The United Nations is urging Asia-Pacific nations to tap the huge savings to finance sustainable development.
The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) told a high-level meeting on sustainable development financing in Jakarta today that the region has vast savings which should be mobilized to finance sustainable development,
“Investments in sustainable development could cost as much as US$2.5 trillion per year to close the region’s infrastructure gaps, provide universal access to social protection, health, and education, and implement measures to mitigate climate change,” Dr. Shamshad Akhtar, United Nations Under-Secretary-General and ESCAP Executive Secretary said in her presentation to leading figures in the public, private and civil society sectors from more than 30 countries.
“But this amount represents only 7.5 per cent of the $33 trillion held by affluent individuals in the region at the end of 2012,” she explained. “Governments now have to look beyond their own revenues and tap private sector involvement in the social and environmental sectors, by creating a better enabling environment and incentivizing appropriately to compensate for risks and returns.”
The Executive Secretary highlighted the importance of developing well-diversified and competitive financial systems, capable of extending finance to address people’s needs and the region’s development. She called on the policymakers and regulators of the region to work together with the private sector to improve the functioning of capital markets, institutions and regulatory frameworks, to foster the development of domestic institutional investors and to help build capacities especially in least developed countries and small island developing economies.
Chatib Basri, Minister of Finance of Indonesia, remarked that the poor bear the brunt of deficiencies in the provision of public infrastructure in areas such as transport, electricity and sanitation. He also emphasized that rapid urbanisation in Indonesia is creating acute additional needs for infrastructure investment in the country. However, he noted that funding from traditional sources of finance, such as official development assistance, loans from multilateral financial institutions and the government budget are insufficient, and encouraged participants at the meeting to discuss alternatives.
Pertti Majanen, Co-Chair of the Intergovernmental Committee of Experts on Sustainable Development Financing, said the most important yardstick for the evaluation of the work of the committee will be how well its recommendations will be implemented, for which a critical element will be the mainstreaming of national policies and sustainable development financing into national budgets.
The two-day Asia-Pacific Outreach Meeting on Sustainable Development Financing is co-hosted by ESCAP and the Ministry of Finance, Republic of Indonesia. As agreed by world leaders at Rio+20, the global development agenda is expanding beyond poverty reduction and the MDGs, incorporating issues such as infrastructure, social development, as well as climate change mitigation and adaptation, for which it is critical to secure new and innovative sources of finance.
The meeting's deliberations will feed into the on-going outreach by the UN Intergovernmental Committee of Experts on Sustainable Development Financing, who will report to the UN General Assembly on sustainable financing options and proposals. The event also builds on the inaugural session of the Asia-Pacific Forum on Sustainable Development held by ESCAP in April 2014.