Financial systems and development

The table reports the value of manufactured im- Net workers' remittances cover payments and reports
of high-income OECD countries by the econ- ceipts of income by migrants who are employed or
omy of origin, and the composition of such im- expect to be employed for more than a year in their
ports by major manufactured product groups. new economy, where they are considered resi-
It replaces an earlier one on the origin and desti- dents. These remittances are classified as private
nation of manufactured exports, which was based unrequited transfers, and are included in the balon
exports reported by individual economies. As ance of payments current account balance, while
there was a lag of several years in reporting by those derived from shorter-term stays are included
many developing economies, estimates based on in services, as labor income. The distinction acvarious
sources were used to fill the gaps. Until cords with internationally agreed guidelines, but
these estimates can be improved, this present ta- many developing countries classify workers' reble,
based on up-to-date and consistent but less mittances as a factor income receipt (and hence a
comprehensive data, is included instead. Manu- component of GNP). The World Bank adheres to
factured imports of the predominant markets from international guidelines in defining GNP and,
individual economies are the best available proxy therefore, may differ from national practices.
of the magnitude and composition of the manufac- Net direct private investment is the net amount intured
exports of these economies to all destina- vested or reinvested by nonresidents in entertions
taken together.
prises in which they or other nonresidents exercise
Manufactured goods are the commodities in SITC, significant managerial control, including equity
revision 1, sections 5 through 9 (chemical and re- capital, reinvested earnings, and other capital. The
lated products, basic manufactures, manufactured net figures are obtained by subtracting the value of
articles, machinery and transport equipment, and direct investment abroad by residents of the reother
manufactured articles and goods not else- porting country.
where classified) excluding division 68 (nonferrous Gross international reserves comprise holdings of
metals). This definition is somewhat broader than monetary gold, special drawing rights (SDRs), the
the one used to define exporters of manufactures. reserve position of members in the IMF, and hold-
The major manufactured product groups re- ings of foreign exchange under the control of monported
are defined as the following: textiles and etary authorities. The data on holdings of internaclothing
(SITC 65 and 84), chemicals (SITC 5), elec- tional reserves are from IMF data files. The gold
trical machinery and electronics (SITC 72), trans- component of these reserves is valued throughout
port equipment (SITC 73), and others, defined as at year-end (December 31) London prices: that is,
the residual.
$37.37 an ounce in 1970 and $484.10 an ounce in
1987. The reserve levels for 1970 and 1987 refer to
the end of the year indicated and are in current
The statistics for this table are mostly as reported dollars at prevailing exchange rates. Because of difby
the IMF but do include recent estimates by ferences in the definition of international reserves,
World Bank staff and, in rare instances, the Bank's in the valuation of gold, and in reserve manageown
coverage or classification adjustments to en- ment practices, the levels of reserve holdings pubhance
international comparability. Values in this lished in national sources do not have strictly comtable
are in current U.S. dollars.
parable significance. Reserve holdings at the end
The current account balance after official transfers is of 1987 are also expressed in terms of the number
the difference between exports of goods and ser- of months of imports of goods and services they
vices (factor and nonfactor) as well as inflows of could pay for, with total imports level for 1987.
unrequited transfers (private and official), and im- The summary measures are computed from group
ports of goods and services as well as unrequited aggregates for gross international reserves and totransfers
to the rest of the world.
tal imports of goods and services, in current dol-
The current account balance before official transfers is lars.
the current account balance that treats net official Table 19. Official development assistance from
unrequited transfers as akin to official capital a ldevemers
movements. The difference between the two balance
of payment measures is essentially foreign Official development assistance (ODA) consists of net
aid in the form of grants, technical assistance, and disbursements of loans and grants made on confood
aid, which, for most developing countries, cessional financial terms by official agencies of the
tends to make current account deficits smaller than members of the Development Assistance Committhe
financing requirement.
tee (DAC) of the Organisation for Economic Co-
240