Eastern Europe, Caucasus and Central Asia

Russia’s war against Ukraine remains the pivotal factor shaping ambivalent developments across the region. The number of democracies has fallen to a historic low: nine autocracies now stand against only four democracies. In addition to the political divide, however, there is a second divide affecting the region, between those which profit economically from war and sanctions and those which are economically disadvantaged as a result.

Politically, Georgia experienced the steepest regression and is now categorized as an autocracy, following election manipulations, repressive legislation and the suppression of opposition. The suspension of the EU accession process triggered mass protests that were violently crushed. In contrast, Ukraine continues to demonstrate remarkable resilience in the fourth year of the war and maintains its EU-oriented course. Moldova, despite massive Russian pressure, opted narrowly for the pro-European path, leading to the opening of EU accession negotiations. Armenia remains comparatively stable despite polarization, while Mongolia maintains its democratic status amid autocratic neighbors. In turn, Russia and Azerbaijan intensified their repressive course.

Economically, the war has produced clear winners in the South Caucasus and Central Asia, where parallel imports, high energy prices and Russian emigration have fueled growth, while energy-dependent importers such as Moldova came under severe pressure. Russia has weathered extensive but circumventable sanctions, while Ukraine, despite unprecedented international support and some macroeconomic stabilization, continues to struggle with a massive fiscal gap.

In terms of governance, Ukraine achieved its highest score to date through efficiency-enhancing reforms and consolidated its leading position in the region. Moldova pursued intensified international cooperation, Armenia was able to implement the controversial border agreement with Azerbaijan without restrictive measures, while Georgia suffered severe setbacks across all governance dimensions. Kazakhstan fell short of its promised modernization, and governance in Belarus, Russia and Turkmenistan must be considered as failed. Overall, there is a clear dividing line between weakly governed autocracies and relatively well-governed democracies.