Almost two-thirds of the way to the 2030 deadline of the Sustainable Development Goals (SDGs), the issues that threaten their achievability loom large across the world. In my visits to countries in the Asia Pacific region, conversations with governments, partners, private sector, councils and communities often point to a couple of factors that may have the biggest impact to drive progress – affordable finance to invest in the policy and infrastructure investments at the scale needed; and the reach and ability of public and private institutions to deliver essential services.

We now have more evidence than we did in 2015, that the policy and factor mix required for SDG acceleration are those that have a multiplier effect across many development dimensions – such as increasing the mix of renewables driving power generation; greater access to digital public services; provision of health and disaster related insurance; ensuring social protection for the most vulnerable; and the protection and regeneration of land, water, forests and oceans  – these are illustrative of what needs longer-term policy with longer term finance, and at affordable rates.

With a staggering $3 trillion gap to bridge the SDG goals for developing nations, vulnerability-linked pricing of finance for climate and development is urgent. It's clear that a substantial portion of this finance must be sourced from capital markets and the private sector, both domestic and international. And herein lies a critical role for UNDP - to foster a win-win tie-up between national policy and financial markets to direct financial flows to SDG-aligned policy and investments; and to strengthen the capabilities of national and local institutions to design, manage and be accountable for the value this would generate. In UNDP terms, value is measured by human development outcomes and sustainability impact on the planet.

To attract this kind of capital, ODA and other grant-based funding plays a significant part – from being a point of leverage and technical assistance to design finance and policy instruments; to absorb early risk by taking ‘first loss’ in demonstration spaces; to provide guarantees and blended finance instruments behind sizeable results; and to build capacities and systems where these remain thin. And importantly, to stay the course during periods of crises, ahead of investors who seek stability and assurance in unpredictable contexts and times.

For many middle-income nations in the Asia Pacific region, borrowing rates from commercial sources can go well beyond 10%. Short-term lending from Central Banks to commercial banks can go even higher. While IFIs offer access to financing at more affordable rates (typically around 5 to 7%; and at 1% to 4% for countries eligible for International Development Association (IDA), the volume of funds available through these mechanisms are not sufficient to meet rapidly growing needs. Hence pushing these countries, as governments and private sector, to seek funds at much higher commercial rates. And for those nations caught in cycles of weak governance and bad economic policy, continuous levels of unsustainable public and private debt drive them to default.

While advocating for better terms of lending to developing countries based on climate and development vulnerability, I am always reminded that this is just one part of the equation. The other part is with those very same developing countries taking responsibility for growing the revenue side. This conversation often covers a mix of instruments as centerpieces of change - from tax reforms and trade policy, to attracting more remittances and optimizing tourism and service sector income; from the valuation and wise management of natural assets to infrastructure and human development investments that pay dividends over time – all bolstering the national account. Revenues are also saved by curbing run-away corruption and waste and achieving that fine balance between stability and risk-taking to motivate monies to come in and stay in, to avoid capital flight.

All this is true. However, the countries in the region that have survived the multiplicity of shocks and continue to show a certain resilience or faster bounce-back, are those that continue to invest in peoples’ agency and capabilities. Without this, the rest falters.