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."
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.
