Developing countries in Asia have been focusing on green and inclusive growth in recent years, in part through a growing commitment to the SDGs.

The region needs to invest $1.5 trillion annually from 2016 to 2030 to achieve the SDGs by 2030. This projection translates to about 4% of the region's GDP, according the Economic and Social Commission for Asia and the Pacific.

A fundamental challenge facing developing economies in Asia is the financing of a green and inclusive recovery. The huge funding needs are often beyond the means of the public sector.

Therefore, Asian economies must attract more private capital to close the funding gap by mobilizing resources from broader funding base.

The participation of private capital can also foster risk sharing on green and social investments. Our research indicates that COVID-19 has adversely affected revenue collection across developing countries in Asia, reducing the public spending on meeting the SDGs.

Tax revenues will recover as the economy recovers, but the region's output remains below pre-COVID trend.

A version of this article appears in the print on June 14, 2021, of The Himalayan Times.