External trade statistics 103

60. The external trade statistics (ETS) records exports and imports of goods and is compiled by the Department of External Trade Statistics from the NSC according to the methodological provisions of the Statistical Commission of the United Nations International Trade Statistics: Concepts and Definitions, UN, New York, 2000.

61. The compilation of the ETS is based on the following monthly data sources:

a) Data base of freight customs declarations (FCD) and customs paying in slip (CPS) received from the State Customs Service;

b) Additional data from reports of enterprises on export and import of gas, electric power and oil as well as data on local trade over the border of livestock and products of slaughtering;

c) Once a year, in June, the estimated volume of export of selected types of agricultural products, not observed by customs statistics, is added to the total of export of goods for the year.

62. The foreign trade statistics is conducted according to Commodity Nomenclature of External Economic Activity (CNEEA) of the Eurasian Economic Community based on the Harmonised System (HS) and the Standard International Trade Classification.

63. In 2008, a bilateral agreement on cooperation and exchange of information was signed between the NSC and the State Customs Service. According to this agreement, the State Custom Service sends the monthly databases of cargo customs declaration (CCD) to the MCC for quality check and validation. The CCD and CCR are then merged and supplemented with information from monthly reports of enterprises on export and import of electricity, natural gas and oil, export of livestock and meat.

64. The ETS keeps record of exports and imports on the basis of “general” foreign trade accounting system, under which all goods entering and leaving the economic territory of the country are recorded. The measurement of the value of exported goods is made at FOB prices (the value of good, including insurance and shipping costs at the Kyrgyz

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border) and imported goods at CIF prices (the value of the good, including insurance and shipping costs at the Kyrgyz border).

65. Monthly data with cumulative total are available 47 days after the reporting month and preliminary annual data 50 days after the reporting year. Monthly ETS for the previous year are revised in the 1st quarter of the next year. Data are published monthly, quarterly and annually in various NSC publications and are posted on the website along with regularly updated metadata.

66. It is common and somehow expected that mirror exercises reveal asymmetries in recorded flows of goods between two partner countries. . In ETS, differences between “mirror” figures can be generated by the application of the international methodology itself. The latter specifies for example that exports should be valued in FOB (‘free on board’) terms, whereas imports should be expressed in CIF (‘cost, insurance and freight’) value. Other sources of asymmetries are due to differences in the methodologies adopted by the partner countries. No strict single methodology for producing ETS. International recommendations by the United Nations exist, but countries frequently adopt methodologies that deviate from them slightly, with a greater or lesser impact on data comparability

67. According to the 2010 annual work plan, the NSC conducted a mirror exercise on external trade statistics with main partner-countries based on 2009 official figures: Russia, Ukraine, Kazakhstan, Tajikistan, Belarus and China. The mirror exercise was performed on volume and value of imports and exports flows of goods at 4-digit level of Commodity Nomenclature of External Economic Activity (CNEEA).

68. The two tables hereunder show the discrepancies in external trade statistics between the Kyrgyz Republic and each of the 6 partner countries selected for the mirror exercise (million US dollars):

69. Table 2: Exports from Kyrgyzstan to partner-countries in 2009 in million US dollars

Partner country Export recorded in Kyrgyzstan Import recorded in partner-country Difference (+,-) Kazakhstan 140,6 116,5 +24,1 Russia 185,8 366,8 -181,0 China 19,4 48,5 -29,1 Uzbekistan 167,6 20,9 +146,7 Belarus 3,5 3,2 +0,3

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70. Table 3: Imports in Kyrgyzstan from partner-countries in 2009 in million US dollars

Partner country Import recorded in Kyrgyzstan Export recorder in partner- country Difference (+,-) Kazakhstan 340,0 390,5 -50,5 Russia 1090,4 915,5 +174,9 China 623,6 5227,5 -4603,9 Uzbekistan 111,7 114,9 -3,2 Belarus 74,1 65,7 +8,4

71. For exports as well as for imports, asymmetries with all partner-countries are relatively important. However, with China, discrepancies between recorded exports and recorded imports are huge, both in relative and absolute terms. According to the 2009 mirror exercise, China reported 9 times more exports of goods to Kyrgyzstan than Kyrgyzstan reported as import from China. The asymmetry amounted to USD 4,600 millions which correspond roughly to 40% of the total GDP. Discrepancies are observed almost for all commodity items, but are more important for consumer goods: shoes, clothes, fabrics, bed linen, and kitchen utensils.

72. The assumption according to some international studies is that Chinese data are more reliable. Indeed, it seems that consumption goods are imported illegally from China and are therefore not recorded by the Kyrgyz State Customs Service. The assumption was confirmed in the course of further surveys conducted in the border zones between both countries. Most of the goods not declared are then delivered to markets in the Kyrgyz Republic, mainly on transit to third countries or for final consumption in the country. If non-recorded imports from China to Kyrgyzstan are mainly on transit and therefore do not affect the macro-economic balance between resources and uses (national accounts), this business must generate important income in the border zone and ultimately illustrate the tremendous challenge for the NSC to incorporate estimation on the non-observed economy into official statistics.

Assessment:

73. The NSC is regularly held responsible for major asymmetries in the ETS. An international study, performed by the National Bank of the Kyrgyz Republic, confirmed that the issue is not of a statistical nature. In order to shun any doubts about the methodology and quality of Kyrgyz external trade statistics, a detailed mirror exercise between China and the Kyrgyz Republic should be undertaken by a group of experts. For each detailed position of the HS a description of the scale of the discrepancies that could be reasonably explained by differences in methodologies between the partner countries should be provided.

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74. In the future, such joint mirror exercises could be undertaken with other major partner countries.

75. Further improvement of the ETS could be foreseen for the calculation of price index and volume of exports and imports and the estimation of seasonally adjusted external trade statistics. In that respect, all ETS should be compiled on a discrete base.