Controversy about the implicit economic calculation of GDP

News & Events

Controversy about the implicit economic calculation of GDP

Prime Minister Nguyen Xuan Phuc has just signed an approval of an unspecified economic sector statistical scheme.

"Un-observed economic sector" includes 5 activity groups: underground economy; illegal economy; informal economy has not been observed; Household self-sufficiency, self-consumption and economic activity were overlooked in the statistical data collection program.

Underground economy is an actual economic activity that is taking place but is intentionally hidden to avoid paying taxes and paying social insurance, implementing state regulations on minimum wage ...

Underground activities also do not have to carry out legal and administrative procedures such as financial reports and statistical reports. Not to mention in the underground economy, there are illegal economic activities, economic activities are prohibited by law.

Sharing with VnExpress, Dr. Vo Tri Thanh - former Deputy Director of the Central Institute of Economic Management (CIEM) said that the statistics on the above economic activities into GDP is necessary, although not easy.

In the 90s of the last century, the statistics agency calculated, it is estimated that the scale of underground economy is about 10% of GDP. 10 years ago, there were also assessments of agencies and organizations that measured by the amount of cash outside circulation, showing that the value of this area increased by 20-40% of GDP. "Of course these are the measurement results of different organizations, giving unified data. But this shows that the scale of underground economy changes quite quickly," he said.

Hàng quán kinh doanh của các hộ gia đình nằm trong diện khu vực kinh tế chưa được quan sát mà cơ quan quản lý muốn đo đếm. 

Hàng quán kinh doanh của các hộ gia đình nằm trong diện "khu vực kinh tế chưa được quan sát" mà cơ quan quản lý muốn đo đếm. Ảnh: Giang Huy.

However, it is not easy to measure the "unobserved economic region" without clarifying the concept of informal sector as well as using any method to control them ... Mr. Nguyen Bich Lam himself - The Director General of the General Statistics Office (Ministry of Planning and Investment) has shared in previous times that it is difficult to collect information in a formal way due to different views and understandings.

However, according to Mr. Lam, the informal economy is only one of the five elements of the economic sector not observed. The statistics agency has collected and investigated for many years with 3 components including informal economy (such as individual business households without business registration, motorbike taxi ...); activities of self-consumption households; Economic activity is omitted due to statistics agency's data collection program.

However, under his view, expert Bui Trinh expressed doubts about the measurement of the underground economic area without a complete, complete management system and not yet recognized by the management agency. "Not to mention whether it is possible to update these data into GDP, even quantifying underground activities is impossible. If these elements are recognized, the governing body acknowledges underground activities. like corruption, hands-on, smuggling, prostitution ... existence and long ago have forgotten it, "expert Bui Trinh said.

Mr. Trinh, for example, once the underground activities have not been recognized and the two-book accounting status: tax reports and internal affairs, the statistics of these activities are not easy. Even in developed countries, the statistics of underground and illegal economic areas are also difficult. Countries that have not observed the economy in GDP such as Australia, Mexico ... also only quantify missed activities of self-consumption, self-sufficiency, economic activity.

Besides, Mr. Trinh said that if finding ways to measure underground economy only to increase GDP scale, prove that the ratio of public debt is lower, overspending / GDP is not large ... then it will not bring any benefits, if not really determined to overcome problems of public debt, revenue and expenditure, especially budget spending.

The best way to manage underground economy, Trinh said, is that the Government creates favorable conditions, creates a more transparent and long-term business environment for businesses and people. "While still in the hands of corruption, the underground economy still has a growing geographical area and cannot be counted, let alone quantify it to put it into GDP," he said.

Nguyễn Hoài

Customer & partner
LONG MINH TECH CO., LTD

TRỤ SỞ CHÍNH

 19/5 Đường số 4, P.Bình Hưng Hòa, Q.Bình Tân, TP.HCM

 0282.2537 656 - 0906.60 84 60

 info@longminhtech.com

 www.longminhtech.com

CHI NHÁNH HÀ NỘI

 Lô 298 KĐT Xala Hà Đông, P. Phúc La, Q. Hà Đông, TP.Hà Nội

 0282.2537 656 – 0906.60 84 60

Follow us
Facebook Google Twitter Skype Zalo
1097736 Online : 3

Designed by Vietwave

Hotline