Financing a sustainable recovery from COVID-19 and beyond

The report highlights the significant financing needs and gaps that least developed countries (LDCs), landlocked developing countries (LLDCs) and small island developing states (SIDS) face in their recovery efforts from the COVID-19 pandemic and in the attainment of the Sustainable Development Goals (SDGs). The report also examines policy options to mobilize financial resources in these countries for that purpose. The report highlights that domestic tax revenue, debt and official development assistance will continue to be the main sources of development financing in many of these countries. Innovative instruments and mechanisms, such as thematic bonds and debt-for-climate swaps, also have the potential to finance sustainable development projects in these countries. As capacity, policy and regulatory gaps, as well as limited engagement and coordination with stakeholders, continue to be constraints in these countries, strengthened cooperation at the sub-regional, regional and global levels is essential to support these countries to complement their domestic efforts in mobilizing financing for development.