A leading economist says Russia, Ukraine, and other East European countries have made significant progress in reforming their economies and embracing market principles. Peter Voicke, the outgoing executive vice president of the World Bank's International Finance Corporation (IFC), says so-called transitional economies have become more competitive in the global market. But, Mr. Voicke says, Eurasia's future economic development will depend heavily on the political will to eradicate corruption.

Peter Voicke is stepping down after six years as the executive vice president of the International Finance Corporation, the private sector arm of the World Bank. He says the IFC has promoted private sector investments in the former communist countries of Eastern Europe and Central Asia, and has provided assistance and advice to governments and businesses.

In an interview with VOA, Mr. Voicke said the IFC has been heavily involved in improving the investment climate in the region.

Russia, says Mr. Voicke, is one of IFC's major clients.

"In Russia, we have a very diversified portfolio," he said. "We are looking now at the finance of natural gas industry. [We] have financed transportation companies. Initially, we provided long-term loan to a company, Logar Dnjeper, a very innovative freight airline. We are in logistic companies, which do oil transportation, railway companies, in glass manufacturing. We would love to invest more in the financial sector.

"In Russia, you have a relatively weak financial sector," Mr. Voicke went on to say. "There are a lot of small banks; we have already supported some of them. Then you have some oligarch banks, big spare banks and big merchant banks, the National Bank. The financial market is one where IFC could provide a lot of investments."

Mr. Voicke sees a great potential for foreign investments in Ukraine, especially in the agricultural processing sector, following recent political changes.

Mr. Voicke says the wars and upheavals of the 1990s have complicated the economic transformation of southeastern Europe. Over the last 10-to-15 years, the IFC, according to Mr. Voicke, has been instrumental in assisting the development of the private sector and improving the business sector in the region. The IFC has invested in infrastructure and private companies, with the hope that, eventually, these companies would become competitive and profitable. It has implemented new business models to better serve the small economies of Albania, Croatia, Macedonia and Serbia and Montenegro.

"There is an increasing need for IFC to help develop small and medium companies," he said. "We have tried to invest in local financial markets, in commercial banks and investment banks, to make them more adaptable to better serve smaller-sized companies."

It is important, says Mr. Voicke, that southeastern European countries cooperate and launch joint projects, particularly in infrastructure. This way, they have a better chance of securing financing and foreign investments, which will benefit the entire region.

"We have talked to the governments, have fostered the idea of more regional integration, should these countries want to join the EU," he added. "Also, in order to attract real infrastructure projects, I think the region needs to have to think regionally."

Mr. Voicke warns pervasive corruption is a serious impediment to the economic growth of Russia and the other Eastern European countries. While most of these countries have created structures to fight corruption, they have been stymied in their effort to eradicate it. He says corruption, which is also fueled by bureaucracy and government regulations, adds to the cost of doing business in the region.

"If you need to have 50 permits to open a business, you do not want to go to all these permits, you are tempted to pay off the people who issue the permits, so as to get things done," he explained.

He says the region's record in fighting corruption has been mixed. He says authorities should reduce and simplify business and investment regulations.

On the other hand, Mr. Voicke adds he is encouraged that many companies, which have refused to pay bribes and engage in corrupt deals, have been quite successful.

Mr. Voicke predicts that, over the next 10 years, Russia, Ukraine and other Eastern European countries will experience rapid economic growth. And the International Finance Corporation, he says, will continue to invest in the region.