Interview | Tuesday, 17 December 2008

Lost and found: New NSO chief talks

In his first newspaper interview since his appointment as the new NSO Director-General a few weeks ago, Michael Pace Ross speaks to Charlot Zahra about his vision and plans for the NSO after the turbulence of the past two years

The National Statistics Office (NSO) has passed from a turbulent period ever since Gordon Cordina resigned as Director-General after his six-month stint marked by the Labour Opposition’s strong criticism of a revision of GDP statistics since 1995.
After that, the NSO had made various calls for applications to fill the top post, but nobody would take the hot seat – all until Michael Pace Ross, a relatively unknown face to the public at large, decided to give it a shot.
“I joined NSO in 1998. I had previously worked for one year on a contract basis as part of my work-phase at University. Since then there have been substantial improvements in the NSO’s operations,” Pace Ross started.
Ten years ago, when he first joined the office, the NSO was still called the Central Office of Statistics and it was a government department.
“In 2001, the NSO became autonomous, reporting to the Malta Statistics Authority (MSA). That has helped substantially in improving the independence and impartiality of our office,” he explained.
Throughout recent years, the NSO has substantially invested in human resources.
“A number of graduates were employed. Moreover, the range of statistics that the NSO publishes has been widened as well,” Pace Ross said.
The NSO also invested in its premises and had now centralised its operations in a single office in Valletta. Previously, NSO staff was spread over two offices, one in Blata l-Bajda and the other one in Valletta.
“The quality of statistics has also been improved substantially, especially since Malta joined the EU. The quality of our statistics is now comparable to that of other EU Member States,” Pace Ross told Business Today.
Moreover, the NSO started participating in a lot of meetings abroad, especially in Luxembourg, where the headquarters of the statistical office of the European Communities, better known as Eurostat, is situated.
The NSO has also invested in a lot of courses for its statisticians. “Therefore over the past ten years, the NSO has made substantial progress in various areas,” Pace Ross said.
Regarding NSO operations, the new Director-General said he was particularly satisfied with the setup that he found at the office as well as with the human resources and the staff’s motivation to work.
“In fact, before taking over, I spent a week with all the members of staff, touring their offices and staying in their rooms to establish their motivation and their dislikes, as well as what we can do to improve the operation.
“I am not surprised that most of the NSO staff is happy and motivated,” he said.
“There are some little issues that they are unhappy with, however, all in all, I am quite happy that in this office I have a strong human resource component.”
In an office like the NSO, there was a mix of technical expertise, including graduates, clerical staff, as well as field officers.
“If you do not have this mixture working together, the NSO would not operate effectively. Fortunately enough, I found all this setup in place and this is one of our strengths,” Pace Ross told Business Today.
Asked about those areas where he would like to see an improvement, the new NSO chief explained that the first thing that he did as soon as he took over on 5 November was to fine-tune the office’s organisation chart.
“I believe that before focusing on particular areas which I would like to improve, we should first have the organisation setup in place,” Pace Ross said.
Currently, the NSO has four directorates. The first directorate is the economic statistics directorate, which incorporated national accounts; public finance; balance of payments; short-term statistics; and price statistics.
The second directorate is the business statistics directorate, which incorporates structural business statistics; international trade and transport statistics; agricultural and fisheries statistics; and environment and resources statistics.
The third directorate is the social statistics and information society directorate, which incorporates demographic, social and cultural statistics; labour market and education statistics; and information society and tourism statistics.
There is also a directorate for resources and support services, which incorporates personnel and budgetary matters; legal, institutional and international affairs; information services; and IT systems.
Pace Ross said that the NSO was generally compliant in getting out its statistics on time, however there were certain pockets where it could improve.
“For instance, there is room for improvement in short-term statistics,” he told Business Today.
“We would also like to see some improvement in our environment and resources statistics, as well as in energy statistics. Moreover, there are also some areas of our structural business statistics which can be issued more on time,” the new NSO Director-General added.
He said that he would be taking a number of effective measures to bring these improvements in the NSO’s operations.
“First of all, I would like to get more human resources employed with the NSO. We will be issuing a call for applications for six statisticians and clerks so that our staff complement is sufficient in these circumstances,” Pace Ross told Business Today.
He explained that with the increase in requirements from Eurostat, the NSO cannot function properly unless it had enough staff to cope with the added workload.
“There are so many additional requests from Eurostat that in order to satisfy these requests, we have to employ new staff, train them and integrate them in the Unit to be able to give us that addition output we need,” he said.
“Internally, I have also made some internal staff movements which, I think, would be useful to improve the efficiency of the organisation.”
The NSO currently employs 140 staff, some of which are on reduced hours.
Asked for his view about whether the fact that the NSO remained without a Director-General for almost two years since Gordon Cordina’s resignation as CEO in January 2007 had affected negatively the NSO’s operations and image, Pace Ross disputed that assertion.
“You are not precise, because between January 2007 and October 2008 we had an Acting Director-General who had all the powers, functions and responsibilities that the law assigns to the NSO Director-General.
“He was indeed in an acting position, but that did not affect him legally in any way,” Pace Ross told Business Today.
Pressed on the fact that it took so long to appoint a new director-general, and its effect on the image of the NSO, Pace Ross was academic in his response.
“The selection of the NSO Director-General is an issue for the MSA to tackle, rather than myself,” he contended.
“They felt that there was the need for an interim period at that moment in time since Gordon Cordina had resigned from the post so unexpectedly that there was the need of a period of cooling-off prior to the appointment of a new Director-General,” Pace Ross added.
“It is an issue for the MSA to decide, therefore I cannot comment on whether the fact that there was an Acting Director-General was good or bad for the NSO,” he told Business Today.
Asked about past criticism both about the timeliness as well as the quality of NSO statistics, especially GDP and inflation statistics, he said that this was mostly unjustified.
“On timeliness, I do not think you are correct. Since Malta joined the EU, the GDP news releases have always come out on time within the stipulated time-frame,” he argued.
“This was originally 90 days after the end of the quarter under review, but was recently shortened to 70 days after the end of the quarter under review.
“Therefore if there was any criticism as to the timeliness, I do not think that it was justified,” he told Business Today.
With regard to GDP statistics, the Pace Ross explained that they were constantly being revised. “Data is always flowing in from businesses, the Central Bank, individuals and households, therefore there is the need for a number of revisions so that the estimates that we made are actually replaced with real figures.
“What we have learnt from the past is that we should explain better the revisions that we effect – why we are revising and the extent to which we are revising,” he conceded.
During the past few years, the NSO had started explaining why the GDP was being revised, in which sectors it was revising, and whether it was a revision upwards or downwards.
With regard to prices, Pace Ross explained that the Retail Price Index (RPI) press releases had not been revised for a very long time. “The only revision that took place was in 1997, however since then, the RPI has not been revised,” he told Business Today.
Pace Ross also defended the NSO’s actions when the controversy about the GDP deflators erupted a few months ago.
“When there was the controversy about the deflators, we had also explained how the GDP is deflated. We issued a publication which is also on the NSO website, which explains how GDP is deflated.
“This is a highly technical area, and unfortunately not everybody appreciates the work that is done in the deflation process and the complexity of the exercise,” Pace Ross said.
“However we do everything openly and transparently – the method is described on the NSO website and Eurostat from time to time visit Malta in order to verify that the methodologies and systems used by the NSO are in conformity with their requirements,” he added.
“Therefore I do not think that the criticism about the deflators is much justified,” the new NSO chief said.
Speaking to Business Today on 30 January 2008, veteran economist Karmenu Farrugia had proposed that the Director-General of the NSO should be transformed into an independent authority and its head should be appointed by the House of Representatives, just like the Auditor-General and the Ombudsman.
Asked about this proposal, Pace Ross again defended the current setup with the MSA. “It is an interesting proposal which should be considered like other proposals that there might be. However nowadays we are already at arm’s length from the government of the day since there is the MSA,” he said.
“The MSA has its legal setup, with its chairman and board of directors, of which I am an ex-officio member, therefore in every suggestion, the present board of the MSA should be involved as this proposal would entail changing the present legislation on the MSA as well as various other things.
“However the present setup is a good one since the MSA board, besides the Chairman appointed by the Government, also includes professions from various sectors such as the University of Malta, and the Central Bank of Malta, among others.
“Therefore I believe that the present system is also good,” the new NSO chief told Business Today.
Pace Ross added that irrespective of the setup, the NSO abided by Eurostat’s code of practice, which included 15 principles which guide the office on how it should operate.
“If you adopt that code of practice, you have your independence and impartiality safeguarded. I believe that the setup in Malta strengthens the hand of the NSO to implement that code of practice,” he insisted.
Until a few years ago, Pace Ross was a PN local councillor in Sliema. Asked whether this would impinge on his new job as NSO Director-General, he replied: “I will not let anything impinge on my new job. What you have mentioned there I did it voluntarily outside office hours.
“That was another time, when I had some free time. That time is now over, and I will not allow anything from my past to impinge or interfere in the work that I do.”
Finally, asked about whether he would survive more than six months in the job, unlike his predecessor, Pace Ross said diplomatically: “I am not a prophet, therefore I cannot say where I will be in six months’ time or five months’ time. I will strive to do my utmost and God will do the rest.”

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17 December 2008

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