data collection 
activities by surveys, or by using administrative data sources, to be carried out by the 
various bodies. Some other statistical activities like GDP or analytical outputs carried 
out by these bodies are mentioned as well. There is a part of the programme which 
deals with publications; it fixes what output is considered to be official and has to be 
given free to anybody (within the limit of one copy per user). 

13.  Whereas  the  five-year  programme  has  no  link  to  resources,  the  annual 
updates have, at least as regards the SSO. They are passed by the government in 
September together with the SSO budget for the next year. This is a de facto rather 
than  a  statutory  link,  which  is  respected  by  the  government.  For  further  details 
concerning the budget, see 3.2. At the level of the Parliament, this link is not possible 
any  more,  since  only  the  budget  and  not  the  statistical  programme  is  discussed  at 
this  highest  level.  At  ministerial  level,  the  budget  of  the  SSO  is  defended  by  the 
Minister of Finance, and since the adoption of the law, the proposal of the SSO has 
always  passed  the  government  and  Parliament  debates  without  cuts.  It  would  be 
against the book of rules of the government if, for the discussion at government level, 
a  ministry  were  to  propose  an  amendment  of  the  proposed  annual  programme 
without having obtained the consent of the SSO before. 

14. 
Before  reaching  the  government  level,  the  annual  updates  are  discussed  by 
the Statistical Council, which gives a formal opinion on it. The Statistical Council is a 
body  for  official  statistics  explicitly  foreseen  in  the  statistical  law.  Its  members  are 
appointed by Parliament. The first Statistical Council was set up according to the new 
law  in  1998  and  has  13  members  (president  included),  of  which  5  (including  the 
president) are from the research community, 3 are members of the Parliament, 3 are 
from government or related public bodies such as the National Bank, and 2 represent 
the business community. There are no representatives from trade unions or NGOs. 
Its role with respect to the programme (and with respect to its other tasks listed in the 

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statistical law) is only advisory. The practice is to submit all proposals from the SSO 
to the government first to the Statistical Council for opinion, such as the draft law on 
the  population  census  or  the  draft  act  on  NACE  Rev.  1  and  its  amendments.    The 
Council  establishes  an  annual  report  about  its  activities  to  the  Parliament,  which  is 
the  vehicle  by  which  the  Parliament  is  regularly  informed  about  the  major  issues  in 
official  statistics  in  addition  to  the  budget  and  the  passing  of  laws  such  as  for  the 
population census. 

For the preparation of the SSO part of the annual updates of the programme, 
15. 
extensive  consultations  take  place  with  users  (government  and  others)  and 
respondents. For important issues, the SSO organises round tables. The SSO is also 
officially represented in all high-level inter-ministerial policy groups (in order to verify 
the  data  used  in  these  debates  and  in  order  to  be  informed  about  forthcoming 
information needs). 

16. 
As an important strategic tool in the planning and programming process, the 
SSO has established a "Master Strategic plan of the Statistical Office of the Republic 
of  Macedonia",  covering  the  years  1999  to  2005.  This  plan  has  no  official  status 
compared to the 5-year and annual statistical programme, but it is more strategic in 
nature than the formal programmes, and serves mainly as instrument to assess the 
relative  importance  of  various  programme  items  (see  3.2.).  The  Statistical  Council 
has been associated when this strategic plan was established. 

Assessment  

17. 
The planning and evaluation of statistical activities is carried out by the SSO 
not only as a bureaucratic exercise, but as the basic management tool for the SSO. 
The  level  of  detail  prescribed  by  the  law  for  each  element  of  the  statistical 
programme  to  be  adopted at government level may seem to go too far and to lean 
too much towards listing surveys instead of defining outputs in terms of information to 
be  produced,  but  without  government  adoption,  the  legitimacy  of  data  collection  by 
the SSO could easily be questioned. 

18. 
There is much discretion for the SSO in shaping the statistical programme to 
be submitted to the government. This could be a temptation to minimise the effort of 
annual  updating  by  carrying  over  the  maximum  number  of  items  unchanged. 
However, the annual updates are carried out by the SSO with great care. There is a 
systematic  check  for  rationalisation.  Furthermore,  all  SSO  activities  are  discussed 
with users and respondents in informal networks and round tables. The fact that the 
SSO proposals, including its budgetary mirror, have passed the government (and the 
budget  also  the  Parliament)  practically  unaltered,  are  a  proof  of  the  careful 
preparation  and  the  balancing  of  the  needs  of  various  users  and  the  burden  of 
respondents by the SSO. 

The  master  strategic  plan  is  very  essential  for  the  legally  required  planning 
19. 
and  evaluation  process  not  to  become  a  routine  operation  without  great  impact  or 
interest,  and  for  avoiding  the  risk  of  merely  putting  together  lists  of  activities  from 
various  subject  areas  without  them  being  embedded  in  longer  term  perspectives. 
This strategic master plan is a model of clarity and concise statement of challenges, 
strengths  and  weaknesses,  and  would  be  of  higher  substantial  interest  to  the 
government than the details of the 5-year programme. It is therefore recommended 
that  an  updated  version  of  this  master  strategic  plan,  complemented  by  a  strategic 
plan for the system of official statistics as a whole as suggested below, be included 
as a kind of first and summary chapter of the next 5-year programme to be adopted 
by the government. 

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20. 
It  is  too  early  to  give  an  assessment  of  the  role  and  the  impact  of  the 
Statistical  Council.  In  addition  to  its  opinion  on  the  statistical  programme  and  the 
updates thereof, where its primary role should be the discussion of information needs 
and  their  balancing  against  the  burden  of  respondents,  there  is  a  great  potential  in 
using  the  Statistical  Council  for  advice  on  standards  and  principles  which  are 
intended  to  govern  all  producers  of  official  statistics  in  the  system.  Recently,  some 
members  of  the  Council  have  expressed  an  interest  in  dealing  with  such  type  of 
issues. It is recommended that an evaluation of the work of the Statistical Council be 
made before its first term will end in 2002. 

21. 
The part of the 5-year statistical programme which is in need of improvement 
concerns  the  activities  of  other  authorised  bodies.  The  impression  from  outside  is 
that the lists submitted by other producers have been simply added to the SSO main 
part without being filtered or scrutinised. Approximately half of the items which figure 
under  the  other  authorised  bodies  are  simple  counts  of  administrative  events.  For 
these  items,  the  qualification  as  official  statistics  should  be  assessed  against  the 
same  criteria  as  those  used  by  the  SSO.  With  the  exception  of  the  statistics  of  the 
National  Bank,  these  activities  have  benefited  from  much  less  efforts  to  introduce 
international standards, recognised methods of official statistics, new technologies or 
management techniques. It is therefore recommended that, under the leadership of 
the SSO, a master plan be designed also for those parts of the programme that do 
not appear under the heading of the SSO. This master plan should also cover plans 
how to develop and modernise important statistical areas where no authorised body 
feels  responsible  under  the  present  programme,  notably  for  public  finance  or 
environment statistics, or where competencies are shared without somebody feeling 
responsible for the area as a whole like in health statistics. It is recommended to co-
ordinate the development of this missing part of the master plan with the evaluation 
of the statistical law as mentioned under 1.1. 

22. 
Before starting the work on setting up the statistical programme for the years 
2003  to  2007,  some  thoughts  should  be  given  on  how  the  present  structure  of  the 
detailed  programme  might  be  improved  (in  addition  to  the  proposal  to  include  the 
master  strategic  plan),  and  to  which  elements  have  to  be  adopted  by  the 
government,  and  what  can  be  added  (and  amended  if  the  need  arises),  by  the 
director of the SSO after having consulted the Statistical Council. What the decision 
makers  and  users  are  primarily  concerned  with  is  the  amount  of  information 
produced  and  made  publicly  available  in  terms  or  content,  periodicity,  timeliness, 
geographical and other breakdowns, accuracy and international comparability, and a 
systematic  view about these outputs (irrespective of whether they are disseminated 
on  paper  and/or  by  other  means)  should  come  out  more  systematically  and  more 
clearly than in the present programme. The means by which the data necessary for 
compiling  these  results  are  collected  (whether  by  survey  or  on  the  base  of 
administrative  data,  or  through  a  combination  of  both)  is  of  importance  mainly  to 
respondents, and their cost to decision makers, but they should always be seen as 
instruments and not as an end in itself. It is recommended that the Statistical Council 
be associated to this type of reflection, including the question on how the 5-year and 
the annual programmes can complement each other in the most efficient way, while 
at  the  same  time  strictly  respecting  the  specifications  in  the  statistical  law  on    the 
information content of the 5-year statistical programme. 

1.4. Protection of Independence 
23. 
The  situation  is  different  for  the  SSO  and  the  other  authorised  bodies. 
Whereas the legal protection of the independence of the SSO is rather general, the 

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de facto situation has been without any attempts of interference since 1996/1997 (in 
terms  of  requests  or  wishes  to  suppress  or  alter  results,  or  to  delay  their 
dissemination). The directors of the SSO have had a very clear policy in this respect, 
which  has  been  communicated  both  to  the  government,  to  users,  and  to  the  SSO 
staff. When results are released, all users, including those from government, receive 
them  by  fax  simultaneously.  This  has  caused  some  negative  reactions  in  the 
beginning, but is now accepted as necessary good practice. 

The  director  of  the  SSO  is,  according  to  the  statistical  law,  appointed  and 
24. 
dismissed  by  the  government.  The  regular  term  is  for  4  years.  Re-appointment  is 
possible.  It  is  the  prime  minister  who  submits  a  proposal  to  the  government  in 
matters concerning the director of the SSO. The director has the rank of a minister, 
but is not part of the government. The government has made use of its competence 
by appointing a new director for the SSO who took over on 6 June 2001.  

25. 
For  other  producers  of  official  statistics  in  the  sphere  of  the  government, 
activities  of  official  statistics  are  intertwined  with  administrative  and  other  activities 
and  are  not  clearly  separated  with  respect  to  responsibility.  Most  of  their  statistical 
output  is  internal,  and  only  a  small  part  gets  published.  These  other  producers  are 
likely to be affected by the forthcoming general reform of the public sector. The only 
exception  is  the  National  Bank,  where  the activities concerning official statistics are 
grouped in two departments. As an entity separate from government with a separate 
budget  and  staff  rules,  the  public  sector  reform  is  not  directly  applicable  to  the 
National Bank.  

Assessment  

26. 
Through  its  clear  policy  and  the  quality  of  its  output,  the  SSO  has 
accomplished  a  status  of  de  facto  professional  independence  which  is  fully  in  line 
with  the  UN  Fundamental  Principles.  Its  output  is  now  recognised  as  authoritative, 
and  no  minister  would  presently  dare  to  put  the  SSO  under  pressure  in  order  to 
prevent results from being released, or to receive advance information. 

27. 
It  remains  to  be  seen,  however,  whether  this  practice  is  really  sustainable 
given that the law merely states the principle. The competence to dismiss the director 
of the SSO for any reason a government may invoke, used as a threat, might be the 
handle by which professional independence could be undermined, but it is likely that 
this would provoke strong critics from the media if such an incident were to become 
public.  The  recent  change  in  the  top-level  post  of  the  SSO  is  unrelated  to  such 
considerations. 

28. 
In  the  case  the  law  on  the  organisation  and  operation  of  the  state 
administration  bodies  is  changed,  an  attempt  should  be  made  to  differentiate  the 
director  of  SSO  (and  of  similar  bodies)  from  directors  of  political  bodies  in  this 
respect. This could be done e.g. by stating some criteria for persons to be appointed, 
and/or by limiting the reasons for dismissal within the term. It is also in the interest of 
the  competent  body,  i.e.  the  government,  that  its  decisions  are  not  perceived  as 
being  in  anyway  connected  to  undermining  the  professional  independence  of  the 
SSO.  

29. 
Although  the  other  producers  of  official  statistics  are  submitted  to  the 
statistical law in principle since 1997, it is difficult to discern an impact of this law on 
their work over and above their reporting for the statistical programme. The reform of 
the  public  sector  should  be  used  to  clarify  the  status  of  these  other  authorised 
producers.  Some  may  even  disappear  like  the  Payment  Agency.  When  an  agency 

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admits its role as producer of official statistics and is willing to be in full compliance 
with the statistical law and international standards, its statistical activities have to be 
clearly separated in organisational terms from administrative and political tasks of the 
same  agency  in  order  to  safeguard  the  independence  of  the  statistical  unit(s).  The 
director of the SSO should have a say in the appointment of heads of such statistical 
units that are part of other bodies. On the other hand, if an agency is not willing or not 
able  to  act  as  a  producer  of  official  statistics  in  the  true  sense,  including  the 
implementation  of  international  standards  and  methodologies,  or  if  it  fails to have a 
minimal volume of official statistics activities, it would then stop disseminating official 
statistics and be dropped from the statistical programme. It would be considered as a 
user  of  statistics  and  a  possible  generator  of  administrative  data  which  are 
transformed into official statistics by other bodies, notably by the SSO. 

1.5. Data Protection and Statistical Confidentiality 
30. 
Statistical  confidentiality  is  guaranteed  both  for  natural  persons  and  legal 
entities (of the private sector). The legislation in the statistical law is in full compliance 
with both the relevant EU legislation, and, as regards natural persons, also with the 
more specific Recommendations of the Council of Europe concerning the Protection 
of Personal Data Collected and Processed for Statistical Purposes. 

Implementation of these rules in the data collection phase, and in processing 
31. 
and  storing  personal  data  by  the  SSO,  is  very  strict.  Staff,  and  especially 
interviewers,  are  regularly  made  aware  of  the  necessity  to  comply  with  statistical 
confidentiality.  Respondents  are  informed  about  the  nature  of  the  survey  and 
purpose for which data are collected. 

32. 
There  is  a  working  document  on  a  book  of  rules  to  be  signed  and  put  into 
force by the director of the SSO in the near future by which good practice should be 
established across the whole SSO (except for the population census, where special 
rules  apply).  With  respect  to  dissemination,  the  draft  requires  any  cell  with 
aggregates  from  only  1,  2  or  3  units  to  be  suppressed  before  dissemination  (this 
threshold is even 10 in the case of the population census).  

33. 
The  law  provides  for  the  possibility  that  researchers  can  access  microdata 
files  from  the  SSO  (without  identifiers),  but  a  request  has  to  be  announced  long  in 
advance so that it can be listed in an annex to the annual updates of the statistical 
programme.  Transmission of individual data from the SSO to government bodies is 
strictly prohibited, which is seen as a problem by the agency in charge of morbidity 
statistics who would like to receive individual mortality data from the SSO. 

34. 
The legal bases for some administrative data sources concerning legal entities 
allow the transmission of individual data on request, e.g. for assessing the financial 
risk involved in granting loans to such entities, by the responsible agency. Since this 
is not a publication, but only a disclosure on request, it is not possible for the SSO to 
disseminate  such  data  in  its  publications  or  data  bases  (the  statistical  law  allows 
publication of individual data that have been already published elsewhere). However, 
some variables of these administrative sources (e.g. size, activity code) are given to 
anybody without further need of justification. Pending on how the final legal solution 
for  these  data  sources  (they  are  in  the  course  of  being  modified),  these  latter 
variables might not have to blocked any more in tables disseminated by the SSO. 

The  census  law  provides  that  the  two  variables  ethnicity  and  religion, 
35. 
considered as particularly sensitive from the confidentiality point of view, are exempt 
from the response obligation. 

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36. 
The personal data protection law is currently being revised in order to make it 
fully  compatible  with  the  corresponding  EU  directive.  The  present  law,  to  which  the 
statistical  law  refers  for  all  issues  that  are  not  covered  by  specific  articles  in  the 
statistical law, has not caused any problems to the SSO until now. It provides for the 
exemption  for  statistics  where  necessary,  e.g.  as  regards  the  right  of  the  person 
concerned  to  see  the  data  stored  on  him-/herself  and  to  see  it  corrected  upon 
request. 

Assessment  

37. 
There have not been any doubts voiced concerning insufficient data protection 
standards  in  the SSO, neither from the public nor from respondents. In the present 
mix  of  activities  of  the  SSO,  there  is  however  one  problem  that  might  affect  the 
confidentiality  perception  in  the  public;  the  administrative  registers  (administrative 
business  registers,  administrative  population  register,  electoral  lists).  The  fact  of 
being  in  charge  also  for  the  administrative  population  register  (the  legal  basis  for 
which  is  very  open  and  would  theoretically  allow  a  complete  merger  of  all 
administrative  files  on  persons  within  the  administration)  is  a  particularly  sensitive 
item.  It  would  be  illegal  to  use  data  from  surveys  for  updating  these  registers,  and 
this  is  strictly  adhered  to  by  the  SSO.  Having  both  activities  in  the  same  house  is 
however problematic, and the move of these administrative tasks away from the SSO 
already decided is very welcome under this aspect. 

Based on the same considerations, a statistical office should not be connected 
38. 
in any way to decisions about who is eligible for voting. Such a task is not compatible 
with the principle of statistical confidentiality, and the SSO should stop any activity in 
this respect immediately. Some countries use the credibility of the statistical office as 
impartial  body  to  give  the  responsibility  for  processing  the  election  results  and 
guaranteeing  their  objectivity;  this  task  does  not  have  any  conflict  of  interest  with 
official  statistics,  provided  resources  for  this  additional  activity  are  not  used  at  the 
detriment  of  official  statistics.  However,  in  order  to  make  it  very  clear  that  the  SSO 
has  nothing  to  do  any  more  with  election  lists,  it  would  be  better  not  be  involved in 
any way in the election process.   

39. 
Practical  problems  concerning  confidentiality  exist  however  in  the  perception 
of the SSO itself. The first item is making statistical confidentiality operational for the 
dissemination  of  tables,  especially  when  more  data  are  disseminated  by  Internet, 
including those at municipal level. The fixing of a level of the number of units has the 
advantage of being clear and simple, but may render impossible the public access to 
detailed break-downs where no threat to privacy exists. The second issue relates to 
the  so-called  one-way  principle,  i.e.  that  personal  data  can  flow  from  administrative 
bodies  of  the  government  to  the  SSO,  but  never  in  the  reverse  direction:  This 
asymmetry, in spite of being clearly stated in the statistical law, is not understood by 
those  public  bodies  that  are  in  charge  of  administrative  data  with  a  potential  for 
official statistics, because for a long period in the past prior to the statistical law, data 
used to be exchanged in both directions. It is therefore recommended that the SSO 
clearly  states  its  policy  in  this  respect,  seeks  a  favourable  opinion  by  the Statistical 
Council on this policy, and then starts parallel actions to make known and explain this 
policy  to  all  stakeholders  and  to  implement  it  with  respect  to  the  access  to 
administrative data (see 2.10). 

40. 
In addition to the refinement of the rules for dissemination, the draft book on 
rules  should  be  complemented  by  special  articles  on  the  statistical  registers  of  the 
SSO,  on  matching  files  for  statistical  purposes  with  the  removal  of  identifiers  once 

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matching has been completed, on rules for keeping identifiers when they are needed 
for a longer time (such as for panel surveys), and on internal access to microdata by 
other units. On the other hand, it is disproportionate to require all files of the SSO to 
have an entry in the data catalogue required by the personal data protection law; this 
should be restricted to files with permanent identifiers such as statistical registers or 
address  lists.  Rules  concerning  microdata  files  in  the  SSO  should  become  part  of 
rules  on  metadata  and  documentation,  irrespective  of  whether  these  microdata  are 
subject to statistical confidentiality or not. 

41. 
It is important that the SSO makes its voice fully heard in process of revision 
for  the  personal  data  protection  law,  so  as  to  save  the  specific  rules  applicable  to 
official  statistics.  If  possible,  the  list  of  reasons  given  in  the  present  law  for 
transmitting microdata to users from outside the country should be enlarged so as to 
allow not only transmission for "scientific" purposes, but also for  the purpose of co-
operation  in  the  area  of  official  statistics  if  the  recipient  country  or  international 
organisation has an adequate level of protection of confidentiality. 

42. 
It  was  not  possible  to  assess  the  statistical  confidentiality  practice  of  other 
producers of official statistics, but it is evident that the forthcoming book of rules for 
implementing statistical confidentiality in the SSO as regards data collection, storage, 
processing and dissemination would have also to be followed by other producers. 

2. National Statistical System 

2.1. Principles 
43. 
The SSO and its staff are fully committed to the UN Fundamental Principles of 
Official  Statistics.  The  subscription  to  the  SDDS  (see  the  Executive  Summary)  will 
make  this  commitment  visible  for  a  particularly  important  area  of  official  statistics. 
The awareness of the other authorised bodies about the UN fundamental principles 
is low, however. 

44. 
The  importance  of  the  UN  Fundamental  Principles  is  underlined  by  the  fact 
that  a  reference  has  been  built  into  the  article  on  statistics  in  the  Stabilisation  and 
Association  Agreement  between  FYROM  and  the  EU,  which  was  signed  on  9  April 
2001. 

Assessment  

It is recommended that the SSO, in collaboration with the Statistical Council, 
45. 
issue  a  book  of  rules  concerning  the  implementation  of  the  fundamental  principles 
and  the  statistical  law  beyond  the  area  of  confidentiality,  so  as  to  make  explicit  the 
current  more  implicit  codes  of  conduct,  to  standardise  understanding  of  these 
principles  across  subject  areas  and  to  train  new  staff.  The  essence  of  this  book  of 
rules  should  be  issued  as  standards  which  have  to  be  followed  by  the  other 
authorised bodies as well. This might include mechanisms to treat authoritatively with 
borderline  cases  so  as  to  establish  "case  law"  for  a  coherent  application  of  these 
rules and their updating throughout the statistical system. 

2.2.  Structure  of  the  System,  Providers  of  Official  Statistics,  and  Relationship 
between SSO and Other Providers 
46. 

The issue of regional units is specific to the SSO and will be treated under 3.1. 

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In addition to the SSO, there are 9 authorised producers listed in the current 

47. 
5-year statistical programme: 
(cid:3)(cid:2) State Bureau of Health Protection 
(cid:3)(cid:2) Payment Agency (to be dissolved soon) 
(cid:3)(cid:2) Ministry of Internal Affairs 
(cid:3)(cid:2) National Bank 
(cid:3)(cid:2) Ministry of Justice 
(cid:3)(cid:2) Bureau of Employment  
(cid:3)(cid:2) Pension and Handicapped Fund 
(cid:3)(cid:2) Health Insurance Fund 
(cid:3)(cid:2) Administration for Hydro-meteorological Affairs 

48.  With  the  exception  of  the  National  Bank,  these  bodies  do  not  carry  out 
statistical surveys with household or businesses; their work consists of transforming 
administrative  data  sources  in  their  respective  systems  (e.g.  health  care;  pension 
fund)  into  official  statistics  and,  in  the  case  of  the  Agency  for  Hydro-meteorological 
Affairs,  of  collecting  data  through  various  forms  of  measurement  techniques  rather 
than through questioning businesses or individuals. It is important to note that neither 
the Ministry of Finance nor one of its bodies is listed as producer of official statistics, 
which  leaves  public  finance  statistics  outside  official  statistics  except  for  what  is 
included in national accounts. 

The  statistical  law  allocates  some  important  competencies  to  the  SSO  in 

49. 
terms of "primus inter pares" among statistical producers: They are as follows: 

(cid:1)(cid:2)

(cid:1)(cid:2)

(cid:1)(cid:2)

it  shall  present  its  opinion  on  the  methodological  bases  for  their  work  to  the 
authorised bodies; 
it shall present its opinion to authorised bodies concerning the introducing of 
new  statistical  activities  planned  by  these  bodies,  amending  the  content  of 
existing  statistical  activities  carried  out  by  these  bodies  and  creating  of  new 
administrative data that can be used as source for official statistics; 
it  shall  prescribe,  develop  and  harmonise  methodological  bases of statistical 
activities. 

The  law  specifies  further  that  "in  the  implementation  of  statistical  activities,  unified 
standards covering classifications and nomenclatures shall be used", and that "data 
collected  in  accordance  with  the  statistical  programme  shall  be  stored  at  the  Office 
and  the  authorised  bodies  in  compliance  with  relevant  prescribed  norms  and 
standards". 

50. 
The  SSO  has  a  role  of  representative  and  focal  point  of  the  entire  national 
statistical system in all international relations concerning official statistics. Notably, all 
data requests from international organisations and other countries are verified in one 
or another way so as to ensure that the most relevant official data are transmitted in 
a  coherent  way.  All  ministries  are  formally  instructed  to  send  statistical  parts  of 
information  requests  they  receive  from  international  organisations  to  the  SSO,  and 
this is fully respected in practice. International publications are checked by the SSO 
whether they are consistent with what was transmitted, and if this is not the case, the 
SSO reacts. 

51.  With the exception of the international relations aspect, the SSO has made a 
very  cautious  use  of  the  instruments  to  impose  standards  on  the  other  authorised 
bodies, because of the policy to first implement these standards within its own house 
in all relevant areas. As a consequence, the other bodies carried out their parts of the 
statistical programme on their own terms,  the only obligation being de facto to inform 
the  SSO  about  the  annual  updates  of  the  programme.  Meetings  between  subject 

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matter  specialist  from  the  SSO  and  other  producers  focus  primarily  on  organising 
data  transmission  for  publications  like  the  statistical  yearbook  and  less  on  co-
ordinating  production  of  these  other  producers  with  standards  or  activities  of  the 
SSO.  Meetings  at  the  level  of  the  Director  of  SSO  with  Heads  of  statistical  units 
outside  the  SSO  are  even  less  frequent,  since  statistical  activities  are  mixed  with 
other tasks in the internal organisation of the respective bodies and there is no clear 
head  of  a  statistics  function  defined  within  these  other  bodies.  Meetings  between 
SSO  and  the  National  Bank  are  more  regular,  and  have  recently  focused  on  the 
issue of the IMF SDDS, with a confirmation of the role of focal point for the SSO. The 
law foresees that the Statistical Council has to be involved in some forms of standard 
setting  and  proposals  to  modernise  and  rationalise  state  statistics  (which  includes 
organisational issues related to the system), but due to its short period of activity so 
far, it has not been able to play any role in this respect up to now.  It has been seized 
only  once  on  an  issue  of  relationship  between  the  SSO  and  another  authorised 
producer. 

Somewhat surprisingly, nobody has ever made an effort up to now to estimate 
52. 
the total size of the system of official statistics composed of the SSO and the above 
authorised bodies, be it in terms of staff or budget. It was not possible for the SSO to 
provide this information in the time between the first mission and the finalising of the 
report.  

Assessment  

After  the  successful  formulation  and  implementation  of  standards  of  official 
53. 
statistics  within  the  SSO,  time  has  come  to  extend  their  application  to  the  whole 
statistical system. The law provides for the necessary instruments. Not using them at 
all for a prolonged period would signal to the other producers that the statistical law is 
only for the SSO and not for themselves. It is recommended, however, that the SSO 
acts  proactively  in  discussing  standards  and  ways  to  follow  their  implementation  in 
round  tables  with  the  authorised  bodies  rather  than  to  recur  to  legal  instruments 
directly.  Such  an  approach  will  be  more  likely  to  create  a  system  of  common 
understanding  on  what  is  official  statistics,  which  is  necessary  to  fill  the  notion  of 
"system of official statistics" with real life and spirit. The working arrangements for the 
role of the SSO with respect to the international relationships may serve as a model 
in  this  respect.  To  increase  visibility,  the  SSO  should  assign  this  systemic  task  for 
implementing  standards  across  the  whole  statistical  system  to  a  organisational  unit 
and allocate sufficient resources. The Statistical Council should also start to assume 
its role in this respect as envisaged by the law. 

The division of work between SSO and other authorised bodies has not been 
54. 
modified  since  independence.  Only  when  new  activities  had  to  be  inserted  into  the 
programme, there were discussions about where to locate them if it was not already 
clear  from  the  outset.  The  reform  of  the  public  sector  should  be  used  to  assess 
whether  this  traditional  division  of  work  still  stands  up  to  the  requirements  of  a 
coherent and professional statistical system in all subject areas. 

55. 
It is urgent to produce the most basic statistical information on the statistical 
system,  such  as  budget  and  staff.  The  SSO  should  establish  the  standards  in  co-
operation with the other bodies, and involve the Statistical Council before reporting is 
made mandatory for all agencies concerned. 

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[2.3. Official Statistics System; Providers of Official Statistics: Grouped 
together with 2.2.] 

2.4. Liaison with Research Institutes and Universities 
Strong links between the statistical offices and research institutes/universities 
56. 
were a feature of the old Yugoslav system of official statistics, and this can still be felt 
in  the  present  Macedonian  system.  The  presence  of  5  members  of  the  research 
community  in  the  Statistical  Council  is  the  strongest  evidence,  but  also  in  the 
preparation of the annual updates of the programme, there is a regular involvement 
of  the  scientific  community  as  user  of  official  statistics  to  an  extent  that  is 
comparatively higher than in EU countries. When questioned about the main user of 
certain  elements  of  the  statistical  programme,  the  answer  was  surprisingly  often 
given  as  the  research  community  rather  than  government  ministries.  The  SSO  has 
recently started to charge the research community for extra services, so as to make 
them aware of the fact that providing this service is using resources. 

Assessment  

57. 
The research community has a strong impact as user of official statistics, and 
it  uses  its  ways  to  voice  its  information  needs  effectively.  It  is  not  quite  clear, 
however,  to  what  extent  the  research  community  provides  a  service  to  the  SSO  in 
return, e.g. by supporting the SSO in the analysis of data quality and the formulation 
of strategies to improve it. 

2.5. Liaison with the Business Community 
58. 
The network and round tables of the SSO described in other chapters include 
representatives  from  the  business  community,  both  concerning  user  needs  and 
respondent burden. For some statistics (e.g. PRODCOM), the business community is 
even  the  main  user.  In  some  sectors  of  the  economy,  however,  the  business 
community  is  not  yet  sufficiently  organised  in  forms  of  associations,  with  the 
consequence of difficulties in finding a representative who is willing to spare the time 
to discuss statistical issues with the SSO. This is especially the case for SMEs in the 
service area (transport, restaurants e.g.). 

59. 
In order not to jeopardise the good relationship with the business community, 
the  SSO  has  not  applied  until  now  the  article  of  the  law  concerning  penalties  for 
businesses which do not reply to surveys. The approach was to contact those units 
and to persuade them to participate by gaining their confidence, either by phone or 
by letters, and this has worked until now in all important cases.. 

60. 
It is far from sure whether other authorised bodies have similar networks with 
the business community as users of their statistics. As an exception, there is a close 
relationships between the National Bank and the banking sector. 

Assessment  

61. 
The  present  networks  of  the  SSO  for  contacts  with  the  business  community 
are effective. The efforts to set up a forum for discussion with the SMEs should not 
be given up in spite of the initial difficulties. The present networks should be opened 
to  include  issues  concerning  the  whole  statistical  programme,  and  other  authorised 
bodies should be associated when items in their field of competence are discussed. 
As a parallel, the SSO should be able to attend meetings between the National Bank 
and representatives of the banking sector concerning official statistics. 

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2.6. Product and Dissemination Policies 
62. 
A  short  visit  to  the  SSO  library  (open  to  the  public)  allowed  the  reviewer  to 
consult  a  number  of  paper  products  (press  announcements;  publications)  of  the 
SSO.  In  addition,  he  has  consulted  the  CD-ROM  with  the  statistical  yearbook 
(bilingual English/Macedonian; very user-friendly) and the SSO website (available in 
English and Macedonian). A presentation was made during his visit of SIPOV, an on-
line database for presently four subject areas, but only open to governmental users 
and  therefore  only  in  Macedonian.  Only  one  area  (external  trade)  is  a  dynamic 
database;  the  other  three  areas  are  electronic  copies  of  paper  products.  The 
reviewer  was  also  given  a  selection  of  statistical  publications  (in  English)  by  the 
National Bank. 

The  statistical  yearbook  is  the  only  product  so  far  that  covers  statistics 
63. 
originating from more than one producer. But even this publication is not complete in 
covering  all  areas  of  official  statistics:  the  subject  areas  in  the  competence  of  the 
National Bank are missing. The user will therefore have to know who is responsible 
for  statistics  in  which  area;  there  is  presently  no  one-stop  shopping  for  official 
statistics  (except  for  international  organisations  asking  for  Macedonian  data,  where 
the  SSO  acts  in  this  capacity).  Other  summary  publications  are:  Monthly  statistical 
report (will be revised), “Macedonia in Figures” (will be restructured) and “Indicators 
for  the  Short  Term  Statistical  Data  for  Economic  Movements  in  the  Republic  of 
Macedonia”  (the  latter  will  be  revised  during  the  next  year  and  then  it  will  be 
published on Macedonian and English). 

The  paper  publications  of  the  SSO  (including  the  monthly  or  quarterly 
64. 
"announcements" for short-term indicators like consumer price index in the form of 2 
to  8  pages)  other  than  the  statistical  yearbooks  (only  occasionally  with  bilingual 
Macedonian/English tables; texts only in Macedonian) contain only few comments in 
addition  to  describing  the  sources,  definitions,  classifications  and  methods  used  in 
compiling the results. If there are comments, they describe the main figures and their 
development over time; only in two cases (demography and national accounts) were 
there comments that can be classified as analytical in terms of indicating to the user 
some influencing factors for the changes over time or for differences between groups 
or  regions.  The  published  tables  contain  mainly  elementary  aggregates  and 
percentages  (ratios  of  elementary  aggregates  from  the  same  statistics),  but  only 
rarely indicators where numerator and denominator are taken from different sources 
(like  e.g.  in  productivity  indicators).  There  are  few  charts,  and  maps  showing  the 
geographical  distribution  of  a  phenomenon  can  only  be  found  in  the  statistical 
yearbook.  For  some  statistics,  the  SSO  produces  explanatory  comments,  but  for 
governmental users only. 

65. 
The  statistical  programme  lists  the  break-downs  for  each  survey  (e.g.  by 
municipality;  NACE  activity)  which  have  to  be  published  as  official  statistics.  One 
copy  of  each  publication  with  the  official  data  is  free  of  charge  for  those  who  are 
noted in the special list of regular users. For any cross-classification or tabulation not 
contained  in  the  publication,  the  SSO  charges  users  outside  government  (and 
international organisations); such figures do not have the status of results of official 
statistics. These services are very frequent for government users, but also business 
users, especially big companies, are increasingly demanding special extracts. 

66. 
There is a differentiated pricing policy. Media, libraries and government users 
get  one  copy  of  a  publication  free  of  charge,  and  students  and  the  research 
community  get  discounts.  But  normal  users  have  to  pay  even  for  paper  copies  of 

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press  releases  (which  can  be  voluminous,  however).  The  same  differentiation  is 
applicable to services. 

67.  Dissemination  of  official  results  is  immediate  and  simultaneous  to  all  users. 
There  is  no  privilege  for  government  users.  Recently,  the  SSO  has  not  used  press 
conference  any  more  for  dissemination  purposes,  but  only  for  announcing  new 
events in terms of activities of data collection with large public impact, or at the case 
of an official visit from EUROSTAT at high level 

68.  Coverage of SSO data in the media is very good. The SSO results are, in the 
great majority, considered as authoritative. When in one instance doubts were voiced 
publicly  by  some  economists  on  GDP  results,  the  SSO  organised  a  public  round 
table  to  discuss  this  issue  openly,  and  was  able  to  convince  these  critics  that  the 
GDP  estimates  were  unbiased  and,  within  the  limits  of  the  underlying  sources, 
accurate. 

The master plan of the SSO emphasises the upgrading of the dissemination, 
69. 
both  by  making  paper  publication  more  attractive  (better  layout,  more  graphs  and 
maps) and by setting up a true output database accessible by all users via Internet, 
using  SIPOV  as  core.  Present  use  of  SIPOV  through  governmental  users  is  low, 
since staff outside the SSO are not very familiar with using new technologies. 

70. 
As an important element to be implemented in 2001, the present website will 
be  considerably  enriched.  The  “About  us”  branch  will  include  not  only  the  state 
statistics  act  and  the  mission  statement,  but  also  the  master  strategic  plan  and  the 
organisation chart. The few key data will be replaced by a systematic set of indicators 
of 17 newly defined subject areas. Other important amendments are the first pages 
of all press releases (which will have a new harmonised format and include names of 
contact  persons  for  more  detailed  information),  information  about  the  population 
census  (including  the  census  law  and  the  dissemination  strategy  for  the  population 
census), a possibility for users to address questions to the SSO, the advance release 
calendar  (first  for  economic  statistics,  by  the  end  of  the  year  for  all  releases),  and 
links  to  websites  not  only  of  EUROSTAT,  but  also  of  international  organisations,  of 
NSIs of other countries, and of other national producers. The part on the population 
census will be enlarged the closer the census date will come (there are already some 
attractive maps with statistics from the 1994 census displayed). 

71. 
The  new  classification  of  17  subject  areas  will  be  used  systematically  for  all 
products,  and  will  replace  the  present  grouping  of  the  statistical  yearbook  into  34 
chapters. 

72. 
There is a special dissemination policy formulated for the population census. It 
is  not  in  contradiction  of  the  above  general  elements,  but  describes  in  addition  the 
different points in time when census results become available. 

73. 
The  SSO  has  an  IT-based  system  to  capture  user  requests  for  data,  by 
whatever  means  they  arrive  at  the  SSO.  This  system  is  able  to  provide  excellent 
information for adapting the statistical programme, both in its dissemination part and 
for the data collection part, but it requires general implementation across all subject 
areas 

There are plans to introduce user satisfaction surveys by the SSO as part of 
74. 
its  strategy  to  be  more  user-oriented  and  to  shape  products  to  become  more  user-
relevant and user-friendly, in addition to the present regular contacts with important 
users as part of the programming exercise. 

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75. 
Another important step in becoming more user-friendly is the introduction of a 
rule  by  which  each  request  for  service  will  receive  a  first  reply  containing  the  price 
implication (and the time to produce the results) with 24 hours. 

76. 
The  publications  of the National Bank are very modern and attractive. There 
are separate editions in Macedonian and English. Two of these publications contain 
many  analytical  comments,  and  they  are  also  accessible  via  the  National  Bank's  
website. This website also contains key economic figures. 

The  dissemination  policy  of  other  producers  is  very  restrictive.  Publications 

77. 
are annual at best, and are very traditional in content and layout. 

Assessment 

78. 
Product,  dissemination  and  pricing  are  areas  where  the  SSO  is  about  to 
establish  and  implement  policies  which  can  meet  the  challenges  of  the  future  and 
make efficient use of the new technologies. Such policies cannot be a substitute for 
insufficient data quality, but when data are both relevant and of good quality as is the 
case  for  the  SSO,  such  policies  should  be  in  place  to  bring  these  data  to  the  best 
possible  use.  In  taking  the  initiative,  rather  than  waiting  with  the  preparations  for 
these  new  policies  until  there  is  an  explicit  request  by  users  or  an  explicit 
dissatisfaction  from  their  side,  the  SSO  has  demonstrated  its  capacity  to  think 
proactively,  since  the  implementation  of  such  policies  will  take  time  and  require 
considerable  material  resources  for  being  made  operational.  Another  essential 
element  of  successful  implementation  is  the  training  of  the  staff,  both  of  the 
dissemination unit and of the production units, which should be preceded by a careful 
rethinking of the rules of procedure and the assignments of responsibilities between 
production and support units. 

In  complement  to  the  many  items  already  foreseen  in  the  master  plan,  it  is 

79. 
recommended that the policy of the SSO explicitly addresses the following items: 

(cid:1)(cid:2) more  emphasis  in  products  on  analytical  comments  which  highlight  the 
background  and  influencing  factors,  provided  these  comments  can  be 
substantiated  by  facts.  Staff  has  to  be  trained  to  write  such  comments,  and 
horizontal  groups  (across  sectors)  should  be  established  to  cross-check  the 
quality  and  relevance  of  such  comments  within  the  SSO.  Clear  instructions 
have to be included in the book of rules on the limits of comments by the SSO 
(staying  clearly  away  from  policy  prescriptive  comments  or  speculative 
analysis not substantiated by facts). As a first step, the explanatory comments 
about  regular  time-series  prepared  for  governmental  users  should  become 
part of the general dissemination; 

(cid:1)(cid:2) more inclusion of and more focus on key indicators, where possible based on 
international recommendations and standards. Each subject area should have 
a  set  of  predefined  key  indicators,  with clear and consistent decisions which 
figures are to be used for numerator and denominator, as already foreseen for 
the website. High visibility should be given to these indicators in dissemination 
in all ways of dissemination (press releases, publications, CD-ROMS) so as to 
guide  non-specialised  users  effectively.  Where  a  particular  user  prefers  a 
different set of indictors for a specific purpose, this should be either handled 
as a service, or if included in a product, be clearly characterised as having a 
lower level of relevance for other users; 

(cid:1)(cid:2) more attractive layout with more inclusions of charts and maps. Since charts 
and  maps  are  very  much  liked  by  users  (and  the  media),  but  can  easily 
provoke  biased  perceptions  by  readers,  clear  criteria  for  how  these 

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components  are  to  be  used  should  be  worked  out  and  incorporated  into  the 
book of rules. Thematic maps, where the SSO has a high technical standard 
as a result of a co-operation project, should be used extensively for the results 
of the population and agricultural censuses, and for any other statistics where 
regional break-downs of indicators are both relevant and of good quality; 
(cid:1)(cid:2) gradual elimination of large tables with elementary aggregates covering many 
pages  in  paper  publications  (transfer  to  the  output  database;  CD-ROMs 
instead of paper publications as foreseen for the population census); 

(cid:1)(cid:2) definition of clear objectives for the output database. This should include the 
statement  that  eventually  the  output  database  would  contain  all  official 
statistics  of  Macedonia,  from  the  SSO  and  from  other  producers,  and  that  it 
should  be  a  true  dynamic  database  that  allows  "slicing  and  dicing"  and  not 
just be a reproduction of paper documents in an electronic format. The critical 
success  factor  of  an  output  database  project  is  the  organisation  of  the  data 
flows and the defining of responsibilities in a clear way. The database has to 
be filled gradually with data and accompanied by a clear policy of quality and 
coherence for data and metadata within and across subject areas (see 3.3). It 
needs a central data and metadata management which goes well beyond IT-
aspects; 
redefinition of official statistics from the "paper output" approach to the "output 
database"  approach,  i.e.  that  most  of  the  aggregates  produced  today  as 
"services" and therefore not included in official statistics would become part of 
official statistics; 

(cid:1)(cid:2)

(cid:1)(cid:2) deciding on whether the present pricing policy should be upheld and extended 
to  accessing the output database and downloading data from there. This is a 
key  decision  that  has  also  an  impact  on  the  pricing  of  other  forms  of 
dissemination.  The  two  major  options  are:  non  governmental  users  have  to 
pay  (except  for  a  few  key  aggregates  and  indicators),  and  the  amount  is 
depending on the quantity of information downloaded, or all data of the output 
database  are  freely  accessible  to  all  users  (with  some copyright restrictions) 
as  part of a policy to stimulate the use of new technologies in the society at 
large.  The  two  options  will  have  to  be  judged,  among  other  criteria,  against 
the possibility of financing the necessary investment and running costs of the 
output  database  (the  potential  of  revenues  from  selling  official  statistical 
information  via  Internet  in  a  country  where  users  either  do  not  have  much 
experience  in  using  such  technologies,  or,  if  they  have  as  an  increasing 
number of young people do, are not willing to pay for official statistics, should 
not  be  overestimated),  and  against  the  additional  complexity  of  the  software 
development if billing is to be included; 

(cid:1)(cid:2) developing the website as the one-stop entrance to official statistics, and not 
only to the SSO. A concrete step would be to subdivide the present “About us” 
chapter  into  “About  the  System  of  Official  Statistics”  and  “About  the  SSO”. 
Conclusions of the Statistical Council could then be included in the former; 
(cid:1)(cid:2) making it straightforward with the new website format to put all press releases 
on  the  Internet  in  their  full  length  (which  should  have  an  upper  limit  in  size; 
otherwise  a  product  should  not  be  called  press  release  any  more):  Serious 
consideration should be given to disseminate the new form of press release, 
whether  in  paper  form  or  through  downloading  from  the  website,  free  of 
charge to everybody;  

(cid:1)(cid:2) using the SDDS set of indicators as core for the key economic figures on the 
website; the figures should be identical in the websites of both the SSO and 
the National Bank; 

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(cid:1)(cid:2)

(cid:1)(cid:2)

restructuring the summary paper publication on short-term indicators by using 
the  same  SDDS  set  as  a  core  and  by  including  relevant  data  from  other 
producers, as well as  analytical comments; 
installing,  as  part  of  the  library,  terminals  where  the  output  database can be 
accessed by persons from outside who are not equipped at home or at their 
work place. Such points of access should later on be installed also at regional 
offices; 

(cid:1)(cid:2) while carrying out user surveys as an additional source of information is to be 
supported, the results are to be interpreted with caution and should in no way 
replace the many fora for dialogue where the SSO meets users; 
the  excellent  system  of  capturing  user  requests  should  be  declared 
compulsory  and  implemented  across  the  SSO  in  a  way  that  results  are  fully 
comparable and additive. 

(cid:1)(cid:2)

80. 
It is suggested that a horizontal group within the SSO, under the direction of 
the head of the dissemination unit, be established concerning the issue of developing 
and implementing (once the policy has been approved by the senior management) a 
policy  of  comments,  graphs  and  maps  in  dissemination.  This  group  would  have  to 
ensure that implementation is roughly comparable across subject areas. 

The present system of co-ordinating the transmission of data to international 
81. 
organisations  is  excellent  and  should  be  maintained.  New  requests  should  be 
checked in all cases, i.e. also when they involve data from other producers. Once the 
output database will be in operation, data should be taken from there. 

2.7. Relations with the Central Government 
82. 
The  SSO  is  responsive  to  the  needs  of  the  various  parts  of  the  central 
government  in  their  planning  and  programming  of  statistical  activities,  and  in 
servicing  governmental  users  with  special  cross-tabulations  and  analysis,  without 
compromising  on  the  fundamental  principles.  It  is  seen  as  professional  and 
authoritative by these users. This is proven by the fact that the book of rules of the 
government states that each quote of a statistical figure in a government document 
should  be  checked  by  the  SSO  for  its  validity.  The  SSO  can  also  see  all  drafts  for 
legislation or amendments for legislation and react in time if such proposals would be 
in  conflict  with  the  statistical  law.  Very  important  in  this  context  are  the  frequent 
meetings of the director of the SSO with the Prime Minister, the Minister of Finance, 
and occasionally other ministers, since this is used as a two-ways dialogue. 

83. 
A  further  sign  of  high  reputation  is  the  fact  that  the  SSO  is  officially 
represented  in  a  series  of  important  inter-ministerial  bodies  at  high  level,  where 
policies are shaped before being presented to government. Its representatives advise 
there on the correct use of statistics, and as a return it is able to get important and 
early  knowledge  about  future  information  needs.  The  SSO  director  chairs  also  the 
working  party  on  statistics,  customs  and  taxation  in  the  context  of  the  Stabilisation 
and Association Agreement with the EU. The statistical culture of government users 
varies, but it is improving. 

Assessment  

84. 
The  relationships  of  the  SSO  to  the  central  government  as  major  user  of 
statistics  is  exemplary.  It  is  recommended  that  all  statistics  (and  all  related 
comments) used by the central government in decision-making should be classified 
as  official  statistics  and  made  available  for  the  public  simultaneously,  even  when 
there are seen as part of the service function of the SSO today. The SSO should also 

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be able to check whether data used in government reports are coherent with official 
statistics  in  cases  where  the  data  originate  from  other  authorised  bodies  as  it does 
for transmission to international organisations. 

The  only  problem  lies  with  the  public  availability  of  those  statistics  which  do 
85. 
not appear in publications and are produced in response to special requests from the 
government, since they do not count as official statistics today (see 2.6.). The same 
holds for some explanatory comments on publicly released figures, addressed only to 
government users. Both elements should become publicly accessible, either as part 
of products or of the future output database. 

2.8. Relationships with the Local Governments 
Some  representatives  of  local  governments  are  included  in  the  consultation 
86. 
networks  of  the  SSO.  The  SSO  has  to  indicate  in  the  statistical  programme  which 
statistics can be broken down by municipality, and this is the case for a surprisingly 
high  number.  The  main  user  of  such  data  has  been  the  central  government  up  to 
now,  as  well  as  the  research  community,  rather  than  local  governments,  where 
familiarity with quantitative methods is not very high. The degree of autonomy of local 
governments  is  limited  today,  but  likely  to  grow  in  the  future,  which  may  lead  to an 
increased use of official statistics beyond census data from this group of users. The 
SSO's regional offices will in future play an important role to serve these clients. 

Assessment  

The regional offices of the SSO should be brought into a position where they 
87. 
are able to serve local governments as future users of official statistics, detect their 
information needs for the updating of the programme, and train this group of users in 
the use of statistics. 

[2.9. Relationships with Other Providers of Statistics: Grouped together with 
2.2.] 

2.10. Access to Administrative Records 
88. 
Article 25 of the statistical law stipulates that "the administrative data files may 
be  used  as  data  sources  for  statistical  activities  in  all  cases,  with  the  exception  of 
cases  where  the  relevant  act  strictly  specifies  that  these  data  may  not  be  used  for 
statistical purposes". No example of such an exception prohibiting the statistical use 
was  given,  so  that  access  for  statistical  purpose  is  legally  possible  to  all 
administrative  data  sources  from  a  purely  legal  point  of  view.  The  same  article 
continues  with  an  explicit  obligation  for  managers  of  administrative  data  files  to 
provide  these  data  on  request  to  the  SSO.  Managers  of  such  files  are  in  addition 
requested to apply relevant statistical standards. 

There  are  examples  where  the  application  of  the  provisions  has  become  a 
89. 
regular feature, e.g. the transmission of data from the Customs Office (where a first 
check of the raw data takes place) to the SSO which, as producer of external trade 
statistics,  is  in  charge  of  further checks, data entry, processing and  dissemination. 
Another example are data from the Payment Agency relating to payments made by 
legal entities (companies), which are transmitted to the SSO and form an important 
source for updating the statistics business register in deciding whether a unit is active 
or not, and for national accounts. In the future, these data should be obtained from 
the  Central  Register  which  will  be  formed  through  the  process  of  transformation  of 
Payment Agency. 

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There are other examples, however, where the potential of administrative data 
90. 
sources for official statistics have not yet been examined in detail by the SSO. This is 
the case for the information on employment and wages which originates from payroll 
taxes,  and  for  the  recently  introduced  VAT  (effective  since  April  2000).  The  master 
plan  mentions  the  continuing  search  for  the  substitution  or  reduction  of  surveys  by 
better use of administrative data sources. 

91. 
In  spite  of  the  clear  legal  situation,  access  to  administrative  records  is  not 
always straightforward for the SSO. The public body responsible for an administrative 
data set tries to obtain access to the SSO’s microdata in exchange for granting the 
SSO access to its own files. This has been the practice for most of the time before 
the new statistical law became legal force.  

92. 
As  regards  standards,  NACE  Rev.  1  has  been  declared  mandatory  in  1998 
not  only  for  all  statistical  data  sources,  but  for  all  administrative  records.  The 
implementation  of  this  decision  for  administrative  records  takes  more  time  than 
originally thought, given that the question of the activity classification is not of prime 
importance for the main administrative purpose of some of these records.  

Assessment   

93. 
The  SSO  has  made  a  prudent  use  of  its  prerogatives  with  respect  to 
administrative  data  sources  until  now.  It  is  recommended,  however,  that  a  more 
systematic  approach  be  envisaged,  starting  with  establishing  a 
list  of  all 
administrative data sources which have a potential for official statistics, accompanied 
by a mechanism to update this list. This would include regular bilateral meetings with 
government  units  in  charge of such sources, which seems to take place today only 
for  those  sources  which  are  presently  used  by  the  SSO.  Such  meetings  could  be 
used by the SSO to get informed as early as possible about forthcoming changes in 
administrative  data  sources,  and  for  giving  opinions  from  the  SSO  in  how  the 
potential  for  official  statistics  can  be  maximised  and  how  the  potential  can  best  be 
translated into regular use. 

94. 
As mentioned in 1.5, it is important for the SSO to communicate the policy on 
statistical  confidentiality  and  the  relationship  to  data  flows  between  holders  of 
administrative  data  and  the  SSO  as  an  important  element  of  its  communication 
policy.  

3. Description of the SSO 

3.1. Mission, Internal Organisation (including Regional Offices) 
95. 
The  mission  statement  of  the  SSO  is  clear  and  comprehensive.  It  is  recent 
(year 2000) and included as first chapter of the master plan. It also appears on the 
SSO's website. The only missing element is the role as leader and co-ordinator of the 
statistical system beyond the aspect of international relations, especially as setter of 
standards for the whole statistical system and for administrative data sources. 

96. 
The internal organisation is based on 10 sectors, which are in turn sub-divided 
into  departments,  Three  sectors  are  devoted  to  production  in  a  given  subject  area 
(national  accounts;  business  statistics;  social  statistics),  and  seven  to  supporting 
functions.  All  departments  are  allocated  to  one  of  the  above  sectors..  Some 
modifications in the organisation chart have been made recently, as response to the 

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management  expertise  from  19981.  An  example  is  the  creation  of  the  unit  on 
metabases and metadata management in the development and research sector. 

97.  One of the supporting sectors is in charge of the regional offices. There are 8 
regional  offices  across  the  country,  of which 3 (Bitola, Ohrid and Skopje) had been 
visited by the expert. The main functions of the regional offices are the data collection 
with businesses (farms included) and for censuses, data entry and coding of simple 
questions. They are not involved, however, in household surveys (except for checks 
for completeness and some data entry in the labour force survey). Their only role in 
dissemination today is to sell publications; requests for specific tabulations from local 
users have to be passed on to the SSO headquarters for handling. 

Assessment   

98. 
The  present  structure  requires  a  high  degree  of  co-operation  between  staff 
from  the  substantive  sectors  on  the  one  hand  and  the  supporting  sectors  on  the 
other.  Given  that  this  seems  to  work  effectively,  and  that  the  respective  roles  and 
competencies  are  clearly  specified,  there  is  no  compelling  reason  to  change  the 
structure in any fundamental way. 

The role of regional offices should be enhanced, both with respect to servicing 
99. 
local  governments  and  local  users  generally,  but  also  with  respect  to  updating  the 
business  register.  It  will  certainly  help  the  relationship  between  regional  offices  and 
respondent  units  if  regional  offices  can  be  perceived  also  as  agencies  which  can 
"give something in return" (i.e. statistical results and statistical services) on request or 
even  as  a  kind  of  regular  feed-back.  This  requires  more  up-to-date  communication 
links between Skopje and the regional offices (see 3.7), as well as training of the staff 
for the additional functions. 

3.2. Planning, Programming and Priority Setting 
100.  The  main  description  of  planning  and  programming  is  given  in  1.3.  The 
present chapter deals with priority setting within the SSO. 

101.  Through  their  various  networks,  and  through  the  systematic  capturing  of 
information  requests,  the  different  sectors  of  the  SSO  have  a  good  grasp  of  user 
needs.  They  adjust  their  annual  programmes  (and  to  a  certain  degree  also 
publications)  accordingly.  Another  major  element  in  priority  setting  is  the  master 
strategic plan 1999 to 2005. 

102.  On  specific  examples  for  priority  setting  between  programme  items,  the 
information given was that for any item that cannot be funded from the budget of the 
SSO,  other  sources  of  finance  will  be  sought  (see  3.5.)  and  have  been  found  until 
now.  Regional  offices  are  consulted  when  setting  up  the  programme.  Programme 
items which seem "unrealistic" on any grounds will be filtered out at an early stage. 
However, there is no information on cost of statistical activities on an item level; cost 
are only allocated by organisational unit at the sector level. 

103.  When  activities  are  funded  or  co-funded  from  international  donors,  the 
adjustment  of  priorities  to  new  situations,  for  whatever  reasons  they  are  caused, 
poses  some  problems.  Two  examples:  the  activities  funded  from  the  SOP98 
programme, originally to be terminated in April 2001 at the latest, were retarded first 
by  organisational  changes  introduced  by  the  EU  Commission,  and  secondly  by  the 

1 RSSM Ltd: Organisational Needs of the State Statistical Office of the Former Yugoslav Republic of 
Macedonia: Final Report, 14 July 1998 

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postponement  of  the  population  census  from  April  to  October  2001.  It  now  seems 
possible  to  finance  such  activities  until  April  2003  at  the  very  latest.  The  second 
example  is  with  the  information  needs  emerging  from  the  recent  Stabilisation  and 
Association Agreement between FYROM and the EU other than those derived from 
the article on the harmonisation of statistics: the need for statistics on the transit of 
goods  and  passengers  through  FYROM  is  an  example  of  this  kind,  which  is  both 
urgent, not foreseen by the current statistical programme and impossible to carry out 
without  benefiting  from  EU  funds.  The  SSO  will  inform  EUROSTAT  about  these 
needs and ask for inclusion as priority items for funding. 

Assessment 

104.  The SSO is well aware that it has to play the key role in finding out about user 
needs, assessing ways on how the necessary data could be collected, and bundling 
closely related needs into one survey. It has shown great flexibility in this respect. It 
has e.g. added questions on work accidents to the labour force in one year. Lessons 
from  previous  years  are  incorporated  into  the  subsequent  annual  programmes  and 
the corresponding resource allocation. 

105. 
If users are confronted with the questions about their needs, their answers are 
not always precise. Their replies may also be distorted by the fact that normally they 
do  not  have  to  pay  anything  (or  only  for  the  marginal  cost  of  dissemination)  for 
getting  their  needs  fulfilled.  In  order  to  be  ready  in  time,  the  SSO  has  also  to 
anticipate  forthcoming  needs,  and  this  has  occasionally  lead  to  "producer-driven" 
initiatives  for  a  given  survey  for  which  no  specific  request  has  been  made.  This  is 
certainly legitimate in order to gain experience in a new area in time, and if there are 
clear criteria for evaluating such a pilot. An example is the innovation survey with the 
manufacturing industry and services, which has been carried out as a pilot in 2001 by 
to  EUROSTAT's 
using 
recommendation. The SSO has also a clear policy for what type of information need 
fall inside or outside official statistics; demands for surveying very small groups have 
been  rejected.  The  SSO  has  proven  great  skills  in  balancing  different  needs,  and 
getting support and government adoption for its proposed mix of activities, and there 
is therefore no need for major changes in this respect. 

the  EUROSTAT/OECD  questionnaire  and  according 

106.  Regarding the adaptation of priorities where funds from abroad are involved, 
and  especially  the  specific  information  demands  originating  from  various  non-
statistical articles of the Stabilisation and Association Agreement, the SSO deserves 
strong  support  for  its  demand.  If  no  EU  funds  are  made  available  in  time,  the 
Macedonian  system  of  official  statistics  will  not  be  in  a  position  to  collect  the 
necessary  data;  the  only  possibility  for  the  government  would  then  be  to  turn  to 
private operators for these tasks. This would throw a negative light on the capability 
of  adaptation  of  official  statistics  in  the  eyes  of  important  decision  makers  and 
undermine the hitherto excellent reputation of the SSO. 

107.  Some recommendations have to be made nevertheless: 

(cid:1)(cid:2)

in order to be able to balance cost and benefit of the information generated, 
the cost part has to become available. It is therefore suggested to introduce a 
cost-accounting system that shows ex-post what the cost of each item of the 
statistical  programme  was.  The  main  factor  towards  such  information  is  the 
allocation  of  staff  time  to  the  various  programme  items.  Once  ex-post  data 
become  available,  ex-ante  estimates  of  activities  can  be  made  on  safer 
ground,  and  the  priority  setting  can  take  the  cost  side  into  more  explicit 
account; 

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(cid:1)(cid:2)

for  statistical  activities  where  there  is  a  main  customer,  be  it  from  a 
government  body  or  from  science, and which is fully financed from the SSO 
budget  today,  there  should  be more follow-up of the actual use made of the 
data  by  those  major  clients.  It  would  be  desirable  to  develop  criteria  when 
such  activities  are  to  be  fully  financed  from  the  SSO  budget,  and  when  the 
SSO makes their implementation dependent on a financial contribution to the 
extra data collection cost coming from the budget of this client. 

funded  by 

the  activities 

is 
recommended  to  the  SSO  to  scrutinise  the  present  long  list  and  to 
concentrate this source on a few activities where it is sure that the conceptual 
ground is clear enough for starting work soon, and where the work load to the 
SSO  can  be  digested  in  parallel  to  the  population  and  agricultural  censuses 
and to all the other activities planned until April 2003. 

the  SOP98  programme, 

it 

(cid:1)(cid:2) concerning 

3.3. Monitoring Quality in all Activities 
108.  The implicit overall quality culture within the SSO is high. Response rates and 
accuracy is monitored regularly, and results are checked for internal consistency and 
strange effects (especially compared to the previous period). If strange effects occur, 
the causes are investigated before such results are released. Quality checks in such 
cases  are  carried  out  internally,  in order not to violate the principle of simultaneous 
release. Only in cases where the raw data come from administrative sources will this 
check  occasionally  involve  experts  from  another  government  body.  There  is  also  a 
close  follow-up  of  the  work  of  interviewers  for  household  surveys.  The  quality 
component  features  high  in  the  criteria  for  preparing  the  annual  update  of  the 
statistical  programme,  and for the parallel preparation of the budget, and there is a 
strong culture of learning from unexpected difficulties in the implementation of items 
of the programme. 

109.  A  quality  element  of  special  importance  is  timeliness  in  the  dissemination  of 
results.  For  annual,  quarterly  and  monthly  data,  the  “golden  rule”  principle  is 
generally respected (monthly data at the end of month t+1 at the latest, quarterly data 
at  the  end  of  next  quarter,  and  annual  data  at  the  end  of  first  quarter  next  year.) 
Annual national accounts data become available, on a provisional basis, in the month 
of  November  or  December  of  the  following  year,  and  on  a  definitive  basis  in  the 
month  of  September  of  the  subsequent  year.  The  publication  deadlines  for  the 
population census are very ambitious and are spread between 2 months and 2 years 
after the reference date. 

Assessment  

110.  Although  the  quality  culture  is  already  remarkably  high,  it  would  be 
strengthened by making it more explicit in the form of identifiable and verifiable steps 
in the production process, rather than just by relying on the intrinsic motivation of the 
staff.  Explicit  quality  criteria  should  be  formulated,  as  well  as  minimal  quality  levels 
necessary  for  data  to  be  released  as  official  statistics.  The  latter  should  be 
communicated  to  outside;  this  is  a  preventive  measure  against  being  accused  of 
bowing  to  political  interference  when  a  release  has  to  be  postponed  for  insufficient 
quality. 

111.  An area where quality control is particularly important is the impact of different 
response  rates  between  groups  of  respondents  in  a  sample  survey,  and  the  way 
such effects will be corrected in grossing up the sample to the universe. This analysis 
should  not  only  be  made  for  groups  or  segments  used  for  stratification,  but  on  any 
grouping relevant for disaggregating results. 

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112. 
 It  is  proposed  that  a  horizontal  group  be  established  within  the  SSO  for 
dealing  with  quality  issues  across  the  board.  This  group  would  further  increase  the 
awareness  of  quality  issues,  and  encourage  that  standards  are  comparable  across 
subject  areas.  Its  findings  should  be  made  public  as  part  of  the  metadata,  and  in 
compliance with the transparency principle. 

113.  One  aspect  which  requires  more  attention  is  the  consistency  of  data  and 
metadata  across  surveys.  During  the  visit,  the  question  of  the  expert  on  which, 
among the multiple sources from which employment data are published, is the result 
that is recommended as best approximation and therefore given the most visibility in 
the  dissemination,  gave  rise  to  an  internal  debate:  it  was  admitted  that  with  the 
present practice it is left to the user to select the figures that suit his specific purpose 
best. This is in spite of a clear statement from an IMF delegation that the best figures 
are  from  the  labour  force  survey.  As  long  as  results  from  different  sources  are 
published in different publications, this may not cause negative reactions from users, 
because  they  will  only  rarely  get  aware  of  this  inconsistency.  When  such  figures 
appear in the same context, as it is the case e.g. in the statistical yearbook, in a "key-
figure"  table  on  the  current  website  or  in  the  future  output  database,  the  user  will 
have to be guided by ways of clearly distinct and consistent terminology across the 
whole  area  of  official  statistics,  by  adequate  metadata  and,  finally,  by  the  way  of  a 
clear  indication  from  the  SSO  on  which  is  the  most  comprehensive  and  unbiased 
source  for  a  specific  phenomenon,  and  for  what  type  of  more  specific  (or  more 
frequent)  information  requirements  complementary  sources  have  to  be  used. 
Comparing  different  sources  and  analysing  the  causes  why  they  lead  to  different 
results  is  also  an  important  aspect  of  the  internal  quality  control  and  gives  many 
insights in how to improve or consolidate important aggregates. 

114.  While timeliness is generally adequate, it could be made more visible through 
the  systematic  introduction  of  advance  release  calendars  as  suggested  under  2.6. 
Furthermore, efforts should be made for ensuring that the definitive annual national 
accounts can be published much earlier, i.e. not later than today's publication of the 
provisional results (which would then become redundant). For reaching this objective, 
the obstacles should be analysed, listed, and removed one by one.  

[3.4. Organisation of Large-Scale Surveys: to be found under B 2] 

3.5. Finance and Budgeting 
115.  The budget of the SSO has to follow the overall scheme for the government. It 
is  very  detailed  by  type  of  expenditures  (not  by  activity  or  programme  item);  the 
director is free on how to allocate each of these budget items to the various statistical 
activities.  The  person  in  charge  of  a  sector  knows,  at  the  beginning  of  each  year, 
what  the  resources  at  his  disposal  are,  and  this  will  only  be  changed  if  major 
unexpected  events  take  place.  The need for a transfer between the various budget 
items  of  the  office  can  arise  within  a  year;  in  this  case,  the  approval  of  the 
government is necessary, and the proposal has to be channelled via the ministry of 
finance. This has always worked in the last three years.  

116.  The annual budget proposals are discussed between the director of the SSO 
and  the  Minister  of  Finance,  before  it  is  submitted, as part of the overall budget, to 
the  government  and  subsequently  to  Parliament.  The  SSO  has  seen  its  proposal 
adopted  without  difficulties,  which  is  a  sign  of  trust  into  responsible  planning  and 
budgeting.  Once  the  budget  is  agreed,  the  SSO  has  to  get  the  signature  of  the 
minister of finance each month to "free" a monthly allowance for actual spending. 

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In  addition  to  the  allowances  from  the  budget,  the  SSO,  as  one  of  very  few 

117. 
public bodies in the government budget, is explicitly authorised to: 

(cid:1)(cid:2)

(cid:1)(cid:2) use the receipts from selling its publications and providing special tabulations 
for  reinvestment  into  statistical  activities;  these  receipts  do  not  go  to  the 
ministry  of  finance,  as  is  the  case  for  many  NSIs  in  other  countries;  these 
funds can, for the time being, be used also for financing wages (of temporary 
staff and others), but this might change; 
to  receive  funds  for  its  participation  in  high-level  "government  projects"  in 
addition to the budget; this may include the financing or co-financing of ad hoc 
surveys; however, regular surveys cannot be financed in this way. Temporary 
staff  can  be  engaged  for  the  duration  of  the  project.  In  the  case  of  such  a 
project,  there  is  a  written  contract  which  guarantees  the  professional 
independence  of  the  SSO  with  respect  to  collecting,  processing  and 
disseminating  data;  in  addition,  the  SSO  has  a  clear  policy  for  what  type  of 
statistical  surveys  it  will  not  accept  even  if  it  were  paid  (e.g.  political  opinion 
polls); 
to receive funds from donors outside the country (international organisations, 
other countries) for certain items of the statistical programme.  

(cid:1)(cid:2)

(cid:1)(cid:2) A  part  of  the  receipts  for  services  is  linked  to  services  with  respect  to  the 
administrative  business  register  which  will  be  transferred  to  other  agencies 
soon and will therefore not be available in future. 

118.  These extra funds are an important instrument for the director to motivate key 
experts (notably in the IT area) to stay with the SSO, by giving complements to the 
low salaries. It is therefore important that the possibility to use these funds for wages 
of  permanent  staff  be  kept  in  the  future.  The  great  majority  of  missions  to  other 
countries and to international organisations are financed by funds from international 
donors.  

119.  Unused credits at the end of the year cannot be carried over to the following 
year, with the only exception of credits earmarked for the population census. 

120.  The  SSO  has  an  excellent  reputation  for  financial  management  which  dates 
back  to  the  population  census  1994;  this  major  activity  was  closely  monitored  also 
from the financial management point of view by international experts.  

Assessment  

121.  De  facto,  the  director  of  the  SSO  has  the  necessary  flexibility  in  allocating 
funds  to  various  activities,  in  spite  of  the  detailed  budget  by  type  of  expenditure. 
Sector  heads  are  informed  in  time  about  the  resources  available  to  them,  and  they 
can  count  on  these  resources  not  to  disappear  by  sudden  reallocation  to  their 
detriment without their consent. 

122.  A move towards less detailed formal budget is unrealistic for the next future, 
due to the IMF-inspired restructuring of the public sector with the explicit objective to 
cut down on public expenditure and staff. The same holds for the rule that prohibits 
carrying over unused credits to following years. It is a major achievement for the SSO 
that the three possibilities of extra-funding mentioned above can continue during this 
phase  of  trimming  down  the  public  sector;  this  will  allow  the  SSO  the  flexibility 
needed to implement the master plan by using these other sources of finance where 
strategic  items  of  the  master  plan  cannot  be  financed  by  budget  allocations  alone, 
and  by  using  it  as  a  deliberate incentive to key staff. The total amounts involved of 

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each extra-budgetary source should be made more transparent, however; they were 
not available to the expert. 

123.  As part of the restructuring of the public sector, the extension of the project-
type  financing  from  other  government  units  to  financing  regular  surveys  which  are 
very  specific  and  for  which  one  main  client  in  form  of  another  government  body  or 
scientific  institution  can  be  identified  should  be  carefully  examined  and,  if  feasible, 
gradually  implemented.  It  would  be  logical  that  such  bodies  finance  the  data 
collection which is mainly carried out for their specific information needs irrespective 
of  whether  this  demand  is  ad  hoc  or  regular.  This  would  enable  the  SSO  to 
concentrate  its  budget  more  on  statistical  infrastructure,  on  multi-purpose  data 
collection  which  is  necessary  for  the  main  aggregates  and  indicators,  and  on 
dissemination, and thus contribute to priority setting. 

3.6. Staffing, Staff Recruitment and Training 
124.  The staff number is fixed by government for every year. It is 263 for the year 
2001  (including  the  8  regional  offices  which  are  dependent  on  the  SSO  and  which 
account for 82 persons altogether). It has increased since 1997, when it was 193 (the 
increase was mainly given as temporary staff). 182 have a university degree, 191 are 
women. The age structure is characterised by a relatively low number of staff retiring 
in  the  near  future;  the  average  age  of  SSO  staff  is  younger  that  in  the  rest  of  the 
administration.  Wages  for  all  staff  in  the  public  sector  have  been  frozen  in  nominal 
terms since 1993, but it is hoped that financial working conditions can be upgraded 
as from 2002. 

125.  Given  that  there  is  a  clear  common  understanding  within  the  SSO  on  what 
should  be  done  under  official  statistics  and  what  not,  there  is  a  fair  amount  of 
delegation to head of sectors and heads of departments possible concerning the way 
they  carry  out  their  respective  programme  items  and,  most  importantly,  for the way 
how results are disseminated. The text or contents of publications or announcements 
do not have to be cleared by the director every time, which increases both timeliness 
of the products, and motivation and sense of responsibility of the staff.  

126.  There  are  signs  of  low  status  of  the SSO staff in comparison to other public 
bodies such as ministries, which are difficult to reconcile with the high status of the 
SSO  in  terms  of  reputation.  Public  bodies  are  ranked  according  to  their  relative 
importance  (in  other  terms  than  number  of  staff  and  budget),  and  the  SSO  has 
together  with  the  archives  a  relatively  low  status  in  this  respect.  This  has  an 
immediate  effect  on  the  salaries  of  the  SSO  at  all  levels,  which,  together  with  the 
above mentioned freeze in nominal terms, contributes to staff leaving the office.  

127.  New  staff  is  well  introduced  to  the  SSO  through  courses  and  on  the  job 
training. There are strict requirements for all new statisticians to know English and to 
be IT literate. Furthermore, the SSO has made a constant effort to train staff on new 
methods,  international  standards,  and  modern  tools  of  management.  There  is  an 
Intranet  available  to  all  staff  with  very  rich  content  and  regular  updates,  and  this 
source  is  extensively  used  by  staff  for  acquiring  knowledge.  The  assimilation  of 
methodological know-how is excellent. 

128.  Because  of  the  SSO's  leading  role  in  introducing  new  technologies, 
international  standards,  and  because  of  the  feeling  that  innovative  changes  are 
possible  and  encouraged  by  the  senior  management,  management  culture  is 
different  in  the  SSO  in  comparison  to  other  government  bodies.  This  is  the  main 
reason  why  it  is  felt  to  be  practically  impossible  to  recruit  heads  of  units  or  even 

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heads  of  sectors  from  outside.  Recruitment  from  outside  takes  place  at  junior  level 
only. 

129.  The director of the SSO anticipates a peak in the training needs for the years 
2002/2003, especially concerning management in the wider sense, for which external 
assistance  is  needed  (contacts  have  been  established  with  the  Agency  for  Civil 
Servants  in  this  respect).    TES  courses  are  very  much  appreciated,  and  the  SSO 
would  like  to  send  more  participants  in  the  future.  A  clear  strategy  for  in-house 
training  is  on  the  way  of  being  set  up.  There  is  not  a  separate  budget  item  for 
training,  however.  From  2007  onwards,  the  SSO  expects  to  be  able  to  cope  with 
training without assistance from other national bodies. 

130.  The impact of the forthcoming transfer of some administrative tasks away from 
the  SSO  on  the  staff  number  is  not  yet  clear.  19  persons  are  currently  working  for 
these  tasks.  The  policy  is  to  retain  as  many  persons  as  possible  and  to  reassign 
them  to  statistical  tasks,  since  the  are  very  well  acquainted  with  the  culture  of  the 
SSO. 

131.  Corporate  identity  among  staff  is  high.  There  is  a  high  commitment  to  the 
cause of official statistics, which is the basic ingredient for a good spirit of work. The 
many changes in the recent past have lead to a quasi permanent workload of some 
key staff that is well above what can be handled during normal working hours even 
by very efficient staff, and this has, together with the insufficient financial incentives, 
had  some  negative  effects  on  the  otherwise  good  spirit  of  work.  Creativity  is  highly 
valued, which is untypical in the public sector, but there is a feeling that more use of 
non-financial ways for recognising staff with initiatives and performance could help in 
encouraging creative and professional behaviour even further. Some staff in regional 
offices  are  concerned  by  the  fact  that  they  provide  only  inputs  to  the  headquarters 
without being involved in the rest. 

132.  80% of the staff have at least a working knowledge of English, due to the fact 
that since 1992 90% of the staff who were with the SSO before were sent to English 
courses. There are however not enough opportunities for all staff to use English for 
more  than  reading,  so  that  a  rather  important  minority  did  not  feel  in  sufficient 
command of English to participate in the discussions with the expert without the help 
of an interpreter. 

133.  The recommendations of the 1998 management expertise as regards human 
resources have been implemented in certain aspects. The most difficult to implement 
(because it is difficult to reconcile with the office culture) is the recommendation on a 
general  system  of  job  rotation.  There  are  examples  where  persons  have  changed 
jobs within the SSO on their own initiative, and this is considered sufficient. There are 
however plans to be more systematic about career plans (as a consequence of the 
reform of the public sector). Another recommendation from the expertise which is not 
easy  to  implement  is  the  working  in  project  groups  where  staff  from  different  units 
work together and are responsible, for this part of their work, to a project leader and 
not to their line supervisor. 

Assessment   

134. 
It is fair to say that the low status of the SSO in terms of wages is a potential 
risk  for  the  human  capital  of  the  SSO.  The  high  unemployment  rate  in  the  country 
helps  the  SSO  in  attracting  and  keeping  skilled  and  motivated  staff  in  spite  of  this 
aspect. One reason why the fluctuation of staff is not higher is certainly that most of 
the persons who work in the SSO like their job and can identify themselves with the 

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institution they work. If the general economic situation in the country were to improve 
and, as a consequence, the labour market were to become tight, the SSO might be 
confronted  with  a  high  rate  of  fluctuation.  The  reform  of  the  public  sector  has  to 
proceed  further  in  order  to  be  able  to  assess  whether  there  are  options  possible  in 
the future for raising the status of the office in this aspect. 

135.  Another  aspect  to  be  urgently  addressed  by  the  management  is  the 
permanent heavy workload in excess of the capacity of even committed and efficient 
staff. Not dealing with this issue in a situation where financial incentives can only play 
a  modest  role  is  a  sure  recipe  for  staff  morale  to  decline  rapidly  in  the  near  future. 
This issue is directly linked to priority setting, and if need be, some activities should 
be dropped to rebalance the situation.  

136. 
It  is  also  recommended  to  gain  more  experience  with  project  teams  from 
various  parts  of  the  organisations,  formed  to  carry  out  a  project, with a responsible 
project  leader.  It  is  likely  that  this  form  of  organising  work  will  gain  increasing 
importance through the reform of the public sector, and it is preferable to acquire a 
certain practical knowledge in time beyond the modest experience gained until now. 

137.  Horizontal  committees  with  executive  powers  (i.e.  with  the  power  to  decide 
within the rules and criteria specified by the management of the SSO, and where only 
exceptional  cases  are  referred  back  to  the  management  board  for  decision)  are  an 
important  tool  for  enhancing  corporate  culture  and  team  work,  learning  from 
colleagues  and  increasing  sense  of  responsibility.  Such  committees  have  been 
suggested for certain aspects of dissemination and of quality control. 

138.  More should be done to encourage job rotation within the SSO as part of the 
forthcoming system of career development.  Having worked in different subject areas 
of official statistics, or in both horizontal and subject area specific functions, or in the 
SSO’s  headquarters  and  in  a  regional  office,  is  an  effective  way  of  creating  mutual 
understanding,  corporate  identity  and  ensuring  the  coherent  application  of  the 
principles of official statistics. Ways should also be found to exchange staff between 
the  SSO  and  other  producers  of  official  statistics,  and  these  possibilities  used  to 
spread good practice of official statistics to these other bodies.   

3.7. Information Technology 
139.  The  SSO  is  in  full  control  of  its  IT;  it  does  not  have  to  share  it  with  other 
government  units.  It  uses  standard  products  concerning  hardware  (IBM,  Compaq), 
software  (database:  DB2,  Microsoft  SQL;  development:  Visual  Basic  Microsoft 
Access; tabulation: Microsoft Access, SAS) and communication throughout the SSO. 
It  has  recently  introduced  client-server  technology,  which  has  lead  to  a  noticeable 
improvement; and shut down all mainframes. The SSO's IT standards in terms of a 
limited range of products put at the disposal of the staff are strictly adhered to, so as 
to avoid a too great variety of products to be maintained. The hardware is physically 
located  in  the  premises  of  the  SSO  headquarters  in  Skopje,  which  makes  data 
security  from  the  physical  access  point  of  view  unproblematic.  Office  automation  in 
the SSO is at international level. 

140.  The  SSO  develops  applications  mainly  in-house,  using  standard  software 
tools.  Only  rarely  is  development  work  given  to  private  sub-contractors;  as  an 
example, it is planned to develop a classification server in house. The same holds for 
the output database, which will be a further elaboration of the present SIPOV pilot. 

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141.  Microdata  sets  are  standardised  in  format  and  description.  This  facilitates 
access by other units of the SSO, provided they are given authorisation. Elementary 
aggregates intended for output as official statistics are stored in relational databases 
(one  per  survey),  which  use  common  software,  but  do  not  share  any  common 
metadata  like  classifications  up  to  now.  Access  to  such  aggregate  data  is  easy  for 
other sectors of the SSO. 

142.  SSO's regional offices are linked to the SSO Headquarters, but the number of 
lines  is  insufficient.  They  can  transmit  data  from  business  surveys  which  they  had 
entered from the questionnaires, but they cannot access the data files or registers at 
the present moment. Only 1 or 2 persons per regional office are linked to the office 
automation system, and Internet access is not possible (for staff in the headquarters, 
use of internet is de facto limited as well because of insufficient number of lines to the 
outside). The upgrading of this connection is foreseen in the master plan. 

143. 
In  view  of  the  growing  use  of  IT  both  internally  and  from  users,  possible 
bottlenecks  perceived  by  the  IT  sector  of  the  SSO  are  purchases  of  hardware  and 
networks,  but  not  software.  Another  element  in  need  of  urgent  upgrading  is  the 
central telephone facility. 

Assessment  

144.  The  policy  of  limiting  the  range  of  products  is  a  very  good  strategy  to  keep 
cost in limits and not to disperse the rare expert know-how. Even if the present set-up 
is sufficient for the present needs of  the SSO, an IT strategy has to anticipate future 
challenges. This is the case in the SSO for most IT aspects, but some aspects need 
to be given further thought and made more explicit: 

(cid:1)(cid:2) data  security  has  to  be  ensured  in  such  a  way  that  users  from  outside  who 
can access the present SIPOV, the website or the future output database can 
in no way access the internal data files of the SSO (firewall); 

(cid:1)(cid:2)

(cid:1)(cid:2) whatever  the  software  used  for  developing  the  output  database,  a  clear 
concept  with  data  models  should  precede  the  development  work,  using 
international conceptual standards such as the Sundgren model. The present 
SIPOV is conceptually rather remote from the Sundgren model. It should also 
be borne in mind that this output database is to become the output database 
of  the  entire  national  statistical  system  and  should  offer  the  possibility  of 
including  data  from  other  producers  and  maybe  even  a  selection  of 
international statistics; 
the  main  difficulty  in  applying  standard  development  software  for  output 
database in official statistics is the complexity of the metadata associated with 
the  various  subject  areas  of  official  statistics,  which  may  undergo  slight  or 
important changes over time and be only partially compatible between subject 
areas. It is therefore important to develop first a clear view on what is called a 
central  classification  server,  i.e.  a  software  capable  of  handling  interrelated 
classifications,  of  which  each  can  have  several  versions  over  time  or  in 
simultaneous use, in such a way that each descriptive or constitutive element 
is  only  described  and  updated  once  for  the  whole  range  of  official  statistics. 
An  output  database  will  have  to  rely  heavily  on  such  a  classification  server. 
The  in-house  development  of  classification  servers  for  official  statistics  by 
using  standard  software  development  tools  have  rarely  been  successful  in 
other  NSIs;  it  is  therefore  recommended  to  broaden  the  possible  options for 
this  central  element  beyond  the  present  standards,  provided  the  interfaces 
with  the  current  products  of  the  SSO  are proven to be effective and easy to 
maintain;  

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(cid:1)(cid:2)

the  upgrading  of  the  links  with  the  regional  offices  is  a  prerequisite  for  their 
becoming  more  effective  in  terms  of  servicing  local  governments,  and  of 
contributing to the updates of the statistical registers; 

(cid:1)(cid:2)

(cid:1)(cid:2) where  data  collection  is  made  on  the  spot,  pilots  should  be  made  to  use 
portable  equipment  by  which  interviewers  can  enter  data  directly.  The  first 
area where this new technique should me tested may be price statistics. Co-
operation with other NSIs should be sought; 
there should be a discussion with the business community to what extent data 
collection  via  Internet  to  replace  the  paper  is  feasible,  and  tests  with  well 
equipped  companies  should  be  made  along  the  same  line  as  the  National 
Bank is testing this modern way of data collection with the banking sector; 
the installation of a modern telephone and communication infrastructure is a 
key element for both dissemination and more effective data collection. 

(cid:1)(cid:2)

3.8. Internal Monitoring of Performance 
145.  There is no established set of quantitative indicators by which performance is 
measured across subject areas. However, the information by which performance for 
each programme item can be assessed is regularly collected, mainly for the purpose 
of  assessing  quality  (see  3.3),  but  it  also  includes  e.g. the use made of the data in 
media. This information is used for the annual updating of the programme and for the 
annual  report  to  the  government  (see  3.9).  This  more  descriptive  way  of  assessing 
performance  allows  for  a  more  differentiated  evaluation  than  a  standard  set  of 
quantitative indicators. 

146.  The  SSO  had  an  assessment  of  its  national  accounts  by  Italian  experts  in 
2000.  It  would  very  much  like  to  repeat  this  exercise,  in  view  of  its  recent 
improvements  in  GDP,  notably  the  introduction  of  quarterly  GDP  at  constant  prices 
(quarterly  GDP  at  current  prices  are  still  missing).  The  SSO  participated  in  the 
exhaustiveness of GDP analysis by EUROSTAT as well. 

147.  As  regards  performance  monitoring  of  staff,  it  is  presently  done  only  when 
persons  apply  for  jobs  internally,  or  for  new  staff  after  an  initial  period.  The 
systematic appraisal of the performance of each person in the SSO, as proposed in 
the  1998  management  expertise,  has  not  yet  been  introduced.  It  is  likely,  however, 
that the reform of the public sector will a introduce a performance-related part of the 
salary;  this  will  necessitate  the  introduction  of  such  a  systematic  appraisal  even 
though it is felt not to fit in very easily with the present culture. The main fear is that 
by introducing such a system, the traditional public sector culture of giving priority to 
avoiding  mistakes  at  any  price,  with  obvious  negative  consequences  on  the 
creativity, i.e. a type of behaviour which has been successfully overcome in the SSO, 
would be brought back. 

Assessment  

148.  For  assessing  performance  for  individual  programme  elements,  a  slightly 
higher degree of standardisation would be desirable, without going too far in relying 
on quantitative indicators. The work on assessing quality in a standardised way is a 
major element in the assessment of overall performance. 

149.  For  the  SSO  to  continue  to  be  considered  as  a  model  for  applying  modern 
management  techniques  in  the  public  sector,  it  is  recommended  that  systematic 
assessment  of  performance  of  individual  staff  members  be  introduced  as  soon  as 
possible so as to become acquainted with this instrument before it will be mandatory 
for  the  whole  public  sector.  This  assessment  can  also  be  based  in  part  on  the 

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evaluation  of  the  programme  items  to  which  each  member  of  the  staff  has 
contributed.  It  is  important  that  this  assessment  is  used  as  a  tool  for  encouraging 
staff, and for giving them due recognition of their accomplishments, rather than as an 
exercise that is perceived either as irrelevant or even as a threat. 

150.  Key statistics should be assessed by international experts at regular intervals. 
All  initiatives  by  the  SSO  in  this  respect  should  be  encouraged  and  responded 
favourably by the international community. 

3.9. External Accountability 
151.  Article  21  of  the  Statistical  Law  asks  for  an  annual  report  to  be  prepared  by 
the SSO on the implementation of the statistical programme of the pervious year. In 
this report, an evaluation is made of what has been achieved and what not and, for 
the  latter,  the  reasons  why  and  the  corrective  measures  that  have  been  taken  to 
prevent  missing  the  objective  again.  This  report  is  discussed  also  by  the  Statistical 
Council,  but  the  government  just  takes  note.  The  report  is  publicly  available  on 
request,  but  it  is  not  translated  into  English.  The  same  holds  for  the  reports  by  the 
Statistical Council to the Parliament about its activities. 

152.  The  most  important  way  of  how  the  SSO  is  accountable  to  the  other 
stakeholders  than  the  government  is  through  its  many  networks  and  round  tables, 
where it is confronted with the questions from different users. The main occasion is 
the  annual  update  of  the  statistical  programme,  where  lessons from previous years 
and  the  measures  the  SSO  propose  to  take  are  put  on  the  table  and  discussed.  A 
similar discussion takes place when the Statistical Council comes to an opinion about 
the annual update of the programme (which precedes the formal ex-post report to the 
government mentioned above). 

In  a  wider  context  of  external  accountability,  it  is  important  how  accessible 
153. 
metadata are for the users. This will give an indication of how transparent the whole 
system  is.  Whereas  metadata  on  definitions  and  classifications,  as  well  as  on 
sources, are given with the publications of results, users will have more difficulties in 
getting hold of precise descriptions for how the results are derived if the algorithm is 
complex,  such  as 
indices.  Such 
documentation  is  sometimes  available  only  as  internal  documents  and  are  not  in  a 
format to be given to outside. 

the  case  of  sample  surveys  or  price 

in 

154.  The  recent  decision  to  ask  for  an  international  monitoring  of  the  population 
census,  postponed  to  October  2001,  is  another  feature  of  external  accountability. 
Such international monitoring took place in 1994 as well, but unlike the 2001 census, 
the census as such was co-funded from international donors to a substantial extent. 
The  motive  behind  the  international  monitoring  in  2001  is  only  to  have  a  neutral 
check on the quality and neutrality of the process, in order to give maximum strength 
against any interest group who might invoke biases later on. 

Assessment  

155.  The  procedures  for  ex-post  evaluation  through  the  annual  updates  of  the 
programme and the ex-post report on annual implementation to the government are 
important  for  the  external  accountability.  Their  impact  would  be  even  higher  if  the 
annual report were to be made publicly accessible on the Internet. 

156.  Furthermore, efforts have to be made to transform the internal documentation 
on some methodological aspects into forms that can be readily given to users upon 

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request, and users have to be made aware (e.g. via the website) how they can obtain 
metadata information from the SSO. 

4. Statistical Infrastructure 

4.1. Classifications 
157.  The SSO and the National bank are very strict in there respect of international, 
and  especially  EU  standard  classifications.  NACE  Rev.  1  was  declared,  through  a 
government  decision,  mandatory  not  only  for  all  producers  of  official  statistics,  but 
also  for  all  administrative  registers  that  use  activity  classifications  of  economic 
agents. External trade statistics uses the HS classification. PRODCOM nomenclature 
has  also  been  declared  mandatory  for  all  relevant  statistics  through  government 
decision, and it has been (will be?) implemented in the statistical surveys in the area 
of industry. 

158.  A  proposal  for  a  NUTS  classification  for  FYROM  was  submitted  to 
government, and the government adopted it end of April. At NUTS 1 and 2 levels, the 
country  will  remain  without  subdivisions.  The  only  administrative  structure  presently 
used,  i.e.  the  123  municipalities,  will  form  level  NUTS  5.  Levels  NUTS  3  and  4  are 
new and contain 8 respectively 34 subdivisions. 

[4.2. Registers: will be taken up under B 4, B 5 and B 7]           

B. Technical Part: Capacity of Producing Statistics in Various 
Areas 

1. Assessment of the Overall Capacity 

159.  The Macedonian system of official statistics has a rich fund of statistical data. 
It has tried to combine adjustment to European standards and relevant concepts of 
the market economy with maintaining comparability over time. The overall capacity to 
produce  relevant,  timely  and  reliable  statistics  can  be  qualified  as  good  in  terms  of 
average EU standard. This capacity is not only sustainable for the period ahead; due 
to the SSO's master plan it will increase further. By the year 2006, the full EU acquis 
in statistics should be available from Macedonia. 

160.  With  290,  the  number  of  separate  surveys  is  on  the  high  side.  On  the  one 
hand,  it  proves  the  capacity  of  the  statistical  system  to  run  many  data  collection 
activities in parallel. On the other hand, a high number of separate surveys is prone 
to  the  risk  of  collecting  the  same  information  from  the  same  respondent  about  the 
same time period more than once, and the results from different surveys may be less 
easy  to  harmonise  or  even  integrate.  This  is  especially  the  case  with  business 
surveys.  It  is  therefore  suggested  that,  when  the  next  5  year  programme  will  be 
established,  each  survey  is  not  only  assessed,  as it is currently the case, one after 
the  other  for  possible  improvements  in  terms  of  user  needs,  response  burden, 
relevance  and  efficiency,  but  that  an  assessment  takes  place  for  categories  of 
surveys  grouped  together  from  the  point  of  view  of  a  possible  merger,  of  the  total 
response  burden  for  the  same  respondent  and  possible  duplications,  and  of 
coherence of the results. 

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161.  A high number of surveys has another potential risk. The time of qualified staff 
may be devoted to a too exclusive extent to managing and administering surveys, to 
the  detriment  of    analytical  work.  The  present  impression  is  that  analysis  of  data 
quality, in search for improvement and for causes of incoherence, is still possible at a 
satisfactory level, but this is not the case for many subject areas as regards analytical 
work related to outcome relevant analysis in terms of search for influencing factors of 
certain  developments  or  discrepancies.  Given  the  importance  of  this  type  of 
comments for many users, a merger of surveys may be an important step to redress 
this imbalance without having to wait for additional resources.   

2. Capacity to Organise and Carry out Censuses 

162.  The  population  census  2001  (which  includes  a  census  of  households  and 
dwellings)  and  the  agricultural  census  in  2002  will  be  important  milestones  for  the 
SSO.  The  last  population  census  was  carried  out  in  1994,  with  its  operation  being 
credited  as  unbiased  by  international  observers.  The  last  separate  agricultural 
census  dates  back  to  more  than  30  years  (in  the  meantime,  until  independence,  it 
used to be coupled with the population census). 

163.  The  preparations  for  the  population  census  have  started  early,  and  the 
organisational set-up is fixed in much detail in the census law. Given the significance 
of the census, whatever could have been prepared in advance was done. There will 
be  a  post-census  survey  to  check  the  accuracy  of  the  census  itself.  All  these 
preparations  have  however  been  affected  by  incidents  of  violence  which  have 
occurred  in  certain  parts  of  the  country  since  March  2001.  The  SSO  came  to  the 
conclusion  that  the  conditions  were  not  met  to  carry  out  the  population  census 
throughout  the  country  at  the  date  originally  foreseen  in  the  law  (2nd  half  of  May), 
since the situation in certain parts of the country, as a consequence of the incidents 
mentioned  above,    would  have  had  a  negative  effect  on  the  quality  of  the  results. 
This decision was made on purely professional grounds, and it had been possible to 
organise an all parties support (i.e. parties in the then government and parties of the 
opposition) to back the proposal that the date fixed in the census law be changed to 
the  first  half  of  October  2001  (this  decision  was  taken  early  May).  In  addition,  the 
SSO  has  asked  for  an  international  monitoring  of  the  census..  The  development  of 
the situation in the country in the near future will determine whether the conditions for 
a successful conducting of the population census in October are likely to be met or 
not.   

Assessment  

164.  Judging  by  the  careful  preparations,  the  capacity  to  organise  censuses 
(including  the  necessary  additional  funding)  can  be  answered  positively.  The  SSO 
follows  a  clear  strategy  of  depolitisation  of  the  census,  and  having  found  an  all 
parties  support  for  postponing  the  census  is  a  very  positive  sign  and  a  remarkable 
achievement.  A  final  judgement  will  have  to  be  made  once  these  censuses  have 
been carried out. 

It  is  of  crucial  importance  that  the  international  monitoring  of  the  census  will 
165. 
find  support  from  the  international  community  of  official  statistics  in  terms  of 
additional  resources  and  sending  experts  who  have  a  sufficient  experience  in 
population  censuses,  demography  or  at  least  official  statistics.  For  the  cohesion  of 
the  country,  results  will  have  to  be  recognised  by  all  parties as being objective and 
free of biases. 

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3. Capacity to Produce Annual Population Statistics after the Population 
Census 

166.  The  SSO  produces  mid-term  population  statistics  by  age,  sex  and 
municipality,  with  the  last  census  as  a  base,  and  by  adding  the  flows  concerning 
birth,  deaths,  domestic  migration,  emigration  and  immigration.  All  flows  are 
considered  to  be  reliable  with  the  exception  of  the  emigration  to  other  countries, 
where the legal obligation to deregister is often not respected. It is therefore expected 
that  the  new  census  will  show  a  certain  degree  of  overestimate  of  the  current  mid-
year population figures. 

167.  As from 2002, the new census will be the base for the current population stock 
estimate,  and  earlier  figures  will  be  revised  accordingly.  For  emigration,  other 
sources  than  the  number  of  officially  emigrated  persons  will  be  used  to  provide  a 
better estimate. The inclusion of a question to households in the labour force survey 
on whether a former member of the same household had recently emigrated is also 
an option. 

Assessment 

168.  The  capacity  to  produce  accurate  mid  year  population  statistics  after  the 
census  2001  is  present  in  a  sustainable  form.  Emigration  should  be  estimated  by 
making the best use of different sources rather than by sticking to only one source or 
method which is known to be biased. 

4. Capacity to Carry out Household Surveys 

169.  Presently, there are two important household surveys: the labour force survey 
(twice a year), and the household budget survey. The latter will undergo an important 
modernisation  concerning  the  way  data  are  collected  as  from  this  year  (increased 
sample,  combination  of  diary  and  interview  instead  of  interviews  only;  spreading 
respondents over the whole year). 

170.  As a sampling frame, the dwellings list from the census 1994 is used in both 
cases,  with  collective  households  and  dwellings  in  very  remote  places  (isolated 
farms)  excluded.  There  is  a  two-stage  sampling;  first  a  stratified  selection  of 
enumeration  districts,  and then a random selection of dwellings within each chosen 
enumeration  district.  The  dwellings  are  contacted  by  writing,  then  visited  by 
interviewers, who have to present an authorisation signed by the director of the SSO. 
The administrative population register, for which the SSO has been responsible, but 
which  will  soon  be  transferred  to  another  body,  has  not  been  used  as  a  sampling 
frame. 

Interviewers are carefully selected by the SSO on the base of offers in reply to 
171. 
job announcements and proposals from regional offices. The selection, training and 
assessment  of  interviewers  is  concentrated  in  the  department  of  support  of  sample 
surveys and data entry. There are many unemployed young people with high school 
or  even  university  degree  who  act  as  interviewers;  most  interviewers  are  reused  if 
performance  is  satisfactory.  Except  for  a  first  control  of  completeness  (and  some 
straightforward  data  entry  in  the  case  of  the  labour  force  survey),  regional  offices 
have no role in the data collection and processing for household surveys. 

172.  The response rate is very high (92%) in the case of the labour force survey. 
For the household budget survey, there is a high degree of oversampling, and when 

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a  household  refuses  to  participate  (or  when  a  dwelling  is  empty  or  contact  is 
impossible), it is replaced by a "reserve" unit, thus allowing the target of successful 
interviews  to  be  achieved. Legally speaking, household surveys are mandatory, but 
unlike  businesses  as  respondent  units,  they  could  not  be  fined  if  they  refuse  to 
participate. 

173.  Because of the incidents referred to in paragraph 163, the 2001 labour force 
survey  had  to  be  postponed  from  spring  to  September,  and  the  start  of  the  new 
continuous household budget survey from 1 April to 1 July. 

174.  Up  to  now,  there  have  not  been  any  panel  surveys  concerning  households 
carried out by the SSO.  

175.  The SSI is currently in charge of the administrative population register. There 
is a legal base on this register in a separate law, which calls for a very ambitious and 
far reaching register with many variables. The law has not been implemented in full; 
currently,  the  SSO  is  engaged  in  some  pilot  activities  to  assess  the  scope,  quality, 
accuracy  and  comparability  of  data  from  various  administrative  registers  and  their 
potential  for  being  merged  using  the  personal  identification  number  as  a  key  for 
connection.  The  responsibility  for  the  administrative  population  register  will  be 
transferred to the Ministry of the Interior in the near future.  

176.  This  pilot  project  concerning  the  administrative  register  will  also  be  the  base 
for defining the model for statistical register of population, which is an activity to be 
realised  within  the framework of SOP 98. The statistical population register will use 
as a starting base the census 2001 and the basic administrative records used for vital 
statistics and migration. The basic tasks of the register will be: providing information 
on  the  total  population  and  its  movement  at  any  time;  production  of  current 
demographic statistics, including the formation of families and households; and use 
as  a  sampling  frame;  the  register  will  create  possibilities  for  reducing  the 
questionnaires  by  inserting  stable  variables  from  this  register.  This  register  should 
become  part  of  a  system  of  statistical  registers  in  the  SSO,  which,  by  mutual 
connection, will provide additional information from the business register, register of 
territorial  units,  and  in  the  future  some  other  statistical  registers  to  be  established  ( 
register  of  dwellings,  farms  etc.).  In  view  of  the  complexity  of  this  question,  the 
creation of the statistical population register will be developed in several phases.  

Assessment  

177.  Except for the sampling frame, the present system of carrying out household 
surveys  is  very  effective  and  has  been  carefully  designed  to  fit  the  culture  of  the 
country  and  the  best  ways  of  contacting  people.  Household  surveys  are  well 
accepted  by  respondents.  This  system  could  be  used  for  many  more  household 
surveys  should  the  need  arise.  For  the  sake  of  transparency,  it  would  be  better  to 
explicitly declare household surveys as voluntary in the statistical programme, rather 
than to create a false sense of obligation which cannot be enforced anyway. 

178. 
It is recommended to give urgent thought on how the sampling frame can be 
optimised  between  the  census  2001  and  the  subsequent  census  in  2011.  It  is  not 
advisable  to  rely  on  the  list  of  dwellings  obtained  through  the  census  2001  for  10 
years  without  any  form  of  update.  Whether  the  proposed  statistical  population 
register  is  the  best  option  as  a  sampling  frame  in  the  future  is  uncertain.  The 
continuous  updating  of  a  population  register  is  a  heavy  burden,  and  will  use  many 
resources at the detriment of other fields of official statistics.  

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179.  The  documents  presently  available  on  the  statistical  population  register 
(produced  by  outside  experts,  not  by  the  SSO)  are  not  sufficient  as  a  basis  to 
allocate resources for such an important endeavour. Neither are the objectives clear, 
nor  are  milestones  defined  which  would  allow  a  piecemeal  implementation  without 
commitment  to  all  stages  from  the  outset.  The  need  for  a  statistical  population 
register in addition to the administrative population register is mainly based on a false 
analogy to business registers, without taking into account that countries without any 
population register can have excellent household surveys (which is not the case for 
business surveys). The available material also seems to mix up continuously updated 
registers  and  microdata  sets  for  a  given  period  or  a  given  point  in  time,  since  the 
number  of  variables  listed  is  beyond  any  reasonable  limit  in  a  register  context.  In 
addition, the distinction between administrative and statistical population registers is 
not  always  clear.  The  ideal  of  a  series  of  connectable,  continuously  updated 
registers,  from  which  many  official  statistics  could  be  derived,  presupposes  an 
administrative  culture  throughout  the  whole  administration,  the  population  and  the 
economy  which  can  be  found  only  in  a  few  number  of  European  countries. 
Continuing with this project on the present basis would result therefore in a cathedral 
project that risks never to be finished and not to be of sufficient quality for any of its 
intended use in official statistics. The SSO is starting to be aware of this risk. 

In order to bring more clarity into this issue, it is recommended to make a very 
180. 
strict separation between SSO activities for the administrative register (as long as the 
SSO is still in charge) and those for the statistical population register. Concerning the 
first, the SSO should continue with the pilot, by associating the new agency to which 
the register will be transferred to, and make a very objective and neutral evaluation 
before  the  transfer  is  taking  place.  In  doing  this,  the  SSO  should  abstain  from 
expressing  any  views  about  what  variables  would  be  desirable  to  be  included  for 
administrative  purposes;  this  could  undermine  its  clear  stand  on  confidentiality  and 
privacy issues. The sooner the transfer of this activity (which shows a clear conflict of 
interest with statistical activities) takes place, the better. 

181.  As regards the statistical population register, it is not clear whether a sample 
of  persons  from  such  a  register  would  indeed  be  more  effective  than  a  sample  of 
dwellings,  given  that  the  fluctuation  of  persons  are  more  frequent  than  those  of 
dwellings.  If  a way could be found to update the list of occupied dwellings from the 
census 2001 with newly constructed dwellings and with information on other changes 
such as street names (e.g. with the help of the postal service, the electricity or water 
suppliers or the municipalities), this would, from the point of view of a sampling frame 
for  household  surveys,  be  entirely  sufficient  and  have  many  practical  advantages 
over a register of persons. It is proposed that the creation and updating of a register 
of  dwellings  receives  first  priority,  this  may  even  affect  certain  details  of  the  data 
processing in the upcoming population census. 

182.  The  advantages  of  a  statistical  population  register  may  lie  elsewhere,  i.e.  in 
making  use  of  the  personal  number  every  person  receives  when  he/she  is  born  or 
immigrates  for  the  first  time.  If  this  number  were  consistently  used  in  all 
administrative  files,  they  could  be  linked  for  statistical  purposes  at  the  level  of  a 
person,  e.g.  to  analyse  educational  and  labour  force  careers.  Such  files  could  be 
linked with survey data for statistical purposes if the persons interviewed can either 
directly indicate their number, or if it can be added ex-post via a population register 
on the base of the name and date of birth indicated during the interview. For the SSO 
to  be  able  to  use  this  potential,  it  does  not  seem  necessary,  however,  to  have  a 
statistical register of its own; copies from the administrative population register frozen 
at certain points in time and established and transmitted periodically to the SSO, with 
name,  date  of  birth  and  personal  number  as  identifiers,  would  be  sufficient.  This 

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would have the advantage for the SSO to limit its role to matching, without the need 
for  continuous  updating  of  the  individual  elements.  Once  the  matching  has  been 
completed  and  a  connected  microdata  set  has  been  obtained  for  a  given  point  in 
time, the identifiers like the personal number, names and addresses can be dropped, 
which  is  a  crucial  advantage  from  the  confidentiality  and  credibility  point  of  view. 
Organising  the  matched files as a register would require the inclusion of identifiers, 
and the SSO would not only be perceived as potential big brother, but would have to 
comply with very strict rules from a future general data protection law concerning the 
rights of persons to inspect and modify their own data. It is therefore recommended 
to  explore  other  options  than  creating  a  parallel  statistical  population  register  in  the 
SSO as a matter of urgency before investing to many resources in this register, and 
to scrutinise thoroughly the relative costs and benefits of the different options. 

183.  A  practical  way  of  readjusting  this  project  may  be  in  defining  the  above 
suggested elements, i.e. the establishment or a register of dwellings, and the use of 
copies of the administrative register to match microdata outside a register context, as 
steps 1 and 2 of this project. The resource implications and time frames would have 
to  be  defined,  as  well as clear criteria for success. The director should then decide 
whether steps 1 and 2 (or step 1 only) be implemented or not, and under which title 
(the  term  statistical  population  register  may  create  a  false  impression).  No 
commitment  for  further  steps  should  be  made  for  the  time  being.  In  parallel  to  the 
implementation  of  steps  1  (and  2),  the  benefits  of  supplementary  steps  might  be 
explored,  but  by  checking  all  possible  options,  including  those  which  might  be 
completely dissociated from steps 1 and 2. The present material should not serve as 
a basis for this work, however. 

184.  Furthermore,  the  SSO  should  investigate  in  how  panel  surveys  with 
households be handled best in terms of use of the possible use of the identification 
number,  in  order  to  be  prepared  for  the  labour  force  survey  to  be  carried  out  on  a 
quarterly or continuous basis.  

5. Capacity to Carry out Business Surveys 

185.  The  SSO  carries  out  a  great  number  of  business  surveys,  some  on  a 
comprehensive basis, some other on a sample basis. Only part of the sample based 
surveys  are  true  probability  surveys;  the  rest  are  selections  of  units  made  on  the 
base of prior knowledge in the SSO about the relevance of units for a specific survey. 

186.  The  main  reason  for  this  limited  use  of  probability  samples  is  to  be  found  in 
some shortcomings of the business register, especially concerning the size variable, 
essential for stratification, but which is not uniformly present in this register. This has 
lead to "satellite" business registers for different activities or surveys, which are kept 
and updated in parallel by various units of the SSO. 

187.  Data  collection  for  business  surveys  is  principally  done  by  mail.  The  main 
function  of  regional  offices  is  to  prepare  respondents  to  such  surveys  and  to  track 
missing replies. A lot of effort has to be devoted to finding out whether a business on 
the list is still active or has disappeared or moved. They are also responsible for data 
entry, but coding of difficult questions and editing is done centrally at the SSO. 

188.  The  statistical  programme 
the  date  when 
indicates 
questionnaires  are  mailed,  and  the  latest  date  by  which  the  response  has  to  be 
mailed back. Contrary to household surveys, participation of businesses in statistical 
surveys is mandatory. The law has an article by which penalties can be inflicted on 

for  each  survey 

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those  who  refuse  to  participate,  but  no  use  has  been  made  until  now  of  this 
possibility  because  of  inexperience  with  the  procedure  that  would  have  to  be 
followed. In spite of being mandatory, response rates vary between  40% and 90%, 
but  it  is  difficult  to  assess  how  much  is  true  refusal,  and  how  much  is  due  to  the 
inadequacies of the address lists (non-active entities). 

189.  Presently,  the  SSO  has  only  an  administrative  business  register.  This 
administrative  register  (which  includes  the  determination  of  the  activity  class 
according  to  NACE  Rev.  1  for  all  new  entities  and  the  assignment  of  a  business 
number) will be moved away from the SSO to another agency in the near future. The 
administrative  business  register  is  complete  for  legal  entities  and  the  public  sector, 
and  has  some  coverage  of  unincorporated  enterprises.  However,  it  lacks  some 
important  variables  such  as  size,  or  it  has  some  variables  like  activity  classification 
which  may  be  correct  in  the  beginning,  but  are  not  updated  from  administrative 
sources if the situation changes.  

In  its  master  plan,  the  SSO  foresees  to  create  a  statistical  business  register 
190. 
which  draws  on  the  administrative  register  and  other  administrative  records  for 
updating, but which can use in addition information from statistical surveys for those 
units which are included there in order to update those variables which are outdated 
in the administrative register, and to add those which are missing there. 

191.  The distribution of businesses is highly skewed: 600 companies cover 80% of 
the  value  added.  In  terms  of  employment,  and  especially  concerning  its  regional 
distribution, the impact of the SMEs should not be judged by this figure, however. 

192.  Another  important  source  for  business  statistics  and  the  statistical  business 
register will be the annual reports by all legal entities to the public body succeeding 
the  Payment  Agency  (Central  Register).  The  SSO  plans  to  have  regular  data 
transmission from this public body and build a warehouse for internal purposes, from 
which both national accounts data (production side) and structural business statistics 
can  be  generated  for  the  legal  entities.  Coverage  of  this  source  concerning  the 
unincorporated enterprise is partial only. 

193.  Extrapolation of business data to cover the whole economy is made by using 
total  employment  figures  from  the  labour  force  survey  (the  difference  between  the 
total  economy  and  the  part  covered  by  business  statistics  amounts  to  15% 
approximately). However, such an extrapolation is done only for GDP, and only rarely 
for sector specific economic statistics. 

Assessment  

194. 
It is recommended that the plan for a statistical business register undergoes a 
thorough revision and be designed so as to be able to play the role of the backbone 
for  all  business  surveys  effectively;  as  a  consequence,  all  satellite  registers  would 
become  redundant.  The  objective  should  be  to  comply  fully,  as  regards  definitions 
and content, with the EU-regulation, but not to enlarge the content beyond this limit 
(with  the  possible  exception  of  auxiliary  variables  which  facilitate  the  management 
and the updating). In order to have a homogenous starting point across all sectors of 
the  economy  outside  agriculture,  it  is  recommended  to  start  the  revised  business 
register with a systematic check for all unit presently in the administrative register, by 
sending  them  the  extract  from  the  register  and  asking  them  to  check,  modify  and 
complement the missing variables for a given reference date. Should the coverage of 
the  administrative  register,  even  after  being  completed  by  other  existing  sources, 
considered  to  be  insufficient,  it  is  recommended  to  carry  out  a  proper  economic 

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census as a starting point. Regional offices will have to contribute to a major extent to 
this activity, whether a economic census is necessary or not. 

195.  The  new  concept  should  make  clear  from  which  sources  the  statistical 
business registers is updated, and should examine sources not used up to now (e.g. 
postal  service;  electricity  and  water  suppliers).  It  may  also  foresee  that  this 
systematic  check  be  repeated  at  certain  intervals.  The  concept  should  also  fully 
examine the IT implications of this business register (unlike IT for surveys, registers 
ask for a transaction oriented type of database software).   

196.  As a consequence of having a revised business register, a plan should be set 
up  to  replace  the  non-probability  samples  by  stratified  probability  samples,  to 
reassess whether survey with comprehensive coverage can be replaced by stratified 
probability  samples,  and  to  examine  whether  surveys  which  are  separate  today  but 
have a partial or complete overlap in respondents could be merged (see B 1). 

6. Capacity to Produce Data on Public Sector Activities 

197.  The  review  tried  to  assess  the  capacity  of  producing  statistics  on  important 
public sector activities like education and health care, as well as on the public sector 
as a whole in terms of public finance statistics according to the new IMF manual. 

198.  The SSO is in charge of producing education statistics, It does not encounter 
any reporting problems from the various public bodies and institutions in this sector at 
the various levels of education. Reporting does not extend to expenditure, however. 
R&D  from  universities,  public  science  institutions  and  some  private  companies,  is 
also  covered.  The  SSO  publishes  the  standard  elementary  aggregates,  but  also 
indicators like pupil/teacher rations, enrolment rates etc. 

199.  The situation is more complex in the health care area. There is an old law (to 
be  revised  shortly)  by  which  all  the  public  bodies  in  this  area,  including  doctors 
outside hospitals and pharmacies, have to report extensively to the State Bureau of 
Health  Protection  for  both  administrative  and  statistical  purposes,  and  statistics  on 
hospitals, doctors, morbidity etc. are compiled from this source. Most of the statistics 
are  considered  to  be  internal  for  the  purpose  of  managing  the  system,  and  only  a 
small part is published as official statistics. This Bureau has produced indicators for 
the WHO, but it is not clear to them whether this consists official statistics or not. The 
new  law  is  likely  to  reduce  the  reporting  for  administrative  purposes,  and  will  leave 
some gaps to be filled by statistical surveys. 

200.  The  Health  Insurance  Fund  on  the  other  hand  is  in  charge  of  expenditure 
statistics  in  the  health  area.  This  covers  only  those  parts  which  are  either  directly 
paid by this agency or reimbursed (to less than 100%). Another authorised producer 
is in charge of statistics on traffic accidents. 

201.  No  authorised  body  in  the  statistical  programme  is  in  charge  of  producing 
public  finance  statistics  according  to  the  rules  of  official  statistics.  The  Ministry  of 
Finance publishes data from the national ex-ante budget and the corresponding ex-
post transactions, and considers this to be sufficient. It is only the national accounts 
sector  of  the  SSO  that  follows  the  area  to  the  extent  it  is  relevant  for  national 
accounts. Systematic statistics on expenditure of the public sector using the new IMF 
manual or the (old or new) COFOG classification are not available. Neither are good 
sectoral expenditure statistics for certain areas such as education, health, transport 

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etc.,  if  COFOG  deviates  from  the  organisation  structure  used  in  the  budget  of  the 
government. 

Assessment 

202. 
It  seems  that  nobody  feels  responsible  for  public  finance  statistics,  either  in 
the sense of the IMF manual or as an important complement to sectoral statistics like 
education,  health,  transport  or  environment.  This  is  to  be  corrected  urgently, 
especially because of the IMF SDDS requirements where public finance statistics are 
an important part. 

203.  Unless the Ministry of Finance explicitly agrees to act as a producer of official 
statistics in the full sense, it would be natural for the SSO to take a leadership role for 
this  cross-cutting  subject  area  of  public  finance  statistics,  and  to  include  the 
necessary items in the next annual update of the programme. The most urgent items 
are  certainly  the  SDDS  parts  of  public  finance  statistics,  and  the  implementation  of 
the new IMF manual. 

204.  The  various  sectors  and  departments  of  the  SSO  should  be  encouraged  to 
develop  a  concept  of  how  to  add  public  expenditure  statistics  in  their  respective 
areas  as  part  of  their  responsibilities.  Cost  elements  are  increasingly  important  as 
components  of  indicators  that  relate  cost  to  volume  of  input  or  output  in  the  public 
sector.  Such  information  is  of  high  importance  when  the  public  sector  undergoes 
important  changes,  and  should  be  produced  in  such  a  way  that  international 
comparisons are possible. 

205. 
In some areas like health or R&D, public expenditure is only one component. 
A major summary information is the total expenditure by all economic agents (net of 
double counting) as percentage of GDP. No such overall expenditure statistics exist 
in  any  area,  and  prompted  by  a  question  on  the  overall  health  expenditure,  it  was 
clear  that  no  agency,  the  SSO  included,  had  ever  thought  conceptually  or  even 
operationally  what  might  be  possible  ways  to  fill  this  gap.  Since  this  is  a  type  of 
statistics where different components have to be brought together and harmonised, 
with a high degree of complexity as it is the case for national accounts, it seems that 
only the SSO has the potential to act as a producer for this information. 

206.  The situation in non-monetary health statistics should be closely monitored by 
the  SSO,  since  important  administrative  reporting  channels  may  have  to  be 
substituted  by  new  business  surveys  in  the  future.  Furthermore,  only  a  very  small 
part  of  the  statistical  information  is  available  for  users  outside  the  responsible 
agencies. Given the importance of this area, it is recommended to develop actions as 
part of the statistical programme to bring health statistics closer to the level of official 
statistics  present  in  other  subject  areas.  A  major  improvement,  not  only  in  health 
statistics, but in all other areas where administrative data concerning natural persons 
are  an  important  source,  would  be  the  systematic  use  of  the  personal  number  in 
these files (see the comments under B3). 

7. Capacity to Produce Agricultural Statistics 

207.  Agricultural statistics is fully in the hands of the SSO. 

208.  The agricultural census, the first after 1969, will be used to revise the register 
of agricultural holdings by integrating the hitherto missing privately owned units. This 
register  will  be  based  on  the  statistical  law  and  therefore  be  only  accessible  by  the 

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SSO.  This  register  will  enable  the  existing  sample  surveys  to  become  more 
representative  and  to  allow  the  implementation  of  surveys  in  line  with  the 
requirements of the EU. 

209.  The SSO has set a target date (2003) by which its agricultural statistics should 
be in full compliance with the EU acquis (except for periodicity in cases where the EU 
acquis  is  asking  for  monthly  data).  The  main  missing  element  today  are  livestock 
statistics with higher periodicity than annual, and structural data from the census. 

210.  There  have  been  some  comparison  with  mirror  statistics  from  some  partner 
countries  as  regards  trade  in  agricultural  products.  Discrepancies  were  found  to  be 
high,  and  an  in-depth  analysis  has  shown  that  this  is  not  due  to  a  bad  quality  of 
Macedonian  external  trade  statistics,  but  that  they  may  have  more  to  do  with  the 
country coding in the partner countries. 

Assessment 

211.  With the postponing of the population census to October 2001, the timetable 
for  the  agricultural  census  will  have  to  be  adapted.  The  pilot  that  should  be  carried 
out in Autumn 2001 is planned to be realised at the end of spring 2002, and the full 
census  in  autumn  2002.  Good  quality  should  have  priority.  This  shift  will  also  have 
some  consequence  on  the  ambitious  target  date  for  the  full  compliance  with  EU 
requirements. 

212.  The capacity to produce agricultural statistics is satisfactory today, and will be 
very  good  in  the  future  once  the  census  is  completed  and  the  farm  register  will  be 
established.  Given  that  Macedonian  agricultural  policy  is  less  interventionist  and 
therefore less demanding for detailed statistics than the present CAP, the objective of 
being  in  full  compliance  with  EU  standards  in  such  a  short  time  is  a  remarkable 
expression of the SSO’s commitment to EU standards. 

213.  The  project  of  the  farm  register  should  be  made  more  visible,  and  prepared 
sufficiently in advance as regards sources for updating and the IT environment. 

8.  Capacity  to  Produce  Monetary,  Financial  and  Balance  of  Payment 
Statistics 

214.  As  regards  monetary  and  financial  statistics,  all  commercial  banks  have  to 
submit  balance  sheets  (and  other  information  such  as  interest  rates)  every  month. 
The National Bank establishes the consolidated account for the whole banking sector 
(National Bank included), following IMF and OECD standards. Results are published 
in both national currency and US dollars. There are plans to gradually substitute the 
monthly reporting on paper by data collection via e-mail. 

215.  Balance  of  payments  statistics  is  recent  and  started  directly  with  the  5th 
edition of the IMF BoP manual. It is based on data from different departments in the 
National  Bank,  and  as  from  1999,  on  a  new  survey  on  foreign  direct  investment 
(stocks and flows). Results on FDI are published by country, and by activity class. An 
important  source  is  a  kind  of  mandatory  transaction  reporting  system  for  all  banks, 
where each transaction is coded according to BoP relevant categories. 

In spite of this range of reliable sources, the errors and omission item in the 
216. 
BoP  is  almost  as  high  as  the  deficit  in  the  current  account.  The  analysis  by  the 

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National  Bank  is  that  the  biggest  source  of  error  is  in  expenditure  in  cash  by  non-
residents (mostly in DM). 

217.  Furthermore,  the  present  restrictions  in  capital  transactions  for  residents  are 
likely to gradually disappear in the near future. It is not possible for the moment for a 
resident natural person to have an account with a bank outside the country. The last 
steps  in  liberalising  transactions  will  affect  the  comprehensive  coverage  of  the 
sources used until now for BoP statistics. 

218.  As mentioned in  Part A, item 2.6, the publications of the National Bank are of 
excellent  appearance  and  quality,  and  everything  is  available  in  English.  There  is 
also a  website available to users. 

Assessment 

219.  The statistics of the National Bank are in the hand of professional staff, who is 
very well acquainted with the international standards and has regular contacts with its 
counterparts  in  other  countries.  It  is  remarkable  how  much  was  achieved  in  such  a 
short  time  in  an  area  where  there  was  absolutely  no  experience  prior  to 
independence. 

220.  Due  to  the  forthcoming  institutional  changes  in  the  financial  markets,  the 
sources used up to now, notably the transaction reporting system of the banks, will 
not  cover  any  more  the  whole  range  of  transactions  necessary  for  BoP  statistics. 
Data  collection  aimed  at  entities  outside  the  banking  sector  will  have  to  close  this 
gap. But this should be co-ordinated very closely with the SSO. 

221.  Closer  and  more  regular  co-operation  between  the  statisticians  from  the 
National  Bank  and  from  the  SSO  could  be  mutually  beneficial  also  for  current 
activities.  Examples  are  the  coding  of  the  NACE  category  for  FDI  statistics,  the 
comparison of the two sources used for the balance of trade in goods and in some 
parts  of  trade  in  services,  and  the  inclusion  of  National  Bank  statistics  in  the 
statistical yearbook, in the SSO’s publication on short term indicators and in the SSO 
output  database.  The  two websites should agree on a common and identical set of 
key economic figures. 

222.  The two units in charge of official statistics within the National Bank (Research 
Department and Balance of Payments Department respectively) are not in charge of 
activities  that  are  not  compatible  with  official  statistics.  This  is  a  good  sign  of  a  de 
facto protection of professional independence of statistics from the policy branches of 
the National Bank, but as with the SSO, no legal guarantee exists. 

223.  The  legal  base  for  the  new  survey  of  the  National  Bank  on  FDI  has  been 
published  in  Official  Gazette  of  Republic  of  Macedonia  from  1999,  and  it  is  not 
mentioned in the statistical programme adopted by the government. In the statistical 
programme,  there  exists  however  a  FDI  survey  which  is  to  be  conducted  by  SSO. 
This is a clear duplication of activities and leads inevitably to unnecessary response 
burden  for  companies.  Given  that  the  statistical  law  is  the  only  legal  base  for  the 
statistical  activities  of  the  National  Bank,  it  should  be  reminded  to  observe  this  law 
concerning procedures, methods and content (inclusion in the statistical programme; 
co-ordination with SSO). On the other hand, the SSO should refrain from carrying out 
a survey that is clearly duplicative before having discussed it with the National Bank 
(and,  eventually,  having  submitted  the  case  to  the  Statistical  Council  if  there  is  no 
consensus),  even 
the  statistical 
programme.  

implementation  would  be 

legitimated  by 

if 

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