 What does the ICP do? Who does ICP serve? Who finances ICP? Why should a country participate in the ICP? How does the ICP serve the UN’s Millennium Development Goals? What goods and services does the ICP cover? Who carries out the survey and analysis work for ICP? What is the role of the ICP Global Office? What is the difference between CPI and ICP? What are ICP’s accomplishments to date? About the ICP and PPPs What does the ICP do? The ICP coordinates the collection of price data for a basket of goods and services in countries outside the jurisdiction of Eurostat (Statistical Office of the European Union) and OECD (Organization for Economic Cooperation and Development). The data collected are combined with other economic variables from country national accounts to calculate Purchasing Power Parities (PPPs). By using PPPs to convert GDPs expressed in national currencies into a common currency, ICP enables economists, country policy makers and other interested parties to measure the relative economic well-being of countries and monitor the progress of poverty reduction efforts, etc. In order to do this successfully, ICP’s governing body and its global office works closely with other international and regional organizations and national statistics offices. Who does ICP serve? The ICP offers researchers and economists a powerful tool for comparative research on economic and social development. All the major international development agencies, including the World Bank, IMF, WHO, UNESCO and UNDP use PPP data to analyze economic and social conditions within their areas of concern. The data provided by the ICP is also very useful at the country level. For example, India has used the data for assessing competitiveness of selected manufacturers in world trade and for evaluating taxes and subsidies. The importance of this project can therefore not be emphasized more. Who finances ICP? The ICP is financed by a consortium of international, regional and national development agencies. Why should a country participate in the ICP? A country should participate in ICP because ICP provides robust global economic data that help countries to compare prices and quantities with those of another. Furthermore, participation in ICP will also help enhance national statistical capacity in developing countries. How does the ICP serve the UN’s Millennium Development Goals? The ICP contributes substantially towards the Millennium Development Goals of the United Nations by improving the reliability of estimates of those living in poverty and enabling more accurate comparisons of GDP and component levels across countries. Economic information provides the cornerstone for successful policies. Evaluating economic data from different countries and different regions allows us to piece together a realistic picture of global living standards and poverty. What goods and services does the ICP cover? The ICP divides GDP aggregates into 155 Basic Headings. A Basic Heading is the lowest level of detail for which expenditure weights can be provided. Prices are collected for individual items to compute National Annual Average Prices. These items range from food, clothing and footwear to hospital equipment and compensation of government employees, etc. Regional coordinating agencies have worked very closely with country offices to come up with regional product lists that are both representative of the countries as well as comparable across countries and regions. For full regional product lists please visit our website. Who carries out the survey and analysis work for ICP? The ICP is organized on a regional basis. In each of the five regions - Africa, Asia, the Commonwealth of Independent States, Latin America and Western Asia, regional coordinating agencies take responsibility for the execution of the Program and provide the mechanism to coordinate activities and to liaise with participating countries. The organizations who are acting as ICP regional coordinating agencies include the African Development Bank; Asian Development Bank; Federal State Statistical Service of the Russian Federation; Interstate Statistical Committee of the Commonwealth of Independent States; Bureau of Economic Analysis Foundation, Russia; United Nations Economic Commission for Latin America and the Caribbean; Statistics Canada and United Nations Economic and Social Commission for Western Asia. Organizations like the Australian Bureau Statistics are also providing technical assistance to individual regions. ICP’s regional partners have established Regional ICP Offices with appropriate staffing and other resources to implement and monitor the Program at the regional level. They maintain contact with participating countries, offer relevant training support, analyze and validate the data received from various countries, etc. ICP price collection surveys are carried out by National Statistical Offices in participating countries. What is the role of the ICP Global Office? The Global Office carries out the day-to-day work required to implement the ICP at the international level. It also prepares timely progress reports for both the Executive Board and other interested parties such as the United National Statistical Commission (UNSC). The Global Office is located at the World Bank’s headquarters in Washington DC and consists of a Global Manager and Deputy Global Manager, supported by a team of professional and administrative staff. The Global Office, through the Global Manager, reports to the Executive Board and prepares annual work programs and budgets for its approval. Its activities are financed from the ICP Global Trust Fund established at the World Bank and follows World Bank administrative and fiduciary rules and regulations. The ICP Global Manager also reports to the Director of Data Development Group (DECDG) in the World Bank. On matters related to the execution and implementation of the ICP, its policy, programs, priorities and standards, the Global Manager acts within the directives provided by the Executive Board and within the framework of the work programs and budgets approved by the Board. What is the difference between CPI and ICP? ICP is a spatial index in which each item priced by a country must be matched to an item priced by another country. CPI, on the other hand, is a temporal index in which the same item must be priced in each index period. Furthermore, ICP’s basket of goods and services is more broad based than usually the case for CPI. In many countries prices for the CPI are only collected in capital cities, whereas ICP encourages country-wide collection of prices, in both rural and urban areas. However, the ICP aims to work within a country’s CPI framework where possible. Experts expect ICP related activities to help enhance statistical capacity in developing countries and thereby improve the CPI framework in developing countries. Most of the international organizations involved in ICP are committed to this end. What are ICP’s accomplishments to date? The ICP has developed from a research effort in a few countries to a global program and is now the largest and most complex statistical undertaking involving six regions and more than 150 countries. An independent evaluation, commissioned by the UN Statistical Commission in 1998, concluded that there is no alternative to PPP data for cross-country economic comparisons or for poverty measurement at the global level. The ICP is therefore contributing towards international efforts to understand factors that affect levels of economic and social development across countries on an ongoing basis. |
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