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CIPE in Eurasia



Background and Overview

Eurasia is a vast region covering 11 time zones and comprises countries as culturally varied as Kyrgyzstan and Belarus. Amidst this disparity, many countries in the region face a similar challenge, namely, the transition to capitalism and democracy following the collapse of authoritarian regimes.

Over the past few years, high energy prices brought economic stability and growth to the resource-dependent states of Eurasia, but at a high cost to democratic and economic freedom. In Russia, Vladimir Putin has been leading a regional trend away from democracy and market liberalization and toward a model of state capitalism and managed democracy. While the Yukos affair has highlighted the tenuous nature of private property in Russia, it is the small businesspeople throughout Russia’s regions who are most affected by the changing operating environment for business. Local businesspeople still face stifling regulation, corruption, and threats to their property. CIPE and its partners throughout Russia have begun to develop new models for public-private cooperation that identify barriers to growth, improve governance, and cooperate to lower business barriers. In doing so, they are forging new relationships between government and the private sector that are creating the basis for sustained democratic development.

Reform is progressing in Ukraine, where civil society empowerment brought to power a reformist president, Viktor Yushchenko, following peaceful protests over fraudulent election results. CIPE and its partners plan to work with the new administration to achieve concrete results in strengthening governance mechanisms and improving the environment for doing business.

In Belarus, a state that can be called the epitome of post-Soviet authoritarianism, the keys to reform lie in the ability of the private sector to work with local leadership to create a hospitable environment for independent economic activity. However, the private sector in Belarus must unite to lead civil society and to withstand continued government attacks on economic and political freedoms.

While authoritarian leaders continue to inhibit sustained economic growth, several Central Asian and Caucasian countries have showed signs of change. Krygyzstan is embarking on a new path following the ouster of Askar Akaev, the results of which are still uncertain. Kazakhstan and Georgia remain at the brighter end of the scale, proving that change and reform is possible through differing processes. Kazakhstan’s private sector is gaining political power and influence; through groups such as the Almaty Association of Entrepreneurs, pro-business policy is being forged in a transparent and public fashion. In Georgia, the political and economic opening forged by the Rose Revolution is providing the country a new opportunity to effect democratic and economic reform. The Saakashvili administration has undertaken a number of important initiatives, such as anti-corruption reform, but it is uncertain whether this will lead to a consolidated democratic and market-based system.

CIPE’s overarching strategy for Eurasia focuses on building the capacity of business organizations, facilitating anti-corruption reform and advocacy efforts, and fostering broader public understanding and support for market-oriented reforms and their link to democratic society.
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