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1993 SNA Update Information - Country comments for issue:
Private/public/government sectors delineation (sectorization boundaries)

Issue description
Issue description in [English] | [French] | [Russian] | [Spanish]
According to the 1993 SNA, two factors determine whether a corporation or non-profit institution is controlled by government and thus falls into the public sector. One factor is the degree of control exercised by government. Concern has been expressed about the “mainly financed” phrase cited in respect of non-profit institutions. The determination of control in respect of special purpose vehicles (SPVs), notably created in the context of public private partnerships (PPPs) or securitization, is not always clear cut. The second factor is about “economically significant prices.” Concern has also been expressed over possible ambiguity in this concept. Is it possible to give greater content to the description without going so far as to prescribe a fixed proportion of costs to be covered by sales?
Country comments
Number of country comments for selected issue:44
  Date postedSourceComment
 11/27/2006AustraliaWe agree with the recommendations made by AEG at its Jan-Feb 2006 meeting.
 10/10/2006SwedenAgreement with proposal
 9/29/2006Bank of KoreaWe agree that further descriptions are required for quasi-corporations.
 9/15/2006United KingdomWe fully support the recommendations made by the AEG, which deliver valuable extra clarity on delineation...
 9/15/2006LatviaAfter deep discussions and expert consultations we basically support the 1993 SNA Update Issues.
 8/25/2006Central Bank of EcuadorEl Banco Central del Ecuador se encuentra realizando un trabajo de sectorización de la economía, para lo cual se han tomado en consideración varios aspectos, entre los que se puede mencionar:
• Destino de la producción: determinar si la producción de bienes y servicios de las unidades institucionales es de mercado o no.
• Fuentes de financiamiento: identificar el origen de los ingresos de las diferentes unidades institucionales, para el financiamiento del negocio (composición de pasivos y patrimonio para financiar los activos) y, fuente de ingresos para financiar los gastos de la actividad (ingresos y gastos).
• Control de las operaciones: determinar la persona natural o jurídica que realiza el control de la unidad institucional a ser clasificada,(mayor del 50% de capital). El control ha de entenderse como la capacidad para determinar la política general o el programa, mediante el ejercicio de del derecho a nombrar sus directivos, quienes son los responsables de su gestión general.
• Ámbito de acción, verifica la existencia reconocida por ley y estados financieros propios. La consistencia del objeto y actividades permitidas en el marco legal y normativo, con el sustento de la definición teórica del Sector en el que se incorpora a la Unidad Institucional.
• Riesgo de quiebra: verifica quién asume las pérdidas en caso de quiebra de la unidad institucional, si lo hacen los contribuyentes o si tienen algún respaldo estatal (Criterio complementario, para identificar si son públicos o privados los Fondos de Pensiones que se constituyen con personería jurídica propia, desvinculándose de instituciones públicas).
• Centro de interés económico: verifica si el centro de interés está dentro o fuera del territorio nacional. (Nacional / Resto del Mundo)
 8/18/2006ItalyExperiences done in the framework of the EDP procedure, analysing ESA manual could be useful in the revision of the SNA.
 8/18/2006USAWe agree with the recommendations of the AEG.
 7/28/2006Vietnam- If the unit is controlled by a government unit or another public corporation it is part of the public sector. If not, it is neither a general government unit, nor a public corporation (part of the public sector). The public unit dispose of all or most of its output at economically significant prices.
- The distinction between government and public corporation might be based on a legal status or whether production takes place at economically significant price. We think the 50 percent of the costs is high enough to distinguish between government and public corporation.
 7/28/2006FranceL’INSEE approuve de façon générale les orientations prises en ce qui concerne la délimitation du secteur des administrations publiques. Ces orientations rejoignent celles qui sont déjà adoptées en Europe, et qui ont prouvé leur pertinence.
 7/28/2006LithuaniaIn general we support the recommendations.
 7/27/2006EgyptWe agree with the AEG recommendations. The list of indicators is very helpful.
 7/24/2006GermanyThe conceptual recommendations adopted by the AEG are reasonable and particularly recommendation b) is fully supported.
 7/24/2006SwitzerlandWe support the outcomes of the AEG discussion with the following comments (including two reservations, see 2 and 5 below):
1. A decision tree is a simple, but useful tool. We strongly support its inclusion both in the chapter on government and in the chapter on the public sector (some confusion appeared in the meeting report).
2. The list of indicators is helpful, even though criteria 5 “Golden shares and options” and 7 “Control by a dominant customer” are not very explicit. In our view, these two indicators are not central and could be deleted as their inclusion may add some confusion. It should clearly be stated in the SNA that the list is indicative (versus prescriptive), and –as suggested by the AEG- indicators should be used in conjunction with each other.
3. It could be useful to add a reference to the International Public Sector Accounting standards (IPSAS) issued by the International Federal of Accountants, where it is stated that a government controls a corporation if it has the power to govern its financial and operating policies so as to benefit from its activities.
4. The difference in the definitions is relevant to corporations for which the government involvement is as a fiduciary or trustee, such as for autonomous pension funds for government employees. The classification of such units in the SNA is not entirely clear and the proposed change to the SNA definition of control will result in the classification of these particular units to the private sector. In the Swiss National Accounts this classification is already in place.
5. We do not share the view that the 50% rule may result in a unit flipping from market to non-market (or vice versa), given the fact that we believe that the rule should be observed over a longer period of time. A change in one year should thus not lead to a change of classification as it would not be considered as structural. We are conscious of the ambiguities linked to setting a threshold, but are uneasy with the current proposal which does not provide any firm guidance.
 7/10/2006DenmarkAgreement
 2/23/2006South African Reserve Bank We appreciate the research being done and will provide further comments once the final report has been analysed.
 1/27/2006Central Bank of El SalvadorNo estamos de acuerdo con utilizar un criterio único para la clasificación. Para esta delimitación sectorial, es importante considerar el origen del financiamiento, las funciones que desarrollan, el marco legal que las rige y el destino de la producción. Una razón única y estricta de 50% de cobertura de costos no permitiría un análisis más exhaustivo sobre las actividades realizadas y su mejor ubicación o clasificación. Es importante señalar que las empresas públicas son autónomas en sus decisiones y en sus recursos, el gobierno requiere de una aprobación legislativa de su presupuesto.
 1/17/2006Central Bank of West African States cb_WesternAfricanStates36;
 1/17/2006Central Bank of ChileConsideramos que el SCN93 es claro en la delimitación de estos sectores, pero estamos de acuerdo en incorporar en la nueva versión del SCN otros aspectos que permitan una mejor definición de las fronteras entre estas actividades, a través de casos prácticos, un listado de situaciones u otra forma que ilustre una mejor toma de decisión en la clasificación de las instituciones o empresas pertenecientes a estos sectores.
 1/3/2006CubaDebe profundizarse en el tema de la frontera de la sectorización, que está estrechamente vinculado con la propiedad y la producción de mercado y no mercado; la clasificación en uno u otro lugar de determinada actividad y producto, repercute directamente en los niveles de los macroagregados y su aporte. Un ejemplo de lo anterior sería: La producción de servicios individuales no de mercado
El SCN como instrumento de medición para una economía de mercado, incorpora otros flujos que se encuentran dentro de la frontera de producción y que no tienen como destino el mercado. En aquellos casos en que no se cuenta con un precio en el mercado, se recurre a otras metodologías de cálculo o en particular al costo de producción, tal es el caso de los servicios individuales sociales gratuitos.
La incidencia de estos flujos será distinta de acuerdo con las características de la economía y la valuación utilizada en cada caso. Las transacciones de no mercado son valuadas por los costos de producción, mientras otros flujos “imputados” del Sistema se valoran al precio de mercado de productos similares.
La relevancia de estas metodologías de valoración del producto es que afectan el nivel del PIB de la economía, por incidir al mismo tiempo en los conceptos de valor agregado y gasto final y siempre serian casos relevantes de análisis para una economía, dependiendo de su nivel de desarrollo o de su estructura económica.
Conforme los servicios de viviendas ocupadas por sus propietarios, de no imputarse una producción al precio de mercado de productos similares, tergiversaría las comparaciones intertemporales e interespaciales, la producción de servicios sociales individuales de mercado y de no mercado tergiversan el análisis de los resultados económicos, igual producto valuado por diferentes metodologías aportan al PIB diferentes magnitudes.
Proponemos que las transacciones valuadas por el método de los costos sean revisadas, dado que en lo fundamental son los servicios de educación, salud, cultura y deporte, todos ellos de gran repercusión social y cuyo valor económico es mayor que el costo incurrido en los mismos, fenómeno que se acrecienta con el paso hacia una sociedad del conocimiento.
 12/22/2005Serbia and MontenegroWe agree with the suggested changes.
 12/14/2005FranceL'INSEE attendra la version définitive du texte pour se prononcer.
 12/13/2005CanadaCanada supports the inclusion of a chapter and annex on general government and public sector issues.
Canada is very supportive of the work being done here for inclusion in SNA. A decision tree is used for these purposes in Canada and has helped guide the difficult job of classifying borderline entities. We will review the paper by Jean Pierre Dupuis.
 12/12/2005Bank of KoreaWe are in agreement with the recommendations of the AEG.
However, we think that many specific and practical examples need to be shown in the revised SNA, to cope with various situations.
 12/9/2005European Central BankThe recommendations concerning the delineation between the public and the private sector jcontribute mainly to the clarification of the SNA and of the ESA; the conclusions made on the definition of the government sector are in line with the 1995 ESA and Eurostat's Manual on Government Deficit and Debt
 12/9/2005RussiaRosstat largely supports the recommendations on the updating 1993 SNA, made at the July 2005 meeting of the Advisory Expert Group on National Accounts.
 12/5/2005DenmarkAgreement
 12/2/2005NetherlandsWe generally support the recommendations of the AEG.
 12/2/2005AustraliaAustralia does not have any concerns with the decision to produce a revised version of the paper to clarify issues, for e-discussion.
In particular, we support the detailed clarification of the concept of control and its application to delineate the public-private sector boundary. We support the additional text proposed for inclusion in the SNA as it elaborates on the concept of control without being rules-based or prescriptive. We also note that the control of NPIs as proposed will in fact align it with the UN Handbook on NPIs and we support this strongly.
On the issue of the delineation of the market/non-market sectors based on the concept of economically significant prices, we note that the additional guidance proposed considerably advances the current SNA. Again, these proposals are neither rules-based nor prescriptive and Australia supports this strongly.
 12/2/2005TurkeyWe agree with the recommendations made at the July 2005 meeting of the Advisory Expert Group on National Accounts.
 12/1/2005GermanyWe are pleased to express our agreement with the proposal.
 12/1/2005NorwayWe appreciate the efforts to give more guidance on this difficult question. Our further comments shall await the final paper for the next AEG meeting.
 12/1/2005BrazilWe have no comments in the moment. For a better reflection we are waiting the latest versions of the papers presented to the AEG.
 12/1/2005Central Bank of NicaraguaEstamos de acuerdo con el árbol de decisión presentado ante el grupo consultivo de expertos para clasificar una unidad institucional que pertenece al sector público como gobierno general o empresa pública.
Se necesitan indicadores de control similares a los propuestos al grupo de expertos, para identificar las empresas y las ISFL de mercado de aquellas de no mercado, aunque se mantiene la discrecionalidad al momento de establecer cuántos de los indicadores son suficientes y necesarios para establecer el control de las mismas.
En lo referente a los precios económicamente significativos, queda pendiente establecer que porcentaje de sus costos deben ser cubiertos por las ventas.
 12/1/2005IranWe agree on all AEG suggestions except for suggestion No. 6 due to the difficulty in calculation of the cost of capital services. In this respect, we follow the recommendations proposed in the SNA 1993.
 12/1/2005United KingdomWe support the proposals put to the AEG and think that the further revised paper now available should be used as the basis of improved definitions in the revised SNA.
 11/30/2005Slovak RepublicSO SR give support to AEG recommendation related to ongoing effort for clarification of issue.
 11/30/2005Palestinian Central Bureau of StatisticsPCBS support the recommendation to include the updated SNA a chapter and annex to covering general government and public sector questions.
 11/30/2005ItalyIstat fully agrees with the recommendations made at the July 2005 meeting of the Advisory Expert Group on National Accounts.
 11/30/2005State Bank of PakistanWe have gone through recommendations made by Advisory Expert Group (AEG) and fully agree with them.
 11/30/2005State Bank of VietnamThe distinction between government and public corporation might be based on legal status or whether production takes place at economically significant price. We agree with the ESA 1995, having established a rigid rule of 50 percent of the cost to be covered by sales is high enough.
 11/29/2005People's Bank of ChinaI agree with your improvements and have no other suggestions.
 11/25/2005VietnamThe distinction between government and public corporation might be based on legal status or whether production takes place at economically significant price. We agree with the ESA 1995, having established a rigid rule of 50 percent of the cost to be covered by sales is high enough.
 4/11/2005PhilippinesCan you include some guidelines on dividing between general government and public corporations? There are cases where government provides equity contributions to government corporations. Moreover, in the case of government corporations, how are these further classified into industries?
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