Supporting Asia-Pacific LLDCs and Bhutan in Mobilizing Resources for the SDGs
Financing needs in the land-locked developing countries (LLDCs) are disproportionately large relative to their socioeconomic development. To tackle the needs, the 12 LLDCs of the Asia-Pacific region require greater domestic resource mobilization, complemented by strong international assistance and foreign direct investment (FDI), to improve tax and other revenue collection. The countries also need to identify additional and innovative financing sources, as well as develop their financial markets in an efficient, fair and predictable manner.
These challenges have been highlighted by the global community through the 2030 Agenda for Sustainable Development or the Sustainable Development Goals (SDGs) and the Addis Ababa Action Agenda of the Third International Conference on Financing for Development (AAAA). ESCAP member States are in the process of identifying practical ways to use existing financial resources effectively and to raise additional resources for the pursuit of the sustainable development goals. In this connection, the United Nations has already embarked on a number of plans of action to support the development challenges faced by LLDCs, including the Istanbul Programme of Action for LDCs (IPoA, 2011-2020). Such policy issues for LLDCs have also been highlighted in ESCAP’s Regional road map for implementing the 2030 Agenda for Sustainable Development in Asia and the Pacific. ESCAP, as a United Nations regional commission, is critically placed to assist LLDCs in the region in this subject due to its role as an intermediary in implementing the internationally agreed global and regional policy agendas at the country level in support of the United Nations country teams.
To narrow the development gaps of LLDCs, it is important to recognize that a key constraint to realizing their development opportunities is the lack of strong financial intermediation mechanisms to bridge long-term financing sources and sustainable development-oriented investments. The LLDCs have very limited resources to address their development challenges while they face limited capacities to attract new investments. This is mainly due to an absence of well-functioning financial systems and weak governance and institutional structures, and high protectionist sentiments among developed countries also contributes to low investment flows to the LLDCs.
Bhutan, as an LLDC and a least developed country (LDC), faces similar challenges. According to ESCAP research and analysis, Bhutan requires approximately 12.7% of GDP per year of investments to meet with its infrastructure needs in transport, energy, information and communications technology (ITC) and utilities. There is a need of mobilizing financial resources for Bhutan to narrow socioeconomic gaps and address the SDGs. Consequently, using the existing resources effectively and raising additional resources are top priorities for Bhutan.