Page 157 - Invited Paper Session (IPS) - Volume 2

IPS195 Gabriel Quirós-Romero et al.
measurement issues on the informal economy need to be addressed as well.
In fact, most of the priorities are substantially linked: globalization,
digitalization, informality, income and wealth inequality or the need for welfare
indicators are often closely linked and reinforce each other.

3. Globalization
The broad topic. Economic globalization has led to tighter integration of
economies, with the creation of global value chains, allowing businesses to
organize their production chains more efficiently. Furthermore, multinational
enterprises (MNEs) organize their production and marketing at a global level
and may utilize special purpose entities (SPEs) structures, to obtain benefits
from different legal and tax regimes which allow them to maximize profits after
taxation. In addition, as the economy becomes increasingly digitalized, digital
businesses can be “born global” reaching customers all around the world at
an unprecedented scope and scale. This has increased the complexity of
compiling economic statistics as it is more difficult to break down production
activities on a country-by-country basis as well as to determine in which cases
there is a real transfer of economic ownership as opposed to the provision of
(manufacturing or other) services. As a result, the measurement of key
economic indicators, including GDP, has been affected.
These emerging and ever-changing global production arrangements
pose challenges to macro-economic statistics. The IMF’s Committee on
Balance of Payments Statistics (BOPCOM), have made progress, described
below, on certain issues that can be addressed through more supplemental
and granular statistics (that do not change the core fundamentals of the
accounts) to shed light on the phenomena.
Globalization: Progress made so far. SPEs have evolved beyond those
structures anticipated in the current statistical manuals. While originally SPEs
were mostly set up by financial institutions, they have evolved to include
nonfinancial specialized entities established by MNEs to manage intellectual
property rights, research and development, trade, and other activities as part
of the group-wide financial and profit maximization strategy. The common
denominator of these activities is often tax arbitrage among jurisdictions in a
context of free capital movements. Considering the evolving nature of SPEs,
the IMF BOPCOM’s Task Force on SPEs proposed an international definition of
SPEs in the context of cross-border statistics, providing further guidance on
SPEs beyond what is in the current statistical manuals which allows for cross-
2
country comparable data to be collected. This definition was adopted by
BOPCOM and supplementary SPEs data collection will begin by the end of
2021.

2 https://www.imf.org/external/pubs/ft/bop/2018/pdf/18-03.pdf
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