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Delivered by Armida Salsiah Alisjahbana

01 November 2023

ESCAP ES

Excellencies, Distinguished Delegates, ladies and gentlemen,

It is my pleasure to welcome you to this fourth session of the ESCAP Committee on Macroeconomic Policy, Poverty Reduction and Financing for Development.

We are meeting at a critical juncture for the Asia-Pacific region. Against the backdrop of challenging macroeconomic conditions, such as constrained economic growth prospects, higher interest rates, tight fiscal positions and rising debt levels, the region is exhibiting slow progress in achieving the Sustainable Development Goals (SDGs) by 2030.

Accelerating progress towards the SDGs will require significant additional investments, along with other initiatives and policy interventions.

To help policymakers prioritize and maximize the impact of investments, the United Nations has identified six SDG transition pathways: jobs and social protection, education, digitalization, food systems, climate and energy.

The identification of these transition pathways has been inspired by the UN Secretary-General’s initiative "SDG Stimulus to deliver the 2030 Agenda for Sustainable Development.” This ambitious yet achievable initiative aims to tackle the high cost of debt, scale up long-term financing for development and expand contingency financing to countries in need.

However, the imperative for significant additional investments is marked  by an increasing number of countries experiencing rising debt distress. Higher interest rates are likely to keep the debt servicing costs elevated for several developing countries.  

In this environment, a key policy challenge is how to accelerate investments in SDGs while maintaining public debt sustainability. The current popular approaches used to assess public debt sustainability are basically short-term focused. There is a risk that too much emphasis is being placed on reducing near-term debt distress risk at the cost of investments in sustainable development.

Given this risk, we, in the 2023 edition of our flagship publication – the Economic and Social Survey of Asia and the Pacific – have proposed a new approach to assess public debt sustainability that complements the current approaches.

This long-term approach to assessing public debt sustainability incorporates a country’s SDG investment needs, its national SDG financing strategies, and the socioeconomic and environmental gains of these investments. During our deliberation later today under agenda item 2, we look forward to receiving an endorsement for this innovative approach from our member States.

Mobilizing substantial volumes of public and private financing for the SDGs and climate action also requires a transformation of financial systems in the region. Moreover, the terms of such financing need to be both affordable and accessible.

Our new financing for development report lays out ten principles for action to close the gap in sustainable finance. We discuss in detail what policymakers, regulators and private finance entities can do to scale-up sustainable finance and how to increase its affordability and accessibility.

These ten principles are guiding ideas that are in line with the Paris Agreement and the 2030 Agenda to support financing for the SDGs and climate action.

We look forward to discussing these ten principles in agenda item 3 and stand ready to work closely with member States in implementing them at the country-level, while keeping in view countries’ own priorities and preferences.

To conclude, I understand that adopting a long-term public debt sustainability assessment approach and bridging the sustainable finance gaps are not easy tasks. But I am confident that we can work together to create the much-needed transition in how we address these twin challenges.

We are already working with the Government of Viet Nam on long-term debt sustainability assessments after illustrating its usefulness in the case of Mongolia. We are also working with many Asian and Pacific countries to accelerate financing that is in line with the proposed ten principles.

Our support includes policy assistance in the area of taxation in Pakistan, sustainable finance regulation and frameworks in Cambodia and Sri Lanka, supporting the central bank of Mongolia in greening its financial system, and financing nature-based solutions in Samoa and the Maldives.

We stand ready to provide further support to our members in these and related areas in collaboration with our partners.

I wish you a successful Committee session.

Thank you

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