Southeast Asia, Regional

Key development challenges

Regional finance in Southeast Asia mostly focuses on transnational challenges through measures such as limiting the spread of infectious diseases, the promotion of robust civil society networks, and the environmental protection of cross-border ecosystems including oceans and forests. ODF in this category supports the operation of organisations that are critical to regional cooperation, such as ASEAN, and facilitates policy coordination among Southeast Asian states aimed at tackling transnational crime, corruption, and illegal fishing.

Overview of development finance trends

ODF to Southeast Asia, Regional averaged just $787 million annually from 2015 to 2022, amounting to a total of just under $6.3 billion. Fifty-seven donors committed to 6,800 projects. Spending in 2021 was boosted considerably by a disbursement of a non-concessional loan from the Asian Infrastructure Investment Bank (AIIB).

The level of commitments has almost tripled from 2015 to 2022, reflecting increased use of regional platforms by development partners. Up to 2022, 78% of commitments had been fulfilled.

The AIIB and the United States are the top partners on a regional level, each disbursing more than $1 billion over the period. However, the United States is declining in importance, with its share of the disbursements dropping from 35% in 2015 to 9% in 2022. Other traditional partners such as Germany, Canada, Australia, and the European Union have provided steady but small levels of funding on concessional terms.

More than $121 million was implemented through ASEAN and its associated bodies.

ODF provided to Southeast Asia, Regional was highly concessional, with the boost in other official flows (OOF) spending in 2021 attributable to a non-concessional AIIB loan.

Health, government and civil society, and humanitarian assistance are the key sectors for spending to Southeast Asia, Regional. Control of infectious diseases, such as malaria and more recently Covid-19, attracted high levels of spending in the health sector, especially from the Global Fund. Since 2020, 11% of funding on a regional level has been explicitly targeted to Covid-19 response and recovery.

Emergency provision of basic supplies and material relief was also a major sub-sector, supported predominantly by the United States.

Climate

A total of $1.5 billion was spent on climate-related finance delivered at a regional level. Canada, the Asian Development Bank (ADB) and the United States together provided more than half of the climate finance to Southeast Asia, Regional, reflecting a high concentration of partners in this space. The majority of climate development finance spending (72%) was for projects marked as having a “principal” focus on climate, which is a reversal of the trend for climate ODF received by Southeast Asian nations bilaterally.

Renewable energy and general environmental policy were the most funded sub-sectors, followed by support to agricultural industries.

The biggest climate development project was Canada’s Accelerating Coal Transition Investment Program, with $230 million disbursed in 2022.

Gender

During 2015–22, a total of $1.9 billion was spent on gender equality finance in Southeast Asia, Regional, averaging $235 million annually. Disbursements for projects designated as having a “principal” focus on gender were consistently very low, but since 2019 a gradual increase in spending on projects tagged as having a “significant” focus on gender has reflected growing attention from major donors including Sweden, Canada, the ADB, Australia, and Germany.

More than half of Regional funding was delivered through grants. Almost half (47%) was spent in the government and civil society sector, especially in the legal and judicial sub-sector.

A major boost to disbursements in 2020 was in part attributable to Canada’s $19 million (current) concessional loan through the International Fund for Agricultural Development to extend support for climate-smart agriculture to smallholder farms, especially those run by women. Other notable projects delivered on a Regional basis include Australia’s Investing in Women Initiative and Sweden’s RWI Regional Asia Programme on Human Rights and Sustainable Development.