The three least developed countries in ASEAN – Cambodia, Lao PDR and Myanmar – all have more than 10% of their COVID expenditure from loans and yet they have some of the lowest expenditure per person for the region, ranging from USD 121, 0.46 and 8.12 per person, respectively. So, what are the stimulus packages financing?

ASEAN Member States’ COVID-19 stimulus expenditure as a proportion of population and GDP 

Sources: (1) Martinus and Seah, 2020 – ISEAS-Yusok Ishak Institute, #87, (2) UNIDO  downloaded 8 June, 2020, (3) authors analysis based on (1) and (2)


ASEAN national stimulus packages are focused on health and economic recovery. There is little in the packages that is targeted towards sustainable development. However, there are some stimulus packages that appear to be aligned to specific SDG priorities of ending poverty, health, economic growth and jobs, and food security.

In terms of SDG 1 on ending poverty, the Philippines’ Cash-aid program for low-income households as an economic stimulus focuses on reducing poverty as well as supporting households through COVID-induced economic downturn. SDG 2 focuses on delivering zero hunger, and Food aid by Indonesia and ssupport packages for households: cash payout to all Singaporeans, and additional payments for lower-income individuals and the unemployed’ are two examples of achieving both SDG targets and economic stimulus.

Alongside SDGs 1 and 2,  ASEAN COVID stimulus packages are most aligned with SDG 3 on health and wellbeing, and SDG 8 on decent work and economic growth, especially in least developed countries. Indonesia, Philippines are supporting healthcare and the social safety net via cash transfers. Thailand and Laos, for example, are supporting the health sector through equipment and cash. Malaysia and Singapore are promoting employment and growth through incentives such as the grants for trainings for workers in affected industries, and job support schemes. Indonesia and Vietnam are running am enterprise finance scheme for SMEs, while Laos, Thailand, Philippines are arranging loan restructuring.

We propose five pathways to an SDG-driven recovery for ASEAN nations:

Mission oriented recovery

It’s not just about growing GDP anymore; nations are required to deliver SDGs and the Paris Agreement through reducing poverty and inequality and enhancing environmental outcomes. Therefore, COVID recovery must have a mission that is central to all decision making, such as decarbonization and a circular economy, including efforts aimed at environmental protection, such as conserving biodiversity, reducing air pollution, protecting ecosystem services, and more sustainable use of natural resources.

Design stimulus packages with SDG alignment

When and how planned expenditure should align with SDGs must be considered right at the start of the planning process. This requires a transformation in how stimulus packages are designed so that they consider all 17 SDGs, including social equality, justice and equitable distribution, as central to the portfolio of options, rather than just using traditional risk-adjusted returns and returns on investment over the short term.

Catalytic investment in priority areas

Financial expenditure by development banks (multi-national, national or public) is necessary to deliver a long-term certainty to the nations and stimulate catalytic private investment. Therefore, financial stimulus from government should be aligned to the recovery mission and on investments that can support social and environmental outcomes and ‘higher risk’ options, while creating space for private sector investment.

Establish sustainability standards for financing

Combined environmental and social governance (ESG) indicators are needed to deliver transparency, accountability, and harmonisation to all recovery investments. These should be coherent across scale to promote and encourage coherent reporting. The delivery of the recovery package flows should be monitored and evaluated for the lifetime of the measures, to allow progressive adjustment and adaptation to the quickly changing conditions.

Social compact for partnerships

Partnerships within and across nations, and with financial investors, such as banks, are driving the COVID recovery. Without a realignment of the ‘compact’ between partners to ensure mutualistic (not parasitic) relations, along with agreement on long term mission and clarity of roles, there will never be a coherent ecosystem of SDG driven financial recovery.