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The role of supply and use/input output tables in the perspective analysis of economic development of Rwanda

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par Jean Baptiste HABYARIMANA
National University of Rwanda - Bachelor's degree 2010
  

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Chapter II: LITERATURE REVIEW

2.1. National Accounting in Economic Development

National accounts and cyclical indicators development for past, present and future economic development are based mainly on the data containing in the economic core of the 1993 SNA, which deal with analysis of production, income, and saving. It includes aggregates SUT data and also Integrated Economic Account (IEA) data for the mains sectors of the SNA covering the production, income, and use of income and capital accounts.

The indicators analysis focuses, however on assessing development in the past, and SNA model within SUT extends this analysis, by using relation between development and corresponding data in the past as a means of projecting the development and data to the future, in this, for socio-economic indicators ,indicators ratios are used as basis for projecting past development to the future.

Projection of future development

Selection and compilation of indicators measuring past trends

Macro-account design and compilation

Statistics and statistical development

Policy analysis formulation

[c] [h] [g]

[a] [c] [f]

[b] [d]

Source: UNITED NATION; 2002; Use of Macro-accounts in policy analysis; pp 63-64

The above diagram shows how indicators and macro-accounts could play a central role in statistical development and policy formulation .The arrows in diagram represent the interaction between the deferent elements. Thus, policy formulation could be based on the use of indicators measuring past and present trends [a], and may also take into account future developments that are based on alternative values of indicators in the future [b]. The use of indicators in projection is reflected in direct link with the indicators measuring past trends [c].

In order to define statistical development that would support policy formulation, links are needed to translate policy formulation into indicators [d], indicators into the design and compilation of macro-accounts [e] and macro-accounts into statistical development [f]; the derivation of values of indicators are represented by reverse links between statistics and the compilation of Marco-accounts [g], and between the macro-accounts data and the derivation of indicators values [h].

The diagram shows also the three uses of indicators in Assessment [a], Compilation [g], and projection [c] interact with one another.

2.1.1. Definition and nature of SNA information for economic development

The SNA is a comprehensive, consistent and flexible set of macroeconomic accounts intended to meet the needs of government and private sectors analyst, policymakers and decision takers.

The SNA provides information not only about economic activities, but also about the levels of an economy's productive asset and the wealth of its inhabitants at particular point of time and also includes links between national economy and the rest of the world.

This information is drawn in a comprehensive accounting framework within which economic data can be compiled and presented in a format that is designed for purposes of economic analysis .In practice the accounts are compiled for succession of time periods, thus providing a continuing flow of information that is indispensable for monitoring, analysis, and evaluation of the performance of an economy over time.

National accounts are estimated by economic activities which are classified according to the International Standard Industrial Classification (ISIC) of all activities and this is used alongside the United National Central Product Classification (CPC) that is linked to the Harmonized System (HS) used for classifying international trade

All these, are adopted to Rwanda`s development level keeping their framework as much as possible (KAREN Wilson 2004, pp 1-24).

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