The Asia-Pacific region could face costs of between $2.1 trillion to $2.5 trillion per year to close infrastructure gaps, expand basic social protection and address climate mitigation and adaptation in order to meet post-2015 sustainable development requirements, says a new report by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP). Countries in the Asia-Pacific region are, however, uniquely placed to deliver this agenda, due to their vast financial resources.
The region is known for its high saving rates, build-up of foreign exchange reserves and for attracting large capital flows and remittances. In 2013, for example, the region’s fiscal revenue was estimated to be $4 trillion, and private sector savings were estimated to be another $6 trillion. In the same year the stock of financial assets of the region’s most wealthy individuals amounted to $35 trillion.
The latest report from ESCAP, Financing for Transformation: from agenda to action on sustainable development in Asia and the Pacific, highlights the fact that the Asia-Pacific region’s financing systems will need to be further enhanced to fully tap this enormous potential and channel the right mix of financing for the implementation of the sustainable development agenda.
“The key is to address the skewed distribution of financial needs and resources across countries in the region to promote long-term financing and risk capital to support infrastructure investment, and to prioritize investment in sustainable development, which has significant socioeconomic benefits but low or zero private returns,” said Dr. Shamshad Akhtar, United Nations Under-Secretary General and Executive Secretary of ESCAP.
Dr. Akhtar emphasized that the region would also benefit from improved access to financial services for small and medium-sized businesses, as well as poor households which are often excluded from the formal financial system.
The report highlights a number of the ways in which innovative policies can reduce extreme poverty, turn the tide of rising socioeconomic inequalities, promote investment in human capital and decent jobs, expand productivity-enhancing infrastructure, as well as address environmental and climate-related challenges.
Key policy recommendations in the report include financial sector reforms for intermediation of funds for development; social sector financing, including financial inclusion; climate finance strategies for adaptation and mitigation; trade finance and investment promotion policies; and enhancing the effectiveness of official development assistance with a focus on supporting least developed countries and other vulnerable countries in the region.
Watch ESCAP Executive Secretary Akhtar Presentation to the 2015 Asia-Pacific Forum on Sustainable Development
Learn more about the Third International Conference on Financing for Development