Asian Capital Markets and Financing for Sustainable Development

Transcription

1 Asian Capital Markets and Financing for Sustainable Development Aniket Shah Program Leader, Financing for Sustainable Development Ini>a>ve Sustainable Development Solu>ons Network 1

2 What is sustainable development? Sustainable Development Requires Highly Func>oning Public and Private Sectors 1) Sustainable Development is not a new concept: Gro Brundtland ar>culated this concept in Our Common Future Report in ) What is different today compared to 1987 is we have a) more sophis>cated technologies, b) much more global wealth and c) a more inter- connected world. All three give more poten>al as well as challenges 3) Sustainable development challenges will be met by PARTNERSHIPS between public and private sectors. 22

3 Asia is slowly becoming the center of the world economy Source: McKinsey Asia is currently approximately 30% of Global GDP, projected to be above 50% by In 2014, China overtook the US in GDP on PPP basis. 33

4 Asia exemplifies the challenges and opportuni>es of sustainable development Tokyo, Japan Dhaka, Bangladesh 44

5 Asia has made significant strides in poverty reduc>on over the past 30+ years Source: McArthur

6 Meanwhile many the challenges of environmental security have worsened in Asia Beijing, People s Republic of China Leyte, Philippines Source: McArthur

7 Asia requires a mul>- part financing framework for Sustainable Development A mul>- part financing framework for Sustainable Development is required. This will include: Global Funds and Global Partnerships Climate Financing (private and public) Infrastructure Financing (private and public) Development Aid Financial market transparency Interna>onal Financial Flows to Least Developed Countries Source: McArthur

8 Asia requires a mul>- part financing framework for Sustainable Development 88 Source: UN Report of the Intergovernmental Commiiee of Experts on Sustainable Development Financing

9 Asian Capital Markets: An overview Asian economies must develop financial markets that are aligned with sustainable development objec>ves of broad- based economic growth and environmental security. This includes, but is not limited to: Deepening and broadening of capital markets that encourage long- term investments, par>cularly in infrastructure, as opposed to short- term trading Crea>on of financial regula>on that supports full disclosure of environmental and social impact of corporate opera>ons Further integra>on of regional markets and economies to support more stable and less flighty investment 99

10 Asian Capital Markets: An overview Asian economies have experienced a significant in- flow of FDI and porkolio flows since These flows must be managed and directed towards SDG priori>es including climate adapta>on/mi>ga>on, infrastructure, agriculture and more. 1010

11 Asian Capital Markets: An overview The structure of Asian financial markets is set to evolve significantly over the next ten years, with more significant bond markets developing as banks role in savings- intermedia>on is expected to decrease. 1111

12 Asian Capital Markets: Role in infrastructure development Asian infrastructure financing gap of $4 trillion through 2030 will need to be filled by a combina>on of public and private capital. Public investment as % of GDP is not increasing fast enough to meet 1212 the needs, par>cularly in India, Indonesia and key ASEAN economies.

13 Asian Capital Markets: The demographic challenge Decreasing working age popula>on in many Asian economies may create significant challenges for sustainable development and will require new financing solu>ons that support elder community but also channel savings to appropriate investments 1313

14 Asian Capital Markets: Regional integra>on Integra>on of Hong Kong/Shanghai stock exchanges, as well as ASEAN region, will create deeper investable markets for diversifica>on of investments of local and foreign savers 1414

15 Development of China s financial system will be cri>cal to sustainable development globally 1515

16 How to make 2015 Financing for Development Conference a success? Update Monterrey framework 1. Adopt financing needs (public & private) 2. Clear standards for domes>c resource mobiliza>on 3. Reform interna>onal rules & transparency 4. Clarity on role pooled finance mechanisms for key investment areas integra>on with climate finance 5. Promote long- term infrastructure investments 6. Mobilize capital markets for sustainable development 7. Standards for ODA mobiliza>on and eligibility 8. Public- private technology partnerships (energy, agriculture, urban development) 1616

17 Organizing public funding: Example of infrastructure Na>onal Investment Systems Infrastructure Project Prepara>on Facili>es for early- stage projects MIGA and other Effec>ve subsidy and investment risk- mi>ga>on mechanisms Global investment rules (Basel III, Solvency II) Harmonized infrastructure investment plakorms & secondary markets 1717

18 Mobilizing public resources Domes>c Standards for Domes>c Resource Mobiliza>on Strengthened public finance management Combat illicit financial flows (BEPS, automa>c informa>on exchange, beneficial ownership, ) Interna>onal ODA target 0.7% for all HICs; 0.1% for UMICs Private philanthropy Giving Pledge Innova>ve financing mechanisms 1818

19 Using scarce public resources effec>vely: Targe>ng ODA Need to adopt clear ODA eligibility criteria (e.g. IDA countries) 1919

20 A new, mul>- stakeholder development assistance forum is needed Non- OECD donors such as China, India, Malaysia and others must be brought into a forum to facilitate future scale- up and direc>on of aid. This should be a major discussion item for the Addis Conference 2020

21 SDGs and Investment Prospects for Asia SDGs will lead to high- quality development within Asia and other regions. Countries that follow this development path will be able to tap a wider stream of public and private capital, ensuring broad- based, environmentally- friendly development and sustainable growth. If host- countries and investors use the SDGs as a guide and scorecard, it will be possible to mobilize a lot more high- quality investment. 2121

22 SDSN and Financing for Sustainable Development The Sustainable Development Solu>ons Network (SDSN) was launched by UN Secretary General in 2012 and is directed by Professor Jeffrey Sachs. The SDSN is providing technical advice on the Financing for Development Summit hosted in Addis Ababa in July The SDSN is leading four Working Groups to provide recommenda>ons to the Summit s Co- Facilitators and Hosts: Working Group 1: Public Private Partnerships and Pooled Financial Mechanisms Working Group 2: Climate and Infrastructure Finance Working Group 3: Mobilizing Resources from Public and Private Sector Working Group 4: Financial Regula>on for Sustainable Development 2222

23 More informa>on: Website: