The world continues to face the unprecedented socio-economic impacts of the COVID-19 pandemic, and the Southeast Asian sub-region is no exception. Considerable efforts are needed to not only build back better and recover from the pandemic but also to resume the journey towards the Sustainable Development Goals. Despite the historic amounts of fiscal stimuli introduced by several countries to provide immediate relief, additional spendings will be required for the short and medium-term at the global and national levels. Importantly, the significant policy packages rolled out by Governments may have missed the opportunity to promote low carbon, climate-resilient and green development.
At the 4th Southeast Asia Multi-Stakeholder Forum on the Implementation of the Sustainable Development Goals, held in October 2020, countries expressed the need to address capacity gaps to explore innovative approaches to scale up climate finance. Only a few countries in the subregion (e.g., Indonesia, Singapore, Thailand, and Malaysia) have the capacity to issue green bonds to finance their spending needs, particularly during COVID-19. The high standards and the requirement to have a strong bond issuance capacity are particularly challenging for some countries.
In this context, the Southeast Asia Policy Dialogue on Sustainable Finance aims to facilitate mainstreaming of the green/SDG-linked bonds in the region in the overall financing strategy, with a focus on identifying additional needs, tools, and operational frameworks. The salient insights emanating from this discussion will help develop concrete action plans for Southeast Asia’s recovery and will feed into intergovernmental meetings, such as the 5th South- East Asia Forum on Implementation of the Sustainable Development Goals to be held later in 2021.