Asia-Pacific Policymakers Call For Urgent Action To Bridge Financing Gaps For Sustainable Development

Saturday, 21 December 2024, 10:58 pm
Press Release: UN ESCAP

Bangkok, 19 December 2024

The High-Level
Regional Consultation on Financing for Development in Asia
and the Pacific concluded today with a resounding
call for urgent measures to address the region’s pressing
financing gaps to achieve the Sustainable Development Goals
(SDGs) by 2030.

Participants highlighted the
staggering $4 trillion annual financing gap in developing
countries worldwide, with leaders stressing the need for
coordinated international support, enhanced domestic
resource mobilization and greater private sector
engagement.

While Asia and the Pacific remains the
most economically dynamic region, addressing debt challenges
emerged as a central theme during the discussions. High
public debt, rising borrowing costs and limited
international support are undermining progress. Eleven
economies in the region, mostly countries in special
situations, are either already in external debt distress or
face a high risk of distress. In 2023, net interest payments
took away at least 10 per cent of government revenues in 15
countries.

“There is an urgency to mobilize
sufficient and affordable financing from all sources, public
and private,” said Armida Salsiah Alisjahbana, United
Nations Under-Secretary-General and Executive Secretary of
the Economic and Social Commission for Asia and the Pacific
(ESCAP), in her opening remarks.

She further
underscored, “More than 2.2 billion people in the region
live in countries that spent more on interest payments than
on health care. Developing countries, therefore, need urgent
solutions to their debt woes, which requires effective
international coordination and response.”

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This was
echoed by Rebeca Grynspan, Secretary-General of the United
Nations Trade and Development (UNCTAD) who highlighted the
distinct challenges faced by developing countries when it
comes to financing for development.

“The smaller and
least developed the country, the more patchy, volatile and
costly its access to finance. From a development
perspective, this makes no sense. It means that if
development were a race, the most behind are running on
sandals, while those already ahead run on sneakers,” said
Grynspan.

“We do not enjoy the luxury of time
because development delayed is development denied,” said
H.E. Bishnu Prashad Paudel, Deputy Prime Minister and
Minister of Finance of Nepal in his keynote address, further
calling for innovative solutions, public-private
partnerships and a clear domestic revenue mobilization
strategy with specific goals and
targets.

Policymakers, experts and key stakeholders,
including multilateral development banks, the private
sector, civil society organizations, further deliberated
policy ideas, pertinent actions and initiatives under four
key areas: i) strengthening domestic public resources; ii)
accelerating the mobilization of domestic and international
private finance and investment towards the Sustainable
Development Goals; iii) tackling public debt sustainability
concerns; and iv) addressing new and emerging
issues.

Participants noted some progress in financing
for development within the region, including an increase in
average tax revenue collection to 18.4 per cent of GDP in
2022, up from 13 per cent in 2001. There is room to enhance
tax revenues further in some developing economies. ESCAP
research analyzing past experiences from the region shows
that rationalized tax structure, digitalized tax
administration, and fewer wasteful tax exemptions are the
three main factors that matter the most for increasing tax
revenues.

Participants also called for stronger
financial regulations in the areas of risk, impact,
disclosure and taxonomies, as well as measures to deepen
domestic banking and capital markets to fully unlock private
finance’s potential in support of the SDGs. In addition,
concessional finance approaches also need to be transformed
to catalyze private finance and flow towards the most needed
areas.

The Consultation emphasized the growing need
for private finance to allocate capital towards areas with
SDG impact. Reforms to the international financial
architecture were also a key focus, with leaders advocating
for fair representation of developing countries from Asia
and the Pacific in international financial institutions to
amplify regional voices and influence global financial
policymaking.

The Regional Consultation was organized
by ESCAP in close collaboration with UNCTAD, ADB and AIIB as
part of preparations for the Fourth International Conference
on Financing for Development, which will be held in Spain
from 30 June to 3 July 2025.

Going forward, ESCAP, as
the regional arm of the United Nations system in Asia and
the Pacific, can strengthen the regional follow-up process,
chart out regional priorities and needs, and work closely
with governments to facilitate the implementation of
commitments.

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