Abstract
After the collapse of the Soviet Union, each of the new countries which obtained sovereignty had to create a new economy and the respective banking system, as well as to establish international financial and economic relationship in order to ensure progressive social and economic development. The article analyzes the role of international and national development banks for the post-Soviet countries. The main conclusion is that international development banks made certain positive contribution to this process. However, the lack of own development banks, tendencies of the commercialization of state banks and general weakness of banking systems in the post-Soviet countries in terms of resources, along with mistakes in economic reforms, are the factors which give rise to economic problems and hinder further economic and social development in these countries. Establishing and strengthening national and regional development banks can be an important factor for such development.
Highlights
Over the past years, the role of development banks and prospects of their future activities has been a matter of debates in scientific, banking and political communities
Some proponents of market economy argue that international development banks have already accomplished their role, and their significance, scope and efficiency of activities is gradually decreasing in the new architecture of global financial system (Johannes)
It is suggested that the accretion of power of international development banks, the refocusing of their activities from poverty reduction to sustainable economic growth and global financial stability, the authorization of a bigger share in their funds and governing bodies of new developing countries with large potential can significantly increase the contribution of these banks into social progress (Johannes; Harvard school of economy, 2011)
Summary
The role of development banks and prospects of their future activities has been a matter of debates in scientific, banking and political communities. Turkmenistan and Uzbekistan strive to pursue relatively independent policy; in the Eurasian part of the former Soviet Union, Belarus signed the Union Treaty with Russia and joined the Eurasian Union, Moldova signed the agreement of association with the European Union; at present, tragic events take place in Ukraine, where civil war has been initiated and still continues, due to the impossibility of any civilized solutions to the problems of political guidance and the formula of economic interaction between Eastern and Western countries. Low production profitability, weak income basis of budgets, the underdevelopment of the countries’ own banking system, challenges regarding its optimal structure, and weak resource base became the significant obstacles to banking support of economic and social development in the post-Soviet countries In these circumstances, their appeal to the existing international financial and banking institutions for assistance was quite natural. Over two decades after the restoration of independence, the strengthening of links with international financial institutions (IFIs) is still one of the major factors in social and economic development of the post-Soviet countries
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