Governments of developing Asia-Pacific countries urgently need affordable and long-term financing as many of them are forced to choose between servicing debt in a high-interest rate environment.

A UN report said on Thursday that countries should also invest in education, health, and social protection for their people.

According to the latest report by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), new perspectives and approaches can help solve this long-standing challenge.

It noted that donors should prioritise the development financing needs of recipient countries over political interests, while multilateral development banks need to improve their lending capacities, including through fresh capital injections.

The report also urged credit rating agencies to adopt a long-term perspective and appreciated that public investments to realise shared development raise fiscal credibility over time.

On the domestic front, the report recommended stronger public revenue collection, digitalising tax administration and policies to increase society’s willingness to pay taxes.

More developed capital markets are also needed to unleash sizeable domestic savings in the region.

“Governments of developing countries across Asia and the Pacific are victims of an unjust, outdated and dysfunctional global financial architecture.

“They face fiscal constraints, rising borrowing rates, shorter loan maturity, and heavy debt burdens,’’ said UN Secretary-General Antonio Guterres.

Gross domestic product (GDP) growth in the region is projected to remain relatively steady at 4.4 per cent in both 2024 and 2025, while inflation and interest rate trends remain uncertain.

The report said an escalation of geopolitical tensions and trade fragmentation are examples of economic headwinds faced by the region’s economies.

Published annually by ESCAP since 1947, the Economic and Social Survey of Asia and the Pacific is one of the longest, continuously running reports in the UN system. 

(Xinhua/NAN)