Estimating Historical GDP of Asian Countries: Some Experiences from Indonesia, Thailand and Vietnam

Abstract

This research paper was written to draw attention to the main challenges that the "Project for Compiling Long-Term Economic Statistics for All Asia" must overcome when reconstructing national accounts in the past. These challenges became apparent from the experiences of national account reconstruction in Southeast Asian countries, particularly Indonesia. Part 1 demonstrates that when reconstructing national accounts based on existing data, it is more appropriate to use Gross National Income (GDPQ) based on production rather than Gross National Income based on income or expenditure. Part 2 describes the procedure for estimating data on Total Value Added (GVA) of major economic sectors in past national accounts using 'backward' extrapolation from time-series indicators of economic activity. Part 3 details the main issues related to the construction of the above indicators, and Part 4 considers the selection of years in which the estimated indicators can be linked to existing value-added data. Part 5 discusses the assumptions implied in the above estimation procedure, namely, the assumption that relative prices, the ratio of inputs to total output, and the proportion of items included in and excluded from production remain constant. Part 6 briefly touches upon the elements that constitute the difference between Gross Domestic Product (GDP) and Gross National Income (GNOM), and states that it is desirable to mention the impact of changes in the terms of trade. In the sections on Indonesia, Thailand, and Vietnam, the author describes the main problems encountered in the process of estimating the historical GDP of these three countries. The remaining two parts, while extending beyond the scope of the national accounting reconstruction project, focus on two issues that this project should consider: income distribution and the possibility of international comparisons of per capita GDP levels. Finally, a summary is provided of matters related to past national accounting reconstructions that are worth considering in this project.