“STATISTICS FOR ECONOMIES BASED ON NATURAL RESOURCES”
20-22 August, 2012
Ulaanbaatar, Mongolia

  The Ulaanbaatar city group on “Statistics for economies based on natural resources”, initiated jointly by Mongolia and Australia, was endorsed at the 43^rd Session of the United Nations Statistical Commission (UNSC).

  The First meeting of the Group was successfully organized during 20-22 August, 2012 in Ulaanbaatar, Mongolia.  The meeting was attended by 21 representatives from 13 countries and 3 international organizations including:

             - Australia
             - Azerbaijan
             - Brazil
             - People’s Republic of China
             - Kazakhstan
             - India
             - Iran
             - Lesotho,
             - Madagasgar
             - Mexico
             - Mongolia
             - Russian Federation
             - Vietnam
             - Interstate Statistical Committee of the CIS  
             - United Nations Industrial Development Organization and
             - United Nations Development Program

Delegates actively participated in discussions and as the outcome of the First meeting the Terms of Reference and Work Schedule of the Ulaanbaatar city group were adopted.

The work schedule of the Group will consist of four work streams, including:

• Work stream 1: Develop a harmonized system of standard indicators for data collection
• Work stream 2: Assess the impact of mining industry on economies and develop methodological and practical recommendations on how to demonstrate the impact on official statistics
• Work stream 3: Develop methodologies and indicators for assessing the impact of mining industry to the social sector
• Work stream 4:  Develop practical recommendations for measuring the impact of the mining industry on the environment

Moreover, delegates have discussed the establishment of Steering Committee and Expert Group of the Group. The Steering Committee of the Ulaanbaatar city group will consist of Australia, Azerbaijan, Brazil, China, India, Iran, Kazakhstan, Madagascar, Mongolia and Russian Federation. The members of the Steering Committee have agreed that the Committee will be co-chaired by Australia and Mongolia and that the First meeting of the Committee will be organized in 2013 in Sankt-Petersburg, Russian Federation. 

The Expert group of the city group will be headed by Australia and it has been agreed to nominate experts for this group by September 5, 2012. The Expert group welcomes not only statisticians but also representatives from government and ministries, private and public sectors, academicians and researchers.

Purpose:

The group intends to:

(a) play a leading role in developing methodological and practical guidelines and recommendations by pooling best theoretical and methodological practices, in order to rationally track mining industry activities and accurately measure the industry’s contribution to the economy and its impact on other social sectors and the environment;

(b) serve as a forum for sharing the expertise of national and international statistical organizations and other interested parties;

(c) collaborate with the United Nations and the specialized agencies on developing and improving statistical methodologies and standards for statistics on natural resources and provide support in this area;

(d) develop practical manuals and recommendations based on best practices that ensure coverage, reliability, accuracy and relevance of statistical data to support the efforts made by countries with large mining sectors to implement the System of National Accounts 2008, the System of Environmental-Economic Accounting and the revised Framework for the Development of Environmental Statistics.

Year organized: 2012

Participants: To be decided

Meetings:

The first meeting of the city group is intended to be held in August, 2012, in Ulaanbaatar, Mongolia.

Topics considered:

(a) The impact of the mining industry on a country’s economy should be articulated and analyzed. In addition to carrying out their main activities, mining enterprises also engage in the development of infrastructure, including roads, transportation and communications, as well as the service sector. Some of these activities are not currently classified under the mining sector. An assessment of the contribution made by the mining sector could include these indirect contributions;

(b) The mining sector plays an important role in total production and the unit price of mining products could affect the assessment of the contribution to the national economy. The price of mining products often fluctuates significantly, influencing estimates of the gross domestic product (GDP) at current and constant prices. Therefore, a methodological assessment should be carried out on the impact of price volatility;

(c) Considering that investment is one of the components of GDP estimates, the issue of how to accurately estimate foreign direct investment should also be addressed. There is an urgent need to define an efficient methodology for collecting data on the capital expenditure of mining industries and for information on foreign direct investment for foreign investors;

(d) Indicators for assessing the actual gains made from investment need to be identified;

(e) Methodologies and recommendations for determining the size of the informal mining sector are needed. Due to the specific nature of the mining industry, workers engaged in the informal mining sector are likely to be constantly migrating, moving from site to site, which could limit their capture in household surveys. As already mentioned, the price of mining products in the formal sector is high, and the cost of such products in the informal sector, within which mining represents a large share, is also estimated to be large. Therefore, the issue of how to calculate the economic contribution of the informal mining sector should be addressed;

(f) Some mining products are being handled by a single company, which raises the issue of how data confidentiality should be addressed;

(g) The issue of the classification and identification of activities of transnational companies for the accurate estimation of GDP and associated income flows could also be addressed;

(h) An additional issue that could be addressed is that of the enormous impact of the mining sector on the social sectors. Measuring the influence derived from the benefits arising from and the income generated by the mining sector on the living standards (conditions, nominal and real income) and poverty profile of the population is important. The spillover effects of the mining industry should be identified and studied.

Products: To be decided

Planned activities:

(a) Assess the impact of the mining industry on economies and develop methodological guidelines and practical recommendations on how to demonstrate the impact in official statistics;

(b) Develop methodologies and indicators for measuring the benefits provided by and the influence exerted over other social sectors by the mining industry;

(c) Develop practical recommendations for measuring and identifying the impact of the mining industry on the environment;

(d) Develop a system of standard indicators for data collection.