1. TOWARD REGIONAL COMPARABLE CLASSIFICATION IN MANUFACTURING SECTOR Experience of Establishing a Regional Cooperative Framework in East Asia Workshop on Manufacturing Statistics Lusaka, Zambia, 4-7 May 2009 EAMS Secretariat (FY2008) Tomoyuki Kuroda Ph.D

2. Table of Contents 1 What Is EAMS? 2 Background of Establishing EAMS 3 Current Activities and Future Vision

3. Table of Contents 1 What Is EAMS? 2 Background of Establishing EAMS 3 Current Activities and Future Vision

4. 1. What is EAMS? a) EAMS E ast A sia Expert Meeting on M anufacturing S tatistics b) Foundation January 2007, Tokyo, Japan c) Member Countries “ASEAN+3” || ASEAN 10 Countries + China, Japan and South Korea What Is EAMS? 1.

5. d) Organization in Each Member Country What Is EAMS? 1. CountryOrganizationCountryOrganization BruneiJPKEMyanmarNSC CambodiaNISPhilippinesNSO ChinaNBSRepublic of KoreaNSC IndonesiaBPSSingapore Economic Development Board Japan Ministry of Economy, Trade and Industry Thai NSO Lao PDR DOSMinistry of Industry Ministry of Industry and Commerce VietnamGSO MalaysiaDOS

6. What Is EAMS? 1. e) Objective Promoting international comparability in manufacturing statistics f) Means Developing a common, harmonized manufacturing industry Classification at 4-digit, reflecting the characteristics of regional economy Establishing a network of manufacturing statistics organizations in East Asia Implementing support for human resources with the cooperation of member countries

7. g) Past Meetings What Is EAMS? 1. The 1st Meeting (Jan. 2007, Tokyo, Japan) Adoption of Terms of Reference and Work Program List of contact persons of each organization The 2nd Meeting (Jul. 2007, Vientiane, Lao PDR) Reports by each country on the current status of its industrial classification Adoption of time frame for developing the common manufacturing industry classification at 4-digit The 3rd Meeting (May 2008, Beijing, China) Reports by each country on the current status of the application of ISIC Rev.4 Announcement of the Draft EAMIC and further Pilot Study activities Explanation of ERIA projects and their linkage with EAMS *The EAMS shall meet at least once a year.

8. h) Initiative What Is EAMS? 1. Chairpersonship (Co-Chair Style) The host country Japan (Ministry of Economy, Trade and Industry) Secretariat Japan ･ Ministry of Economy, Trade and Industry ･ Hitachi Research Institute (for FY2008) ASEAN Secretariat

9. Table of Contents 1 What Is EAMS? 2 Background of Establishing EAMS 3 Current Activities and Future Vision

10. ２. Background of Establishing EAMS India Hong Kong, Taiwan, Russia, USA, Mexico, Canada Australia, New Zealand Chile, Peru, Papua New Guinea China, Japan, South Korea APEC Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam Cambodia, Laos, Myanmar ASEAN East Asia Summit (EAS) ASEAN ＋ 3 a) Political Framework in East Asia ASEAN+3 region has some established, official frameworks for political cooperation. (e.g. ASEAN+3 Summit, AEM+3) Background of Establishing EAMS 2.

11. ２. Background of Establishing EAMS b) Economic Growth in East Asia High intra-regional trade ratio in ASEAN+3 (1980: 34.9% → 2003: 52.4%) Vertical production and distribution networks (A qualitative characteristic of manufacturing sector) Rapid growth of economic power in the world (East Asia’s share of global trade is approaching NAFTA’s.)   The political cooperation bodies need more accurate, comparable statistics for making regional policies.   The Economic growth is attracting private sector’s, academy's and government’s attention globally to East Asia. Background of Establishing EAMS 2.

12. c) Manufacturing Industry in East Asia   More than 30% of the world manufacturing products has been produced in East Asia in this 20 (or more) years.   Manufacturing industry occupies a large proportion of the whole value added in each country in comparison to the other regions. In East Asia, manufacturing industry is extremely important both domestically and internationally. China: Percentage for the mining and manufacturing industry Compiled based on METI-Japan (2006), raw data published by the UN (Not all countries) Background of Establishing EAMS 2.

13. Although each country essentially uses either ISIC Rev.3 or its own industrial classification based on ISIC Rev.3, detailed evaluation of 4-digit data shows that the number of industries that are actually comparable is relatively low. Number of industries under ISIC Rev.3 Section D (manufacturing industry) (4-digit) Number of such industries that are comparable between ASEAN countries Number of such industries that are comparable between ASEAN countries, China, Japan and ROK 127 48 （ 38% ） 36 （ 28% ） “Actually comparable” here refers to industries that correspond to one item of data under one category (class) of ISIC (rather than being bundled together with other categories), excluding other differences such as definition, statistical unit, scale of survey subject, survey method and so on. d) Current Status of International Comparability Background of Establishing EAMS 2.

14. Target area:ASEAN + 3 EAMS -Extending the study to cover all categories of ISIC- 4digit Section D, and foundation of the EAMS. FY 2006 Target area: 8 ASEAN countries + Japan -Basic study on industrial statistics in general FY 2003 Target area: 10 ASEAN countries + Japan -Initial study into the international comparability of manufacturing statistics FY 2004 Target area: 10 ASEAN countries + Japan -Trial studies into the comparability of manufacturing statistics in three industries (Textiles, Motor vehicles, Furniture) FY 2005 e) Past Studies Background of Establishing EAMS 2.

15. Table of Contents 1 What Is EAMS? 2 Background of Establishing EAMS 3 Current Activities and Future Vision

16. a) The Whole Picture of EAMS Activity.Current Activities and Future Vision 3.

17. b) An Illustration of EAMIC (presented at the the 1st EAMS) Focusing on harmony between classification systems （ ISIC, ACIC, NSIC) ISIC Rev.4 Section A Section B Section C Manufacturing Section D ： ACIC EAMIC Section A Section B Section C Manufacturing Section D ： Compliance 4-digitCurrent: 3-digit Section A Section B Section D ： Future: 4-digit Manufacturing 4-digit Manufacturing industry only Section C Manufacturing Converter A standardized ASEAN+3 system of industrial classification (4-digit) for the manufacturing industry.Current Activities and Future Vision 3.

18. Background of Pilot Study As individual countries are at different stages of economic development, there are huge gaps between stages of development in the statistical sector in each country. Given such differences between stages of development, what is the best way to approach a system of industrial classification to reflect the industrial characteristics of the region? After due consideration, we decided to select four typical countries from amongst the member countries and conduct pilot studies in an effort to compile a prototype EAMIC. In view of the primary importance of reflecting the characteristics of the countries that make up East Asia, we decided to select the relevant four countries from amongst the ASEAN countries. Japan, China and South Korea will use correspondence tables to submit their respective data to the EAMIC. Essentially, we have adopted a basic stance aimed at reflecting the industrial structures of the ASEAN countries, which make up the core of East Asia, rather than working on a system of industrial classification based around the more advanced industrial structures. 3.

19.   Objective: Developing the prototype EAMIC   Time period: 2 years (FY2007 and FY2008)   Participation to the Pilot Study: 4 countries (from the view of balancing the efficiency with the area coverage)   Process of Pilot Study: Workshop with model countries c) Pilot Study   Model Countries: IndonesiaPhilippinesThailandVietnam Indonesia, Philippines, Thailand and Vietnam.Current Activities and Future Vision 3.

20. d) Pilot Study Results First Year (FY2007) Created the base structure for the Draft EAMIC Discussion on the data to be collected Awareness on the importance of the metadata Second Year (FY2008) Determined the format, deadline and other details related to the practical operation for data submission Reconfirmed the Draft EAMIC based on the results of data insertion Chief-level officers of each statistics bureaus confirmed the results of data insertion and reconfirmed the Draft EAMIC.Current Activities and Future Vision 3.

21. e) Challenges for EAMS Various developing stage in each country Differences in each statistical system other than industrial classification (statistical unit, survey method, definition of items surveyed e.t.c.) Restriction of budget and/or human resources Maintaining the cooperative framework for more than five years (Target Year : FY2010).Current Activities and Future Vision 3.

22. Draft EAMIC contained 180 classes (tentative), compared to 137 classes under ISIC Rev.4. Activities over the course of the next fiscal year will involve EAMS member countries submitting industrial statistical data in line with this version of the EAMIC. That covers all of EAMS’ activities to date..Current Activities and Future Vision 3.

23. Ｋｅｙ issues relating to the running of EAMS The first step is to apply ISIC Rev.4 and IRIS 2008. This is both the first step and something that needs to be addressed before proceeding. It does not need to be applied completely however. It is just needed as a yardstick to first of all ascertain how far away national statistics in each country are from the global standard. It is impossible to draw up effective plans for the future without first carrying out fact finding studies. Out of all the EAMS member countries, there is not a single one that is completely compliant with ISIC Rev.4. Japan is no exception. Needless to say, the issues faced by each county vary depending on the socioeconomic conditions in the relevant country. It may well be the case however that there are countries that have been working to resolve the same issues. If that is the case, exchanging information and transferring technology could potentially speed up the process of resolving the relevant issues to some extent. It is important to establish a shared awareness of issues and goals within the region. I believe that EAMS has effectively provided a forum for sharing precisely this sort of information.

24. Key Issues relating to the running of EAMS key point : the importance of establishing shared interests. If working without the participation of all member countries (if selecting a number of countries and requiring them to shoulder some of the workload as part of a pilot study for instance), it is essential to come up with a scheme that will offer benefits to the relevant countries in return for their participation. Rather than providing any form of payment, it is necessary to clearly spell out the benefits for the relevant countries, such as capacity building for example. The impression that the participating countries have drawn the short straw must be avoided at all costs. In EAMS’ case, we stressed the benefits of participating in the EAMIC, which only deals with the manufacturing industry, on the basis that the experience would prove useful when working on other sectors in the future by themselves. As each of the countries involved viewed compliance with ISIC Rev.4 as part of the process of revising their own NSIC, the timing of the pilot study was ideal. With all this behind us, EAMS will continue to work towards a successful conclusion. I would like to finish by saying that, if the nations of Africa decide to proceed with a similar initiative, I would recommend establishing an organization such as EAMS.

25. ISIC Rev.4 ACIC EAMIC AMCs NSIC Reference Classification Derived Classification Classification NSICNSICCSIC JSIC JSIC KSIC KSIC Correspondence Tables Correspondence Tables The Harmonized Regional Common Industrial Classification

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