Video: Investment climate, its assessment
2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:43
A pressing issue for any country is the investment climate, as well as the ratio between foreign and domestic investment. If domestic ones ensure stable growth of the economy, then foreign ones do not seem to be needed. Looking from the other side, the state may not have enough of its investments, then there is a need for an influx of capital from foreign investors.
In order for investors to come to the country and start investing in the economy, there must be a favorable investment climate, which is determined by the risks received from investing in the economy of the state and a certain region, as well as the possibility of efficient use of capital.
Russia has many opportunities to attract foreign capital: huge natural resources, unlimited potential of personnel, serious scientific and technical base, low competition of Russian business, economic development prospects.
But there are also factors that hinder the inflow of capital into the country: undeveloped communications and transport infrastructure, outdated production facilities, lagging agricultural development, high corruption. This, of course, lowers the investment climatestate.
All this resulted in 0.5% of foreign investment by the end of the 90s.
The investment climate can be good or bad.
Favorable implies stable work of investors, capital inflow into the country. A stable legal framework and protection of depositors' capital.
Unfavorable is risky for the investor. There is an outflow of capital, investment activity is steadily declining. The country's economy is falling.
The investment climate of the region and the country takes into account all factors for attracting funds to this territory. There are two types:
Type one: macroeconomic indicators
A complete analysis of the GDP of the whole country is made, what distribution of budget funds goes to a particular region, the economic policy in the country, how stable the national currency is, the volume of production, how protected the rights of investors and capital, the legal framework for investment, how developed the stock market.
Second type: multi-factor indicators
These include the factor of bioclimatic potential, what resources are available in the region, the availability of energy potential and labor resources, how developed the infrastructure and scientific and technical production, the ecological situation in the region. The policy factor is also considered. The standard of living of the population in this territory, the level of wages are taken into account. An important, largely determining linkare the financial climate, the professionalism of the regional administration, the attitude towards foreign capital, the observance of human rights and freedoms, the state of the state and local budgets.
True, investors do not consider indicators of only one investment climate, this is just a component that is taken into account before injecting capital into a region or country. Next comes a specific approach to the industry for investment. And here other parameters are considered.
The investment climate and its components are very multifaceted, and in each case different indicators are taken into account.
Rating is also important for investors. Many cannot do their own analysis and in-depth research, especially in other countries. For them, rating agencies give their assessment, so when a country's rating is increased, there is always an influx of investments.
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