An urgent problem for any country is the investment climate, as well as the ratio between foreign and domestic investment. If domestic ensure stable economic growth, then foreign ones do not seem to be needed. Looking on the other hand, the state may not have enough of its investments, then there is a need for an inflow of capital from foreign investors.
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 money 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
personnel potential, a serious scientific and technical base, low competition of Russian business, and the prospect of economic development.
But there are also factors that hinder the flow of capital into the country: undeveloped communications and transport infrastructure, outdated production capacities, lagging agricultural development level, and high corruption. This, of course, lowers the investment climate of the state.
All this by the end of the 90s was expressed in 0.5% of foreign investment.
The investment climate can be favorable and unfavorable.
Favorable implies stable work of investors, capital inflow into the country. Stable legal base and protection of investors' capital.
Adverse risky for the investor. There is a capital outflow, investment activity is steadily decreasing. The country's economy is falling.
The investment climate of a region and a country takes into account all factors for attracting funds to this territory. There are two types of them:
Type one: macroeconomic indicators
A full analysis of the GDP of the whole country is made, what distribution of budgetary funds goes to a particular region, economic policy in the country, how stable the national currency is, the volume of production, how the rights of investors and capital are protected, the legal framework for investments, how developed the stock market is.
Type two: multivariate indicators
These include the factor of bioclimatic potential, what resources are available in a given region, the availability of energy potential and labor resources, how developed is the infrastructure and scientific and technical production, and the environmental situation in the region. The policy factor is also considered. It takes into account the standard of living of the population in this territory, the level of wages. An important and largely determining element is the financial climate, the professionalism of the region’s administration, the attitude to foreign capital, the observance of human rights and freedoms, and 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 introducing capital into a region or country. The following is a concrete approach to the industry for investment. And here are other options.
The investment climate and its components are very multifaceted, and in each case different indicators are taken into account.
The rating is also important for investors. Many cannot do the analysis and in-depth research themselves, especially in other countries. For them, rating agencies give their assessment, therefore, with an increase in the country's rating, there is always an influx of investment.