Asia-Pacific to pursue action-oriented financing strategy to transform development
Asia-Pacific policymakers, together with business and civil society representatives from around 40 countries in the region, on Thursday agreed to a landmark financing strategy to harness the region’s immense financial resources for inclusive and sustainable growth.
Endorsed at a high-level consultation organized by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and the Government of the Republic of Indonesia, the regional action plan on financing for development outlines ways to mobilize new and additional financial resources to transform the regional development landscape.
Focused on countries that are among the poorest in the world, as well as nations challenged by their geographical location, the strategy aims to unleash large-scale job creation, and to bridge deep and widespread socioeconomic inequalities along gender, urban-rural and geographical lines, placing the region on track to implement the ambitious and transformative post-2015 sustainable development agenda.
“The countries of Asia and the Pacific have produced concrete and actionable recommendations to mobilize new and additional financial resources, improve financial capacities and develop innovative instruments to support the emerging sustainable development goals in the region,” said United Nations Under-Secretary-General and ESCAP Executive Secretary, Dr. Shamshad Akhtar, at the conclusion of the Asia-Pacific High-Level Consultation on Financing for Development, held in Jakarta from 29 to 30 April.
Bambang PS. Brodjonegoro, Minister of Finance of Indonesia reiterated that: “The consultation has been very successful in forming a foundation for our national, regional and international initiatives to identify options and strategies for resource mobilization in achieving the sustainable development goals expected to be adopted by world leaders later this year, to succeed the Millennium Development Goals.”
More than 200 participants, including 50 ministers, deputy ministers, central bank governors and deputy governors, and senior policymakers, participated in the consultation, which was also supported by the Asian Development Bank (ADB), the Asian Development Bank Institute and the United Nations Development Programme (UNDP).
The regional action plan will also guide global deliberations leading up to the Third International Conference on Financing for Development, to be held in Addis Ababa in July this year. Participants noted that the financing strategies agreed today in Jakarta, will help to implement the ambitious and transformative new global development agenda in the Asia-Pacific region.
Estimates of the potential financial resources that could be tapped for sustainable development in the region include $218 billion in remittances, $492 billion in foreign direct investment and $4 trillion in fiscal revenues per year. The region has another $6 trillion in private savings. In addition, the stock of financial assets of the region’s most wealthy individuals amounted to $35 trillion in 2013.
Among the key priorities identified by the action plan are the urgent need to invest in social sectors to reduce social disparities and income inequalities, including those between genders; making financial markets more effective and efficient to channel the vast pool of regional savings for infrastructure development; mainstreaming climate considerations into national budgets and setting up institutional and risk management frameworks for private investors towards climate mitigation and adaptation. Along with addressing the special needs of least developed countries (LDCs), landlocked developing countries (LLDCs) and small island developing states (SIDS), by leveraging trade, foreign direct investment, transfers of technology and capacity-building while ensuring that unmet official development assistance commitments are fulfilled.
The financing for development modalities set out in the action plan include: (i) raising tax-to-GDP ratios through appropriate tax policies and improved administrative efficiency, including a recommendation to create an Asia-Pacific tax forum; (ii) adoption of harmonized regulations and institutions for domestic capital markets to facilitate trading of securities across countries, laying the groundwork for a regional capital market; and (iii) increased social impact investment by the private sector, including venture philanthropy to fund education, health and environmental protection, particularly at the community level.
The consultation followed the Asia-Pacific Outreach Meeting on Sustainable Development Financing, also organized in Jakarta, in June 2014 by ESCAP and the Ministry of Finance of Indonesia.