Governments across Asia-Pacific are grappling with the urgent need for affordable and sustainable financing to balance debt obligations and essential investments in education, healthcare, and social welfare. A recent report from the United Nations underscores the necessity for new perspectives and strategies to address this pressing challenge.
The report advocates for a shift in priorities among donors, urging them to prioritize the development needs of recipient nations over political agendas. It emphasizes the crucial role of multilateral development banks in bolstering lending capacities through fresh capital injections. Additionally, the report urges credit rating agencies to adopt a long-term perspective, recognizing that public investments foster fiscal credibility over time.
Domestically, the report highlights the importance of strengthening public revenue collection to narrow the “tax gap” and reduce fiscal risks. Digitalizing tax administration and implementing policies to enhance societal willingness to pay taxes are identified as key strategies. Furthermore, the development of robust capital markets is essential to mobilize domestic savings and increase the availability of long-term capital for Sustainable Development Goals (SDGs) initiatives.
United Nations Secretary-General António Guterres emphasizes the challenges faced by developing countries in the region, attributing them to an outdated global financial architecture. Rising borrowing rates, fiscal constraints, and heavy debt burdens hinder their ability to invest in critical areas.
Addressing income inequality is another critical aspect highlighted in the report, with declining national minimum wages exacerbating the challenges faced by lower-income groups. The strategic deployment of public debt to invest in SDGs is proposed as a means to alleviate debt distress and promote long-term economic growth.
While economic growth in the region has shown signs of recovery, uncertainties such as inflation, interest rate fluctuations, and geopolitical tensions persist. The report projects steady but below-pre-pandemic trend growth rates for the coming years, necessitating innovative solutions to navigate economic headwinds.
Published annually since 1947, the Economic and Social Survey of Asia and the Pacific provides policymakers with vital insights into socio-economic issues and policy challenges. It serves as a cornerstone for promoting inclusive and sustainable development in the region, guiding decision-makers towards effective strategies for progress.