ASEAN and the IMF: Staying on Track with the Sustainable Development Goals

IMF News, November 8, 2018

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Publication date: November 8, 2018.
The member countries of the Association of Southeast Asian Nations (ASEAN) are projected to average 5.2 percent growth for 2018.
The IMF report titled "ASEAN Progress Towards Sustainable Development Goals and the Role of the IMF" takes stock of progress toward the 17 Sustainable Development Goals (SDGs) and outlines IMF support.

The 10 ASEAN member countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.
Strong income and consumption growth has:
- Reduced poverty.
- Improved health and education outcomes.
- Led to greater inclusion, varying across countries.
Eradication of absolute poverty:
- With continued income growth and strong policies, most ASEAN countries are on track to eradicate absolute poverty by 2030.
Health indicators:
- For the median ASEAN country, mortality for children under the age of five currently stands at 24.5 per 1,000 live births, already below the global goal.
Convergence:
- If income gains based on recent forecasts are realized, and if past trends for sustainable development indicators continue, economic welfare will continue to converge towards levels found in Asia’s developed economies.

Income inequality:
- Income inequality, as measured by the Gini coefficient, is almost 20 percent higher in the median ASEAN country than in advanced Asia.
Life expectancy:
- Life expectancy in the median ASEAN country is about 69 years and remains well below advanced Asia, a gap projected to persist through 2030.
Environmental strain:
- The shift towards manufacturing is straining environmental sustainability.
Infrastructure and public services:
- Many lower middle-income ASEAN countries need to invest more to close infrastructure gaps and improve health and education outcomes.
Revenue constraints:
- In most ASEAN countries, tax revenue-to-GDP ratios are still below 15 percent.

Areas of IMF support:
- Financial stability.
- Sustainable and inclusive economic growth.
- Capacity building for infrastructure provision.
- Pursuing inclusion.
- Addressing challenges of climate change.
- Strengthening economic institutions for good governance.
Revenue mobilization:
- Over the past two decades, most developing ASEAN-member countries have strengthened revenue collection, reaching or going beyond the level of other developing countries in the region.
- Cambodia and Myanmar have seen a significant increase in tax revenue as a share of GDP following IMF technical assistance.
- The IMF has developed initiatives such as Medium-term Revenue Strategies (MTRS) to help boost resource potential.

Adopt country-specific strategies with emphasis on:
- More quality government spending on priority areas such as infrastructure, education, and health.
- Improving environmental sustainability by reducing distortions in fuel pricing and reducing energy subsidies.
- Considering tax policy measures such as carbon taxation.
- Tackling income inequality by increasing reliance on progressive direct taxes and strengthening targeted social spending to improve safety nets.
Fiscal and spending considerations:
- Higher spending in priority areas will require continued improvements in revenue mobilization and efforts to boost spending efficiency.
- Cost estimates suggest large spending needs for most ASEAN countries, especially lower-middle-income ASEAN countries.

The IMF’s report indicates that realistic policies to improve consumption, life expectancy, greenhouse gas emissions, and income inequality could:
- Significantly improve economic welfare in ASEAN.
- Bring welfare for the ASEAN median country close to 30 percent of the estimated levels in advanced Asia by 2030.
The IMF remains committed to supporting ASEAN partners in pursuing a more prosperous and sustainable future.

Source: IMF news article "ASEAN and the IMF: Staying on Track with the Sustainable Development Goals" (November 8, 2018).