Improvements in the value added calculations and analyses in vietnam transport

1 Introduction 1. Importance of the thesis SNA is the system of accounts closely related with each other. It is composed of general economic indicators presented in the form of accounts to reflect the social reproduction and gross domestic product within a certain period (usually a year). The basic purpose of the SNA is to provide information for macroeconomic analysis,and policy making to lay foundations for monitoring, managing and reacting to the economy. During the opening process, integration of the SNA applied uniformly throughout the country is an objective necessity. Transport is one of the key industries, are indispensable in the economic structure of each country. The exact value-addeddeterminationin the transport sector (VA vt ) will help ensure the accuracy and reliability of the gross domestic product (GDP), thereby contributing to improve effectiveness and efficiencies ofthe decisions on the socio-economic development. Since SNA is formally adopted in our country (1993), there have been a number of researches related to the method calculating VA and VA vt . On these perspectives, this research has addressed and clarified some issues, which are more or less related to the VA and VA vt such as the method calculating production value in national accounts reporting regimes; Statistical information system of the road transport in our country; methods calculating the production value of the transport sector at current prices in Vietnam etc. However, so far in Vietnam, no in-depth research referring to the complete and comprehensive methods of collection, calculation and analysis of VAvthas showed the contribution of this sector to the national economy. The research perfectingcalculating and analytical methods of VA vt is not only meaningful in terms of methodology, but it also contributes to improve transport sector statistics in our country in the future. Wishing to practically contribute to improve the accuracy and reliability of VA vt indicators, better meetthe needs of transport statistics, and economic information statistics in general, the researcher selected the title of my doctoral dissertation as “improvements in the value - added calculations and analyses in the Vietnamese transportation industry”. 2. Objectives of the research The thesis of improvements in the value- added calculations and analyses in Vietnam transportation consists of 2 - Clarifying the VA vt method according to SNA. - Studying the situation, improving and proposing the method of calculating, analyzing VA vt Vietnam - Studying the current problems, and proposing to improve the statistical information system for the calculation and analysis of VA vt Vietnam - Testing and analyzingVAvtin Vietnam Railways in the 2008-2012 Period 3. Subject and scope of the research Subject of the research is the calculation and analysis of VA vt Vietnam Scope of the research: - Focusing the research on the method of calculating the current value of the VA vt Vietnam of the SNA department according to the General Statistics Office for the transport sector nationwide. - Improving the calculation of VA vt according to the currenttransport sectorof the SNA department and the method of production. - Improving the analysis of VA vt Vietnam according to the transport sector. - Improving the information source serving the VA vt Vietnam under the direction of the researcher. - Testing and analyzing VA vt Railways 2008-2012. 4. Research methodology To accomplish the research objectives, the thesis will use a combination of the following methods: (1) Literature review: Collect and analyze some articles and works related to the thesis topic to inherit and develop their research, and prove that the subject of my thesis is not a duplicate topic, except for a new research. (2) Information collection: To obtain a theoretical basis, legal basis and source of data for the calculation and analysis of VA vt , the researcher gathered legal documents relatingto the statistics field in general and Statistics in the transport sector in particular; materials (including books, newspapers, magazines, research) on the method of calculation and analysis VA vt ; the relevant data from the statistical reports, financial reports of enterprises and transport sector, from the thematic surveys and sample surveys. Besides, the researcher also referred to the opinions of experts 3 working at the General Statistics Office, transportation - relatedstatistics departments, as well as statistics staff directly working in the Ministry of Transportation, in the transport businesses to see the actual situation of the statistical information, the calculation of key indicators of the industry in general and railways transport in particular, as well as the inadequacies in the analysis VA vt nationwide which the Department of National Accounts System is currently facing. (3) Descriptive statistics, statistical analysis: technical tables, graphs, statistic grouping, structural analysis, factor analysis, analysis of variation over time, model diagrams used in the thesis to calculate and analyze VA vt . 5. Contributions of the thesis The thesis has a number of new academic contributions as follows: (1)Systemizing and clarifying theoretical issues related to the VAvtmethodology according to the SNA. (2) Analyzing the situation of calculatingthe current VA vt Vietnam for the country's transport sector according to the Department of National Accounts System. (3) Clarifying the analysis of the current VA vt Vietnam of General Statistics Office. (4) Analyzing the situationof information system to calculate and analyze the current VA vt Vietnam of General Statistics Office. (5) Improving the method of VA vt calculation and analysis of the SNA (6) Improving the information system for the VA vt calculation and analysis towards the direction of the completed one (7) Testing and analyzing VA vt inVietnam Railways. 6 Structure of the thesis In addition to the Introduction; Conclusions and Recommendations, the main contents of the thesis consist of three chapters: Chapter 1: Overview of the value added calculation in the transport sector according to the System of National Accounts Chapter 2: Improvements in value added calculation and analyses in Vietnam Transport Sector Chapter 3: Testing and analysis of VA vt Vietnam Railways for the period 2008 -2012 4 CHAPTER 1 OVERVIEW OF THE VALUE ADDED CALCULATION IN THE TRANSPORT SECTOR ACCORDING TO THE SNA Transport is one of the key industries, are indispensable in the national economy. Its critical role is partly reflected by the industry’s VA generating for the economy. In order to properly assess these contributions, it is essential thatthe method calculating transport VAvt should be carefully studied. To create a basis for the proposal, and improvements in calculating and analyzing VA transport industry in our country, the first chapter will focus on the following issues: (1) Overview of the System of National Accounts; (2) The common problems of the transport sector; (3) the VA vt calculation method according to the SNA. 1.1 Overview of the SNA The SNA is a system of economic indicators presented in the form of double- entry bookkeeping accounts or statistical tables built according to international standards generally, to reflect the productionconditions and results, as well as the process of creating income, distribution, redistribution,its final use of the income of the economy and institutional sector. The SNA represents a tool to measure the social production results and the model analyzing fundamental economic phenomena at the macro level. 1.1.1 The process of formation and development of SNA The System of National Accounts of the United Nations has been introduced by the world's leading economists. Its foundation has been laidsince the seventeenth century with the proposals of the economists such as W.Petty (1665) and G.King (1688). In 1953, the United Nations established the first SNAwhich was based on the report of the research team from Cambridge University (UK). This is also the first version of the System of National Accounts - SNA version - 1953. In 1968, the United Nations and OECD revised and extended the SNA, and made public the SNA -1968. With the aim of simplifying and facilitating, as well as adding indicators reflecting changes in the economy, since 1968 to date, the UN has, in turn, published the versions SNA - 1993; SNA - SNA 2003 and - 2008. 5 1.1.2 Role of The SNA - Providing conceptual systems, general accounting rules to build the system of macroeconomic information to evaluate and analyze the performance efficiencies of the economy. - Describing and analyzing the basic economic phenomena, from production, consumption and accumulation of wealth in the economy. - Allowing the construction and analysis of economic models. - Meeting the needs of international comparisons. 1.1.3 Basic concept of the SNA The concept of production: Production is the process of using labor and machinery of the institutional unit to transfer the cost of these materials and services into other products and services. All goods and services produced are able to sell in the market or at least capable of providing them to another instituation with charge or free of charge. Residential Concept: An institutional unit is considered to be a residential unit when there is a center of economic benefits within that country’s territory. Concept of economic territory: The economic territory of a country consists of the geographic territory under the administration of the State in which residents, commodities, property and capital freely circulate. In the country with coastlines, the economic territory also includes the islands under the sovereignty of the nation,and its fiscal and monetary policy similiar to the mainland. Central concept of economic benefits: An institutional unit is called the center of economic benefits within the territory of a country, if that unit has its headoffice, production sites, or buildings in the economic territory of the country, carrying out production activities and economic transactions for a long time (usually above1 year). 1.1.4 Major groups of the SNA (1) By industry: Industry subdivision means the national economy is divided into different groups based on the production characteristics of the units participating in this division (2) By institutional sector: Institutional sectorsubdivision means the economy is grouped into different parts called institutional sectors, which are based on the characteristics of operating funds, the purpose and field of institutional units’performances. 6 (3) By products: Product classification institutes product sub-categories based on the major use of the product. 1.1.5 Basic content of the SNA The economic indicators of the SNA are: (1) Gross output (Gross Output - GO), (2) intermediate costs (intermediate Consumption - IC): (3) Value added (Value Added - VA); (4) Gross Domestic Product (Gross Domestic Product - GDP; (5) Gross national income (Gross National Income - GNI), (6) Net national income (Net National Income- NNI), (7) National disposable income (national Disposable Income- NDI), (8) Final consumption (Consumpion C), (9) or Savings (saving - S), (10) Exports of goods and services (export - E), (11) Imports of goods and services (import - M) The accounts and I –O tables: (1) Production account; (2) income distribution account; (3) Financial capital account; (4)Economic foreign relations account and (5) Table I - O. 1.2 Common isues in the transport sector 1.2.1 Transportation and its role Transport concept: In fact, each approach has its transport definition. To conduct a statistics research, it is essential to have a concept which not only describes the nature of phenomena, but also lays a foundation for research, quantification of transport activites. To do this, the researcher argues that “Transportation is the activity that moves goods and passengers to a certain place so as to meet socio – economic needs”. The role of transport: (1) Assisting the ongoing production process; (2) The travel needs of the people; (3) Contributing to the implementation of the socio - economic links among local locations and creation of economic relationship among nations; (4) To promote economic and cultural activities of each region or area; (5) Strengthening national defense. 1.2.2 Classification of transport: There are numerous different classifications of transport, here are 3 major classifications. By mode of transport: (1) Waterway transport; (2) Rail transport; (3) Road transport; (4) Air Transport; (5) Pipeline transport. According to transport objects: (1) Cargo; (2) Passenger. Under the scope of transport: (1) Local transport; (2) International transport 7 1.2.3 Transport system of Vietnam According to the table of Vietnam industry classification in 2007, transportation activities are classified as a Class I industry "H: Transportation warehousing and storage" Calculation principles of the transport sector: (1) fully calculating all means of transport and economic sectors; (2) calculating transport activities considered as production activities only; (3) covering transport unit’s side business with no loss and profit accounting in the transportation industry. Calculation scope of the transport industry: (1) freight and passenger; (2) loading and unloading operations in ports, railway stations and bus stations; (3) for – hire vehicles, loading and unloading, warehousing; (4) other transportation services. 1.3 Method calculating value added according to SNA in the transport sector After presenting statistical principles of transport objects as well as the principles VA vt , the thesis presents the methods calculating VA vt according to the SNA: production and distribution methods. On the other hand, the thesis has also clarified information sources to ensure the application of this methodology. Calculating VAvt according to the production method VA = production value - intermediate cost According to the method of production, VA, the production value, IC of the transport sector can be calculated at current prices or comparative prices. According to the distribution method: According to the distribution method, VAvt totals distribution factors: (1) workers’ income earned from production ; (2) other production taxes; (3) depreciation of fixed assets; (4) production surplus. Information sources serving calculating VA vt To calculate VAvt according to the production and distribution methods, It is necessary that information related to the production value targets and IC of the transport sector, first income of workers and the business, and the depreciation level of fixed assets should be collected. All this information can be gathered from the following reports and surveys: - Report of the Railway Corporation. - Reporting of Aviation Corporation. - Report of Maritime Corporation. 8 - Report of the provincial Statistics Bureau and centrally-managed cities. The Report of Statistics Departments has been collected, compiled from: (1) periodic statistics report of state enterprises; (2) results of annual enterprise surveys; (3) individual establishments’ annual business results from the sample survey; (4) annual results from quantities of the individual establishments (5) The transportation survey results from non - state enterprises and individual busineses CHAPTER 2 IMPROVING THE VAvt CALCULATION AND ANALYSIS IN THE CURRENT TRANSPORT SECTOR In this chapter, the authors focus on the situation and propose the improvements in VAvt calculation and analysis, as well as information source to ensure thatcalculation and analysis. 2.1 Overview of the SNA statistics in Vietnam To lay a foundation for conducting a research into improving VA vt calculation analysis of VA vt Vietnam, simultanously ensure its accurate and timely data, in the opening of chapter 2, the researcher has focused on clarifying some common issues of the Vietnamese statistics sector such as organizational system; distribution and decentralization in compiling SNA statistics; compare the levels implementing SNA statistics in Vietnam with the provisions of the IMF. 2.2 Improving the method calculating value added in Vietnam Transport sector on a national scale 2.2.1 The situation of the method calculating VAvt in the transport sector nationwide Currently, the VAvt in the transport sector is being calculated on a national scale by the Department of National Accounts System, which implemented it quarterly and yearly, mainly in accordance with the production method (VASX = GO - IC) and calculated according to the transport industry. In the diagram below: GOhh, t and Goss, t is the transport production value at time t at current prices and comparative prices 9 IChh,t and ICss t, t is the transport intermediate cost at time t at current prices and comparative prices VAss,t and VAhh, t is the value-added at time t at current prices and comparative prices PPI is an index of freight rates IC IC܁܍܋ܜܗܚ Figure 2.1: The process of calculating the present VAvt Vietnam The current process of calculating VAsx of the Department of National Accounts as follows: (1)Calculating GO in the transport sector: The Department of National Accounts calculates GO in the transport sector according to comparative prices, based on the increasing speed of freight and passenger movements. The value of transport services is allocated on the following principles: the more movements, the more transport services, therefore, the transport value is allocated according to the weighted freight and passenger transport value in the total value of freight and passenger (2)Calculating IC transport industry: Based on IC transport coefficients provided by the General Statistics Office to calculate the transport IC at comparative prices and current prices. IC ss/hh,t = GO ss/hh,t x IC Transport Sector (3) The VA vt : Application of the production calculation method for calculating VA ss,t , and VA hh,t ܄ۯ ܛܛ/ܐܐ,ܜ = ۵۽ ܛܛ/ܐܐ,ܜ − ۷۱ ܛܛ/ܐܐ,ܜ After presenting the situation of calculating GO, IC in the transport sector, the thesis provides some comments and conclusions on advantages and disadvantages GO ss,t IC ss,t VA ss,t GO hh,t IC hh,t VA hh,t PPI _ = = 10 and some problems that need further researching in perfecting the current VAvt calculation method of the Department of National Accounts: Strengths : the current calculation method of Department of National Accounts has theavailable original information source, just gathers information about the volume of freight and passenger movements. Weaknesses : Calculating GO in the transport sector at comparative prices based on the speed of freight and passenger movements, then turningthis calculated GO intothat of the current price, based on PPI which has not taken advantage of all information sources reported from the levels and firms in the transport sector. On the other hand, based on the data speed of original freight and passenger movements will increase the errors of GO, because the speed of freight and passenger movements may not be accurately reflected, whenthe time gap between the original period and calculation period is longer. The IC industry Transport at current prices and comparative prices over years are based on the same transport coefficients IC 2007, which does not reflect the intrinsic VA over years, because of the intermediate cost rates over years may not always be equal according tocomparative prices and current ones. A number of issues need further research and improvement: - ForState transportation businesses, production value and IC in the transport sector are compiled at current prices from the annual report, then converted GO and IC transport sector at comparative prices through PPI and intermediate costs. - For non - state transport enterprises and individual transportation establishments, the survey may directly collect information about revenues. With this information and data, transportation production value can be completely calculated at current prices. Furthermore, non - state transport enterprises and individual transportation establishments do not own large production scales. Hence, it can be coordinated with the Price Statistics Department for information about the input index in order to transfer IC to the current prices, after comparing prices based on the coefficient IC. 2.2.2 Improving the method of calculating the value added in the transport sector nationwide 2.2.2.1 Improving the method of calculating the value added in the transport sector for State transport enterprises The improvement in the VA vt method for state transport enterprises is shown by the diagram 2.2: 11 - = Transportation Price Index (PPI) - = ICSector Chart 2.2: Process of calculating the VAvt for State transportation businesses Specifically, the process of calculating VAss, t for these enterprises is shown as follows: (1) From the periodic reports of the transport industry, GOhh, t, IChh, t can be collected. (2) From the indicators collected in the report and associated with PPI , GO ss,t , IC ss,t can be calculated as follows: ۵۽ ܛܛ,ܜ = ۵۽ ܐܐ,ܜ ۾۾۷ ܜ IC ss,t can be calculated in 02 ways: The first: method shows that if IC in the transportation sector provided by the surveys of the General Statistics Office is applied (IC of the Transport Sector is currently applied in 2007), the freight price index (PPI) oughts totransfer in the same year as that of IC in the transport industry provided by the General Statistics Office (transfer the freight price index in 2007). The calculation formula can be shown as followings: IC ୱୱ,୲ = GO ୱୱ,୲ xICTransportSectorin2007 VA hh,t IC hh,t GO hh,t VA ss,t IC ss,t GO ss,t 12 The second: method argues that it can be calculated according to the annual IC in the transport sector, based on information collected by GO, IC Transport sector at current prices according to the formula: ܫܥ ௦௦,௧ = ܩܱ ௦௦,௧ ݔ ூ஼ ೓೓,೟ ீை ೓೓,೟ ,Afterwards, the freight price index from the Price Statistics Department is applied. (3) Application of the production calculation method for calculating VA ss,t , and VA hh,t ܄ۯ ܛܛ/ܐܐ,ܜ = ۵۽ ܛܛ/ܐܐ,ܜ − ۷۱ ܛܛ/ܐܐ,ܜ In conclusion, this above – mentioned calculation process has taken an advantage of the information from the periodic transport statistics reports in order to calculate GO hh,t and IC hh,t , thereby overcoming the existing reality that reflects the shortcomings of production price index calculation. 2.2.2.2 The method of calculating VA in the transport sector for non - state transport enterprises and individual transportation establishments The improvement in calculating VA in the transport sector for non - state transport enterprises and individual transportation establishments is shown in the diagram 2.3 _ = The freight price index (PPI) The input price index ICSector - = Diagram 2.3:The process of calculating VA in the transport sector for non - state transport enterprises and individual transportation establishments VA hh,1 IC hh,t GO hh,t VA ss,t IC ss,t GO ss,t 13 Specifically, the process of calculating VAss, t for these enterprises is presented as follows: (1) From the survey results according to the Decision No. 612 / QD –TCTK, dated 12/9/2011 of the General Department of Statistics, GOhh, t can be calculated (2) With this available GOhh, t, associated with PPI to determine Goss, t. (3) Determining IC hh,t according to the formula: IC hh,t = IC ss,t x Material input price index at time t With this formula, to calculate the transfer IC ss,t to IC hh,t the material input price index is needed. However, the fact that there is PPI only. For this reason, to use the formula, the material input price index is replaced by the PPI. 4) Calculating VA ss,t, VA hh,t according to the production method with the following fomula: VA ୦୦/ୱୱ,୲ = GO ୦୦/ୱୱ,୲ − IC ୦୦/ୱୱ,୲ The application of the VA calculation process for State transport enterprises and individual transport establishments can limit the errors when calculating IC Transport Sector in the current calculation of the Department of SNA (see the diagram 2.1) 2.3 Improving the current analysis of the value-added in the Vietnamese transport industry 2.3.1 Situation of analyzing the value-added in Vietnam transport sector at present In our country, the VAvt targets calculated by the Department of National Accounts System serve the annual calculation of GDP of the economy . Therefore, the VAvt analysis lies within the calculation of simple statistical indicators such as : (1) Determine the absolute and relative VAvtvariation; (2) Use statistics tables and graghs to illustrate thesefluctuations. The current analysis of Vietnam VAvt has not clarified the position and role of the transport sector in the economy, as well as evaluated the level of development in the transport sector . 2.3.2 Improving the current analysis of value-added in the Vietnam transportation industry On the basis of the current VA research and analysis, the proposed VA vt calculation method, the dissertation improves this analysis with the following contents: 14 - Analyzing VA vt according to the time to clarify the degree of increase or decrease in this indicator over time, thus making comments on VA vt fluctuations over time. - Analyzing the transport market share through the calculated VA share of the transport sector in the total VA vt and GDP of the economy, from which an overall assessment of transport sector’s role in general and each transport sub- sector in the economy in particular. - Analyzing the factors affecting VA vt by a number of analysis methods ( index method, method of analyzing each section of the fluctuations) through some economic equations as follows: Table 2.1: Criteria group used in the analysis of VA Transport Sector due to the effects of the factors Targets Symbol First targets 1 Production value according to the transport sub - sector GO 2 Intermediate transport costs according to the transport sub - sector IC 3. Labor costs according to the transport sub - sector V vt 4. Depreciation of the fixed assets according to the transport sub – sector C 1 5. Transport labor quantity according to the transport sub – sector L vt 6. Transport business results according to units in kind Q Calculation targets 7.  Revenue  per  user  calculated  according  to   VA = VA \ business results according to units in kind D 8. Capacity of using costs ሺ L vt  , C 1  , V vt ሻ = ୚୅ ୡ୭ୱ୲ୱ H 9.  Average  imcome  per  labor = ୪ୟୠ୭୰  ୡ୭ୱ୲ୱ ሺ ୚ ౬౪ ሻ  ୪ୟୠ୭୰  ୤୭୰ୡୣ ሺ ୐ ౬౪ ሻ V bq 10. Total costs = C 1 + IC + V vt TCP 11. Cost  structure =  ஼ భ ሺ ௢௥ ௏ ೡ೟  ;  ௅ ೡ೟ ሻ ்஼௉ D 12. Capacity of using costs according to the business results of the units in kind = ୕ ୡ୭ୱ୲ୱ H Q 15 Equation 1: Analysis of VA fluctuations in the transportation industry affected by revenue per user and transport volume VA =  ୚୅ ୲୰ୟ୬ୱ୮୭୰୲୰ୣୱ୳୪୲ୱୟୡୡ୭୰ୢ୧୬୥ ୲୭୲୦ୣ୳୬୧୲୧୬୩୧୬ୢ XTransport results according to the unit (Q) Or: VA = D x Q Q: indicators of transport results according to the units in kind Equation 2 : Analysis of VA in the transportation industry affected by capacity of using costs and cost scales VA =  VA costs Xcosts = HxCP CP: Cost, could be: C1 (depreciation of fixed assets); V (labor cost); L (labor scale) Equation 3 : Analysis of VA fluctuations in the transportation industry affected by capacity of using labor costs, average income per worker and labor scale VA =  VA LaborcostsሺV ୴୲ ሻ X LaborcostsሺV ୴୲ ሻ laborforce ሺ L ୴୲ ሻ Xlaborforce ሺ L ୴୲ ሻ Or: VA = H x V bq x L vt Equation 4: Analysis of VA in the transportation industry affected by capacity of using costs, cost structure and cost scale VA =  VA C ଵ ሺhoặcV ୴୲ ; ICሻ X C ଵ ሺhoặcV ୴୲ ; ICሻ TCP XTCP Or: VA = H x d x TCP Equation 5 : Analysis of VA in the transportation industry affected by the revenue and capacity of using costs calculated according to the results of units and scale cost VA =  VA Q X Q costs XcostsOr ∶ VA = DxH ୕ xCP CP can be: C1 (depreciation of fixed assets); V (labor cost); L (labor scale); IC (intermediate costs). 2.4 Improving information sources, ensure the application of the value- added analysis and calculation in Vietnam transportation sector Based on the reality of the information system and the transport statistics reports, the author of the thesis has made the following primary recommendations to 16 ensure the information needs for the application of the value – added analysis and calculation: * For State transportation enterprises - To accurately determine the indicators of GO, IC transport, worker’s initial income (V), production surplus (M) (from which VAvt can be determined), the researcher suggests supplementing the indicators of gross transport revenues and costs to the annual statistics reporting regimes accompanied with The Prime Minister’s Decision No 77/2010/QD- TTG, dated on 30/11/2000 - To determine enterprices’ monthly VA (from which quartly and yearly statistics can be compiled), the researcher suggests adding the indicators of revenues, total transport costs and labor scales to the table No 01 – CS/VTKB. * For State transport enterprises and individual transportation establishments, to have adequate information for VA analysis and calculation, some problems in carrying out the periodic statistics surveys of non – State enterprises, cooperatives and individual transport – related establishments according to the Decision No 612/ QD – TCTK dated on 12/9/2011 of the Head of GSO should be improved such as (1) Don’t select a sample with only criterion which is the number of workers, choose the sample with many different criteria, in accordance with each type of enterprise; (2) Addition to the survey indicators (including identified indicators ) for the enterprise branches located in each local area to separate the pure local database ; (3) Simultanously, establishing the database storage and data sharing system among the units responsible for collecting, processing and storing data with other units in the statistics or non – statistics/statistics - related industries. CHAPTER 3 TESTING AND ANALYZING THE VALUE – ADDED IN THE VIETNAMESE RAIL TRANSPORTATION SECTOR IN THE PERIOD 2008-2012 In this chapter, after generalizing the rail transportation in Vietnam and worldwide, the researcher will focus on calculating and analyzing the VAvt in the Vietnamese rail transportation in the period 2008 -2012. On the other hand, for the sake of collation and comparison, in this chapter, VAvt Vietnam Railways in the period 2008 -2012 is calculated according to the current method of the Department of the SNA. 17 3.1 Overview of the rail transportation sector in Vietnam and in the world By generalizing the rail transportation in Vietnam and worldwide, the researcher clarifies the development trends, models of production organization, rail administrations in Vietnam and throughout the world. On the other hand, from the history of formation and development of Vietnam rail transportation over time, the thesis has clarified the role of transportation for the course of industrialization, modernization and country’s defense. 3.2 Calculating the value – added in the rail transportation sector (1)Calculating VA vt Vietnam Railways according to the current method of the Department of the SNAmeans calculating GO in the rail transportation from the comparative prices based on the growth in freight and passenger movements, then transfer the current prices through annual rail freight rates. Rail IC at current and comparative prices is calculated by using IC 2007. VAvt at current and comparative prices is calculated according to the production method. Table 3.2:Results of the VAcalculation in the rail transportation sector in the period 2008-2012 according to the calculation of the Department of the SNA (According to PPI of yearly freight and passenger transportation) Year Targets 2008 2009 2010 2011 2012 HHLC đs (mn tonnes.km) 4170.9 3864.5 3960.9 4162 4024.5 HKLC đs (mn of passenger arrivals.km) 4560.4 4138.1 4377.9 4571 4600.6 T HHLC (times) 1.0743 0.9954 1.0202 1.0720 1.0366 T HKLC (times) 0.9787 0.8881 0.9396 0.9810 0.9874 GO hgh,ss,t (bn. VND) 1096.655 1016.093 1041.44 1094.315 1058.162 GO hk,ss,t (bn. VND) 1542.795 1399.93 1481.055 1546.381 1556.395 GO ss,t (bn. VND) 2639.45 2416.023 2522.495 2640.696 2614.557 IC 2007(%) 47.56 47.56 47.56 47.56 47.56 IC ss,t (bn. VND) 1255.322 1149.060 1199.699 1255.915 1265.123 VA ss,t (bn. VND) 1384.128 1266.963 1322.796 1384.781 1371.074 18 PPI hk (%) 122.39 104.075 114.55 118.37 122.00 PPI hgh (%) 123.44 103.874 110.21 112.84 107.82 GO hgh,hh,t (bn. VND) 1353.711 1055.416 1147.771 1234.825 1149.910 GO hk,hh,t (bn. VND) 1888.227 1457.047 1696.548 1830.451 1898.802 GO hh,t (bn. VND) 3241.938 2512.463 2844.319 3065.276 3039.712 IC hh,t (bn. VND) 1541.866 1194.928 1352.758 1457.845 1445.687 VA hh,t (bn. VND) 1700.072 1317.536 1491.561 1607.431 1594.025 (Source: rail transportation statistics yearbook and researcher’s calculations) HKLC đs :Number of rail passenger arrivals HHLC đs ;Volume of rail freights T HHLC :The growth rate of the original volume of freights T HKLC :The growth rate of the original passenger volume PPI hgh :the index of freight rates PPI hk :the index of passenger travel rates (2)Calculating towards the researcher’s improved method From the annual report of the rail transportation sector sent to GSO, the author of the thesis calculates GO, IC, VA rail transport at current prices. VAvt rail transport can be calculated in 2 ways: Method 1: Calculating VAvt rail transport in the period 2008- 2012 according to PPI transport and the coefficient IC/GO transfers to the orginal year 2007. Calculating GO rail transport according to the prices of the orginal year 2007,t ܩܱ ௦௦,ଶ଴଴଻,௧ = ீை ೓೓,೟ ௉௉ூ మబబళ,೟ IC rail transport according to the prices of the orginal year 2007,t ܫܥ ௦௦,ଶ଴଴଻,௧ = ܩܱ ௦௦,ଶ଴଴଻,௧ ݔܫܥݎ݈ܽ݅ݐݎܽ݊ݏ݌݋ݎݐ2007 VA vt rail transport according to the prices of the original year 2007,t ܸܣ ௦௦,ଶ଴଴଻,௧ =  ܩܱ ௦௦,ଶ଴଴଻,௧ − ܫܥ ௦௦,ଶ଴଴଻,௧ Calculating VAvt rail transport in the period 2008-2012 according to the PPI rail transport and IC/GO transferring to the orginal year 2007 has the following strengths and weakneses: 19 Strengths: Taking an advantage of IC rail transport 2007 to calculate VAvt rail transport according to comparative prices. Weaknesses: - Depending on IC rail transport calculated by the surveys to build up the interdisciplinary balance (I/O) and compile basic coefficients of SNA 2007 (be used for 5 years) - Calculating the annual transportation freight transferred to that of the original year (2007) Method 2: Calculating VAvt rail transport in the period 2008 -2012 according to annual PPI and IC/GO From the report of business results in the rail transportation sector, GO rail transport (GO hh,t )and IC at current prices can be collected. With two indicators and PPI vt,t , transport rates of year t (provided by the Department of Price Statistics), GO rail transport can be determined according to comparative prices, year t GO ୱୱ,୲ = GO ୦୦,୲ PPI ୴୲,୲ With the GO ss,t just found out, determine IC rail transport at comparative prices, year t (IC ss,t ) with the following fomula ܫܥ ௦௦,௧ = ܩܱ ௦௦,௧ ݔ ܫܥ ௛௛,௧ ܩܱ ௛௛,௧ Finally, VAvt rail transport at comparative prices, year t(VA ss,t ) can be determined VA ୱୱ,୲ =  GO ୱୱ,୲ − IC ୱୱ,୲ Calculating VAvt rail transport in the period 2008 -2012 according to PPI transport and IC/GO has the following strengths and weakneses: Strengths: -Information sources are available and practical for each transport sub – sector, therefore, when the information is compiled for GO, IC rail transport at current prices can be calculated. -The transport freight rates are provided by the Department of Price Statistics Weaknesses: Coinciding IC rail transport at comparative prices and current prices each year 20 (3) Comparing the results of calculating VAvt rail transport according to the improved method (VA -1) and the current method of the Department of the SNA (VA -2) - The calculation results of two methods have shown the strengths of a new method - the method that the researcher of the thesis reccommends is to minimize errors when calculating VAvt. Thanks to the direct use of the indicators GO and IC transport at current prices, the method that the researcher of the thesis reccommends has overcome weakneses of the current VAvt method of the Department of the SNA. The reason for these weaknesses is that the original speed of freight and passenger movements (orginal year 2007) has been used to calculate GO at comparative prices, and IC transport 2007 has also been used to calculate IC transport at comparative prices. Hence, the errors of the VAvt indicator increased. Table 3.7: The results of calculating VA – 1 và VA - 2 Targets 2008 2009 2010 2011 2012 VA -1 (bn.VND) 1405.103 705.069 838.060 959.247 1235.976 VA - 2 (bn.VND) 1700.072 1317.536 1491.561 1607.431 1594.025 (Source: the author’s calculations) Chart 3.1:The results of calculating VA – 1 and VA - 2 (Source: the author’s calculations) 3.4 Analyzing the VA vt rail transport In this section, after analyzing the fluctuations of the VAvt rail transport over time, analyzing the structure of the VAvt rail transport according to the elements, the researcher of the thesis has deeply analyzed the market share of the rail transportation and the factors affecting the VAvt in the rail transport sector. 0.000 500.000 1000.000 1500.000 2000.000 2008 2009 2010 2011 2012 VA - 1 VA - 2 [...]... as to evaluate the contributions of the transportation sector to the economy, determine its market share etc from which the business efficiencies and the contributions of the transportation industry to the cause of building and defensing the country has been improved - From the current information system of transport statistics, to meet the needs of calculating and analyzing VAvt, , the researcher... complement and make recommendations of additional indicators, proposed by the author, to the Government and the Ministry of Transportation Simultaneously, the deadlinesubmitting reportsshould be more suitable to meet the requirements of compiling the data at current prices The transfer the comparative prices to the current prices in the VAvt calculation should be terminated soon - In the absence of the index...-Analyzing the market share of the rail transportation :The researcher has analyzed the market share of the Vietnamese rail transportation sector in the period 2008 -2012 through the transport business results, the indicators of quantities and tendency towards the choice of goods owners and residents’ transport means The results of this analysis reflects that in the period 2008 -2012,... costs in the transportation industry, the VAvt,can be conversed from the current prices to comparative ones with the following formula: VAvt of the reporting year at current prices = Production value of the reporting year at comparative prices - The researcher recommends that the GSO should study and issue statistical reporting regimes in the transport industry, more suitable for the objects, in order... advantages and disadvantages of transport statistical information systems, gaining experience of a number of countries around the world and in the region; based on the contents, the requirements of national statistical system indicators; combined with the practical 22 experience of the researcher and colleagues, the author has studied and improved the proposed method of calculation and analysis of the Vietnam. .. VND (3) The number of rail passenger movements increased by 6.7%, leading to the rise in VAvt rail transport by 7.322 billion VND (4) The volume of rail freight movements went down by 3.3%, causing the VAvt rail transport to diminish by 36.96 billion VND according to the method of anlyzing and compiling each part of the fluctuation CONCLUSIONS AND RECCOMENDATIONS Factors affecting VAvt rail transport. .. need adjusting (increase or decrease) or overcoming in order to improve its market share and the sector's contribution to the GDP of the economy - To meet the needs of information for the VAvt, analysis, GSO needs uniform regulations of the deadline for submission of statistical reports of transportation businesses like other businesses (commercial and service enterprises etc.) - According to the current... only in line with international practice, but also suitable with our country’s conditions - From the situational research and analysis of the current method determining VAvt ,Vietnam of the SNA, the writer of the paper has improved the VAvt calculation method to meet the general requirements of the SNA - Based on the proposed VAvt,calculation method, the researcher has perfected the analysis of VAvt ,Vietnam. .. Conclusions Transportation industry is one of the key economic and technical sectors of the reproduction process in particular and the socio – economic life in general Transport statistics is a relatively complicated statistical field, but the focus, innovation and approach to the new, modern and advanced methods have not been paid attention for long Based on the research, with the situational analyses of the. .. recommendations to add some indicators and regulations of the suitable deadline submitting the report in order to perfect the transport statistics information system - To verify the method of proposed VAvt, calculation and analysis, the author has tested and analyzed Railway VAvt in the period 2008-2012 Recommendations - To improve the efficiencies of the VAvtcalculation and analysis, GSO need to conduct . TESTING AND ANALYZING THE VALUE – ADDED IN THE VIETNAMESE RAIL TRANSPORTATION SECTOR IN THE PERIOD 2008-2012 In this chapter, after generalizing the rail transportation in Vietnam and worldwide,. of the value- added in the Vietnamese transport industry 2.3.1 Situation of analyzing the value- added in Vietnam transport sector at present In our country, the VAvt targets calculated by the. Vietnamese transportation industry”. 2. Objectives of the research The thesis of improvements in the value- added calculations and analyses in Vietnam transportation consists of 2 - Clarifying the