The investment climate, its evaluation

An actual problem for any country is the investment climate, as well as the ratio between foreign and domestic investment. If the domestic provide a stable economic growth, then foreign ones are not needed. Having looked on the other hand, its investments from the state may not be enough, then there is a need for an inflow of capital of foreign investors.

For investors to come into the country and start investing in the economy, there should be a favorable investment climate, which is determined by the risks from investing money in the economy of the state and a certain region, as well as the possibility of effective use of capital.

Russia has many opportunities to attract foreign capital: huge natural resources, unlimited capacity of personnel, a serious scientific and technical base, low competition of Russian business, the prospect of economic development.

But there are factors that restrain the flow of capital into the country: undeveloped communication and transport infrastructure, outdated production facilities, lagging level of agricultural development, high corruption. This, of course, lowers the investment climate of the state.

All this by the end of the 1990s was reflected in 0.5% of foreign investment.

The investment climate can be favorable and unfavorable.

Favorable involves a stable work of investors, the flow of capital into the country. Stable legal framework and protection of depositors' capital.

The unfavorable is risky for the investor. There is a capital leak, investment activity is steadily decreasing. The economy of the country is falling.

The investment climate of the region and the country takes into account all the factors for attracting funds to this territory. There are two types:

Type one: macroeconomic indicators

A full analysis of the entire country's GDP is made, the distribution of budgetary funds goes to a specific region, the economic policy in the country, the stability of the national currency, the volume of products, the rights of investors and capital, the legal framework for investment, and the development of the stock market.

Type two: multifactorial indicators

These include the bioclimatic potential factor, the resources available in the region, the availability of energy potential and labor resources, 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. The financial climate, the professionalism of the regional administration, the attitude to foreign capital, the observance of human rights and freedoms, the state of the state and local budget are important in many respects.

However, investors do not consider the indicators of only one investment climate, it is only a component that is taken into account before entering capital into the region or country. Next comes a specific approach to the industry for investment. And here are considered other parameters.

The investment climate and its components are very multifaceted, and in each specific case different indicators are taken into account.

Also, the rating is important for investors. Many can not themselves carry out analysis and in-depth research, in particular this applies to other countries. For them, rating agencies give their assessment, so when the country's rating is increased, there is always an inflow of investments.