Southeast Asia’s dynamic cities are at the forefront of the global push toward sustainability, but a new report by the Organisation for Economic Co-operation and Development (OECD) sheds light on daunting obstacles facing city governments as they work to build cleaner, more inclusive, and climate-resilient urban environments. As detailed in the OECD’s latest publication, “Financing Sustainable Cities in Southeast Asia” (OECD), Southeast Asia’s urban population is rising rapidly, placing unprecedented pressure on sanitation, housing, transportation, and climate adaptation measures—yet local authorities struggle to marshal the funding, expertise, and institutional backing needed to deliver ambitious green infrastructure.
This research matters profoundly to Thai readers, both as residents of one of the region’s most urbanized nations and as stakeholders in Thailand’s economic and environmental future. Nearly half of Thais now live in urban areas, with Bangkok at the epicenter of the nation’s economic activity and pollution challenges. As cities across the region seek to recover from COVID-19, build climate resilience, and meet global commitments like the Paris Agreement and Agenda 2030 for Sustainable Development, securing practical pathways for financing sustainable infrastructure is no longer a theoretical discussion—it’s an urgent national necessity.
According to the OECD analysis, urban governments in Southeast Asia typically depend on a narrow tax base and limited borrowing powers. Many operate under fiscal decentralization models that fail to allocate meaningful revenue streams or autonomy to cities. This means that while local officials are responsible for delivering critical upgrades—from new mass transit to flood barriers—they often cannot raise the funds or attract private investment needed to bring them to fruition. The OECD references a 2022 Asian Development Bank estimate that Southeast Asia faces an infrastructure gap of roughly USD 210 billion annually, with local governments struggling to fund green projects at the pace required (OECD Report Summary).
Expert perspectives echoed in the report highlight the complex interplay between national and local governments. A Southeast Asian development economist cited by OECD states, “Urban resilience will only be possible with more innovative financing—PPP models, green bonds, and greater autonomy in revenue generation are all essential tools, but they require careful risk management and stronger institutional capacity.” The OECD notes that only a handful of Southeast Asian cities have successfully issued green bonds for infrastructure, often relying on support from national development banks or international organizations.
For Thailand, these findings carry specific, high-stakes implications. Despite Bangkok’s relative wealth, local authorities in provincial cities face acute resource constraints, which limit their ability to upgrade water systems, expand public transport, or invest in energy-efficient housing. As a Bangkok-based urban sustainability specialist outlined in a related policy brief, “Thailand needs to reform intergovernmental transfers and empower municipalities with the tools to generate their own funding, including congestion pricing, local property taxes, and innovative financing partnerships.”
Thai urban finance is deeply shaped by national policies dating back to the 1990s, when decentralization reforms started but never fully devolved power or resources to subnational governments (World Bank Urban Decentralization in Thailand). The OECD report argues that these historical patterns persist across Southeast Asia, undermining the ability of growing cities to keep pace with rapid urbanization, much less adapt to climate extremes like urban flooding. Thailand’s experience during the devastating 2011 floods, which overwhelmed local response capacity and crippled urban economies, serves as a cautionary tale referenced by the OECD for the urgent need to strengthen city-level financing (Wikipedia: 2011 Thailand Floods).
Looking ahead, the OECD report identifies several future trends and actionable strategies for Southeast Asia, including Thailand. These include expanding digital service delivery to improve municipal revenue collection, leveraging climate finance instruments like adaptation funds, and fostering regional knowledge sharing around successful financing models adopted in peer cities such as Singapore and Kuala Lumpur. There is also a call for greater engagement with community groups and local businesses to co-finance green spaces and transport solutions, reflecting Thailand’s tradition of participatory urban planning through “chumchon” (community) networks.
For Thai readers, the message is clear: the drive for healthy, livable, and climate-resilient cities hinges not only on visionary plans but also securing new ways to pay for them. Active participation in local government consultations, support for innovative municipal taxes earmarked for environmental projects, and advocacy for greater fiscal autonomy at the city level are practical steps that can move Thailand forward. Engagement with civil society groups, monitoring of local government transparency, and demand for inclusion in urban development decisions offer further avenues for Thai citizens to ensure their voices shape the sustainable cities of tomorrow.
As Southeast Asian cities chart a course towards a more sustainable and resilient future, the challenge of financing transformation will remain at the center of public debate. Continued dialogue between policymakers, urban residents, and international partners will be vital for translating OECD recommendations into tangible, city-level action.
For those interested in learning more, the OECD’s full report (“Financing Sustainable Cities in Southeast Asia”) is freely accessible online for further details, policy options, and comparative insights across the region (Full OECD Report).