COVID-19 has brought to the fore the need to address the problem of financing for development in middle-income countries, which has been characterized by the increasing decoupling of per capita income and the ability to mobilize domestic and external resources, and the disconnect between economic and social needs and the response of multilateral cooperation. This must be urgently addressed, as Latin American and Caribbean countries must recover from the effects of the pandemic and avoid another lost decade. Middle-income countries, such as those in Latin America and the Caribbean, require multilateral cooperation through the expansion and redistribution of liquidity and debt reduction to enhance their policy space to foster a sustainable recovery and advance their economic and social development. To address these challenges, the Economic Commission for Latin America and the Caribbean (ECLAC) proposes an innovative financing for development agenda for the recovery in the region based on five policy actions: (i) expand and redistribute liquidity from developed to developing countries; (ii) strengthen regional cooperation by enhancing the lending and response capacity of regional, subregional and national financial institutions, and strengthening linkages between them; (iii) carry out institutional reform of the multilateral debt architecture; (iv) expand the set of innovative instruments aimed at increasing debt repayment capacity and avoiding excessive indebtedness and (v) integrate liquidity and debt reduction measures into a development financing strategy aimed at building forward better (Caribbean Resilience Fund).