BRUNEI has been urged to combine its National Accounts and Input-Output System to avoid future "distortions" in the national economic statistics.

"Now in the future, I would strongly recommend that we should, (since) we are in the position, to merge these two systems into one," said Professor Dr Jorg Beutel, who was a member of the German consultancy team that helped Brunei develop its input-output system recently.

"And start a balancing process, at the same time, on the traditional system which is in place in Brunei and on the new supply system, that all the macro-numbers are balanced at the same time because then you would not have this distortion," he added, during a seminar held on January 24 to announce the completion of Brunei Input-Output Table (IOT) for the "benchmark" year of 2005.

The IOT stipulates that Brunei's Gross Domestic Product was 9.7 per cent higher than the estimate recorded in the National Accounts for that year.

Beutel, a professor of Economics and Environmental Sciences from the Hochschule Konstanz University of Applied Sciences in Germany, suspected that the deviation was due to limitations in compiling certain statistics at the time.

"I think our finding is a serious indication that so far GDP was underestimated, maybe because the Department of Statistics was not in a position to go in(to) such details, in terms of industries," he said.

"Now we have more detailed information and I think it's now about time to integrate the whole system, and hopefully for the next IOT and the next series of National Accounts, this can be achieved."

However, to do this, he called for the establishment of a "sophisticated" system to calculate capital stock data and to "properly" assess capital consumption across the various sectors government agencies, private companies and non-government organisations.

Statistics on capital consumption was a "new source of assessment", that can be used in helping to verify a country's GDP, he added.

Beutel, who is also a senior research associate for German consultancy firm DIW econ GmbH, said he had previously urged the European Commission to implement a common methodology for the 27-nation grouping to compile capital stock data and compare the ratios among one another.

"It requires a long time series on investment because the idea is each capital good has a typical, average lifetime," he said. "Like for a private car, (it is) 10 years, bus possibly 15 years, power plant 30 years, (and) an office building 30 years."

"And based on this average lifetime, you estimate the retirement of capital goods, and this we call, finally, capital consumption," he said.

The Brunei Times