Her Excellency Ms. Sri Mulyani Indrawati, Minister of Finance, Indonesia
His Excellency Mr. Omar Ayub Khan, Federal Minister for Economic Affairs, Pakistan
His Excellency Mr. Arkhom Termpittayapaisith, Minister of Finance, Thailand
His Excellency Mr. Lyonpo Namgay Tshering, Minister of Finance, Bhutan (video message)
His Excellency Mr. A H M Mustafa Kamal, Minister of Finance, Bangladesh (video message)
Mr. Elliott Harris, UN Assistant Secretary-General for Economic Development/Chief Economist, UN Department of Economic and Social Affairs
Mr. Bambang Susantono, Vice-President for Knowledge Management and Sustainable Development, Asian Development Bank
Excellencies, distinguished delegates, ladies and gentlemen,
Welcome to the third session of the Committee on Macroeconomic Policy, Poverty Reduction, and Financing for Development.
Since this Committee last met in 2019, our world has experienced an unprecedented global health emergency crisis and a subsequent devastating economic crisis. The COVID-19 pandemic has transformed the ways we live, do business and learn.
In addition to the pandemic, the Asia-Pacific region continues to experience unprecedented natural disasters due to climate change.
In short, we have seen the last two years just how vulnerable the Asia-Pacific region is to both the economic and non-economic shocks.
In 2020, the Asia-Pacific region recorded its worst economic performance in decades. Worryingly, 89 million people in the region may have been pushed back into extreme poverty, according to ESCAP estimates.
The disproportionate impact on the poor and vulnerable groups and the uneven access to COVID-19 vaccines have exacerbated already high and rising economic inequalities, both within and across countries.
Even before the pandemic, the region was not on track to achieving the Sustainable Development Goals. Since the pandemic, countries’ ability to achieve the SDGs by 2030 and the Paris Agreement for climate action is at even greater risk.
In this context, to build back better, our Economic and Social Survey of Asia and the Pacific 2021 proposes illustrative policy packages that aim to provide universal access to social services, close the digital divide and strengthen climate and clean energy actions.
Our estimates show that such a package could help reduce the number of poor people in the region by almost 180 million, cut carbon emissions by about 30 per cent and boost the potential output level by over 10 per cent in the long run.
However, given its high financings costs and shrinking government revenues, delivering such policy packages could undermine public debt sustainability in some of the region’s developing countries.
Furthermore, due to ongoing recovery efforts, many countries are experiencing constrained fiscal space. There is a risk that financing flows are diverted away from development financing, which is needed to achieve the SDGs and meet nationally determined contributions under the Paris Agreement.
This is why economic recovery efforts and policies must align with policies and strategies to pursue the SDGs and climate action to ensure that moving forward we are able to truly build back better. To achieve this, we need innovative financing mechanisms and national and regional commitments towards net-zero.
To support member States in identifying and promoting concrete financing solutions, the Secretary-General has launched the Initiative on Financing for Development in the Era of COVID-19 and Beyond. Six thematic clusters have been established to work on sustainability and climate action, socio-economic response, finance and technology, liquidity and debt vulnerability, illicit financial flows, and addressing special country needs.
These issues, combined with country efforts in responding to the pandemic, are at the heart of the conversation that the secretariat wishes member States to share and reflect on in the next three days.
Excellencies, ladies and gentlemen,
In this vein, I would like to highlight policy proposals for your consideration and further guidance.
How can the Asia-Pacific region recover better together? In other words, how can post-pandemic development be more inclusive, resilient and sustainable. A broad mix of public policies are available, such as government support for labour market recovery, economic redistribution policies, a whole-of-government approach to manage shocks, carbon pricing and fiscal incentives for attracting green private investments.
In addition to sharing its perspectives, the Committee may also provide guidance on how the secretariat can provide targeted technical assistance on some of these issues.
How can the Asia-Pacific region mobilize the needed fiscal and financial resources to secure more inclusive, resilient and sustainable development? Specifically, how can countries leverage the potential of innovative and digital financing strategies, such as thematic bonds, climate risk disclosure and reporting, debt-for-climate swaps and digital payment solutions?
The Committee may identify desirable domestic and multilateral policy and regulatory actions and provide guidance to the secretariat on how to support member States in developing and executing such actions.
In this context, the Committee will be considering a proposal to establish a Consultative Group on financing strategies for the Sustainable Development Goals. Given the importance of fiscal resources and financing strategies to recover better together from the pandemic, this proposed consultative group would facilitate a more regular and substantive communication between the Committee and the secretariat and relevant government ministries.
I look forward to member States’ support for this proposal.
Excellencies, ladies and gentlemen,
Despite the new challenges our region has faced since we last met, we have remained resilient. The pandemic has provided an opportunity for us to reconsider our policies and strategies and align fiscal and financial resources with development efforts that will pay significant dividends in the future.
We have also learned that we are more connected now than ever before in our history. The importance of resilient supply chains and digital technology to enable business continuity has been paramount.
This is a time for us to come together, debate and converge on the key issues that matter – which is getting back on track to achieve the SDGs and working towards a net-zero future.
I am optimistic that the future is bright for this region and it is up to all of us to deliver. I look forward to engaging deliberations over the coming days. I hope that it sets us on a path forward to deliver together.
Thank you for your attention. I wish you a very successful Committee session.