This Selected Issues paper analyzes the extent of corruption in Ukraine compared with other countries. The level of corruption in Ukraine is exceptionally high. This could severely undermine economic growth prospects by hindering private investment. Reducing corruption is therefore essential to speed economic convergence with the rest of Europe. Regional comparisons help identify best practices in reducing corruption. The Ukrainian authorities have recently adopted key measures that follow some of these best practices. The country is, however, facing several challenges, including the concentration of political and economic power in a small group of people, which may hamper effective anticorruption efforts.
This Selected Issues paper reviews the financial sector development in Georgia in recent years, and investigates why it has lagged behind economic development, as well as developments in more advanced transition economies. The paper briefly reviews recent financial sector development in Georgia, comparing it with developments in its neighboring countries in the Caucasus, the seven poorest countries in the Commonwealth of Independent States (CIS-7), the Baltics, and central and eastern Europe. The paper also analyzes possible factors constraining financial intermediation in Georgia and in some of the CIS countries more generally.