Nonetheless, corruption remains endemic, while fundamental institutions of open market economies, rule of law and democratic governance remain fledgling and weak. Too often, an arbitrary and oppressive business climate stifles entrepreneurship and honest business. A host of crippling policies ambiguous regulations, bureaucratic arbitrariness, and confiscatory tax policies all conspire to create endemic corruption and lack of transparency. Social capital, trust, and ethics remain weak, though some progress has been made. Private ownership of land remains a divisive issue throughout the region.
Banks are undercapitalized and are failing to mobilize savings.
Corporate governance also remains a key challenge. Information is controlled and distorted, in some cases by the state, in other cases by rival oligarchs. While media coverage is often varied and colorful, nowhere has the institution of a free press taken firm root. All of these challenges point to the need for a vibrant civil society that embraces business associations and think tanks. They have an important role to play in analyzing problems, proposing policy recommendations, contributing to public debate, and helping to shape government policies.