Moody's: CIS countries made tangible progress in implementing reforms in recent years

Moody's Investors Service says in a new report that countries across the Commonwealth of Independent States (CIS) have made tangible progress implementing reforms over recent years, bolstering government effectiveness to varying degrees. Report informs referring to Moody's Investors Service.

External and domestic challenges, as well as political events across the CIS over 2014-16, catalyzed a slew of policy initiatives to address some of the weaknesses exposed by these developments, accelerating the institutional transformation and leading to strengthened government effectiveness. However, institutions in the CIS lag those in other emerging regions, largely because of weak rule of law, corruption and incomplete transitions from Soviet-era frameworks.

"While we expect reforms to continue in some countries, the momentum for policy action is fading in others as economic and external challenges have ebbed," says Evan Wohlmann, a Vice President -- Senior Credit Officer in Moody's Sovereign Risk Group.

Specifically, Moody's says reforms are encountering implementation challenges in Uzbekistan (B1 stable) and Ukraine (Caa1 stable), political hurdles in the Kyrgyz Republic (B2 stable) and Moldova (B3 stable), and reduced urgency as economies recover from the 2014-16 shock that spurred earlier action in Kazakhstan (Baa3 positive) and Azerbaijan (Ba2 stable).

"Moreover, governance -- as reflected in control of corruption and the rule of law -- generally remains weak across the CIS, constraining institutional strength and economic potential," adds Wohlmann.

Even where reforms have produced gains in government effectiveness, advances in governance have been much less tangible. So far, only Georgia (Ba2 stable) and Armenia (Ba3 stable) have demonstrated lasting progress in the areas of control of corruption and rule of law.

Moody's report assesses the credit impact of implemented and planned reforms, and prospects for further progress in the region.


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