November 2016: Two publications from the UN Development Programme (UNDP) describe a shift towards government co-financing for UNDP work in the Asia-Pacific region. The reports outline how UNDP and the Asia-Pacific Development Effectiveness Facility (AP-DEF) are working with country governments and other stakeholders to design Integrated National Financing Frameworks (INFFs) to implement the Sustainable Development Goals (SDGs) in countries in the region.

The reports, titled ‘Together for a Sustainable Future: Achieving the SDGs through Government Co-Financing in Asia and the Pacific’ and ‘Achieving the SDGs in the Era of the Addis Ababa Action Agenda,’ explain that, as the region’s countries transition into middle-income (MIC) status, they have more efficient tax collection, higher growth rates and broader prosperity. These factors have contributed to increasing domestic resources to invest in education, health, job creation, gender equality and other areas.

Asia-Pacific countries are designing new financing strategies to mobilize resources from a range of sources, including domestic resource mobilization (DRM) and private sector financing.

Domestic public and private finance make up 44% and 45% of total resources in Asia-Pacific, respectively, UNDP reports. At the same time, official development assistance (ODA) has declined to 0.7% in 2014, from 2.4% in 2000. As a result of this shift, Asia-Pacific countries are designing new financing strategies to mobilize resources from a range of sources, including domestic resource mobilization (DRM) and private sector financing. Bangladesh, for example, is aiming to fund its 7th Five Year Plan with 78% private financing.

Haoliang Xu, UNDP, observes that “the transformation of development finance translates into increased demand for our services from governments in Asia-Pacific,” and reports that UNDP’s portfolio of government co-financed programs has quadrupled in the past two years. Xu described domestic sources of finance “as a key driving force for sustainable development in Asia-Pacific,” saying such financing sources expand existing development cooperation and partnerships.

‘Together for a Sustainable Future’ documents this transformation in development financing. It states that UNDP’s co-financed portfolio in Asia-Pacific includes agreements in 14 countries, for a total of US$116 million in investment. The report highlights seven projects co-financed by Asia-Pacific governments: strengthening public service delivery in education in the Philippines; accelerating achievement of national development priorities in India; providing policy advisory services in Malaysia; mobilizing people for climate adaptation in Nepal; collaborating to localize the SDGs in Pakistan; developing local governance on national terms in Palau; and diversifying the economy and improving services in Timor-Leste.

‘Achieving the SDGs in the Era of the Addis Ababa Action Agenda’ describes how INFFs can help governments link financing with results, and shares examples of how the AP-DEF and UNDP country offices support countries to implement the Development Finance Assessment (DFA) methodology. The DFA approach: uses existing data and policy analysis; focuses on linking finance with results; and serves as an action-oriented diagnostic tool that helps to establish a baseline for developing an INFF and the roadmap for implementing recommendations from the assessment. DFA analysis can also be used to focus on scenarios for graduation from Least Developed Country (LDC) country status and identify priority finance flows, among other applications.

In an upcoming activity on financing the SDGs from alternative sources, UNDP and Global Initiatives are hosting the ‘Fifth Responsible Business Forum on Sustainable Development’ in Singapore from 22-24 November 2016, under the theme, ‘Innovation and Collaboration to Deliver the Global Goals.’ The Forum aims to help companies to understand the SDGs and support governments to achieve the SDGs. [UNDP Press Release] [UNDP Interview with Bangladesh Minister of Finance] [Together for a Sustainable Future] [Achieving the SDGs in the Era of the Addis Ababa Action Agenda] [UNDP Asia-Pacific Website] [Responsible Business Forum Website] [UNDP Responsible Business Forum Website] [IISD RS Sources]