A new report from the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) offers over 40 innovative and actionable strategies for countries in the region to close the development financing gap. This comes as financial and geopolitical pressures across the region threaten to further derail progress on poverty reduction, climate action and economic recovery.
Developing countries globally now face an annual shortfall of between US$2.5 trillion and US$4 trillion to meet the Sustainable Development Goals. Without major improvements in the way development is financed, many countries in the region risk falling further behind.
The sixth edition of ESCAP’s Financing for Development report points to longstanding weaknesses in public finance and private investment systems. Many governments in the region continue to face difficulties in raising domestic revenues at the scale needed. Tax structures remain inefficient, and opportunities to tap into wealth and real estate are often underused. At the same time, capital markets are underdeveloped, and private financing rarely reaches high-impact sectors such as clean energy, healthcare or affordable housing.
“Nowhere is this challenge – and opportunity – more urgent than in Asia and the Pacific,” underscored Armida Salsiah Alisjahbana, United Nations Under-Secretary-General and Executive Secretary of ESCAP. She added, “This is our chance to build a more resilient, equitable and sustainable economy for all. We aim to foster solutions that are regionally grounded, technically sound and financially viable. Unless Asia and the Pacific can lead boldly, the global transition will fall short of expectations.”
Public debt distress has also become a growing concern. The report calls for more responsible borrowing, better transparency in how public funds are used, and stronger coordination among creditors to ensure fair and effective debt resolution.
The report further recommends closer alignment between sustainable finance and development goals. It also notes that when countries plan investments that support both environmental and economic outcomes, they are more likely to deliver results that benefit people and the planet.
“This report serves as an important guide for governments and regulators in expanding access to financing aimed at sustainable development. It offers effective approaches to ensuring the availability of capital while considering national priorities and specific circumstances,” said Faizidin Qakhkhorzoda, Minister of Finance of the Republic of Tajikistan. He further welcomed the call to strengthen the regulatory framework for sustainable finance, improve disclosure standards and promote innovative financial instruments.
The report was launched on 30 June at the Fourth International Conference on Financing for Development in Seville, Spain. It is the first time that ESCAP and partners such as the Asian Development Bank, Climate Bonds Initiative, the International Renewable Energy Agency and the United Nations Framework Convention on Climate Change Regional Collaboration Centre for Asia and the Pacific have collaborated to call for the region’s action in areas such as sustainable capital markets, financing the energy transition and developing sustainable project pipelines to close the financing gaps.
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