Southeast Asia, Regional

Key development challenges

Although the volume of finance provided at this level is relatively minor, it is important. It mostly focuses on addressing transnational challenges through measures such as limiting the spread of infectious diseases, the promotion of robust civil society networks, and general environmental protection of cross-border ecosystems such as oceans and forests. ODF in this category supports the operation of organisations that are critical to regional cooperation, such as ASEAN, and facilitates the coordination of policy mechanisms aimed at tackling transnational crime, corruption, and illegal fishing.

In this sense, although the volumes are modest, finance provided to regional initiatives is important to Southeast Asia’s economic development.

Overview of development finance trends

ODF to Southeast Asia as a region averaged $637 million annually from 2015 to 2021, amounting to a total of $4.5 billion over the period (constant 2021 US$). Annual flows increased by 157% between 2018 and 2021, initiated by multimillion-dollar disbursements for a United Nations anti-malaria project 47045-QSE-M-UNOPS and sustained by Covid-19 support and other health initiatives.

Main development partners

The major development partners over the period 2015–21 were Germany (14% of total ODF), the United States (13%), and The Global Fund to Fight AIDS, Tuberculosis and Malaria (11%). Closer neighbours Japan and Australia contributed 5% each. Other European nations such as Sweden (7%), the United Kingdom (8%), Norway (5%), and Italy (5%) were also significant partners. Of all the funding, 99% came from traditional development partners.

The form of finance provided to Southeast Asia as a region was overwhelmingly concessional; 92% was grants, and of the minor amount of loans, 44% were official development assistance (ODA). This can be explained by the high concentration of traditional development partners, who tend to provide more concessional finance than non-traditional partners.

ASEAN and its associated bodies are the primary implementing channels for regional ODF. Other major implementing partners include the German service provider GIZ, the Global Alliance for Vaccines and Immunization, various United Nations agencies, and the Asian Development Bank (ADB).

Sectors

Spending in Southeast Asia as a region is largely directed to two sectors: health; and government and civil society. Those two sectors alone are responsible for 48% of regional ODF. In the health sector, most projects are focused on the control of malaria and, more recently, Covid-19. In the government and civil society sector, the largest portion of finance is directed to democratic participation and civil society.

Of the 80% of finance spent in the human development sector, much of it is directed to health, with the most significant development partners being The Global Fund and the United States. The remaining 20% is spent on infrastructure, predominantly on water and sanitation by the ADB and Germany.

Climate

The Southeast Asia Aid Map uses an adapted version of the Organisation for Economic Co-operation and Development’s (OECD’s) climate marking system to sort projects into three distinct categories: principal, where climate change mitigation or adaptation is explicitly stated as fundamental to the project; significant, where climate change mitigation or adaptation is explicitly stated but not fundamental; and not climate-related, where climate change is not targeted in any significant way.

From 2015 to 2021, more than $1.6 billion was spent on regional climate development finance. Principal projects and significant projects accounted for 15% and 20% of total finance flows, respectively. Germany was the primary development partner concerned with climate development finance, followed by Sweden and the United States. However, the two largest climate-related projects were both financed by the ADB: a $93.75-million loan to support smallholder farmers XM-DAC-46004-54325-001-LN3998 and a $33.3-million loan to support PET recycling capacity XM-DAC-46004-54333-001-LN4008.