Tuesday, 18 March 2008

Workshop Bergen:



“Cyprus and Malta: Data resources on Former British Colonies”



By Alexander Apostolides



Introduction: The status of National accounts in Cyprus and Malta Today


Both Malta and Cyprus became new members of the European Union in 2004. During entry negotiations, Cyprus moved from the 1968 SNA system to adopting the European System of Accounts (ESA 1995). Maltese national accounts did not exactly conform to 1968 SNA prior to accession negotiations, as the production approach in estimating the Gross Domestic Product was never attempted. During negotiations both national statistical offices won exceptions from the aquis that affect Historical National Account creation. In the case of Cyprus it was accepted that backward calculation of the GDP according to current practises would be limited. Malta secured significant exceptions both in limiting backward re-calculations and in what data it needs to supply EUROSTAT in the future.

Both National statistical offices were post-war institutions. The pre-cursors of the Maltese National Statistical Office (NSO) and the Cypriot Στατιστική Υπηρέσια (Υστατ) were established in 1947. The first national accounts were published in 1954 – but in Cyprus national account estimates were calculated back to 1950. As far as I am aware, there has been no attempt by either service to use current ESA practise to correct previous estimates.


There were some attempts to estimate national income prior to 1954, but no effort none was sufficient or explicit enough in their methodology. Cyprus and Malta were included in Maddison’s 1995 estimates as a joint GDP estimate, before they were submerged in a group named “Small Western European Countries” in subsequent updates of his work (Maddison, 1995; Maddison, 2006). Maddison calculated benchmark estimators for Cyprus and Malta back to 1850, while his current estimations for “Small Western European Countries” go back to 1 AD. The actual methodology is unclear but it seems that Maddison used post-1950 data in order to calculate the GDP of Cyprus and Malta and calculated the differential of the joint GDP with the South European average. Maddison extrapolated the series backwards by maintaining the GDP per capita differential vis-à-vis his calculated HNA for Southern European countries. Thus although a useful indicator, the Maddison estimates are clearly insufficient as they just assume that the 20% income differential of Cyprus and Malta in relation to Southern Europe in 1950 was constant throughout their history, and their economies developed exactly as the average of the economies of Spain, Greece, Italy, Portugal and Ireland.


Other GDP estimates for sporadic years exist, especially for Cyprus. Christodoulou made an estimate for 1927 as £3.45 million and for “mid-1930s” as £2.8 million, but is completely obscure on his sources and methodology (Christodoulou, 1992). His result is probably based on an estimate based on tax records by members of the Cypriot Legislative assembly for 1926 of £3.5 million (Georghallides, 1985 p.159). By far the most authoritative estimate was made by Fairfield in 1881; he estimated Cypriot national income at the time as £981,000. The methodology and source of data for any of these estimates is completely unknown, but Georghallides argues that the Fairfield estimate is accurate (Georghallides, 1979).


Overall none of the above estimates provide their methodology in order to be able to reproduce their results. I have yet to find any GDP estimates of Maltese income prior to 1954.


My thesis plans to reduce the knowledge gap in the economic history of Cyprus and Malta by constructing HNAs for both countries. I am attempting to provide yearly estimates of GDP per capita (and some estimates of capital accumulation) for the period 1921 -1939. I have chosen a small time period in order to be able to concentrate in constructing detailed Historical National Accounts (HNAs) rather than scattered benchmarks, partly due to the greater data availability of the interwar period but mainly due to the particular importance of the interwar period for both islands both in terms of politics and economics. The methodology used aims to follow the best HNA practise, subject to the constraint of time available to just one researcher. The work of Kostellenos and Prados de la Escosura for Greece and Spain is consulted throughout my work as a check on my methodology and the plausibility of my assumptions (Kostellenos, 1995; Prados de la Escosura, 1993). Thus I am hoping to produce yearly GDP estimates by using the production method, and subsequently calculating for some years the GDP by using the income method (by using data not used in the production method) in order to check the estimates. The thesis has as an overall objective a possible comparison of Cyprus and Malta. This will allow a greater understanding of the interplay between the economic conditions of the islands and political developments of the time.


I am currently concentrating in using published government sources of the time. Extensive archival work has also taken place in Cyprus, but not yet in Malta. The advantage in preferring Colonial government sources is that most Cypriot and Maltese publications had to follow general colonial office guidelines: thus by establishing a method of creating HNAs by relying on published colonial sources will enable a more rapid reproduction of HNAs for other British Colonies. It is worth noting that there was an attempt in 1942 by the British War Cabinet Office to estimate Colonial national incomes using a similar range of published sources as I plan to use for other British colonies (Deane, 1948).1 However an identical approach can not be used as Deane’s approach does not take into account current established national account practises.


Data sources:


The Data sources for Cyprus and Malta are roughly similar, and thus discussed in tandem. The data sources discussed are all for the period of British rule in Cyprus (1878 -1960) and Malta (1815 – 1964). A brief summary of data resources for the 16th – 18th century can be provided on request.


It is worth noting that it is not necessarily true that the availability and quality of data is greater as one gets closer in time to the first estimates of national income. During the first half of the twentieth century there were frequent changes in definitions, altering what was being measured. Some of these changes (for example the definition of a Dwelling in the 1947 Census) create rather than eliminate problems for HNA creation. The quality of data in Cyprus also deteriorated in the 1950s due to anti-colonial tensions and inter-communal tensions resulting to the EOKA struggle in 1955 – 1959. This is also true for archival research: the archives in Malta and Cyprus have not been fully indexed. Thus in the case of Cyprus all of the Secretarial Archive before 1945 has a thematic index (that was created by the colonial authorities) that is a significant help to archival work. It is much more difficult to find any files for the period 1945 – 1960, due to the lack of a thematic index.

Censuses:


Being British dependencies, both Cyprus and Malta had a Census taken every 10 years (i.e. 1931, 1921, 1911, 1901 etc). For Malta the first census was in 1842; Cyprus had its first Census in 1881. The Second World War disrupted taking a census for 1941; thus Malta has a census for 1948 and Cyprus for 1946 instead. A summary census report was published after every census: I have yet to discover the census returns for any of these censuses.


Accuracy of the censuses:


For Cyprus the Census returns were collected by colonial officials who were diverted to from their normal operations for the purpose. There was no dedicated section of the bureaucracy for statistical work, and this tended to have an effect on the quality of the published results. The questionnaires were completed by government officials in the towns, thus providing some basic guarantee to their quality. However for the overwhelmingly rural population, the census questioners were completed by the village headsmen (Mukhtars), for a small financial reward. Thus mistakes in the initial gathering of census data were possible, especially in more remote villages where the Mukhtars’ literacy was limited, and where the Mukhtars they had minimal supervision. However Demographic Studies (Verropoulou, 1997; Agathagelou, 1985) argue that the census data are more accurate than other government sources on population and demography.

Occupation statistics underreport the gainfully employed population, as well as persons employed in agriculture. There is an even greater underreporting of women in employment, especially in the rural areas.


Examples of such underreporting can be found in the 1931 Census. Only 56% of the Male population is considered to be gainfully employed, with more than 11% of the male population in “Unknown Occupation” and 16% in “Persons without Occupation”. A staggeringly low percentage of the female population is considered to be gainfully employed (20%), with 35% of the female population in “Unknown Occupation” and 34% in “Persons without Occupation”.


The Maltese census questionnaire was given to every head of household to fill, subject to a fine if the questionnaire was not returned. Thus the probability for spurious answers was high, considering that over 60% of the population in Malta was illiterate in 1931. This method of census taking also seems to result to an underreporting of women in employment: the ratio of male agriculturalists to female agriculturalists in 1931 was 5:1, which is not considered plausible.


Thus any attempt to use occupation statistics derived from the censuses for HNA purposes should be treated with great caution. The data on occupation should be seen as indicative rather than definitive. In my own attempts to create HNAs I have avoided using occupation data as much as possible, but it seems that some use of the occupation data is necessary to estimate production in the service and handicraft sectors of the economy.


Census Information:


A majority of the questions asked by the census takers which are of interest for HNA construction are very similar over time. Significant improvements took place in the 1921, 1931 and 1946 census where additional questions on secondary occupation, housing and ownership were introduced. An example of such change is the change in the definition of what constitutes a dwelling in the 1921 and the 1946 census, which makes using 1946 data to calculate dwelling stock difficult. These improvements are not always compatible with previous censuses; thus care is needed in comparing census data over time.


New data tables were added in each census. By 1946 the Census was extensive and covered a large array of issues:

  • Population (Population, Distribution, Birthplace, Religion, Mother-tongue, Sex and Age)

  • Other Demographic Data (Mortality, Life expectancy, Conjugal Condition, Age of Marriage, Childbirths, Children per household)

  • Literacy (Including Knowledge of English)

  • Occupation

  • Aliens and Infirmity

  • Housing Accommodation and Housing Services (Dwellings, Rooms per dwelling, Type of Accommodation and type of Tenure, Domestic water sanitations and electricity)

  • An agricultural Census (see below)


The 1948 Maltese Census did not look much different as most of the questions were similar. The largest difference between the Cypriot and the Maltese census was the lack of an agricultural census in Malta; however the Maltese census has statistics on wages and income that the Cypriot 1946 census does not cover. Most of these categories are broken by age and by district, as well as broken down in a rural / urban form2.


The Cypriot Agriculture census provides information about farm holding sizes, irrigated land, crop bearing trees (especially carob and olive yields) and other agricultural yields not covered by the statistical Blue books (aniseed and cherries). The 1946 census also provides a historical perspective; it offers a four-year moving average of prices and output for the ten most important agricultural products of Cyprus from 1896 to 1946.


Going further back in time the basic categories of population, literacy, age, aliens, infirmity and dwellings are given, but less information is given both in terms of detail as well as in terms of breakdown.

Blue Books

By far the most important source of data for Cyprus and Malta are the yearly statistical blue books. The blue books were a yearly compendium of statistics of the colony compiled under colonial office requirements. They were published from the mid-19th century and were discontinued with the outbreak of the Second World War (they were replaced after the war by statistical abstracts such as the Cyprus and the Malta review).


The Colonial blue books combine data from all government departments into one published source, and were published yearly. Some of the sections most relevant to HNA construction are listed below. The sections numbering is from the 1931 Cyprus Blue; the Maltese Blue book of 1931 is similar except it has an additional section on military expenditure as the last section. Blue books prior to 1921 have fewer sections, but most of the information relevant to HNA creation is present.


The 1931 Cyprus blue book has over thirty sections with the most important in terms of HNA are:


Section 1: Taxes Duties and other sources of revenue

  • A detailed description of every tax, duty or fee levied by the government. i.e. Barley duty: 3 copper piastres to the counterweight. (1 copper piaster to a penny)

Section 3: Government Revenue and Expenditure (comparing why it rose or fell)

  • Comparing each tax with the revenue of the previous year and stating the cause of decrease. i.e. Import duties decreased by £51263 in 1931 due to the “general trade depression and decline in commodity prices”

Section 7: Municipal corporations and other Public Bodies

  • Revenue and expenditure of each municipal body

Section 8: Public Works

  • Expenditure in roads, public buildings and harbours

Section 12: Civil Establishment

  • The position and wage of all permanent staff in government.

Section 15: Population and Vital Statistics

  • Based on the latest census figures, the government estimated persons employed by sub-district in agriculture, manufacture or commerce. Also provides number of people who came and left the island, an estimate of the total population and infantile mortality in districts and towns.

Section 19: Currency, Banking, Weights and Measures

  • List of gold, silver and bronze coin in circulation as well as paper money in circulation. There is a list of every bank operational in Cyprus, its number of branches, and the amount of deposits it has in the Colony, as well as a table in order to standardise local weights and measures to the British imperial measurements.

Section 20: Imports and Exports

  • Statement of value and quantity imported and exported, as well as the duty or tariff collected (per item). This is specific to product and by country – an all together exhaustive account of yearly imports and exports.

Section 21: Shipping

  • Number, tonnage, and crews of vessels entered and cleared (separated into steam ships and sailing vessels). This is broken down by country of destination and by country of ownership. The section includes ships involved in the coasting trade in a separate table.

Section 22: Production and Natural Resources

  • This is by far the most important section in terms of creating HNAs. This section provides the acres and quantity produces for the 9 most important crops. After 1931 this expands to include a total of 26 crops, effectively encompassing all cultivated crop production. The only significant exceptions are in the production of carobs, olives and olive oil, wine (although the quantity of grape quantity produced is provided from 1931) and citrus fruits.

  • This section also provides the annual number of livestock, and the yield of animal produce (except meat) and their average farm value.

  • It provides detailed forestry and fishery information.

  • It provides mining information such as and the total value of ore as well as its metallic content.

  • It provides a list of the most important industrial establishments; the number of persons employed the cost of raw material uses, the output produced and the net selling value (prices at the factory door).


This is by far the most important section of the blue book. The basis of my HNA creation effort will be based on this information.


Section 23: Labour Wages and cost of living

  • It provides the average wage rates for several jobs including domestic service

  • It provides for the average, maximum and minimum retail price of staple articles of consumption in the capital (Nicosia)

  • It provides the average monthly export rates (f.o.b) of staple products of the country

Section 30: Savings Banks and Friendly Societies

  • Provides a list of Savings banks and Co-operative societies with the authorised capital and the value of their deposits

Section 32: Railways, Tramways, Steamship services, Roads, Motor Transport

  • It provides through cost and revenue of publicly run Railroads and tramways, as well as the numbers of cars registered and road mileage available to road traffic.

Section 33: Post, Telegraph and Telephone statistics

  • Provides detailed revenue of cost and volume of letters, telegrams, and calls.


Most importantly, the blue books already provide enough information for volume estimates to be created for agriculture, forestry, fishing, mining and manufacturing. In the case of manufacturing value added estimates are provided from 1931 onwards.


The blue books are by far the most extensive yearly data source on Cyprus and Malta. The accuracy of the recorded figures is hard to fathom, as no research has taken place to evaluate how far there were possible errors in recording such information. However qualitative evidence seems to confirm that the British authorities were quite efficient in collecting taxes and stamping out tax evasion. Since the majority of the tax revenue in Cyprus and Malta was collected by duties on imports and exports, on mining licences and taxes on agricultural production, I believe that such data as presented in the Blue Books are reasonably accurate.


The greatest weakness of the blue books is the lack of information on prices and wages. Despite some information on the highest, lowest and average prices of staple goods in the islands’ capitals, as well as some information on wages, there is not enough price data to be able to create good deflators. A cost of living index was not introduced in Cyprus until 1948. In Malta the Royal Navy did create a cost of living index dating back to the First World War, but I have yet to find it.

In the Cypriot government archive, I found handwritten and thus unpublished Blue books for 1941, 1944 and 1946. They provide information on production, wages, and government revenue during the war, thus allowing for an understanding of the economy and possible HNA creation at a time of complete lack of data publication.


Annual Colonial Reports


The annual colonial report is a valuable yearly overview of the situation in a colony for the given year. Its highest value is its provision of a qualitative feel of how the economic situation of the island was perceived by the colonial bureaucrats. A yearly estimate of population, as well as birth and death rates is provided. The derivation of yearly estimate on population is unclear; comparing it to the population returns in census years, the government estimate has a margin of error of plus or minus 4.5%. There is no actual data on migration, but some data on permissions issued to enter and exit the island are provided. However an attempt to estimate the population of Cyprus backwards by using current forecasting projection tools based on such data has been abandoned. This is because even if migration was controlled for, the registration of births and deaths was incomplete and inaccurate, as gross underreporting of Births and Deaths was endemic (even in the 1980s Agathangelou (1885) calculated that deaths were underreported by 20%). Thus the underlying variables needed to project the population backward would have led to spurious results.


Some sporadic data on tourism are also given, but again without explanation on how the data was derived. Some sporadic data on costs to British officials staying in Cyprus or Malta are also sometimes included.



Annual reports of Government Departments


Every government department published an annual report covering a wide range of issues as an annual review; the yearly statistical blue book and the annual colonial reports are effectively based on these reports. Some, such as the customs and excise annual report, do not provide any additional information not accounted in the blue books. Others, such as the Mining commissioners yearly report, the Agricultural department report and the public works department report provide valuable information excluded from the blue books. Unfortunately although published, such reports were not necessarily saved by libraries; however for most years the original manuscript is in the respective national archive.


Information provided includes the cost of construction of roads per mile, the monthly wage rate of workers per district, a bi-annual livestock survey, and some sporadic estimates of value added in agriculture and mining. As with the basic categories of expenditure, cost and wages per department are given. However as one goes further back in time less information is given both in terms of detail as well as in of breakdown. Also some information is not collected until a relevant government department is set up, as was the case for the mining department in Cyprus.


One-off Government Publications


Other important data sources for Cyprus and Malta include publications that were published due specific economic problems. In Malta the dire economic situation in the beginning of the 20th century resulted in an extensive Royal Commission that published its findings in 1911 (Malta Royal Commission, 1911). In Cyprus, popular calls for more active agricultural policy to reduce the dependency on money lenders resulted to an agricultural survey in 1930 (Surridge, 1930) and a report on the economic condition of the island in 1934 (Oakden, 1934). All contain useful information for the years of the survey and are also a good first account of the problems facing the islands.

Archive work and other possible sources


The Archives in Cyprus and Malta are helpful; however they are hampered by outdated rules, especially in terms of public research hours and photography, that severely curtails the research one can do in the time one has available. Extensive research in the Cyprus archive on the construction of government houses and on architectural surveys of villages has allowed me to build a good understanding on the cost and the value of construction of housing. This was combined with census data on dwellings and in a joint project with Mr. Zeitounsian (Head of National Accounts Section, Ystat, Cyprus) enabled us to estimate the dwelling stock of Cyprus form 1921 – 1960. It is hoped that further archival research, combined with dwelling stock calculations will enable a plausible estimation of the construction sector, as well as a good estimate for rental housing income. We are in the process of standardising the methodology; upon completion a similar process will be attempted using Maltese archival material.


Other possible sources of data for HNA estimation includes tax data. I have not yet looked into this in detail; but the lack of income tax in both Cyprus and Malta provides both disadvantages and possibilities. The disadvantage is that an estimate of GDP using the income method by using income tax returns is impossible; however the taxing of production, especially Agriculture (especially in Cyprus were agricultural production was subject to a tithe until 1926), might allow for checking of agricultural estimates for plausibility.


Taxation data published in the blue books and in the annual report of the Land Registration and Survey department might allow calculations is estimating the capital stock, especially since property tax was based on early modern period laws, which counted all property, including orchards, as taxable property.





Conclusion:


The British colonial era in Cyprus and Malta provides ample data sources for an attempt to create HNAs as well as other historical indicators. This attempt will be the first generation of historical national accounts; the wealth of evidence available will enable refinement of the HNA that could complement attempts to create national accounts for the whole of Europe.


Since the first attempt in establishing HNAs for Cyprus and Malta is still in its infancy, adopting a methodology followed by the Nordic project is invaluable as it will aid cross country comparisons, which have always been tricky previously due to the plethora of different methodologies used in estimating Historical National Accounts.


Bibliography


Agathangelou, A., Mortality In Cyprus Nicosia: Ministry of Finance


Christodoulou, D., 1992, Inside the Cyprus Miracle: The labours of an Embattled Mini-Economy Minneapolis, University of Minnesota


Dean, P., 1948, Colonial National Incomes: An experiment Cambridge: Cambridge University Press


Georghalides, G., 1979, A political and Administrative History of Cyprus Nicosia: Cyprus research centre


Georghalides 1985, Cyprus and the governorship of Sir Ronald Storrs Nicosia: Cyprus research centre


Government of Cyprus (Prepared by Hart-Davis, C. H.), 1921, Report and General Abstracts of the Census of Cyprus of 1921. Nicosia: GOP.


Government of Cyprus, 1931, Report and General Abstracts of the Census of Cyprus of 1931. Nicosia: GOP.


Government of Cyprus, 1933, Report appointed to study the conventions and recommendations adopted by the International Labour conference Nicosia: GOP.


Great Britain, Royal Commission, Malta : report of the Royal Commission on the finances, economic position, and judicial procedure of Malta London: HMSO


Kostellenos, G. C., 1995 Money and Output in Modern Greece: 1858 – 1938 Athens, Centre of Planning and Economic Research


Maddison, A., 1995, Monitoring the World Economy Paris: OECD


Oakden, Sir Ralph, 1934, Report of the finances and economic resources of Cyprus Nicosia: GOP


Prados de la Escosura, L., 1993, Spain’s Gross Domestic Product 1850 – 1990: A new series 2003 Ministerio de Economia y Hacienda, Documentos de Trabajo D-93002


Republic of Cyprus, History and Analysis of the methodology of National Accounts in Cyprus, Nicosia: Ministry of Finance

Republic of Cyprus, 2000, Description of the sources and Methods used to compile non-financial national accounts Nicosia: Statistical Service of Cyprus

Royal commission Malta


Surridge, B. J. A Survey of Rural Life in Cyprus. Nicosia: GOP


Veropoulou, 1997, The Demography of Cyprus Ph D. London School of Economics


Web sources:


Cyprus Statistical Service, Ministry of Economics, Republic of Cyprus:

http://www.mof.gov.cy/mof/cystat/statistics.nsf/index_en/index_en?OpenDocument


Maddison Angus, World Population, GDP and Per Capita GDP, 1- 2003 AD: http://www.ggdc.net/maddison


National Statistical Office, Republic of Malta:

http://www.nso.gov.mt/site/page.aspx?pageid=57


1 The experiment involved estimating national accounts for Nyasaland, Jamaica and Northern Rhodesia; however due to standardisation of basic published statistical material as demanded by the colonial office, the published material used in this exercise also exists for Cyprus and Malta.

2 Malta has an additional category between urban and rural – “Sub-urban”

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