LocationsAccelerating Sustainable Development via the Budget System: A Case of Thailand
August 19, 2024
How can a country achieve sustainable development without stronger realignment of the budget towards the SDGs?
The latest SDG Progress Report of the UN shows that, as of 2023, Asia Pacific has achieved only about 17% of the targets. On current trends we will achieve only 33% by 2030, creating a huge progress gap. Achieving the SDGs is estimated to take an extra 32 years beyond 2030 if we follow the current pace.
Similar to the region, multiple assessments on Thailand reveal that, despite Thailand’s achievement in poverty eradication, its progress towards meeting most of the SDGs requires acceleration, especially given the reversal in progress on achieving zero hunger and climate action. In addition, the National Economic and Social Development Council (NESDC, 2021), Sachs et al. (2022), and UNESCAP (2024) identified that many of the SDGs remain off-track, including good health and wellbeing, clean water and sanitation, sustainable cities and communities, responsible consumption and production, life below water, and life on land.
Moreover, there are still widespread disparities and persistent structural exclusion related to inequality. Credit Suisse in its latest 2022 Global Wealth Report revealed that the richest 1% of the Thai population has an average individual wealth of 33 million baht, 2,500 times more than that of the poorest 20%. Thailand, along with the rest of the world, is facing a looming triple planetary crisis—climate change, pollution, and biodiversity loss, as the country is identified in the 2021 Germanwatch’s Global Climate Risk Index as the ninth on the list of the top ten countries most affected by climate, which hits the poorest and marginalized groups the hardest.
This points to the urgent need for the country to not only mobilize more resources but to improve the alignment of available resources to finance SDG-aligned priorities.
Since fiscal year 2020, Thailand has enclosed the details of the budget composition according to the 20 year-National Strategy that comprises 7 components: national security, competitiveness enhancement, human capital development, social equality, eco-friendly development, public sector development, and public sector operations. While there is strategic alignment between the National Strategy and sustainable development agenda, there are rooms for further aligning public budget allocation with the SDGs. The NESDC mapped the linkages between the six National Strategy components and the SDGs in Figure 1.
Figure 1: Linkages between the 20-years National Strategy (2018-2037) and the SDGs
The figure showed that the budget for the eco-friendly development strategy accounts for only 0.69% of GDP and 3.8% of the total budget. This suggests that there are rooms to reprioritize public investment in eco-friendly development strategies, highlighting the linkages between climate action and wellbeing such as via reducing hunger, fostering responsible consumption and production, and creating decent jobs. On the contrary, the budget for public sector development is relatively high at 3.18% of GDP and 17.4% of the total budget, though it has relatively lower repercussions on the SDGs. In addition, the alignment of the budget with the SDGs, even in areas with higher budget allocation such as the social equality and human capital development strategies, cannot be comprehensively measured without the adoption of a systemic approach and instruments, from SDG-aligned taxonomy and budget tagging to impact measurement and management framework, to link the SDG progress with the whole budget cycle.
Enhancing the alignment of the public budget and the SDGs is an integral part of the Integrated National Financing Framework (INFF) formulation for Thailand, on which UNDP is working with the Ministry of Finance and other stakeholders. The INFF will present a holistic financing strategy that improves the coherence between planning and financing, presenting a menu of policy options to realign and mobilize public and private finance. It also serves as a platform that fosters the dialogue between policymakers, the private sector, and other development actors to ensure that the process of scaling SDG-aligned finance is inclusive and participatory. In addition to the INFF, UNDP has other entry-points to foster stronger alignment. For example, our engagement with the parliament through various channels, including the standing committee on monitoring budget administration, can lead to tighter accountability of the Government by the legislature. Another approach can be with civil society by promoting transparency via encouraging public participation in the budget process, through the Civil Society Advisory Committee to UNDP. The budget impact will be amplified as people are empowered and involved in decision-making. UNDP, in its SDG integrator role, is committed to continuing our work with the government and development actors in connecting the dots to accelerate Thailand’s sustainable development via putting in place a comprehensive and fit-for-purpose financing framework.