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Amid tighter fiscal space in Asia and the Pacific, this paper examines how the region’s economies can mobilize additional fiscal and financial resources to ensure public debt sustainability while achieving the Sustainable Development Goals. It explores four selected policy areas, including public debt service suspension, sovereign bond financing, debt swaps for development, and catastrophe finance. While offering some specific policy recommendations, this paper notes at a broad level that developing countries in the region could further benefit from existing debt relief initiatives; governments should increasingly explore bond financing to complement traditional fiscal borrowings; creditors and debtors can work more closely to increase the effectiveness of debt swap arrangements; and countries need to have a mix of financing modalities that match their catastrophe risks. Individual Asia-Pacific countries should carefully consider the instruments and modalities that leverage their strengths and are implementable given institutional capacity.

Amid tighter fiscal space in Asia and the Pacific, this paper examines how the region’s economies can mobilize additional fiscal and financial resources to ensure public debt sustainability while achieving the Sustainable Development Goals. It explores four selected policy areas, including public debt service suspension, sovereign bond financing, debt swaps for development, and catastrophe finance. While offering some specific policy recommendations, this paper notes at a broad level that developing countries in the region could further benefit from existing debt relief initiatives; governments should increasingly explore bond financing to complement traditional fiscal borrowings; creditors and debtors can work more closely to increase the effectiveness of debt swap arrangements; and countries need to have a mix of financing modalities that match their catastrophe risks. Individual Asia-Pacific countries should carefully consider the instruments and modalities that leverage their strengths and are implementable given institutional capacity.

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