kiribati balance of payments (bop)
TRANSCRIPT
Kiribati
Balance of
Payments (BOP)
Manual
2
Kiribati Government
Kiribati
Balance of
Payments (BOP)
Manual
Economic Statistics Section National Statistics Office Ministry of Finance and Economic Planning Bairiki, Tarawa May 2011
3
Foreword
This manual or guide is the second statistical reference material that is being produced
with the financial support of the EU. The purpose and objective is similar to the first one
(i.e. the GDP manual) which is basically to provide statistical reference materials that are
written in the local context and which are more relevant and easier to use by young
statisticians in Kiribati. This is part of the larger and ongoing exercise which is to build up
the capacity of the National Statistics Office over the coming years. The balance of
payment statistics (BOPS) is an important set of statistics that shows the transactions
taking place between Kiribati and the rest of the world, or between the residents of
Kiribati and non-residents. Given the dependency of Kiribati on imports, foreign aid,
investment income, fishing licenses, remittances, etc., this set of statistics is critical for
planning and policy formulation. As a matter of fact some have argued that a better
indicator of economic growth in Kiribati is the gross national product (GNP) or gross
national income (GNI), and not gross domestic product (GDP)—and this is simply
because GNP (or GNI) captures, in addition to domestic production, the value of labour,
property and investment income from abroad, i.e. BOP items. Generally GNP in Kiribati
is twice the size of GDP, which really shows the importance of GNP over GDP as a
measure of the economy and wealth of the country, at least in Kiribati. We do note that
the first guide on the GDP compilation has been used by many people and constitutes
an important reference document for national accounts compilers and we anticipate
that this manual will also serve a very important and useful purpose within the National
Statistics Office. We anticipate also that planners and policy makers would find the
manual an interesting and useful reference material on one of the most important
statistical series routinely produced by the National Statistics Office. In order to improve
future editions of the manual, views and comments on this manual are welcome, and I
suggest that these are directed to the National Statistics Office, a division within this
ministry. Again I want to register here my appreciation to the EU for providing financial
support to this statistics project, and to our local consultant Iete Rouatu, and the NSO
staff who have worked hard to produce this manual and the BOP statistics tables
attached in the annex.
…………………………..
Atanteora Beiatau
Secretary of Finance and Economic Planning
4
Acknowledgement
The balance of payments statistics is one of the key statistical series that the National
Statistics Office (NSO) compiles regularly and it is also one of the more complex and
difficult statistical series in the office and we extend our thanks to Dr Iete Rouatu for
writing this manual, and for conducting the training on it. Dr Rouatu is the former
Republic Statistician who started most of the economics statistics now routinely
collected and compiled by the NSO. Dr Rouatu also wrote the first manual on GDP
compilation in 2010 and this manual is now used extensively by the national account
statisticians and people who want to know and understand what is GDP, and how it is
being calculated here in Kiribati. We hope that this BOP manual will become a very
useful reference material as well and we encourage people to send their views and
comments back to this office so that we can improve future editions of this manual. We
want also to extend our gratitude to the EU for funding this project—as a matter of fact
this is the second time EU assisted our office in developing its capacity in the area of
economic statistics. Last year the EU provided also funding for the production of the
GDP compilation manual—this is now being used by NSO staff as well as interested
users from outside the NSO. Our appreciation also goes to Mr Teriba Tabe, the EU
resident officer here in Kiribati, and to Mr Atanteora Beiatau, the secretary of the
ministry of finance, for their encouragement and ongoing support to the development
of economic statistics in Kiribati. We all know that more and better statistics are needed
in order to have proper and efficient planning and policy formulation and in this regard
we encourage our own government and its development partners to continue
supporting this kind of capacity building approach, i.e. producing local manuals—
manuals that are practical and appropriate to Kiribati, and conduct follow up trainings
on such manuals. I encourage my staff to make use of the manual because it contains
comprehensive and practical guidelines that are specifically geared towards the Kiribati
context. Lastly I want to thank three of my staff who have worked closely with the
consultant on this project, Reeti Takirua, Aritita Tekaieti, and Tiriara Redfern—I trust
that they have learnt and benefited from the project.
…………………………….
Tekena Tiroa
Republican Statistician
5
Author’s remarks
I want to thank the Ministry of Finance, in particular the National Statistics Office, for
the opportunity to work on this second assignment on the economic statistics series. I
also extend my humble gratitude to the EU for providing funding support to this project.
This is the second time the EU has provided funding support in the development of
economic statistics in Kiribati—one was last year when I worked on the GDP manual. As
I said in my introductory remarks in the GDP manual, writing up statistical manuals or
simply documenting what the National Statistics Office (NSO) has done in different
statistical areas, is something I have always wanted to do, even when I was working in
the government, because I know without proper documentation and guiding manuals,
new or young statisticians would find it difficult to continue the works of their ‘older’
and outgoing statisticians. I did not have time to do a lot of documenting myself when I
was working in the NSO because of other commitments and the shortage of staff. We
managed however to produce one bulletin on the balance of payments (BOP) and one
on the government finance statistics (GFS). The first bulletin on the BOP however was
written in 1995 and follows closely the BPM5 manual, and while it served a very useful
purpose that time, there has been marked changes in technology and financial systems
in the world since then, including the publication of the 2008 BPM6 manual, and these
changes need to be reflected in our local manual as well—hence the purpose of the
present manual. As a matter of fact Geoffrey Robertson from PFTAC, Suva, during his
visit to Kiribati last year, strongly recommended that an updated version of the 1995
bulletin on the BOP be made in line with the new BPM6 format. This project therefore is
very much in line with the IMF recommendation as well. I have enjoyed working on this
project and I sincerely hope that this report or manual is useful to the statisticians in
Kiribati and to other users/readers who want to know more about the Kiribati balance
of payments statistics. I encourage users and readers alike to send their views and
comments on the manual to the National Statistics Office so that future editions of the
manual can be improved.
………………………
Iete Rouatu
(Private consultant on statistics, economics, and development issues)
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Contents
Foreword…………………………………………………………………………………………………………………….3
Acknowledgement …………………………………………………………………......................................4
Author’s remark…………………………………………………………………………………………………………..5
Contents………………………………………………………………….…………………………………………………..6
List of Abbreviations……………………………………………….……………………………………………………7
Introduction………………………………………………………….…………………………………………………..…8
1. Brief history of the BOP manuals…………………………………..……………………….................9
2. The development of the BOP statistics in Kiribati..……………………………………………….11
3. The purpose and use of BOP statistics………………………………………………………………….14
4. Structure and main accounts of the BPM6……..…………………………………………………….16
5. Kiribati BOP: Structure, scope, and data sources……………………………………………….…19 Current account………….…………………………………………….. ……………………………………
5.1. Goods Account………………………………………………………………………………………………….20
5.2 Services Account…………………………………………………………………………………………..……21
5.3 Primary Income Account………………………………………………………………………………..…23
5.4 Secondary Income Account……………………………………………………………………………...24
5.5 Capital Account…………………………………………………………………………………………………25
5.6 Financial Account………………………………………………………………………………………….….26
5.7 International Investment Position IIP Account…………………………………………………..27
6. Important concepts, terms, and items in the Kiribati BOP…………………………………….29
7. Future direction..………………………………………………………………....................................38
References……………………………………………………………………………………………………………….…39
Annexes
Summary tables
Table A1. BOP Summary Tables: 1985—2010 ($ 000).……………………………………………………………..40
Table A2. IIP Table:2003—2009 ($ 000).………………………………………………………………………………….42
More detailed tables
Table B1. Goods Account: 1985—2010…………..…………….………………………………………………………...43
Table B2. Services Account: 1985—2010…………………………..…………………....................................44
Table B3. Primary Income Account: 1985—2010……..…………......................................................46
Table B4. Secondary Income Account: 1985—2010………………....................................................47
Table B5. Capital Account: 1985—2010…………………………………………………………………………………….49
Table B6. Financial Account: 1985--2010…………….…………………...................................................50
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List of Abbreviations
AKL………………………………..Air Kiribati Limited (government owned airline)
BOP……………………………….Balance of Payments
BOPS……………………………..Balance of Payments Statistics
BPM…..………………………….Balance of Payments Manual
BOK……………………………….Bank of Kiribati (ANZ)
CBA……………………………….Commonwealth Bank of Australia
CCS………………………………..Container Chief Service (overseas shipping company)
C.I.F……………………………….Valuation of goods based on Cost, Insurance, and Freight
CPPL………………………………Central Pacific Producer Limited (government owned fishing
company)
EU…………………………………..The European Union
F.O.B………………………………’Free on-Board’ valuation (i.e. excludes freight and insurance
charges)
GDP……………………………….Gross Domestic Product
GFS…………….………………….Government Finance Statistics
GNI………………..………………Gross National Income
GNP……………..………………..Gross National Product
IIP…………..……………………..International Investment Position
IMF………….…………………….International Monetary Fund
KAO……………………………….Kiribati and Otoshiro (Japanese company) joint fishing venture
KCM………………………………Kiribati Copra Mill Company
KPF………………………………..Kiribati Provident Fund
KSSL……………………………….Kiribati Shipping Services Limited
PFTAC………………….…….….The IMF “Pacific Financial Technical Assistance Centre”, based in Suva,
Fiji
NSO………………………………..National Statistics Office (sometimes KSO is used)
NEPO………………………………National Economic Planning Office (sometimes NPO is used)
RERF……………………………….Revenue Equalization Reserve Fund (Government reserve
fund)
SDR…………………………………Special Drawing Right
SNA………………………..………System of National Accounts
TKL………………………………….Television Kiribati Limited
TSKL………………………………..Telecommunication Services Kiribati Limited
UNSO……………………………..United Nations Statistical Office
UNSNA93……………………….The 1993 United Nations System of National Accounts System
8
INTRODUCTION
The balance of payments (BOP) statistics is one of the economic statistics series
routinely compiled by the National Statistics Office. Like the national accounts, it is a
fairly complex and difficult series and the compilers need to have very good
understanding of finance, economics, and of course, statistics. But these are just the
starting prerequisites, i.e. to actually collect, compile, and present BOP statistics, one
needs to attend BOP specialized trainings and to go through hands-on-the-job trainings
as well. But because BOP is a very technical subject, even these are not enough, i.e. a
practical manual is also required to be readily available at the side of the compilers to
assist them. The primary focus of this manual is the more junior economic statisticians
who will be working on the balance of payments and who will need a practical guide at
their disposal in order to efficiently carry out their job as BOP statisticians. Needless to
say there are important policy implications of the BOP statistics and this is why it is
crucial that comprehensive and accurate BOP statistics are produced—this manual is
very important in this context. This manual follows closely the format and guidelines
recommended in the BPM6 manual however there may be slight changes in the way the
items in the tables are arranged but this is simply to highlight certain transactions that
are important in the Kiribati context or simply to simplify the table.
This manual starts off with an overview of IMF BOP manuals (or BPMs), followed by the
structure of the BPM6 accounts, then a brief history of BOPS development in Kiribati.
This is followed by the current structure of the Kiribati BOP statistics, then a chapter on
the items and terms used in the Kiribati BOP system, and lastly a brief section on the
‘future direction’ of the BOP development. The annexes contain the full BOP statistical
tables starting from 1985 to 2010. The IIP statement however starts from 2003 and goes
up to 2009 only because of the unavailability of data. In the previous Kiribati BOP
statistics report, there is no IIP statistics shown.
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1. Brief History of the “Balance of Payments” manuals (BPMs)
Whereas the system of national accounts (SNA) is traditionally the product of the UN
Statistical Office (UNSO), the balance of payments (BOP) statistics is basically an IMF
product and responsibility. However as noted in the recent SNA and BOP manuals, there
are more international agencies now involved in the revision of both. At least since the
1993SNA there has been close collaboration between the UNSO, the IMF, and other
international agencies to ensure that the SNA and the BOP manuals (and other
international manuals) are harmonized and consistent with each other, especially in
terms of concepts and definitions.
The SNA or system of national accounts is a systematic summary of the transactions
taking place in an economy, especially those relating to the production and use of goods
and services and to the transfers of income and capital between sectors of the
economy. The account linking the local economy with the rest of the world is called the
“external transactions account” or “the rest of the world account” and this account is
very similar to the balance of payments account. However the ‘rest of the world
account’ or the BOP is by itself a very important set of statistics that the monetary
authorities, and the government for that matter, often use as a basis for their exchange
rate and monetary policies. The IMF and the World Bank also use the BOP statistics to
monitor the financial transactions and the international trade of the countries in the
world to ensure that there is adequate financial liquidity among the countries. The IMF
often assists countries with serious foreign debt or balance of payments problems.
The first BOP manual was produced by the IMF in 1948, a few years after the Second
World War (WWII), but this was soon replaced by another edition in 1950. This was used
for about ten years before the third edition (BPMP3) was produced in 1961. This 1961
edition was used for almost 20 years before it was replaced by the 1977 edition. This
1997 edition is the fourth edition (i.e. BPM4) and was used for quite a long time before
the 5th edition was produced in 1993, the same year the UNSNA93 was produced. This
time there is concerted effort by both the IMF and UN, as well as other international
agencies, to ensure that both manuals contain consistent concepts and terminologies.
The revision process usually takes a long time to complete and for the latest BOP
manual, it took 7 years since the start of the revision in 2001. This long process is
necessary because of the wide consultations required, between IMF and international
organizations, and among statisticians, to ensure that the contents are comprehensive,
relevant, and uptodate. To quote from the BPM6 Preface:
When the Committee decided in 2001 to initiate an update on the manual, it
considered that, while the overall framework of the fifth edition BPM5
remained adequate, it needed to incorporate the numerous elaborations,
clarifications, and improvements and updates in methodology that had been
identified since 1993, and to strengthen the theoretical foundations and
10
linkages to other macroeconomic statistics. The production of the BPM6 was
conducted in parallel with the update of the OECD Benchmark Definition of
Foreign Direct Investment, and the System of National Accounts (SNA) to
maintain and enhance consistency among these manuals.
The revision process also requires lots of technical experts and in the BPM6 case, the
IMF Committee of Balance of Payments established four technical expert groups, with
membership from member countries and international agencies. The groups are the
Currency Union Technical Expert Group (CUTEG), Direct Investment Expert Group
(DITEG), Reserve Assets Technical Expert Group (RESTEG), and the Balance of Payments
Expert Group (BOPTEG). These groups provide technical advice and recommendations
to the IMF, and on the basis of these the BPM6 was produced. Some of the issues are
passed on to the Advisory Expert Group on National Accounts (AEG), which had been
created by the Inter-Secretariat Working Group on National Accounts as an advisory and
consultative body for the update of the SNA. As a matter of fact there are other
specialized bodies involved in the revision process such as those on services, trade,
tourism, remittances, debt statistics, fiscal statistics, etc. Indeed the revision of the BOP
and SNA manuals in recent years is a process of wide consultations and close
collaboration between international agencies and national statistical offices around the
world and this is why there is more consistency now in the manuals, especially among
financial and economic statistics.
Although the 2008 BPM6 manual seems to be very comprehensive and very detailed,
and more than adequate for most countries, there is likely to be further changes in the
future when more activities and transactions take place. Globalization is still in progress,
financial markets are still evolving, and advance in technology is still continuing. The
world is full of changes and these will surely require manuals that are uptodate and
relevant. In other words, the revision of the BPM manual will continue and there may be
a new manual within the next ten years or so.
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2. The Development of BOP statistics in KIRIBATI
Whereas the work on the current national accounts1 started in the mid 1980s, a few
years after Kiribati attained its independence from Britain, the work on the BOP started
later in the mid 1990s after a staff2 of the National Statistics Office attended a 3-week
course on the balance of payments in Australia, conducted by the IMF. The local staff,
upon return, started the collection and compilation of BOP statistics and a few years
later assigned one staff3 to carry on the work. The appointed staff received hands-on-
the-job training in the office and later attended a BOP course organized by the IMF in
Washington in April 1995 for 6 weeks. The work on the BOP proceeded very well, as was
the case for the national accounts work, but unfortunately the trained staff left after
some years when her husband returned to the Solomon Islands to take a pilot job with
Air Solomon. The work temporarily stopped for some time due to the lack of qualified
staff within the NSO. Fortunately one staff from the Planning Office ‘volunteered’ to
carry on the work on the BOP statistics, in addition to her own work in the Planning
Office, and this staff was given hands-on-the-job training by the Director of the NSO and
for some years the BOP compilation was undertaken by the Planning Office. However
after some years the compilation work on the BOP was returned to the NSO when more
staff joined the NSO. There are now three staff looking after the economic statistics but
given the small size of the office, these staffs tend to move occasionally to other areas
of statistics when there is shortage of staff in those areas. For instance, at the time of
writing up this manual one staff has been assigned to assist in the conduct of the 2010
population census—and another staff was recently seconded to the Planning Office to
assist in the formulation of the national development plan leaving only one staff to work
on the national accounts, balance of payments, and on the government finance
statistics (GFS)4.
Since the start of the BOP series in 1992, there have been consultants visiting Kiribati to
assist further in the BOP statistics, mostly people from PFTAC, Suva. The visits are
usually short visits and usually to review what has been done or to recommend
improvements—sometimes they try to update the figures as well. Usually the
consultants write reports during their visits and some contain very useful
recommendations on how to improve the statistical systems however because of the
lack of qualified and skilled staff in the NSO, and because of the lack of resources, the
recommendations listed in the reports are often not followed or taken up by the
1 The previous work on the national accounts for the period 1972—74 was actually started in the National
Planning Office by two expatriate economists, Mike Walsh and Garry Quince, in 1976, as input to the
Fourth National Development Plan. However the work stopped when these two expatriate staff left the
country. 2 This is the former Director of Statistics who is also the author of this manual—the author attended the
IMF 3-week course on BOP in March 1991 in Canberra, Australia. 3 Ms Baakai Teebaki who is now residing in the Solomon islands and working as a senior statistician in the
main Hospital. 4 This series is used to be compiled by two ‘junior’ staff but this has been recently transferred over to the
staff working on the national accounts and the balance of payments.
12
government—and this is one reason why little progress has been noted despite several
TA missions to Kiribati. That is, there is hardly any realistic follow up on the findings and
recommendations of the TAs.
The first IMF visit was in 1993 and in this visit the consultant proposed a form to collect
relevant BOP statistics from corporations/companies. The consultant also worked on
the imports freight, seaman remittances, reserve assets, etc. The visit lasted a week but
it proved very useful to the NSO. In 1994 there were two visits from PFTAC, Suva—but
these were not as fruitful or as productive as the first visit, and after that there was no
more visit until August 2008 when a PFTAC statistical advisor arrived to “help improve
and strengthen the BOP system” in Kiribati. The visit again was quite short but the
advisor managed to list down things that need to be carried out or undertaken in the
future in order to improve the BOP statistics. Three years later, in 2010, Geoffrey
Robertson visited Kiribati to provide further assistance to the NSO in improving the BOP
statistics. The visit main purpose is to improve the system as well as to align it to the
BPM6 methodology. The stated TOR of the visit is as follows:
o Improving compilation methodology and data sources;
o Revising the BOP estimates up to 2007, and updating estimates to end 2009;
o Producing a summary analysis of the main aggregates and publication tables; and
o Improving the capacity of local counterparts to compile BOP statistics.
For some reasons, the production of a ‘local’ manual to assist the BOP compilers has
never been proposed by visiting consultants, despite the usefulness of such a reference
document. In any case in 1995 the NSO produced a BOP bulletin which contains brief
notes on the development of BOP system in Kiribati, important BOP concepts and
definitions, some methodological details, and BOP statistics covering 1984 to 1994. This
manual or report proved very useful to the BOP compilers and to the users as well. Mr
Geoffrey Robertson, in his visit last year (in 2010) highlighted the usefulness and
importance of the report, and this is what he said:
During the visit, Dr. Iete Rouatu, former Kiribati Republic Statistician, who is currently
employed as a national accounts consultant by KSO, was particularly helpful. He is the
author of Kiribati, Balance of Payments Statistics, 1985-1994,which if updated would
assist to consolidate the revised BPM6 based presentation and methodology. It is
recommended that this publication should be updated using the format of the previous
publication using the tables and information contained in this report. Dr. Rouatu’s
assistance in this task would be very valuable.
The objectives of the present consultancy work which EU is funding, is to write up a
manual on the BOP statistics in Kiribati, documenting what has been done as well as
updating the series to 2010—which is very much in line with what Robertson
recommended. In addition to writing up the manual, the consultant also managed to
13
conduct on-the-job training to staff involved in the BOP compilation. The duration of the
training however is restricted to a few days only because of the limited time allocated to
the consultancy work5.
The BOP system is fairly technical and complicated and while the manual is a useful
reference material NSO staff will still need more training and guidance in order to
become very competent BOP statisticians. And while there is apparent progress made
on the BOP and other economic statistics, the government and its development
partners should continue their support in order to enhance and strengthen the overall
capacity of the NSO.
One of the advantages of the report or manual, apart from serving as a useful reference
guide to the BOP compilers, is that it allows people outside the NSO to understand and
appreciate what are the BOP statistics; the methodologies used in their compilation; the
data sources consulted; and their potential use. Often the people requested for data ask
for the reasons or the purpose of the data collection, and the report or manual on the
subject is very helpful in this respect. From experience people who know or understand
the subject are likely to cooperate and assist than those who don’t know what is the
subject or the purpose for the data collection.
5 This consultancy work is just for a month—for comparison, last year the National Accounts consultancy
work lasted two months. The duration of the work depends on the money made available by the donor.
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3. The purpose and use of the BOP statistics
The BOP statistics, like all official statistics, are important and useful for a variety of
purposes, including policy formulation purposes. The BOP statistics, for instance, shows
how much income we receive from abroad, or how much we are paying out on imports,
transport, insurance, maintenance, consultancy, etc. It also shows how much we are
indebted to other countries or to overseas banks, such as ADB. These information are
very important because they inform planners and decision makers which areas or
sectors need to be improved or strengthened, or which loans need to be serviced or
cleared.
For instance, the high trade deficit depicted in the Goods Account should encourage the
government to expand and increase exports in order to offset the increasing imports
bill. Similarly one could observe the Services Account and see which services need
improvement. In the case of Kiribati, for instance, it is quite clear that Kiribati residents
are paying out significant amount of money on imports and exports freight service, and
this is known to have pushed up prices of domestic goods. A policy option would be:
should Kiribati purchase large ships to provide freight service, instead of relying on
overseas shipping companies? Also the relatively large remittances from local seamen
working on overseas ships is also very important because it confirms the notion that
Kiribati people are naturally ‘good’ seamen or fishermen, i.e. this is one comparative
advantage of the Kiribati people, and the government should capitalize on this. In terms
of policy setting, this information suggests that Kiribati could do very well if it invests in
fisheries or in the maritime industry.
In countries where there are monetary authorities or central banks, the figures on the
balance of payments are very crucial when monetary and foreign exchange policies are
formulated. For instance, to address serious current account deficit, the monetary
authorities could lower their currency in order to boost up exports and restrain imports.
Some studies have also shown that the balance of payments can be used to ‘smooth’
consumption and raise the welfare of individuals. The IMF can also assist countries with
financial or economic problems and the balance of payments statistics are very useful in
this respect. Some countries also use their balance of payments statistics to support
their request for imposing import tariffs to curtail imports under the GATT or GATS
agreements.
Just to show the wealth of uses of the BOP and the IIP statistics the following list is
taken from a manual downloaded from the internet.
(a) The use of the IIP and BOP financial account to analyze vulnerability to external
shocks in a world of increasingly mobile financial flows. The role of timely and
comprehensive balance of payments statistics: market expectations and uncertainties
in fundamentals.
(b) The current account balance as an indicator of excess or under-spending. Temporary
15
and cyclical deficit /surpluses on the current account, and their impact on inflation
and country’s terms of trade.
(c) The use of BOP data for an understanding the movements in the exchange rate
through analysis of the supply and demand of foreign currencies driven by the trends
in the BOP components.
(d) The use of BOP statistics in explaining changes in the money supply, an important
indicator for the determination of monetary policy. The possibility that BOP/IIP could
be used as a supplementary data source for monetary statistics under certain
circumstances will be described (in particular, they can be used to adjust monetary
aggregates for holdings by nonresidents of monetary instruments).
(e) The use of BOP/IIP statistics in the context of analyzing globalization and its effect.
The manual could usefully describe the contribution of BOP/IIP statistics and
highlight the conceptual implications for national BOP, for example toll processing,
transfer pricing, and provision of group-wide IT services. Reference could be made to
the Manual on Globalization Indicators.
(f) The role of BOP data in the money market operations of central banks. Changes in
the net foreign assets of the central bank as important explanatory variables of
changes in the liquidity requirement in the money market.
(g) Statistics on international trade in services in understanding structural changes in the
economy and the penetration of foreign markets. Decomposition analysis of price and
volume effects of nominal and real exchange rate changes on the balance on goods
and services.
(h) Statistics on inward and outward foreign direct investment in assessing the role of
foreign financing, including ownership and control, in the corporate sector (both
financial and nonfinancial), and the income generating capacity of investments
abroad.
(i) Trends in the financial account in response to financial market conditions and
economic developments for understanding the link between a change in interest rate
conditions and the amount, direction, and structure of external financial flows.
(j) Statistics on international banking flows and stocks may be useful to understand
issues in the globalization of international banking and to help focus on the soundness
of the domestic banking system.
(k) The use of IIP data as an alternative way of assessing an economy's relations with the
rest of the world.
The list above is not exhaustive but it should be adequate to illustrate the varying use of
the BOP and IIP statistics. But like all information, the usefulness of BOP statistics can be
greatly enhanced if the scope and coverage is comprehensive enough, and the figures
are accurate and uptodate. Incomplete and outdated BOP statistics are not of much use
to planners and decision makers these days given the fast pace of technology and
development.
16
4. The Structure and Main Accounts of the BPM6
BOP and SNA
Before we explain the structure of the BPM6, it is important first to show the position of
the BOP system within the overall national accounts (SNA) of the country. This is
because the ‘Rest of the World’ account of the SNA is essentially the same as the BOP
statistics, except that the BOP statistics is compiled from the viewpoint of the domestic
economy whereas the Rest of the World account in the SNA is viewed as an ‘external
account’ or an account set up for an entity outside the domestic boundary.
Fig 1 The BOP account within the SNA framework
As can be seen from the diagram above, the BOP or the “Rest of the World Account”
captures the flows (arrows) between Kiribati and the rest of the world. The flows or
transactions consist of goods, services, income, capital, and financial assets and
liabilities. The International investment position IIP reflects, on the other hand, the stock
of assets and liabilities of Kiribati in relation with the rest of the world, i.e. is a subset of
the country’s balance sheet. But while the BOP account is part of the SNA, the BOP on
its own is a very important macro statistics that has very important use in the country’s
financial and economic planning. For instance, adverse BOP statistics could have very
serious consequences or implications to the economy and to the government, and this is
why it is important to have comprehensive, accurate, reliable, and uptodate BOP
statistics. One of the causes of the recent global financial crisis is the excessive
borrowings of some countries, or the high indebtedness of some countries, which in
turn created serious illiquidity and trade problems.
KIRIBATI
Domestic Accounts
PRODUCTION Account
INCOME Account
ACCUMULATION
Account
BALANCE SHEET
Account
REST OF THE
WORLD
BOP (or the Rest of
the World) Account
Goods, services,
income, capital,
financial FLOWS
S N A
17
Main Accounts of the BOP
The main accounts of the BOP are the ‘Current Account’, ‘Capital Account’, and the
’Financial Account’. In addition there is an International Investment Position (IIP) which
reports on the stock of assets and liabilities the nation held overseas, and on the foreign
assets and liabilities held here in Kiribati. In order to account for the changes to the
assets and liabilities due to other factors other than those arising from the normal BOP
Fig 2 Structure of the BPM6 and IIP Accounts (and some local examples)
1. IIP ACCOUNT
3 CURRENT ACCOUNT
3.1 GOODS and
SERVICES Account e.g.
imports and exports
3.2 PRIMARY INCOME
Account e.g. investment
income, seamen
remittances, etc
3.3 SECONDARY
INCOME Account
e.g. foreign aid, other
transfers, etc
4. CAPITAL ACCOUNT, e.g.
capital transfers, etc
1a.
INTERNATIONAL
INVESTMENT
POSITION (IIP)
Opening value (e,g,
RERF, KPF, etc
1b. OTHER
CHANGES (in
assets and liabilities)
ACCOUNT
1c
INTERNATIONAL
INVESTMENT
POSITION (IIP)
closing value
2. FINANCIAL ACCOUNT e.g.
making investments, taking out
loans, etc. (e.g. KAO, BOK, etc)
18
transactions, such as the unilateral cancellation of debt, holding gains and losses, and
the reclassifications, another account is set up called “Other Changes in Financial Assets
and Liabilities Account”. That is, this account captures changes and transactions that
leads to the changes in the value of the stock of assets and liabilities at the end of the
year (or accounting period)—and includes the entries in the Financial Account. All the
accounts listed plus the IIP stock account constitute the basis of the BOP statistics.
The main accounts are further split into smaller subheadings—for instance, the Goods
Account is further split into ‘merchandise trade’ and ‘goods procured in ports’. Similarly
the Financial Account is further split into Direct Investment, Portfolio Investment, Other
Investments, etc. And in some cases there are several ways in which to split or
delineate the subsections of the main accounts, for instance, the Financial Account can
also be split according to the Instrument Type, or By sector, rather than by Functional
Category.
The terms commonly used in the BOP statistics is Credit and Debit, rather than Receipts
or Payments, or Inputs and Outputs, etc. For instance, exports value is denoted as
Goods credit while imports value is designated as Goods debit. Likewise payment for
services rendered by overseas firms is termed ‘Service debit’ and income from services
provided to non-residents is classified as ‘Services credit’.
The balances of the main accounts are very important and are often quoted by analysts,
government officials, and politicians. For instance, ‘Current Account deficit’ is often a
topic of great interest as well as the overall balance of payments. The net
lending/borrowing figure signify the surplus or deficit of the country’s transaction with
the rest of the world. For instance a country with current account surplus is likely to
invest and grow than a country that is having deficit account.
19
5. Kiribati BOP statistics: Structure, scope, and data sources
In this chapter the main accounts of the Kiribati BOP will be listed, their scope, coverage,
and data sources. Only the items important in the context of Kiribati—or for small
islands—will be listed here. This means that for more complete coverage of the balance
of payments concepts and terminologies, the BPMP6 manual should be consulted.
The sequence of accounts discussed below does not necessary follow the sequence as
depicted in the BPM6 manual. For instance, in the BPM6 manual the first account
shown is the International Investment Position (IIP) Account, followed by the Financial
Account, then the Goods and Services Account, the Primary Income Account, the
Secondary Account, and finally the Capital Account. The presentation made here
however follows closely the previous BPM manuals—which starts off with the Goods
and Services Account, followed by the Primary Income Account, then the Secondary
Income Account, the Capital Account, the Financial Account, and lastly the stock IIP
Account. This seems to be more logical and ‘real’ than starting with the ‘financial assets’.
In fact this is somewhat consistent with the sequence of accounts in the SNA which
starts off with the Production Account followed by other accounts. The Production
Account, or the production of goods and services, is usually the starting point for
income and wealth creation.
It should be noted that some definitions or examples have been taken directly from the
BPM6 manual but some are simply the author’s own description or examples. Some
BOP items are also deliberately left out because they do not apply to Kiribati or they do
not exist in Kiribati at this point in time.
Current account
This account is an important account of the Kiribati BOP because it contains more well-
known statistics such as merchandise trade, investment income, seamen remittances,
fishing licenses, etc. There are however some slight changes to the entries in the
Current Account of the BPM6, as compared to the previous BPM5, and some of these
will be discussed below but the overall BOP format remains basically the same. One
change, for instance, is the treatment of the item “major maintenance and repairs”—
this is included as part of the “Goods Account” in the BPM5 but now in the BPM6 this is
considered as a “Service item”. This seems more reasonable because many people
consider ‘repair’ and ‘maintenance’ as a ‘service’ item rather than a ‘good’ item. For
fuller discussions of the changes, the BPM6 manual should be consulted.
The first account is the Goods Account and while there are only a few items in it, the
magnitude of the entries in this account is fairly large due to the high imports value
which creates a very high trade deficit of about $80 million in recent years. Items to be
included or excluded from merchant trade are listed in the BPM6 manual (p 151—160).
20
Only the FOB value is included, i.e. the freight and insurance components of the total
imports (or exports) value are removed and placed under ‘freight service’ and ‘insurance
service’ respectively.
5.1 Goods Account
This consists of merchandise exports and imports, as well as goods procured in ports
including bunkering services. Goods are valued on FOB basis, so for goods that are
valued on CIF basis, these will be split into three components: cost, insurance charge,
and freight cost. The cost will be entered here in the Goods Account but the “insurance”
will be entered in the Service Account under “Insurance Service” while the “freight”
component will be entered in the “Freight Service”. In Kiribati imports is valued on FOB
basis but exports depends on the contract.
GOODS
Definition and scope Local examples Data Source
Merchandise exports Goods that non-residents
bought or acquire from
Kiribati. Here the economic
ownership has changed to
non-residents. The valuation
is on FOB.
These are local produce
exported overseas, e.g.
copra, copra oil, seaweed,
shark fins, pet fish, etc.
Customs
export forms,
NSO trade
statistics,
KCM
Merchandise imports Goods that Kiribati residents
import or buy from other
countries, i.e. economic
ownership changed to
residents. Valuation is on
FOB.
Most imported goods are
foods and manufactured
goods, e.g. rice, sugar, cars,
radios, fuel, etc.
Customs
import bills,
and NSO
trade
statistics
Goods procured in
overseas ports (sea
and air)
Purchases of fuel, foods,
water, stores, ballast, etc. in
overseas ports by Kiribati
vessels or aircrafts.
KSSL and CPPL ships (e.g.
Matangare, Moanaraoi,
Moamoa) purchases
overseas, say in Fiji or
Tuvalu.
KSSL, CPPL,
Air Kiribati
Goods provided to
overseas
vessels/planes
Purchases of overseas ships
or planes calling in at Tarawa
or Xmas port, .eg. fuel, food,
stores, etc
Fuel and food purchases of
Our Ailrine, Air Pacific, and
overseas shipping and
fishing vessels, such as CCS
company, etc.
KOIL, CPPL,
KPA, Private
shipping
agents,
21
5.2 Services Account
This contains the value of services rendered by resident service providers to non-
residents, and vice versa. The valuation is on accrual basis, i.e. they should be recorded
as they are rendered. The classification used follows closely the classification in the
Manual on Statistics of International Trade in Services (MSITS) which responds to the
information needs related to the General Agreement on Trade in Services (GATS) and
other trade agreements. The intention is to allocate the ‘service’ rendered to the
‘service’ category rather than to the type of business or ownership of the service. For
instance, if a fishing company has one office or section dedicated solely for transport
services, then ideally the ‘transport’ service should be included under ‘transport
service’, i.e. not part of the fishing output.
SERVICES
Definition and scope Local examples Data
Source
A Manufacturing
services
This covers processing,
assembly, labeling, packing,
etc., undertaken by
enterprises that do not own
the goods concerned
There is no local example at
this stage.
B Maintenance and
repair services, n.i.e.
Covers maintenance and
repair work on goods—only
the value of repair and parts
used should be included.
When Kiribati vessels or
planes undergo
maintenance overseas.
There is hardly any major
repair service done in
Kiribati.
AKL, KSSL
accounts, and
TAX office for
accounts of
the private
ships
C Transport service
1. Passenger
services
2. Freight services
3. Other transport
4. Postal and courier
services
Includes freight charges, and
passenger fares
Freight charges related to
exports and imports is
included here. 20--30% of
FOB value is assumed to be
imports freight value.
Passenger fares estimated
from the number of
arriving and departing
passengers.
Trade
statistics,
Customs
returns,
Government
accounts, Post
Office,
Immigration
statistics
D Travel
1 Business
travel
2 Personal
travel
3 Other
Expenditures on foods and
accommodation,
incurred while travelling
abroad
When government officials
or seamen travel abroad, or
when tourists or
consultants visit Kiribati
Students expenses abroad
also included here
Tourism
Office,
Tourism
survey,
Immigration
data,
E Construction Covers creation, renovation,
repair, or extension of fixed
assets in the form of
buildings, land improvements,
construction works on roads,
bridges, causeways, etc.
Valuation is on gross basis,
Big constructions in Kiribati
are carried out by overseas
firms, e.g. large buildings
by Capella Co, Fletcher Co.,
Dai Nippon Co., OECD, etc.
Kiribati does not have large
construction firms and
Tax Office,
NEPO office,
construction
offices,
donors
22
i.e. including all costs of goods
and services used.
therefore there is no
construction receipts or
credit.
F Insurance services Payments by firms or
individuals to insurance
companies to cover them
from loss, damage, deaths,
etc, i.e. form of a risk
management strategy.
In Kiribati there is only one
insurance company known
as the Kiribati Insurance
company (KIC). This re-
insures overseas its
NonLife policies. For
insurance on imports, 1%
FOB value is taken.
KIC annual
accounts,
trade
statistics
G Financial services Covers financial
intermediation services and
auxiliary services conducted
between Kiribati residents
and non-residents
RERF and KPF investment
management fees paid to
investors overseas included
here. Also BOK payment to
HQ is included here.
Government
accounts, KPF
accounts, and
BOK accounts
H Charges for the use
of intellectual property
NO ENTRIES FOR THIS in
KIRIBATI at this stage
I Telecommunication,
computers, and
Information services
Covers telephone, internet,
telex, facsimile, and other
telecommunication services
This covers the activity of
TSKL and TKL. TSKL used to
be a joint venture with
Australia Telecom but the
company became 100%
government owned more
than 10 years ago.
TSKL and TKL
accounts
Government
accounts
J Other business
services (e.g. research,
study, consultations)
NO ENTRIES YET FOR THIS
TOPIC
K Personal, cultural,
recreational services
NO ENTRIES YET FOR THIS
TOPIC
L Government goods
and services n.i.e.
Services supplied by or to
governments and not
included elsewhere.
Consultancy services
(including studies)
rendered to government is
included here as well as
charges for visa and other
travelling needs.
Kiribati
government
accounts,
budget
reports, NEPO
office,
23
5.3 Primary Income Account
The ‘Primary Income Account’ replaces the ‘Income Account’ of the previous Kiribati
BOP report. As stated in the BPM6 manual (p. 183): The primary income account shows
primary income flows between resident and non-resident institutional units. It represents
the return that accrues to institutional units for their contribution to the production
process or for the provision of financial assets and renting natural resources to other
institutional units.
Primary Income Definition and Scope Local examples Data Source
1 Compensation of
employees (e.g.
salaries, wages,
allowances,
bonuses, etc)
These represent remuneration
in return for the labour input
to the production process
contributed by an individual in
an employer-employee
relationship with the
enterprise.
Seaman remittances (on
German ships)
Fishermen on Japanese
vessels Kiribati nationals
working abroad
remittances.
SPMS office
FTC office
Ministry of
labour
2 Dividends Distributed earnings allocated
to owners of equity for placing
funds at the disposal of
companies.
Distributed earnings
from KAO and BOK (ANZ)
KAO agent, BOK
accounts, Tax
office
3 Re-invested
earnings
Covers the direct investors
shares of the retained
earnings of the direct
investment enterprise.
Retained income from
KAO and the Bank of
Kiribati (ANZ), and
Punjas6 local branch
BOK and KAO
accounts, Tax
Office
4 Interest Covers fixed income on
financial assets, e.g. deposits,
debts, loans, etc. Valuation is
on accrual basis.
Interest income from
RERF and KPF and BOK
investments
Government,
KPF, and BOK
accounts,
5 Investment
income
attributable to
policy holders in
insurance and
pension funds
This is the investment income
on technical reserves (for Non-
Life insurance), and for Life
Insurance, it is income on the
assets reserved to meet its
liability (which is equal to the
net present value of expected
claims from existing policy
holders). The same idea is
applicable to the pension fund.
This is the income from
investments abroad of
the KIC, and the KPF.
KIC and KPF
accounts
6 Rent (including
royalty payments)
Income from giving rights or
access to firms or producers
to use one’s natural assets
This includes fishing
licenses paid by foreign
companies to fish in
Kiribati EEZ.
Government
accounts
7 Taxes (or
subsidies) on
products or
production
This is included here to be
consistent with the SNA
treatment.
This includes customs
duty paid by foreigners
or overseas firms
Government
accounts,
Customs office,
6 A subsidiary of Punjas Company based Suva, Fiji.
24
5.4 Secondary Income Account
This covers current transfers between residents and non-residents—it may be in cash or
in-kind, and excludes capital transfers. In the BPM5 these transactions are simply known
as “Current Transfers” but now in the BPM6 they are known as “Secondary Income” in
line with the SNA terminologies. Capital transfers are shown in the Capital Account, and
whereas the primary income affects National Income (or GNI), the secondary income
(plus the primary income) form the basis of the gross national disposal income (GNDI).
Secondary Income Definition and Scope Local examples Data Source
1 Personal
transfers
This consists of all cash and in-
kind transfers received by
residents from non-residents,
and vice versa, including
remittances,
Kiribati workers abroad
remittances
Ministry of
Labour, SPMS,
2 Other current
transfers
e.g. Current taxes on income
and wealth, social
contributions, social benefits,
net NonLife insurance
premiums, nonlife insurance
claims, overseas assistance,
KIC insurance claims
from overseas re-insurer
and foreign aid
KIC accounts,
Government
accounts
25
5.5 Capital Account
The capital account contains capital transfers between residents and non-residents, and
the acquisition and disposal of natural resources, leases, contracts, and licenses.
Capital flows Definition and Scope Local examples Data Source
1 Acquisition (or
disposal) of Natural
resources
This includes land, mineral
rights, water, fishing rights,
and air space. This includes
acquisition of land by
embassies as well.
No example yet for
Kiribati. If the Kiribati
High Commission
purchases some land in
Fiji, then that will be
included here.
2 Capital transfers Are transfers in which
Ownership of an asset (not
cash or inventories) changes
from one party to another; or
which obliges the other party
to acquire or dispose an asset;
or where a liability is forgiven
by the creditor.
Examples are: debt
forgiveness, very large non-life
insurance claims, investment
grants (for fixed assets),
capital taxes, large gifts,
grants to clear off debts, etc.
In Kiribati, the more
important capital
transfers relate to
foreign aid to the
Government. These aid
are to acquire fixed
assets (e.g. vessels,
power plant), or to
construct large physical
infrastructures (roads,
causeways, water and
sewerage systems, etc)
Also if ADB loans are
changed to grants then
these will be included
here as well.
Government
accounts,
government
budget reports,
NEPO office, GFS
26
5.6 Financial Account
This account records transactions that involve Financial Assets and Liabilities, between
residents and non-residents. The more common terms used here are ‘acquisition’ of
assets and incurring of liabilities, rather the credit or credit entries used in the previous
accounts. For example when the Kiribati government set up its KAO business abroad it is
‘acquiring an asset’, but when ANZ invests here, we are incurring a liability. Acquiring a
financial asset results in another party incurring a liability of the same magnitude
Financial
transactions
Definition and Scope Local examples Data Source
1 Direct
investment
A category of cross-border
investment associated with a
resident in one economy
having control or a significant
degree of influence on the
management of an enterprise
that is resident in another
economy,
e.g. reinvestment of earnings,
direct investment flows in kind
(goods and services), mergers
and acquisitions,
Direct investment
overseas is KAO while
foreign direct investment
businesses here include
the Bank of Kiribati
(ANZ), and Punjas.
BOK and KAO
accounts, Tax
Office
2 Portfolio
investment
A cross-border transactions
and positions involving debt or
equity securities, other than
those included in direct
investment and reserve assets.
Included are reinvestment of
earnings, and capital ejections
Injections to RERF and
KPF investments abroad,
and also retained income
that is reinvested back
into the fund
Government
accounts, GFS
3 Financial
derivatives
NO ENTRIES for this at
this stage
4 Other
investment
transactions
Residual category for
transactions not classified in
other categories
Assets acquired or
liabilities incurred by the
government, bank, and
other institutions.
5 Reserve assets Are external assets that are
readily available to and
controlled by the monetary
authorities for meeting
balance of payments financing
needs, for intervention in the
exchange market to effect the
currency exchange rate, and
for other related purposes
(such as maintaining
confidence in the currency and
the economy, and serving as a
basis for foreign borrowing).
NO ENTRIES for this at
this stage because there
is no central bank or
monetary authority in
Kiribati. Besides, the
Accounts Section has no
information on this.
27
5.7 International Investment position (IIP)
The IIP is a statistical statement that shows at a point in time the value of the
composition of a) Financial assets of residents of an economy that are claims on non-residents
b) Liabilities of residents of an economy to non-residents
The difference between’s the country’s external financial assets and liabilities is the
economy’s net IIP, which may be positive or negative. Unlike the entries in the previous
accounts, which are essentially transactions or flows, the entries in this account are
stocks or balances. In Kiribati the main items here are the RERF, the KPF, the
Government assets abroad, and its liabilities on its existing loans.
Table IIP statement—by Functional Category
Other changes in financial assets and
liabilities account
Assets
IIP
Opening
balance
Financial
Account
transactions
Other
changes in
volume
Exchange
rate
changes
Other price
changes
IIP
Closing
balance
Direct
investment
Portfolio
investment
Financial
derivatives
Other
investments
Reserve assets
Total Assets
Liabilities
Direct
investment
Portfolio
investment
Financial
derivatives
Other
investments
Total Liabilities
Net IIP
Note: There are other ways of portraying IIP statistics, one is by financial instrument; the other by
institutional sector; by maturity; by currency; and by interest rate structure. In the Kiribati BOP the IIP is
by functional category.
28
In Kiribati there is hardly any foreign investor apart from the Bank of Kiribati (ANZ
bank7), Punjas (from Fiji), and the few Chinese businessmen who often join or partner
up with local people, mostly women, before setting up their businesses. Some of these
businessmen eventually married local women and have children thus “legitimizing” their
business status in Kiribati. But the question remains as whether or not these businesses
are foreign owned businesses or local businesses. For the purpose of the current BOP
exercise these Chinese businesses will be treated as local businesses hence they will not
be included in the BOP statistics, however this may be reviewed later when more
complete information on these businesses and ownership are available.
In terms of investment abroad, there is generally no ‘direct investment’ apart from the
KAO fishing venture between the Kiribati government and Otoshiro company however
there are ‘portfolio investments’ made by the Kiribati government (through the RERF)
and the Kiribati Provident Fund (KPF). The values of these are quite substantial and
provide financial stability to the government, and to the country as a whole for that
matter.
The limited number of foreign investment firms in Kiribati, and the limited investment of
Kiribati overseas, reflect the smallness and rudimentary nature of the economy. This is
one reason why there is hardly any real growth in the economy—i.e. there is negligible
evidence of investments both in the country, and overseas by Kiribati residents.
7 This bank is owned 75% by ANZ and 25% by the Kiribati government.
29
6. Important concepts, terms, and items in the Kiribati BOP system
This section is meant to supplement Chapter 5 which outlines the BOP structure in
Kiribati. The idea here is to explain or elaborate more on the terms and concepts used in
the Kiribati BOP statistics. Some are the terms from the BPM6 manual and some are the
local terms or items that are important for the Kiribati BOP statistics, such as the ‘RERF’
investment, seamen remittances, constructions undertaken by overseas firms, etc.
6.1 Double entry accounting:
The IMF BOP system uses the double entry system in which one transaction is entered
into two accounts. For example, exports of copra with a value of $6 million will be
entered in the Goods Account as a credit while the Foreign Exchange Account8 will be
debited with the same amount. This reflects the fact that money comes in through
exports, i.e. there is credit added to the Goods Account, while the Foreign Exchange
Account shows money ‘leaving’ it, i.e. a debit entry. Likewise, imports of $80 million will
be ‘money leaving’ the Goods Account, hence a debit entry, while the Foreign Exchange
account will record money coming in, i.e. a credit entry.
Example: Double entry system,
(e.g. exports of $6 million, and imports of $80 million)
GOODS ACCOUNT FOREIGN EXCHANGE ACCOUNT
debit credit debit credit
imports = $ 80m exports = $ 6 m exports = $ 6m imports = $ 80 m
$ 80 m $ 6 m $6 m $80 m
However instead of the ‘T’ Account format above, the accounts in the BOP manual are
set up with names of the transactions on the left column while the credit and debit
entries are entered on the right-hand side—all on one row. In this way, instead of using
the term ‘Receipts’, or ‘Payments’, or ‘Inflows’ versus ‘Outflows’, the ‘credit’ term is
Example: Format of the Balance of Payments tables in the BOP manual
Credits Debits
Goods $6 m $80 m
Services
e.g. Transport service $3 m $20 m
e.g. Financial service $1 m $3 m
Direct Income, etc $20 m $5 m
8 Part of the Financial Account.
30
used to denote ‘receipts or inflows, whereas debit entries refer to payments out or
outflows. For instance, instead of stating exports as money ‘coming in’, i.e. positive
entries, and imports as negative values, the BOP format shows just one item, say
‘Goods’, and alongside, on the same row, are credit and debit entries—to denote
exports and imports, respectively. However in the Kiribati BOP statistics some explicit
names or terms like ‘exports’ or ‘imports’ will still be used. This is simply to help readers
understand the transactions more easily.
For the Financial Account the format is slightly different. Instead of credits and debits,
the terms “acquisition of assets” and “incurrence of liabilities” are used.
Example: Financial Account format, in the BOP manual
Acquisition of assets Incurrence of liabilities
Direct investment $26 m $80 m
Portfolio Investment
Financial derivatives $30 m $20 m
Other investments $11 m $23 m
Reserve assets
6.2 Residency concept:
This is a very important concept in the balance of payments system because the
transactions to be reported or recorded involve the transactions between residents and
non-residents—in fact this is the basis of the BOP statistics. That is, all transactions that
involve residents only, or nonresidents only, are not included in the BOP statistics,
hence the importance of the resident or residency concept. According to BPM6 (p 70)
“The Residence of each institutional unit is the ECONOMIC TERRITORY with which it has
the STRONGEST CONNECTION, expressed as its CENTRE of PREDOMINANT ECONOMIC
INTEREST”.
Although the one-year of ‘continuous staying’ in one place or one country criteria has
been used in the past as the basis of defining a ‘resident’ as opposed to a ‘non-resident’,
this has been superseded by the “Economic Centre of Interest” criteria. For instance, in
the case of Kiribati seamen working on overseas ships, but whose wives and families are
still staying in Kiribati, these workers are considered as residents of Kiribati. This is
despite the fact that some of them could stay more than a year at sea or overseas. This
is why seamen remittances are included as labour income from abroad, and not current
transfers. Students studying abroad are also treated as residents, until such time they
finished their studies and decided to stay overseas. Staff of the Kiribati High Commission
in Suva, Fiji, are considered also as residents of Kiribati hence their expenditures
overseas should also form part of the BOP statistics.
31
Seasonal workers going to New Zealand should also be classified as residents of Kiribati
because the scheme is meant as a temporary way of employing Kiribati people abroad,
i.e. the workers are meant to return after some time. However the income and
expenditures of these people are difficult to measure and this is why they are not
included in the BOP statistics at this stage.
6.3 Valuation basis:
The values to be used in the BOP statistics are generally the ‘market’ prices but these
are not necessarily the real market prices under perfect competition, rather they are the
offered or going prices at the time of transactions. According to the BPM6 manual (p.
40) “Market prices for transactions are defined as amounts of money that willing buyers
pay to acquire something from willing sellers; the exchanges are made between
independent parties and on the basis of commercial consideration only—sometimes
called “at arm’s length”. Sometimes prices stated in the contracts or agreements are
used which may not be necessarily‘ market prices .
6. 4 Maintenance and Repairs:
In the BPM5 manual this item is treated as part of the “merchandise goods” but now in
the BPM6 this is now classified under “Service”. However only the cost of maintenance
or repair on the equipment or asset is to be included, as well as the cost of spare parts
used. The value of the equipment under repair should not be included.
In Kiribati this item refers mainly to the maintenance or repair of ships or planes. The
bigger ships of the Kiribati Shipping Corporation and the Kiribati Fishing company (CPPL)
usually go to Suva, Fiji for major maintenance and repair services while the Air Kiribati
planes go to New Zealand or Australia. Generally expenditures on this tend to be high
and ‘lumpy’ and difficult to predict. There are other goods (e.g. computers, motor
vehicles, etc) sent abroad for repair but these are difficult to trace because people often
do not report the value of services rendered overseas. The businesses (including
companies) may report these in their accounts but not explicitly as services from
overseas.
6. 5 Net lending/borrowing (current & capital) and Net lending/borrowing (financial
account):
These two ‘lending’ figures should be the same, at least in theory. This is because the
surplus or the balance from the current and capital account is the amount of money
that is available for further investment. That is, any net financial acquisition that is made
should be financed or matched with the surplus on the current and capital accounts
(which is the same as the net lending figure). The difference between the two is called
the ‘Errors and Omissions’ and this is a good indicator of how well the BOP statistics
have been compiled, i.e. the smaller the omissions the better is the collection and
32
compilation of the BOP statistics. In practice the two lending figures are often different
but this is alright because many items in the BOP statistics are actually estimated, such
as transport and travelling credit or debit entries. That is, these entries will have no
equal corresponding entries in the financial account, and this creates imbalances in the
accounts and in the net lending figures.
6.6 Insurance and Re-Insurance:
Insurance needs to be broken down into: service, income, transfer, and financial
account element.
As a service, the value of the output of the Insurance company is:
= Premiums received + Investment income – Claims due
For Non-life or General Insurance, the value of the output is:
= Gross premiums earned + Premium supplements (or investment income)
– Claims payable – Adjustment for claims volatility (if necessary)
For Life Insurance, the value of the output is:
= Gross premiums earned + Premium supplements (or investment income)
– Benefits due – Increase in Life Insurance Reserves
Non-Life or General insurance pays benefit when an event occurs, i.e. not an investment
but primarily designed for pooling risk. Hence Non-Life insurance claims (e.g. for
damaged buses or burnt offices) and net premiums are treated as TRANSFERS. On the
other hand, for Life Insurance, claims and net premiums are treated as FINANCIAL
ITEMS. But TERM LIFE INSURANCE which pays out compensation only in the event of
death (or incapacity) of the insured, is included in the NON-Life Insurance.
Investment Income on the assets invested by the Insurance company is attributed to
policy holders (hence it is a Primary Income item) however because the amount is not
given to policy holders, it is treated as going back to the insurance company as
“Premium Supplements”, i.e. additional income to the insurance company.
Assets invested by insurance companies come from technical reserves which are
essentially prepayment of premiums and claims incurred but not yet paid, i.e. reserves
are an application of an accrual accounting principle. This arises because payments for
policies always made in advance. Income earned on the investment of reserves
constitutes a favourable income to the insurance company and sometimes this allows
the company to charge lower premiums. Technical reserves are meant to meet
obligations arising from claims and entitlements, i.e. they represent liability of the
insurance company to policy holders, or assets of policy holders (or beneficiaries).
Income from technical reserves is therefore treated as income attributable to
policyholders.
33
Re-Insurance is when an insurance company transfers its risk to another insurance
company, often a larger or more specialized insurance company than itself. In the case
of the Kiribati Insurance Company, a large amount of Non-Life Insurance premiums is re-
insured overseas with an Australian Insurance firm. But Life Insurance is not re-insured
overseas, and the Life reserves are all invested here with the Bank of Kiribati (ANZ)
therefore there is no BOP statistics from the Life Insurance section, apart from the
actuarial fee paid oversea to an actuarial expert.
In terms of the Kiribati BOP statistics, one important transaction of the KIC that will be
included is the ‘re-insurance’ payment to the overseas insurance firm. This will be
treated as a payment overseas for the ‘insurance’ service, i.e. will be included in the
Services Account. KIC claim overseas will be treated as current transfer in the
Secondary Income Account, but this is an infrequent flow.
6.7 Provident Fund (KPF):
The Provident Fund caters generally for all employees9 working in Kiribati, however in
recent years seamen working on overseas ships are allowed also to contribute and
invest in this fund. Most of the funds are invested overseas and this is why KPF
investment is an important BOP entity in the Kiribati BOP system, in addition to the
RERF investment. But unlike the income from the RERF, which is basically attributed to
the government, the income from KPF investment is attributed to households, at least in
the first instance, but this is subsequently reassigned as KPF re-invested earnings
abroad. If all monies of the KPF are invested in Kiribati then there will be no BOP
statistics required from the KPF.
In terms of KPF transactions, there are basically three BOP important transactions: the
first is the amount of members contribution invested abroad, and this should be part of
the ‘Financial Account’ under Portfolio investment. The second is the investment
income (e.g. interest and dividends earned abroad) and this is part of the Primary
Income Account, under Portfolio investment category. And the third transaction is an
imputed transaction that is called “Reinvested earnings”, and this arises if the
investment income is not all used up or withdrawn from the investment fund. This
transaction is included under the Financial Account under Portfolio investment. If the
withdrawal is more than the investment income, then it means that the company is
starting to use up (or eat away) the ‘capital value’ of the investment.
From talking to the manager of KPF10, apparently there is no capital injection to the fund
since its transfer from James Capel11 in the mid 1980s. Likewise there is no withdrawals
from the fund invested overseas except in 2006 (of $10 million)12 and in 2010 of
9 People reaching 50 years old can withdraw their KPF savings.
10 Phone conversation (Tokata/Iete) Tues, 26 April 2011.
11 The previous fund manager which also looked after the RERF at one point in time in the past.
12 This was re-invested with the Bank of Kiribati.
34
$3million13. The people withdrawals when they retire are all being met by the
contributions collected annually. This means that for the Kiribati BOP, only two entries
will be made—one as income under ‘Portfolio Investment’ in the Primary Income
Account, and the other is the Re-invested Earnings’ in the Financial Account. If indeed
there is no withdrawal from the fund, then the Re-invested Earnings will be the same,
numerically, as the ‘Investment Income’.
6.8 RERF investment:
This is the investment of the government abroad which started way back in the 1960s
during the Colonial days, with the main purpose of having some ‘standby’ reserves to
balance out the government budget deficit in times of financial problems. It grew out of
the savings from the phosphate taxation but now its growth is entirely up to its income
and capital appreciation, i.e. there are no more government injections to the
investment fund. The government in fact has used the withdrawals from the fund to
balance its budget since independence in 1979 but there is a growing concern now as to
what is the right amount of withdrawals that the government should make. Needless to
say the high withdrawals each year could deplete the fund at some point in time in the
future—and this is what many people are concerned about.
In terms of RERF transactions, there are basically four BOP important transactions: the
first is the amount of injections or additions made to the fund, and if the government
did make this, this should be part of the ‘Financial Account’ under Portfolio investment.
The second is the investment income (e.g. interest and dividends earned abroad) and
this is part of the Primary Income Account, under Portfolio investment category. And
the third transaction is an imputed transaction that is called “Reinvested earnings”, and
this arises if the investment income is not all used up or withdrawn from the ‘body’ of
the investment fund. This transaction is included under the Financial Account under
Portfolio investment—as if the government is investing more to the fund. If the
withdrawal is more than the investment income it means that the government is
starting to use up the capital value of the fund. The fourth transaction is the
management fee paid to the fund managers abroad—this is to be included in the
Services Account.
6.9 Direct investment abroad—KAO
This is a joint fishing venture of the Kiribati government (49%) and a Japanese fishing
company Otoshiro (51%)—known as KAO. Since its formation the company has reported
negligible profit resulting in no dividends ever paid back to the Kiribati government. Had
there been dividend paid, this will be included in the Primary Income Account under
Direct Investment. Another important flow is any payment that the Kiribati government
13
This was to finance the loan scheme which the KPF has recently set up.
35
makes to the company—this will be classified as a ‘capital injection’ under Direct
Investment in the Financial Account. But according to the information collected from
the local agent of KAO here in Kiribati, there seems to be no capital injection from the
government apart from the initial start-up capital.
6.10 Stabex Fund
This fund was initially set up from EU funds to help improve agricultural exports
(especially copra) in times of depressed exports—hence the name ‘Stabilization of
Exports’ or Stabex for short. The fund was meant to improve and increase agricultural
exports and is based on a formula that compares past years production (exports) and
current year’s production—if the present production is below the average production of
the past years then the Kiribati government is entitled to make a claim to the EU for
funding assistance. The money have been deposited in the bank overseas (CBA) and
over the years it grew into several millions of dollars, however there was continuous
withdrawals in the mid 1990s to assist the copra industry, especially in maintaining
copra prices at levels ‘attractive enough’ for copra cutters to continue cutting and
producing copra. In 2000 the balance came to just $460,000. The EU is no longer
injecting money in this account—in fact the balance has been sent back to the EU. In
recent years however the government has set up a Stabex Account to deposit its own
copra subsidy in and to hold other monies related to the copra industry. In other words,
the Stabex fund is no longer part of the BOP statistics.
6.11 SDR
According to the BPM6 manual (p. 86) “SDRs are international reserve assets (or
currencies) created by the IMF and allocated to members to supplement existing official
reserves. These are only held by monetary authorities of IMF member countries and
some financial institutions. These represent unconditional rights to obtain foreign
exchange or other reserve assets from IMF member countries”.
Holdings of SDRs by an IMF member are recorded as an asset. However the allocation of
SDRs is recorded as incurrence of liability of the country receiving it, because there is
intention to repay it, and there is also interest charged on it. Kiribati has never used this
funding facility before however it seems the IMF has allocated Kiribati SDR several times
in the past. For instance, the IMF maintains that it has allocated Kiribati SDR with a value
of US$ 5.3 million in 2009 but the Kiribati government seems not to be aware of this14
and in fact has not used it up to this point in time. Because of this, no entries on SDR will
be made in the current Kiribati BOP statistics. If indeed there is SDR allocated to Kiribati,
this will be treated in the first instance as “incurrence of liability” in the Financial
Account, but later will be entered as a reserve asset in the IIP Account, until the asset is
depleted and no longer shown in the government accounts.
14
Even the Accountant-General seems surprised to see interest charges on the SDR payable to IMF.
36
6.12 Bank of Kiribati (BOK)
This bank used to be a joint venture with the WestPac (51%) and the Kiribati
government (49%) until Oct 2001 when ANZ replaced the Westpac. The new shares are
75% for ANZ and 25% for the Kiribati government, i.e. now more ownership is
transferred to ANZ. The bank is classified as a resident ‘Direct Investment’ entity in the
Kiribati BOP system.
In the BOK accounts the ‘Head Office charges’ and ‘Auditors remuneration’ are assumed
to be payments from the BOK to ANZ headquarters overseas therefore should be
included as debit or outflow items. These are classified as debit entries under “Other
Businesses” in the “Services Account”. The ‘commission’ earned by BOK from abroad is
classified as a credit entry in the ‘Financial Services’. Dividends paid overseas is also an
outflow or debit entry and is included in the ‘Primary Income’ Account. Another inflow
or credit entry is the ‘Reinvested earnings’ of the BOK. This Reinvested earnings is
calculated as 75% of the retained earnings of the company after tax and after payment
of the dividends—and this included in the ‘Financial Account’. The income on foreign
investment is included under ‘Primary Income”.
6.13 Kiribati High Commission
The Kiribati High Commission in Suva, established in 2002, is treated as a resident unit of
Kiribati and it purchases abroad is treated as ‘Government Services’—an outflow or a
debit entry. The figure is estimated as 50% of the High Commission annual budget. For
instance, in 2007 the High Commission budget is $346,000, therefore $173,000 will be
included under ‘Government Services’ as a debit entry.
6.14 Cuban doctors in Kiribati
These are doctors from Cuba who are helping the Kiribati government and are being
paid by the Kiribati government with the same salary levels as the local doctors. Because
they generally stay more than a year in Kiribati they will be treated as residents of
Kiribati. In this respect their salaries or wages are considered as domestic transactions
and not BOP transactions. If they send money to Cuba—these will be treated as private
current transfers, and not ‘compensation of employees’ because they are not residents
of Cuba under the present BOP treatment.
6.15 Kiribati seamen overseas
A large number of local young men (and some women in recent years) are employed on
German ships and on Japanese fishing boats, and some on NCL cruise ships. Some of
these seamen (or fishermen) may work on the boats for more than a year but inevitably
all of them return to Kiribati after a year or so. Their families and properties are in
37
Kiribati so they are all treated as residents of Kiribati, i.e. their principal centre of
economic interest is still Kiribati. In principle all their gross salaries or wages should be
entered under the “Compensation of Employees” from abroad in the Primary Income
Account but because the information on this is not readily available, the remittances
that they send back to Kiribati is recorded instead as the “Compensation of Employees”.
The correct treatment would be to classify the current remittances as “Current
Transfers” to the households in the “Secondary Income Account” while their spending
abroad should be treated as “Travelling” debit in the “Services Account” however
because we want to reflect the importance of Kiribati seamen as Kiribati workers abroad
earning factor income, we have historically classify their remittances as “Compensation
of Employees” from abroad, i.e. the total cost of Kiribati labour service overseas.
6.16 Overseas Construction Services
Most large constructions are undertaken by overseas construction firms and generally
are not residents in the sense that they will leave Kiribati after the completion of their
works. If this is the case then the BOP entries will be the total cost of the project
included as a debit entry under ‘Construction Service’, i.e. Kiribati residents purchasing
construction services from abroad. If these firms employ local staff and purchase local
materials and services, then these will be included as income from abroad or as credit
entries in the Goods and Services Account. Even the goods imported (even by the firms
themselves) for the projects will be re-classified as re-exports to reflect the fact that
they are not resident units. However another treatment, which is being followed in the
current BOP exercise, is to treat the construction firms as notional resident units supply
construction services to Kiribati residents. These notional resident units will be
considered as ‘branches’ or subsidiaries of foreign construction firms and the profit they
send back to their ‘parent’ company or headquarters abroad will be included in the
“Primary Income Account”. This is a more straightforward and simple treatment but it
could mean more work for national accountants because they need to set up a
production account for each construction firm.
There are no large construction firms in Kiribati and therefore there will be no
‘Construction’ credit entries in the Kiribati BOP for the next couple of years, at least. 6.17 Fishing licenses
This is the licenses paid by foreign fishing vessels to fish in Kiribati EEZ waters. The
money goes to the Kiribati government and constitutes a significant source of revenue
for the government—roughly 30% of the total government revenue. In the previous BOP
manual this is treated as a “service income” but now in the BPM6 manual, this is treated
as property or rent income under the “Other Primary Income” in the Primary Income
Account.
38
7. Future direction Like the work on national accounts and GFS, there is still more work to do on the
balance of payments statistics to make it more comprehensive, accurate, and uptodate.
Some entries, like transport and travel payments (or receipts), have been estimated on
past survey results which are quite outdated at this stage. Likewise, figures on foreign
aid need to be checked again especially to identify which are capital flows and which are
current flows. The seamen and seasonal workers remittances is also a weak area and
the figures need to be checked thoroughly because they are still very crude estimates at
this point in time. It is suspected also that there is a significant amount of transfers in
the private sector, especially between the local churches and church headquarters
overseas, as well as among some business people, that go unreported. More concerted
effort should be made on this, and the statistical returns from the Bank of Kiribati (BOK)
is one ideal source for these transfers—this requires more contact and discussions with
the bank. Also standard returns should be issued out to companies and entities that
have dealings with overseas countries or non-residents because the information on
these is very ‘sketchy’ or limited—regular collection schedules should be set up and
effected. There is also a dire need to conduct surveys to collect more recent
information, say on tourists spending, seamen earnings and expenditures abroad,
students spending abroad, etc. These are needed to adjust and correct some of the
present estimates that are based on outdated surveys. There is also a need to check on
the government foreign assets and liabilities because these are not well-presented in
the government annual accounts and the budget reports.
It should be highlighted here that there are now staff in the NSO who are very keen to
carry on the works on the balance of payments and other economic statistics and in
order to capitalize on this momentum the government and its development partners
should continue this kind of capacity building approach of producing practical manuals
and conducting on-the-job training. This seems to be one of the best and most cost-
effective ways of strengthening and building capacity of the NSO.
39
References
International Monetary Fund (2009) “Balance of Payments and International Investment Position
Manual: Sixth Edition (BPM6)” IMF Multimedia Services Division, Washington DC.
Inter-Secretariat Working Group on National Accounts (1993) “System of National
Accounts 1993” Commission of the European Commission, International
Monetary Fund, Organization for Economic Cooperation and Development,
United Nations and the World Bank, Brussels/Luxembourg.
Kiribati Statistics Office (1995) “Kiribati Balance of Payments Statistics 1985--1994” Government
Printery Division, Tarawa.
Annexes
SUMMARY TABLES
Table A1 Balance of Payments (BOP) Summary Table: 1985—2010 ($ 000)
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Current account
--Goods credit 6,095 2,655 3,267 7,159 6,964 4,281 8,662 7,331 6,297 8,410 11,430 7,676 9,403 10,594 14,635
-- Goods debit 21,632 21,502 25,199 28,242 28,661 34,504 33,289 50,608 40,953 36,205 47,685 48,693 52,613 51,970 63,779
Goods balance 15,537- 18,847- 21,932- 21,083- 21,697- 30,223- 24,627- 43,277- 34,656- 27,795- 36,255- 41,017- 43,210- 41,376- 49,144-
--Services credit 3,856 4,342 4,721 5,373 5,387 6,207 4,547 6,247 7,699 6,058 4,121 4,073 8,583 7,303 5,277
--Services debit 17,051 18,282 19,598 19,042 21,148 25,743 24,599 29,441 30,187 25,433 31,155 29,827 30,829 31,545 36,949
Services balance 13,194- 13,940- 14,877- 13,669- 15,762- 19,536- 20,052- 23,194- 22,487- 19,375- 27,033- 25,754- 22,246- 24,242- 31,672-
Goods and services balance 28,731- 32,787- 36,809- 34,752- 37,459- 49,759- 44,679- 66,471- 57,143- 47,170- 63,288- 66,771- 65,456- 65,618- 80,816-
Primary income credit 17,278 21,005 22,192 21,949 23,640 27,560 37,598 38,866 37,587 41,416 40,166 37,687 61,545 77,444 69,450
Primary income debit 656 1,824 1,741 933 1,303 3,167 1,981 1,716 2,533 3,106 1,249 1,506 1,743 4,498 1,685
Primary income balance 16,622 19,181 20,451 21,016 22,337 24,393 35,617 37,150 35,054 38,310 38,917 36,181 59,802 72,946 67,765
Secondary income credit 11,583 11,652 14,205 14,259 15,799 14,834 19,879 18,167 20,160 13,287 12,861 13,647 14,465 20,091 19,246
Secondary income debit 2,149 2,564 2,561 2,495 2,555 2,337 2,878 3,012 2,496 2,734 2,584 2,796 2,749 2,541 3,082
Secondary income balance 9,434 9,088 11,644 11,764 13,244 12,497 17,001 15,155 17,664 10,553 10,278 10,851 11,716 17,550 16,164
Current Account Balance 2,675- 4,519- 4,713- 1,972- 1,878- 12,869- 7,939 14,166- 4,426- 1,693 14,094- 19,739- 6,063 24,878 3,113
Capital account
Capital transactions credit 9,568 13,381 9,762 8,560 8,294 15,973 7,865 22,337 8,401 8,348 7,166 8,838 10,284 15,947 14,007
Capital transactions debit 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Capital Account Balance 9,568 13,381 9,762 8,560 8,294 15,973 7,865 22,337 8,401 8,348 7,166 8,838 10,284 15,947 14,007
Net lending (from
Current+Capital Accounts) 6,893 8,862 5,049 6,588 6,416 3,104 15,804 8,171 3,975 10,041 6,928- 10,901- 16,346 40,824 17,120
Financial Account
Acquisition of assets 504 6,705 7,699 5,508 8,586 12,142 17,820 25,891 16,772 16,144 11,970 4,980 43,356 59,336 52,107
Incurrence of liabilities 1,053 159 313 1,021 1,030 1,637 1,719 648 2,028 710 523 688 690 700 700
Net lending (from Financial
account) 549- 6,546 7,386 4,487 7,556 10,505 16,101 25,243 14,744 15,434 11,447 4,292 42,666 58,636 51,407
Net errors and omissions 7,442 2,316 2,337- 2,101 1,140- 7,401- 297- 17,072- 10,769- 5,393- 18,375- 15,193- 26,320- 17,812- 34,287-
41
Table A1 Balance of Payments (BOP) Summary Table: 1985—2010 ($ 000) cont
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Current account
--Goods credit 7,185 7,461 7,322 6,470 5,052 8,021 5,160 14,575 11,729 9,413 7,066
-- Goods debit 67,993 75,092 91,660 79,708 80,881 100,244 82,627 84,020 88,273 86,313 80,086
Goods balance 60,808- 67,631- 84,338- 73,238- 75,829- 92,224- 77,467- 69,445- 76,544- 76,900- 73,020-
--Services credit 7,850 8,754 15,675 15,734 10,925 11,662 9,626 11,161 11,011 10,230 9,777
--Services debit 39,771 39,786 47,593 47,141 40,530 56,208 46,649 60,209 62,594 62,798 60,264
Services balance 31,921- 31,032- 31,918- 31,407- 29,605- 44,546- 37,023- 49,048- 51,583- 52,568- 50,487-
Goods and services balance 92,729- 98,663- 116,256- 104,645- 105,434- 136,770- 114,490- 118,494- 128,127- 129,468- 123,506-
Primary income credit 72,188 88,553 83,407 61,877 63,415 64,518 70,768 68,572 82,160 69,140 73,902
Primary income debit 1,963 1,324 2,331 1,614 2,397 3,553 4,837 4,493 4,944 8,020 5,950
Primary income balance 70,225 87,229 81,076 60,264 61,018 60,966 65,931 64,079 77,216 61,121 67,952
Secondary income credit 21,517 22,415 41,912 28,402 14,100 32,353 28,542 30,579 29,274 33,101 26,897
Secondary income debit 2,714 2,775 2,943 4,334 4,267 4,053 4,449 4,732 4,784 5,392 5,346
Secondary income balance 18,803 19,641 38,969 24,068 9,833 28,300 24,093 25,847 24,490 27,709 21,552
Current Account Balance 3,701- 8,206 3,790 20,313- 34,583- 47,504- 24,466- 28,567- 26,421- 40,639- 34,002-
Capital account
Capital transactions credit 14,888 17,148 36,718 23,062 11,162 26,053 23,907 22,509 18,866 23,241 16,918
Capital transactions debit 0 0 0 0 0 0 0 0 0 0 0
Capital Account Balance 14,888 17,148 36,718 23,062 11,162 26,053 23,907 22,509 18,866 23,241 16,918
Net lending (from
Current+Capital Accounts) 11,186 25,354 40,507 2,748 23,421- 21,451- 560- 6,059- 7,555- 17,398- 17,085-
Financial Account
Acquisition of assets 49,299 9,839 21,228 16,870 2,665- 9,861 6,404- 12,420- 13,895 8,223 12,168
Incurrence of liabilities 17,338 950 960 1,434 1,567 6,263 755 1,378 3,176 4,070 4,000
Net lending (from Financial
account) 31,961 8,889 20,268 15,437 4,232- 3,599 7,159- 13,798- 10,719 4,154 8,168
Net errors and omissions 20,775- 16,465 20,239 12,688- 19,189- 25,049- 6,599 7,739 18,274- 21,551- 25,253-
42
Table A2. International Investment Position IIP :2003—2009 ($ 000)
2003 2004 2005 2006 2007 2008 2009
Assets at end of year
Direct investment 1,376 1,576 1,776 1,976 2,176 3,053 3,354
Portfolio investment 546,537 674,626 739,710 761,083 740,320 669,543 648,710
Financial derivatives 0 0 0 0 0 0 0
Other investment 60,854 50,858 25,343 15,312 43,184 20,207 23,210
Reserves 0 0 0 0 0 0 0
Total assets 608,767 727,060 766,829 778,371 785,680 692,803 675,274
Liabilities end of year
Direct investment 3,443 5,844 9,457 7,483 9,266 12,443 15,243
Portfolio investment 0 0 0 0 0 0 0
Financial derivatives 0 0 0 0 0 0 0
Other investment 18,649 16,944 15,873 17,539 15,935 15,765 15,100
Foreign debt 15,135 14,958 14,789 16,227 14,590 14,590 14,075
Other 3,514 1,986 1,084 1,312 1,345 1,175 1,025
Total liabilities 22,092 22,788 25,330 25,022 25,201 28,208 30,343
Net IIP (end of year)586,675 704,272 741,499 753,349 760,479 664,596 644,932
43
MORE DETAILED BOP TABLE
Table B1. Goods Account: 1985--2010
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Goods credit 6,095 2,655 3,267 7,159 6,964 4,281 8,662 7,331 6,297 8,410 11,430 7,676 9,403 10,594 14,635 7,185
Merchandise export 6,058 2,496 2,869 6,670 6,435 3,681 7,697 6,331 5,069 7,110 10,030 6,817 8,432 9,300 13,586 6,178
Goods procured in ports 37 159 398 489 529 600 965 1,000 1,228 1,300 1,400 859 971 1,294 1,049 1,007
Goods debit 21,632 21,502 25,199 28,242 28,661 34,504 33,289 50,608 40,953 36,205 47,685 48,693 52,613 51,970 63,779 67,993
Merchandise import 21,582 21,452 25,143 28,185 28,596 34,446 33,226 50,530 40,873 36,115 47,547 48,583 52,536 51,923 63,720 67,924
Goods procured in ports 50 50 56 57 65 58 63 78 80 90 138 110 77 47 59 69
Goods account balance 15,537- 18,847- 21,932- 21,083- 21,697- 30,223- 24,627- 43,277- 34,656- 27,795- 36,255- 41,017- 43,210- 41,376- 49,144- 60,808-
contd
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Goods credit 7,461 7,322 6,470 5,052 8,021 5,160 14,575 11,729 9,413 7,066
Merchandise export 6,466 6,322 5,520 4,205 6,832 4,254 13,336 10,310 8,084 5,666
Goods procured in ports 995 1,000 950 847 1,189 906 1,239 1,419 1,329 1,400
Goods debit 75,092 91,660 79,708 80,881 100,244 82,627 84,020 88,273 86,313 80,086
Merchandise import 75,008 91,585 79,602 80,817 100,163 82,512 83,826 88,076 86,113 79,886
Goods procured in ports 84 75 106 64 82 116 194 196 200 200
Goods account balance 67,631- 84,338- 73,238- 75,829- 92,224- 77,467- 69,445- 76,544- 76,900- 73,020-
44
Table B2 Services Account (Credit): 1985—2010 ($ 000)
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
SERVICES (credit or receipts) 3,856 4,342 4,721 5,373 5,387 6,207 4,547 6,247 7,699 6,058 4,121 4,073 8,583 7,303 5,277 7,850
Maunfacturing services 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Repairs to goods 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Transport services 2,348 2,618 2,466 3,070 3,036 3,798 2,139 3,224 4,322 2,808 1,081 686 791 764 749 931
Sea transport 1,200 1,350 1,440 1,743 1,628 1,827 1,339 1,593 1,740 2,000 481 500 550 508 600 800
Air Transport 1,148 1,268 1,026 1,327 1,408 1,971 800 1,631 2,582 808 600 186 241 256 149 131
Travel 852 989 1,230 1,178 1,108 1,292 1,144 1,510 1,867 1,785 1,507 1,759 2,027 1,951 1,805 2,324
Communication 191 263 293 277 331 389 536 590 597 600 841 821 845 1,005 1,380 2,394
Construction - - - - - - - - - - - - - - - -
Insurance services - - - - - - - 66 74 58 71 85 102 99 108 96
Financial services 28 105 103 157 157 158 173 193 318 300 300 350 350 400 400 505
Computer services - - - - - - - - - - - - - - - -
Recreational services (20% of tourist expenditure)170 198 246 236 222 258 229 302 373 357 301 352 405 390 361 465
Other Business services - - - - - - - - - - - - - - - -
Government services 267 169 383 455 533 312 326 362 148 150 20 20 4,063 2,694 474 1,135
Contd (credit)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
SERVICES (credit or receipts) 8,754 15,675 15,734 10,925 11,662 9,626 11,161 11,011 10,230 9,777
Maunfacturing services 0 0 0 0 0 0 0 0 0 0
Repairs to goods 0 0 0 0 0 0 0 0 0 0
Transport services 980 1,008 1,437 1,487 933 997 878 684 584 664
Sea transport 800 800 1,291 1,318 788 772 693 504 520 520
Air Transport 180 208 146 169 145 225 185 180 64 144
Travel 1,920 2,459 4,664 3,188 3,969 2,990 4,804 3,351 3,689 3,800
Communication 1,448 2,281 2,396 678 541 951 888 920 900 900
Construction - - - - - - - - - -
Insurance services 122 153 144 58 60 60 70 83 51 47
Financial services 601 631 1,962 4,102 4,688 3,673 3,521 5,032 4,170 3,351
Computer services - - - - - - - - - -
Recreational services (20% of tourist expenditure)384 492 933 638 794 598 961 670 738 760
Other Business services - - - - - - - - - -
Government services 3,299 8,651 4,198 774 677 357 39 271 98 255
45
Table B2 Services Account (Debit): 1985—2010 ($ 000)
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
SERVICES (debit or payments) 17,051 18,282 19,598 19,042 21,148 25,743 24,599 29,441 30,187 25,433 31,155 29,827 30,829 31,545 36,949 39,771
Maunfacturing services 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Repairs to goods 344 561 386 1,123 1,152 923 497 439 500 900 875 677 745 593 1,133 829
Transport services 8,814 8,550 9,704 8,972 10,214 13,870 11,270 14,569 13,841 12,340 14,282 14,385 15,996 15,890 17,652 19,933
Sea transport 4,517 4,076 4,777 5,355 5,452 6,545 6,313 9,601 7,766 6,862 9,034 9,231 10,704 10,373 12,107 12,906
Air Transport 4,297 4,474 4,927 3,617 4,762 7,325 4,957 4,968 6,075 5,478 5,248 5,154 5,292 5,517 5,545 7,027
Travel 3,905 4,239 3,761 2,133 2,186 3,222 3,409 4,764 4,599 4,289 5,453 3,791 2,781 2,436 4,103 5,644
Communication 240 457 434 510 696 604 414 863 699 888 990 1,079 1,091 1,163 1,538 2,358
Construction - - - - - - - - - - - - - - - -
Insurance services 1,522 1,648 1,810 1,910 1,805 2,294 2,285 2,974 2,635 2,167 2,792 2,935 3,175 3,128 3,738 4,017
Financial services 87 86 580 510 265 861 866 700 1,513 1,511 1,632 1,640 1,521 1,576 1,931 2,446
Computer services 639 742 923 884 831 969 858 1,133 1,400 1,339 1,130 1,319 1,520 1,463 1,354 1,743
Other Business services - - - - - - - - - - - - - - - -
Recreational services - - - - - - - - - - - - - - - -
Government services 1,500 2,000 2,000 3,000 4,000 3,000 5,000 4,000 5,000 2,000 4,000 4,000 4,000 5,295 5,500 2,802
Balance on Services 13,194- 13,940- 14,877- 13,669- 15,762- 19,536- 20,052- 23,194- 22,487- 19,375- 27,033- 25,754- 22,246- 24,242- 31,672- 31,921-
Contd
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
SERVICES (debit or payments) 39,786 47,593 47,141 40,530 56,208 46,649 60,209 62,594 62,798 60,264
Maunfacturing services 0 0 0 0 0 0 0 0 0 0
Repairs to goods 1,078 1,597 1,688 1,694 696 1,088 720 1,034 947 860
Transport services 22,331 24,512 23,603 20,935 31,478 26,439 36,001 38,235 38,898 38,140
Sea transport 14,252 17,401 15,104 15,343 19,015 15,655 15,890 16,697 16,898 15,140
Air Transport 8,079 7,111 8,499 5,592 12,463 10,784 20,111 21,538 22,000 23,000
Travel 2,957 3,232 2,692 232 3,082 2,126 3,678 4,506 3,355 2,936
Communication 1,283 1,194 1,200 1,200 1,260 1,260 1,260 1,260 1,230 1,200
Construction - - - - - - - - - -
Insurance services 4,384 5,375 5,107 4,321 5,304 4,520 4,682 5,044 4,916 4,309
Financial services 1,612 3,441 2,791 3,184 3,182 3,146 3,554 3,319 2,924 2,784
Computer services 1,440 1,844 3,498 2,391 2,977 2,243 3,603 2,513 2,767 2,850
Other Business services - - - - - - - - - -
Recreational services - - - - - - - - - -
Government services 4,700 6,398 6,562 6,573 8,229 5,827 6,711 6,683 7,761 7,183
Balance on Services 31,032- 31,918- 31,407- 29,605- 44,546- 37,023- 49,048- 51,583- 52,568- 50,487-
46
Table B3 Primary Income Account : 1985—2010 ($ 000) 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Income from abroad (credit) 14,173 17,245 20,046 19,736 20,696 23,586 25,681 25,859 23,460 23,043 28,354 31,453 32,111 37,121 37,520 41,029
1. Compensation of employees 3,035 3,250 3,760 2,960 3,160 3,380 4,780 4,790 5,190 5,600 7,110 9,977 10,118 10,182 10,493 10,521
2. Investment income 11,138 13,995 16,286 16,776 17,536 20,206 20,901 21,069 18,270 17,443 21,244 21,476 21,993 26,939 27,027 30,508
2.1 Direct investment 0 0 0 0 0 0 0 0 0 88 100 100 150 150 150 200
2.2. Portfolio investment 8,204 9,505 11,834 13,508 13,586 15,839 17,460 19,033 16,772 16,106 19,200 19,383 20,076 25,215 25,103 28,287
2.3 Other investment 2,934 4,490 4,452 3,268 3,950 4,367 3,441 2,036 1,498 1,249 1,944 1,993 1,767 1,574 1,774 2,021
3. Other Primary Income 3,105 3,760 2,146 2,213 2,944 3,974 11,917 13,007 14,127 18,373 11,812 6,234 29,434 40,323 31,930 31,159
3.1 rent 3,105 3,760 2,146 2,213 2,944 3,974 11,917 13,007 14,127 18,373 11,812 6,234 29,434 40,323 31,930 31,159
Income paid abroad (debit) 656 1,824 1,741 933 1,303 3,167 1,981 1,716 2,533 3,106 1,249 1,506 1,743 4,498 1,685 1,963
1. Compensation of employees 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2. Investment income 656 1,824 1,741 933 1,303 3,167 1,981 1,716 2,533 3,106 1,249 1,506 1,743 4,498 1,685 1,963
2.1 Direct investment 314 236 390 406 320 491 977 980 886 1,107 1,149 1,406 1,643 2,398 1,585 1,863
dividends 0 77 77 77 92 107 376 329 378 387 556 698 833 1,628 915 1,318
re-invested earnings 314 159 313 329 228 384 601 651 508 720 593 708 810 770 670 545
2.2. Portfolio investment 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2.3 Other investment 342 1,588 1,351 527 983 2,676 1,004 736 1,647 1,999 100 100 100 2,100 100 100
Balance on Primary Income 13,517 15,421 18,305 18,803 19,393 20,419 23,700 24,143 20,927 19,937 27,105 29,947 30,368 32,623 35,835 39,066 Contd
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Income from abroad (credit) 41,948 41,688 31,759 34,477 39,561 44,984 43,152 50,920 39,140 42,394
1. Compensation of employees 12,524 14,885 6,316 7,728 12,316 17,133 12,880 11,518 14,309 15,049
2. Investment income 29,424 26,803 25,443 26,749 27,245 27,851 30,272 39,402 24,831 27,345
2.1 Direct investment 200 200 200 200 200 200 200 879 300 300
2.2. Portfolio investment 26,820 25,149 22,576 24,115 25,733 27,390 29,019 36,812 24,057 25,966
2.3 Other investment 2,404 1,454 2,667 2,434 1,312 261 1,053 1,711 474 1,079
3. Other Primary Income 46,605 41,719 30,118 28,938 24,957 25,784 25,420 31,240 31,000 30,500
3.1 rent 46,605 41,719 30,118 28,938 24,957 25,784 25,420 31,240 31,000 30,500
Income paid abroad (debit) 1,324 2,331 1,614 2,397 3,553 4,837 4,493 4,944 8,020 5,950
1. Compensation of employees 0 30 30 30 40 40 40 40 50 50
2. Investment income 1,324 2,301 1,584 2,367 3,513 4,797 4,453 4,904 7,970 5,900
2.1 Direct investment 1,224 1,401 1,484 1,267 3,413 4,297 3,753 4,404 5,870 5,800
dividends 774 841 450 0 0 3,542 2,275 1,028 1,500 1,500
re-invested earnings 450 560 1,034 1,267 3,413 755 1,478 3,376 4,370 4,300
2.2. Portfolio investment 0 0 0 0 0 0 0 0 0 0
2.3 Other investment 100 900 100 1,100 100 500 700 500 2,100 100
Balance on Primary Income 40,624 39,357 30,146 32,080 36,009 40,147 38,659 45,976 31,121 36,444
47
Table B4 Secondary Income Account (Credit): 1985—2010 ($ 000)
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Secondary income (credit) 11,583 11,652 14,205 14,259 15,799 14,834 19,879 18,167 20,160 13,287 12,861 13,647 14,465 20,091 19,246 21,517
General government 6,693 6,283 9,420 11,155 12,371 10,316 15,119 13,110 14,913 8,348 7,166 8,838 10,284 15,947 14,007 14,888
International aid grant 6,693 6,283 9,420 11,155 12,371 10,316 15,119 13,110 14,913 8,348 7,166 8,838 10,284 15,947 14,007 14,888
Other Sectors 4,890 5,369 4,785 3,104 3,428 4,518 4,760 5,057 5,247 4,939 5,695 4,810 4,182 4,144 5,239 6,630
church remittances 800 900 600 300 600 500 1,000 300 200 400 400 500 500 500 600 600
Nauru (NPC) remittances( no more people working in Nauru)200 200 150 140 130 150 160 160 140 100 100 80 60 60 50 40
re insurance claim recoveries 122 235 87 131 155 173 196 31 104 23 44 104 52 144 128 235
seamen travel costs** 3,568 3,824 3,728 2,293 2,293 3,435 3,134 4,286 4,513 4,116 4,831 3,806 3,240 3,100 4,111 5,405
claim on imports insurance 200 210 220 240 250 260 270 280 290 300 320 320 330 340 350 350
Contd
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Secondary income (credit) 22,415 41,912 28,402 14,100 32,353 28,542 30,579 29,274 33,101 26,897
General government 17,148 36,718 23,062 11,162 26,053 23,907 22,509 18,866 23,241 16,918
International aid grant 17,148 36,718 23,062 11,162 26,053 23,907 22,509 18,866 23,241 16,918
Other Sectors 5,267 5,195 5,341 2,939 6,300 4,635 8,070 10,409 9,860 9,980
church remittances 600 600 700 700 700 800 800 800 800 800
Nauru (NPC) remittances( no more people working in Nauru)- - - - - - - - - -
re insurance claim recoveries 201 148 79 18 112 112 112 5 17 20
seamen travel costs** 4,106 4,067 4,165 1,817 4,988 3,311 6,740 9,165 8,613 8,662
claim on imports insurance 360 380 397 404 500 412 418 439 430 498
48
Table B4 Secondary Income Account (Debit): 1985—2010 ($ 000)
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Secondary income debit 2,149 2,564 2,561 2,495 2,555 2,337 2,878 3,012 2,496 2,734 2,584 2,796 2,749 2,541 3,082 2,714
General government 649 564 861 595 755 637 878 812 696 844 656 830 743 495 995 586
International co-operation 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Other (overseas contribution)649 564 861 595 755 637 878 812 696 844 656 830 743 495 995 586
Other sectors 1,500 2,000 1,700 1,900 1,800 1,700 2,000 2,200 1,800 1,890 1,928 1,966 2,006 2,046 2,087 2,128
Personal transfers - - - - - - - - - - - - - - - -
Expatriate remittances 1,500 2,000 1,700 1,900 1,800 1,700 2,000 2,200 1,800 1,890 1,928 1,966 2,006 2,046 2,087 2,128
Other 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Balance on Secondary income 9,434 9,088 11,644 11,764 13,244 12,497 17,001 15,155 17,664 10,553 10,278 10,851 11,716 17,550 16,164 18,803
Contd
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Secondary income debit 2,775 2,943 4,334 4,267 4,053 4,449 4,732 4,784 5,392 5,346
General government 604 728 1,010 1,099 1,015 1,400 1,496 1,379 1,400 1,390
International co-operation 0 0 0 0 0 0 0 0 0 0
Other (overseas contribution)604 728 1,010 1,099 1,015 1,400 1,496 1,379 1,400 1,390
Other sectors 2,171 2,214 3,324 3,168 3,038 3,049 3,236 3,405 3,992 3,956
Personal transfers - - - - - - - - - -
Expatriate remittances 2,171 2,214 3,324 3,168 3,038 3,049 3,236 3,405 3,992 3,956
Other 0 0 0 0 0 0 0 0 0 0
Balance on Secondary income 19,641 38,969 24,068 9,833 28,300 24,093 25,847 24,490 27,709 21,552
49
Table B5 Capital Account: 1985—2010 ($ 000)
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Capital transfers (credit) 9,568 13,381 9,762 8,560 8,294 15,973 7,865 22,337 8,401 8,348 7,166 8,838 10,284 15,947 14,007 14,888
to Government 9,568 13,381 9,762 8,560 8,294 15,973 7,865 22,337 8,401 8,348 7,166 8,838 10,284 15,947 14,007 14,888
to Other sectors
Debt forgiveness
Acquisition of (debit) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
natural resources
contract, leases, licenses
others
Disposals of (credit) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
natural resources
contract, leases, licenses
others
Balance of Capital Account 9,568 13,381 9,762 8,560 8,294 15,973 7,865 22,337 8,401 8,348 7,166 8,838 10,284 15,947 14,007 14,888
Contd
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Capital transfers (credit) 17,148 36,718 23,062 11,162 26,053 23,907 22,509 18,866 23,241 16,918
to Government 17,148 36,718 23,062 11,162 26,053 23,907 22,509 18,866 23,241 16,918
to Other sectors
Debt forgiveness
Acquisition of (debit) 0 0 0 0 0 0 0 0 0 0
natural resources
contract, leases, licenses
others
Disposals of (credit) 0 0 0 0 0 0 0 0 0 0
natural resources
contract, leases, licenses
others
Balance of Capital Account 17,148 36,718 23,062 11,162 26,053 23,907 22,509 18,866 23,241 16,918
50
Table B6 Financial Account: 1985—2010 ($ 000)
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
1. Direct Investment
1.1. Abroad (acquisition of asset) 0 0 0 0 0 0 0 0 0 38 100 100 150 150 150 200
1.1.1 capital injection 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
1.1.2 reinvested earnings 0 0 0 0 0 0 0 0 0 38 100 100 150 150 150 200
1.2 in Kiribati (incurrence of liability) 314 159 313 328 228 384 653 648 2,028 710 523 688 690 700 700 1,245
1.2.1 capital injection - - - - - - 52 47 1,580 60 - - - - - -
1.2.2 re-invested earnings 314 159 313 328 228 384 601 601 448 650 523 688 690 700 700 1,245
2. Portfolio Investment
2.1. Abroad (acquisition of asset) 504 6,705 7,699 5,508 8,586 12,142 17,820 25,891 16,772 16,106 11,870 4,880 43,206 59,186 51,957 49,099
2.1.1 capital injection - - 865 - - - 2,160 12,500 - - - - - - 5,000 -
2.1.2. reinvested earnings 504 6,705 6,834 5,508 8,586 12,142 15,660 13,391 16,772 16,106 11,870 4,880 43,206 59,186 46,957 49,099
2.2 in Kiribati (incurrence of liability) - - - - - - - - - - - - - - - -
2.2.1 capital injection - - - - - - - - - - - - - - - -
2.2.2 re-invested earnings - - - - - - - - - - - - - - - -
3.Other Investments
Acquistion of assets (abroad) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
--capital ejection 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
--reinvested earnings 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Incurrence of liabilities 739 - - 693 802 1,253 1,066 - 0 0 0 0 0 0 0 16093
--Govt loans 739 - - 693 802 1,253 1,066 - 0 0 0 0 0 0 0 16093
Acquisition of assets 504 6,705 7,699 5,508 8,586 12,142 17,820 25,891 16,772 16,144 11,970 4,980 43,356 59,336 52,107 49,299
Incurrence of liabilities 1,053 159 313 1,021 1,030 1,637 1,719 648 2,028 710 523 688 690 700 700 17,338
Net Acquisition of assets 549- 6,546 7,386 4,487 7,556 10,505 16,101 25,243 14,744 15,434 11,447 4,292 42,666 58,636 51,407 31,961
51
Contd
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
1. Direct Investment
1.1. Abroad (acquisition of asset) 200 200 200 200 200 200 200 879 300 300
1.1.1 capital injection 0 0 0 0 0 0 0 0 0 0
1.1.2 reinvested earnings 200 200 200 200 200 200 200 879 300 300
1.2 in Kiribati (incurrence of liability) 950 960 1,434 1,567 6,263 755 1,378 3,176 4,070 4,000
1.2.1 capital injection - - - - 2,550 - - - - -
1.2.2 re-invested earnings 950 960 1,434 1,567 3,713 755 1,378 3,176 4,070 4,000
2. Portfolio Investment
2.1. Abroad (acquisition of asset) 9,639 21,028 16,670 2,865- 9,661 7,858- 12,072- 13,004 7,898 11,868
2.1.1 capital injection - - - - - - - - - -
2.1.2. reinvested earnings 9,639 21,028 16,670 2,865- 9,661 7,858- 12,072- 13,004 7,898 11,868
2.2 in Kiribati (incurrence of liability) - - - - - - - - - -
2.2.1 capital injection - - - - - - - - - -
2.2.2 re-invested earnings - - - - - - - - - -
3.Other Investments
Acquistion of assets (abroad) 0 0 0 0 0 1254 -548 12 25 0
--capital ejection 0 0 0 0 0 0 0 0 0 0
--reinvested earnings 0 0 0 0 0 1254 -548 12 25 0
Incurrence of liabilities 0 0 0 0 0 0 0 0 0 0
--Govt loans 0 0 0 0 0 0 0 0 0 0
Acquisition of assets 9,839 21,228 16,870 2,665- 9,861 6,404- 12,420- 13,895 8,223 12,168
Incurrence of liabilities 950 960 1,434 1,567 6,263 755 1,378 3,176 4,070 4,000
Net Acquisition of assets 8,889 20,268 15,437 4,232- 3,599 7,159- 13,798- 10,719 4,154 8,168
52