Fast-tracking the closure of physical infrastructure gaps and social development deficits will augment the region's growth potential. About $800-900 billion of annual investments are needed for national and cross-border infrastructure in transport, telecommunications, energy, water and sanitation.

Demands for social protection remain unmet. Almost half the countries in the region spend less than 2 percent of GDP on social protection, covering only about 40 percent of the population. Environmental degradation is already taking a toll on growth, as evidenced by the estimated environmental cost to India of almost 6 percent of its GDP. Another priority for ensuring the sustainability of growth is to better address climate change through more progressive implementation of climate adaptation and mitigation measures.

Enhancing productive and counter-cyclical spending is critical to offer short-term stimulus and to remove domestic structural constraints. It is also vital for making growth more inclusive and environmental-friendly.

Unlocking fiscal space calls for strengthening of tax revenues. In several countries in the region, tax-to-GDP ratios are near single digits. By way of comparison, this ratio ranges from 25 to 35 percent or more in developed countries.

The good news is that tax-to-GDP ratios can be raised. In many Asia-Pacific countries, the gap between potential and actual tax collection is more than 5 percent of GDP. Closing existing tax gaps in 16 developing Asia-Pacific economies could increase revenues by more than $300 billion, boosting tax revenues by more than 70 percent in some countries. Key among the measures to strengthen tax revenues is broadening the tax base, rationalizing tax rates and careful sequencing of tax reforms.

Since domestic tax revenues, too, are affected by policies in other countries, greater regional cooperation and strengthening of national tax administration can help boost revenues by curbing tax evasion, among others. Asia-Pacific developing countries accounted for more than 60 percent of the $5.9 trillion of global illicit capital outflows between 2001 and 2010.

An Asia-Pacific tax forum, to coordinate regional action on these concerns is therefore, an idea that deserves prompt attention. As the largest and most inclusive intergovernmental forum for Asia-Pacific countries, ESCAP is well positioned to host to such a body.

Creating the fiscal space for productive and counter-cyclical spending can help developing countries in the region move toward implementing the G20 global growth compact adopted last year. This is needed to accelerate progress toward the United Nations Millennium Development Goals and set developing countries on course to implementing the post-2015 development agenda whose depth and breadth moves beyond that of the MDGs.

The author is an under-secretary-general of the United Nations and executive secretary of the Economic and Social Commission for Asia and the Pacific. She is also the UN's Sherpa for the G20 and previously served as governor of the Central Bank of Pakistan and vice-president of the MENA Region of the World Bank.