Official development assistance remains important for Southeast Asia's blue economy, but its limitations are increasingly apparent. Yet alternative sources – domestic public finance, international private capital and domestic private capital – are not straightforward substitutes. Each operates under different constraints, targets distinct activities and serves separate functions within the Association of Southeast Asian Nations (ASEAN) Blue Economy Framework. This chapter examines how these sources align with the Framework's strategic pillars, identifies what limits their availability and flow in Southeast Asia and assesses which policy and institutional gaps prevent effective capital deployment. Understanding these dynamics is critical to developing realistic strategies for blue economy financing.
Financing Southeast Asia's Blue Economy
Abstract
3.1.1. Each capital type – international private, domestic private, and domestic public – plays a distinct role within the ASEAN Blue Economy Framework
Financial capital is not fungible. Depending on the provider of this capital (e.g. public versus private), the associated requirements (e.g. commercial return versus public value) and its use cases will vary. This means that domestic public, international private and domestic private sources of capital can support the implementation of the ASEAN Blue Economy Framework in distinct ways (see Figure 3.1).
Source: Authors’ creation based on ASEAN (2023[1]), ASEAN Blue Economy Framework,
https://asean.org/wp-content/uploads/2023/09/ASEAN-Blue-Economy-Framework.pdf.
Domestic public finance channels government revenues towards public priorities. This source targets public goods that markets tend to underprovide: ports, coastal protection, marine research, fisheries enforcement, and environmental management. Because it does not require commercial returns, domestic public finance suits activities with high social and environmental value but limited commercial potential – though deployment depends on fiscal capacity and policy priorities. Within the Framework, domestic public finance could support environmental management under Conservation and Management, foundational infrastructure for Priority Sectors, and fiscal incentives for innovation. Where deployed effectively, it creates governance structures and regulatory frameworks enabling other investments – though this requires adequate fiscal space and political commitment.
International private capital flows from institutional investors, commercial banks and corporations seeking financial returns (see Box 3.1 for two exceptions). This capital targets larger profit-generating activities: shipping, offshore renewables, capital-intensive aquaculture, and coastal tourism infrastructure. Projects must generate revenues sufficient to justify costs and risks – though flow depends on risk perceptions and enabling environments. Across the Framework's pillars, international private capital could back nature-based solutions with environmental, social and governance returns (Conservation and Management), blue economy technology ventures (Science, Technology and Innovation) and major infrastructure like ports and offshore renewables (Priority Sectors). International capital can deliver the scale that domestic sources cannot match alone, though its profit focus means public goods and uncertain ventures may be ignored without public sector intervention.
While technically private, philanthropic funding is largely concerned with generating social and environmental return. It is mainly grant based and, in the case of the blue economy, can essentially function similarly to public sources of finance, although the areas of focus are typically set by philanthropy leadership (e.g. board of trustees) in line with the organisation's mission. Another exception is remittances, which are private transfers between or within households. Their objective and use case are highly variable, but there is evidence that remittances can improve well-being at the household level. Although there has been some momentum to incentivise the use of remittances for collective purposes, such as the green transition, their inherent household-to-household nature makes directing them in a concerted and coherent way a challenge.
Source: OECD (2021[2]), Private Philanthropy for Development – Second Edition: Data for Action, https://doi.org/10.1787/cdf37f1e-en; OECD (2025[3]), DAC Blended Finance Guidance 2025, https://doi.org/10.1787/e4a13d2c-en; OECD (2005[4]), Migration, Remittances and Development, https://doi.org/10.1787/9789264013896-en;
Domestic private capital comes from local commercial banks, institutional investors, corporations and microfinance institutions. Like international capital, it generally seeks economic returns, though often with greater willingness to accept smaller investments. This source could support all Framework pillars at smaller scales: modest eco-tourism and conservation (Conservation and Management), locally adapted solutions from small enterprises (Science, Technology and Innovation), and local businesses operating in traditional sectors (Priority Sectors). Given the Framework's inclusivity emphasis, domestic private capital could be particularly valuable – potentially reaching communities and enterprises international capital skips due to small scale or perceived risk, though this depends heavily on local financial market development.
3.1.2. Visibility of the flows from different capital sources into the blue economy in Southeast Asia remains limited
Tracking capital flows is essential to assuring the adequacy and impact of finance and investment for the blue economy. Without knowing how much capital is available, where it comes from, and where it goes, it is difficult to identify redundancies, address financing gaps, or seize missed opportunities. Such information gaps can mean that capital suitable for – and even intended for – the sustainable blue economy may be diverted elsewhere, co-opted to facilitate further exploitation of ocean spaces, or be concentrated in limited geographies and sectors. Beyond international public finance (see Chapter 2), there is limited transparency on other sources of finance and investment for the blue economy in Southeast Asia – meaning that it is unclear what flows actually exist and whether they are optimally deployed.
In the case of domestic public finance, there is available information on fiscal instruments relevant to the blue economy in Southeast Asia. In particular, the OECD Policy Instruments for the Environment database provides detailed data on ocean-related policy mechanisms employed by Southeast Asian countries – covering an array of domestic revenue-generating tools (e.g. taxes) and government expenditures (e.g. subsidies) (OECD, 2025[5]). Table 3.1 shows the number and types of these instruments used across different Southeast Asian countries. Fees and taxes dominate the ocean-related environmental policy mix in Southeast Asian countries, highlighting a skew towards mechanisms that mobilise domestic revenues while advancing environmental objectives. In contrast, policy instruments such as payment for ecosystem service schemes are present in negligible numbers.
Note: Timor-Leste is not included due to unavailable data.
Source: OECD (2025[5]), Policy Instruments for the Environment Database, http://oe.cd/pinedatabase (accessed in June 2025).
However, a more comprehensive accounting of domestic public finance – especially of expenditures – for the blue economy is missing (OECD, 2025[6]). This is a global challenge. Many developing countries and emerging markets do not systematically track how much they spend on the blue economy. As a result, data on public expenditures for the blue economy are far less advanced than those for climate and biodiversity, which have benefited from early co-ordination on international good practice (Siverwood-Cope and Ling, 2021[7]). A full review of opportunities to generate public revenue from beneficiaries of blue natural capital is also often not common across countries (World Bank, 2021[8]). In the case of Southeast Asia, work on enhancing the transparency of domestic public finance for the blue economy is at an early stage. For instance, countries like Indonesia have piloted a blue budget tagging system, and a refinement of its tagging exercise is envisioned as part of the 2026 work plan. In other countries, there is generally no dedicated tracking system.
In the case of private finance for the blue economy, comparable cross-country data are largely confined to philanthropic contributions. As shown in Figure 3.2, philanthropic contributions to Sustainable Development Goal (SDG) 14 in Southeast Asia show a fluctuating but generally positive trend between 2017 and 2023. The contributions reached their peak in 2019 (USD 13.8 million), declining thereafter to USD 3.2 million. The two largest philanthropic donors (between 2017 and 2023) to the region are Margaret A. Cargill Foundation (USD 15.5 million) and David and Lucile Packard Foundation (USD 14.1 million) – with the others providing less than USD 5 million each.
Source: Authors’ calculations based on OECD (2025[9]), Data Platform on Development Finance for the Sustainable Ocean Economy, https://oecd-main.shinyapps.io/ocean/.
Data on purely private capital for the blue economy – whether from domestic or international sources – are largely incomplete. Efforts to enhance transparency in this area are burgeoning, with initiatives in Europe being most advanced. For instance, the European Union-funded BlueInvest initiative has carried out a study of blue economy investment activity in Europe. Focusing on blue economy deal flow (e.g. mergers and acquisitions, private equity and venture capital deals), the analysis has uncovered a significant increase in disclosed blue economy investments, reaching over USD 13 billion between 2018 and 2023 (BlueInvest, n.d.[10]). The analysis identifies blue renewable energy, blue technology and ocean observation, and aquaculture as the most dynamic sectors for blue investments in Europe. Digital platforms, such as the Hub Azul Dealroom, which function as a matchmaking platform for blue economy investments, also house data on private transactions related to the blue economy (Forum Oceano, 2025[11]). While the tool can conceivably have a global scope, its genesis and current coverage skew towards Europe and North America.
Blue economy finance does not exist in isolation from broader economic fundamentals (see Figure 2.3 in Chapter 2). The fiscal constraints, debt burdens, shallow financial markets and weak regulatory frameworks that limit overall capital availability in many Southeast Asian countries affect blue economy investments just as they constrain financing in any other sector.
Southeast Asia faces several economic headwinds, which may affect the availability of different capital types. For instance, external factors like escalating tariffs and trade uncertainty have hampered the region's near-term economic outlook, resulting in the Asian Development Bank downgrading projections for future growth (see Figure 3.3). More structural issues also plague the region: for example, while economic expansion over the past 40 years has been propped up by a growing working-age population, there is evidence that this is slowing in several countries.
But the vast heterogeneity of countries in the region means that limiting factors for blue economy finance and investment are most salient at the country level. The disparity in per capita output, an average of USD 6 840 in the ASEAN-5 countries (Indonesia, Malaysia, the Philippines, Singapore and Thailand) compared to less than USD 3 000 in countries like Cambodia, Lao PDR and Myanmar (IMF, 2025[12]), reflects fundamental differences in the availability of domestic public, as well as domestic and international private capital.
Source: (ADB, 2025[13]), Economic Forecasts for Asia and the Pacific, https://www.adb.org/outlook/editions/july-2025.
3.2.1. Fiscal constraints limit domestic public finance availability
The availability of domestic public finance for blue economy priorities depends fundamentally on three factors: revenue generation capacity (tax to gross domestic product (GDP) ratios), fiscal flexibility (debt sustainability and budget pressures), and public finance management quality (institutional capacity to allocate and track expenditures effectively). These disparities in fiscal capacity and public finance management have direct implications for blue economy finance. Countries with tight fiscal space are less able to allocate budget to non-revenue-generating but essential blue economy functions such as marine spatial planning, fisheries enforcement or coastal ecosystem restoration. Conversely, where tax capacity and public finance management are stronger, governments are better positioned both to fund these public goods directly and to provide the co-financing to crowd in private investment for the blue economy.
Southeast Asian countries demonstrate significant variation in revenue generation. In 2022, tax-to-GDP ratios ranged from 10.3% in Lao PDR to 19.0% in Viet Nam, with the regional average falling well below the OECD norm of over one-third of GDP (see Figure 3.4). Countries with relatively low ratios face greater potential to increase domestic revenues, while others lie closer to the observed regional maximums. The composition of tax revenues also varies. Indonesia balances corporate income (28.8%) and value-added tax (VAT) (28.2%), Malaysia relies heavily on income taxes (over two-thirds of revenue), while Cambodia, Lao PDR and Thailand depend more on VAT and trade taxes (OECD, 2024[14]). This creates uneven exposure to volatility – countries dependent on goods and services taxes face sharper revenue fluctuations tied to consumption patterns.
Note: Brunei Darussalam and Myanmar are not included due to unavailable data.
Source: OECD (2024[14]), Revenue Statistics in Asia and the Pacific 2024: Tax Revenue Buoyancy in Asia,
Debt sustainability issues are particularly acute in certain countries. Lao PDR faces debt distress with unsustainable public debt trajectories, requiring primary surpluses of approximately 17% of GDP annually between 2025-2029 to reduce debt to benchmark thresholds – a level neither politically feasible nor socially desirable without harming development prospects (see Box 3.2). Malaysia, the Philippines and Thailand face moderate sovereign stress, with Malaysia's debt servicing costs exceeding the 15% revenue threshold in 2024 despite ongoing reforms (IMF, 2024/25[15]). Indonesia, Singapore and Viet Nam demonstrate generally sound debt sustainability, though Viet Nam faces long-term pressures from aging-related expenditures and climate spending needs (IMF, 2024/25[15]). These debt positions risk crowding out domestic public spending on the blue economy while also increasing borrowing costs that constrain the resources available for the blue economy.
Lao PDR's debt distress stems from a confluence of structural weaknesses that have created an unsustainable fiscal trajectory. The country exhibits major economic vulnerabilities including significant financing needs, limited access to international markets and minimal international reserves. The economy continues to exhibit signs of stress, with persistent exchange rate depreciation and low foreign exchange reserves leading to persistently high domestic inflation while simultaneously worsening the public debt burden through currency valuation effects. The significant foreign currency exposure of Lao PDR's debt stock means that currency depreciation directly inflates the nominal value of foreign currency-denominated debt, creating a vicious cycle where macroeconomic instability begets further debt deterioration.
Source: IMF (2024[16]), Lao People's Democratic Republic, https://doi.org/10.5089/9798400293283.002.
Public finance management quality also varies substantially. World Bank Public Expenditure and Financial Accountability (PEFA) assessments reveal notable heterogeneity across Southeast Asia's seven pillars of public finance management, with transparency of public finances showing the starkest differences (see Figure 3.5) – some countries approach international good practice while others remain near basic performance levels. This matters for blue economy finance because, as discussed earlier, weak transparency, particularly for ocean-related revenue and expenditures, makes assessing whether available resources actually flow to blue priorities difficult. These disparities also constrain countries’ capacity to design, implement and credibly manage revenue-raising fiscal tools such as tourism and shipping taxes or levies, even though such instruments illustrate how blue economy assets can themselves be harnessed to mobilise capital (OECD, 2020[17]).
Source: PEFA (2025[18]), PEFA Assessments, https://www.pefa.org/assessments.
It is also worth noting that reforming fiscal instruments so that they no longer incentivise harmful activities can not only support the transition to sustainability, but also create additional fiscal space. An illustrative example is harmful fisheries subsidies. OECD estimates indicate that, between 2020 and 2022, countries and territories accounting for 69% of global capture fisheries production spent USD 10.7 billion per year on public support for their fisheries, and that 65% of this support risks encouraging unsustainable fishing where effective management is lacking (OECD, 2025[19]). Repurposing these funds towards activities such as fish stock assessments, stronger fisheries management, or time bound income support for fishers adversely affected by crises would be a step in the right direction towards a more sustainable and resilient blue economy (OECD, 2025[19]).
3.2.2. International private capital concentrates in financially developed economies
International private capital allocation – both flows and stocks – concentrates heavily in Southeast Asia's most financially developed economies, reflecting risk perceptions embedded in credit ratings and sovereign spreads, as well as varying degrees of financial market openness to foreign investment.
Foreign direct investment (FDI) concentrates heavily in Singapore, which consistently receives over USD 60 billion annually and held over USD 2.2 trillion in FDI stock by 2024 (Figure 3.6). Beyond this financial hub, emerging economies like Indonesia, Malaysia, Thailand and Viet Nam attract USD 10-25 billion per year with steady stock accumulation. Viet Nam recorded the fastest FDI stock growth, from USD 103 billion in 2015 to USD 249 billion in 2024, as firms relocated production from China. Smaller economies – Brunei Darussalam, Cambodia, Lao PDR, Myanmar, the Philippines and Timor-Leste – receive relatively modest inflows, reflecting early-stage integration into international investment networks. International credit follows similar patterns, with Singapore accounting for nearly 40% of total international private credit to Southeast Asia, followed by Indonesia and Malaysia (BIS, 2025[20]).
Creditworthiness explains part of this concentration. Singapore holds the highest credit ratings among Southeast Asian countries, while Indonesia, Malaysia, the Philippines and Thailand maintain investment-grade status (BBB-/Baa3 or above) (Trading Economics, 2026[21]), providing access to institutional investors legally mandated to hold only investment-grade securities. Cambodia, Lao PDR and Viet Nam hold sub-investment grade ratings (Trading Economics, 2026[21]), limiting access to narrower, more expensive investor bases. Sovereign spreads reinforce these patterns: Singapore and Thailand trade well below United States Treasuries, reflecting safe-haven status, while Indonesia and the Philippines show bond yields firmly above United States Treasuries, suggesting a risk premium (Chiang and Chang, 2025[22]).
LHS: stocks; RHS: flows
Source: Authors’ calculation based on UNCTAD (2025[23]), Foreign direct investment: Inward and outward flows and stock, https://unctadstat.unctad.org/datacentre/dataviewer/US.FdiFlowsStock.
Financial liberalisation also shapes capital allocation significantly. The OECD FDI Restrictiveness Index reveals more than six-fold differences between most and least restrictive countries (see Figure 3.7): Lao PDR stands most restrictive (0.414), while Singapore demonstrates greatest openness (0.065). However, liberalisation itself generates considerable risks (e.g. of banking or currency crises) for lower-income countries (Hamdi and Jlassi, 2014[24]). Effective liberalisation requires preconditions – macroeconomic stability and robust domestic financial institutions (IMF, 2002[25]) – that developing economies may lack. Observed differences in restrictiveness may therefore reflect pragmatic policy choices, echoing underlying disparities in economic development and institutional capacity that themselves help explain the concentration of international private capital in certain markets.
From a blue economy perspective, this concentration implies that large‑scale, commercially oriented blue investments – such as port infrastructure, offshore energy and industrial aquaculture – are far more likely to materialise in countries that already combine higher credit ratings, more open FDI regimes and deeper financial markets. This raises the risk that the availability of international private capital reinforces existing disparities in the blue economy, absent financial or policy intervention.
Lower score implies less restrictive FDI policies
Source: OECD (2025[26]), FDI Regulatory Restrictiveness Index,
Remittances and philanthropic contributions represent exceptions to the concentration of capital in the most financially developed countries, as they primarily serve household welfare and social objectives – including coastal resilience livelihoods and smaller-scale blue economy activities – rather than commercial returns. Both sources remain quite important in the ASEAN context. Remittances account for a notable share of GDP in several Southeast Asian countries: Timor-Leste (9.3%), the Philippines (8.9%) and Cambodia (6.6%) lead the region (World Bank, 2025[27]). Private philanthropies also channel significant funding to Southeast Asia, with Indonesia (USD 95.8 million) and the Philippines (USD 10.6 million) receiving the largest amounts in 2023 (OECD, 2025[28]). Though small in volume compared to other capital flows, these contributions were almost entirely grants, highlighting their value for activities like marine conservation and ocean science.
3.2.3. Domestic private capital availability is shaped by heterogenous financial market depth and inclusion
Domestic private capital availability is shaped by three interrelated factors: savings capacity (measured by gross domestic savings rates), financial market depth (captured by credit-to-GDP ratios and stock market capitalisation), and financial inclusion (access to banking and credit services across populations). Many factors affecting international capital allocation – particularly credit risk perceptions and policy predictability – also shape domestic capital availability, as local investors respond to similar country-level risk assessments.
Savings capacity varies significantly across countries and forms the foundation for domestic capital mobilisation. Brunei Darussalam and Singapore maintain high gross domestic savings rates (above 50% of GDP), indicating large and stable pools of domestic funds. At the other end of the spectrum, the Philippines exhibits persistently low savings (around 9%), constraining the resources available to its financial system. Cambodia and Viet Nam show upward trends in savings, suggesting improving capacity for domestic financial self-reliance.
In general, higher savings support greater domestic credit provision to the private sector, though the relationship is not strictly linear (see Figure 3.8). Malaysia, Singapore and Thailand illustrate how strong savings combined with effective financial intermediation translate into deep financial systems, with private credit often at or above 100% of GDP. By contrast, Myanmar and the Philippines maintain credit-to-GDP ratios below 50%, reflecting both lower savings and less developed banking sectors. Brunei Darussalam is a notable outlier: despite very high savings, its domestic financial system remains relatively shallow, indicating limited intermediation of available funds. Meanwhile, Cambodia and Viet Nam have experienced rapid increases in credit-to-GDP ratios, pointing to fast financial deepening. However, sustained credit growth above GDP can introduce financial stability risks – particularly if lending standards weaken or regulatory capacity does not keep pace.
LHS: Domestic savings; RHS: Domestic credit to private sector
Source: World Bank (2025[29]), Gross savings (% of GDP), https://data.worldbank.org/indicator/NY.GNS.ICTR.ZS; World Bank (2025[30]), Domestic credit to private sector (% of GDP), https://data.worldbank.org/indicator/FS.AST.PRVT.GD.ZS.
While credit-to-GDP ratios broadly capture the scale of debt-based – primarily bank-led – financing, stock market capitalisation reflects the role of equity-based, market financing. Across countries, the latter channel of capital allocation shows a similarly uneven pattern of development. Singapore and Malaysia possess highly capitalised equity markets (well over 100% of GDP) signalling strong equity financing capacity and well-developed capital markets (World Bank, 2025[31]). Indonesia and the Philippines show market capitalisation significantly higher than their domestic credit ratios, suggesting a relatively greater role for equity financing compared to bank lending (World Bank, 2025[31]; World Bank, 2025[30]). In contrast, in Thailand and Viet Nam, domestic credit exceeds market capitalisation, suggesting that bank lending plays a more prominent role in private sector financing. Cambodia’s very small stock market capitalisation further underscores the uneven development of capital markets across the region.
Finally, financial inclusion determines whether available capital is broadly accessible. As shown in Figure 3.9, Malaysia, Singapore and Thailand couple deep financial markets with near-universal inclusion (over 87% banked adult population). Viet Nam, with around 70% inclusion, has relatively high access but still faces gaps. Inclusion levels are significantly lower in Indonesia (52%), Cambodia (37%) and the Philippines (34%), suggesting that large segments of the population remain underserved.
Differences in domestic private capital availability have direct implications for the blue economy. Where domestic credit markets are shallow and equity finance limited, even viable blue economy enterprises – such as sustainable aquaculture operations or eco-tourism businesses – may struggle to secure the capital needed to invest and scale. Separately, low financial inclusion means that coastal communities and micro-enterprises often lack access to basic financial services: small-scale fishers cannot obtain loans for improved gear or climate adaptation, and informal blue economy actors remain entirely outside formal credit systems. In both cases, the availability of domestic private capital for the blue economy is constrained.
Population with bank or similar financial institution account
Source: World Bank (2025[32]),Global Findex Database, https://databank.worldbank.org/source/global-findex-database.
The overall envelope of capital available for the blue economy – and its sources – depends on generic economic factors. However, whether available capital actually flows to blue economy priorities is determined by whether these priorities represent viable and attractive investment propositions. Sound policies and regulations at the macro-level play a critical role by directing capital flows, reducing uncertainty and information asymmetries, and establishing a basis for investable projects (Halland et al., 2021[33]). Importantly, policy signals shape not only where capital should flow but also which activities should be excluded – whether for economic, environmental, or social reasons.
Singapore's Second Nationally Determined Contribution (NDC) illustrates this signalling function. The country explicitly states that marine, hydroelectric and conventional geothermal renewable energy options are unviable due to structural constraints including low wind speeds, narrow tidal range, a lack of fast-flowing river systems, and an absence of near-surface geothermal resources (Republic of Singapore, 2025[34]). By explicitly excluding these sectors, the policy statement deters misallocated investment and channels capital more efficiently towards feasible blue economy opportunities.
Yet such clarity in policy signalling is uneven across Southeast Asia. Nascent – albeit emerging – blue economy policy frameworks – and underdeveloped financial policy levers represent a constraint for the flow of available capital to the region’s blue economy ambitions.
3.3.1. Certain Southeast Asian countries have advanced blue economy policies whilst others are in more nascent stages – though momentum is accelerating
Clear and integrated national blue economy policy frameworks are essential for channelling finance towards sustainable ocean development. At minimum, they signal national priorities to investors, donors and financial institutions. More detailed frameworks outline objectives, quantify financing requirements and articulate strategies that align public resources and co-ordinate donor funding. Marine spatial planning (see Box 4.2 in Chapter 4), for instance, helps identify and prioritise investments whilst mobilising donor finance. Whilst the ASEAN Blue Economy Framework provides regional direction, national-level clarity remains critical given substantial heterogeneity across Southeast Asian countries (see Chapters 1 and 3).
National policy framework development in Southeast Asia remains uneven (Table 3.2). Indonesia and Singapore have advanced furthest, with Indonesia explicitly positioning the blue economy as an engine for inclusive growth aligned with national development plans (Government of Indonesia, 2024[35]). Others – including Cambodia, Lao PDR and Timor-Leste – are currently developing the policies and institutions necessary for sound blue economy governance.
Source: Adapted from ASEAN Blue Wealth (2025[36]), National Snapshots, https://aseanbluewealth.com/asean-snapshots/.
Recent developments suggest momentum is building. Since first referencing the blue economy in 2020, Brunei Darussalam has integrated it into its Twelfth National Development Plan (ASEAN Blue Wealth, 2025[36]). The Philippines enacted the Blue Economy Act in 2024, integrating blue economy objectives into the Philippine Development Plan 2023–2028 (ASEAN Blue Wealth, 2025[36]). Malaysia incorporated the blue economy into the 12th Malaysia Plan (2021–2025) and elevated it to a key pillar in the 13th Malaysia Plan (2026–2030) (ASEAN Blue Wealth, 2025[36]).
The latest NDCs also reflect this uneven but accelerating policy attention. Following the first Global Stocktake, 61 of 66 updated NDCs globally included at least one ocean-based action (Khan et al., 2025[37]). Several Southeast Asian countries have incorporated ocean-based mitigation and adaptation measures into their 2025 NDCs (Table 3.3). Indonesia has adopted the most comprehensive approach – consistent with its advanced blue economy roadmap – with commitments spanning blue carbon ecosystems, strengthened marine spatial planning, expanded marine protected areas, ocean accounting and seagrass mapping (Republic of Indonesia, 2025[38]). Looking ahead, Singapore and Cambodia have joined the Blue NDC Challenge launched at the Third United Nations Ocean Conference, signalling growing regional commitment to placing ocean priorities at the heart of climate action (WRI, 2025[39]).
Note: Only includes Southeast Asian countries who submitted their 2025 NDCs by 6 November 2025: Brunei Darussalam, Cambodia, Indonesia, Malaysia, Singapore and Thailand.
Source: Khan et al. (2025[37]), The State of Ocean-Based Climate Action in 2025 Nationally Determined Contributions: A Preliminary Update, https://doi.org/10.46830/wriwp.25.00004
3.3.2. Financial standards for blue economy investments and expenditures are underdeveloped
Financial guidelines and standards, alongside disclosure requirements, constitute critical mechanisms for channelling private capital towards policy objectives – particularly as blue economy sectors navigate different transitions (e.g. decarbonisation). Taxonomies operate by classifying economic activities and establishing performance thresholds that delineate sustainable from conventional investments, thereby reducing search costs for investors seeking eligible projects (Inderst and Opp, 2025[40]). Disclosure requirements complement this by mandating transparent reporting of sustainability information, which enhances market efficiency and mitigates "bluewashing"1 risks that erode investor confidence (Inderst and Opp, 2025[40]). Together, these instruments ensure alignment between financial flows and substantive blue economy outcomes.
At the regional level, ASEAN has developed harmonised sustainable finance frameworks. The ASEAN Capital Markets Forum (ACMF) Action Plan 2026-2030 anchors this effort through two core instruments: the ASEAN Taxonomy for Sustainable Finance, which establishes regional classification criteria for sustainable investments, and the ASEAN Transition Finance Guidance, which provides credibility mechanisms for entities pursuing decarbonisation pathways to access capital markets (ASEAN Capital Markets Forum, 2025[41]). ASEAN has further standardised specific financing instruments through the ASEAN Green Bond Standards (2017), ASEAN Social Bond Standards (2018), ASEAN Sustainability Bond Standards (2018), and ASEAN Sustainability-Linked Bond Standards (2022) – all calibrated to international principles while adapted to regional market conditions (OECD, 2024[42]).
However, the blue economy is largely missing from these frameworks. The ACMF Action Plan 2026-2030 makes no explicit reference to the ASEAN Blue Economy Framework. It does, nonetheless, offer some entry points for strengthening support for the blue economy. The Plan includes the creation of the mARs Guide, a methodology for classifying climate change adaptation and resilience investments under the ASEAN Taxonomy. Such classification allows projects to access capital from labelled debt instruments (e.g. sustainable bonds) (ASEAN Capital Markets Forum, 2025[43]). Since much of ASEAN’s adaptation needs are coastal, the Guide is well-placed to expand access to capital for coastal and marine projects, provided that its future iterations more explicitly recognise the blue economy.
Moreover, while the ASEAN Taxonomy for Sustainable Finance includes Environmental Objective 3 ("Protection of Healthy Ecosystems and Biodiversity"), it lacks sector-specific technical screening criteria for blue economy activities such as sustainable fisheries, aquaculture, or marine conservation (ASEAN Capital Markets Forum, 2024[44]). The ASEAN Transition Finance Guidance similarly omits blue economy-specific transition pathways (ASEAN Capital Markets Forum, 2024[45]). Regional bond standards provide unified frameworks aligned with international principles but do not explicitly delineate blue economy project categories. At the global level, tools such as the United Nations Environment Programme Finance Initiative (UNEP FI) Sustainable Blue Economy Finance Principles, a comprehensive framework for aligning financial institutions with SDG 14 (UNEP, 2018[46]), and the global practitioner's guide for bonds to finance the sustainable blue economy, developed jointly by the International Capital Markets Association, International Finance Corporation, Asian Development Bank, United Nations Global Compact, and UNEP FI (Asian Development Bank, 2023[47]), provide useful reference points for blue economy financing.
Disclosure requirements exhibit similar patterns. At the global level, climate and nature-related disclosure frameworks provide foundational architecture. The Task Force on Climate-related Financial Disclosures (TCFD) established the template for systematic climate risk reporting, which the Taskforce on Nature-related Financial Disclosures extended in September 2023 to encompass nature-related risks and dependencies, including marine and ocean ecosystems (Taskforce on Nature-related Financial Disclosures, 2023[48]). Within ASEAN, however, implementation is characterised by cross-country heterogeneity and minimal blue economy integration. Five member states (Indonesia, Malaysia, Singapore, Thailand, and Viet Nam) have mandatory requirements for corporate sustainability disclosure; three others (Cambodia, Lao PDR, and the Philippines) maintain softer regimes (OECD, 2024[42]). Implementation timelines diverge markedly. Indonesia phased in requirements between 2017 and 2025, while Thailand adopted its "One Report" standard in 2022. Reporting frameworks also vary. Malaysia and Singapore require climate-related disclosures consistent with TCFD recommendations, whereas Viet Nam's 2016 guidance references the Global Reporting Initiative principles (OECD, 2024[42]). Across jurisdictions, disclosure focuses predominantly on climate change-related metrics (e.g. greenhouse gas emissions, energy consumption) (OECD, 2024[42]), with standardised approaches for blue economy-specific indicators – such as marine ecosystem health, sustainable fisheries performance, or coastal community impacts – remaining underdeveloped. As a result, policymakers and investors lack the information needed to consistently compare the sustainability and effectiveness of blue economy activities in the region.
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← 1. Bluewashing refers to firms leveraging sustainability initiatives to signal strong environmental, ethical or human rights performance, while making limited substantive changes to their actual practices (Berliner and Prakash, 2014[49]).