Page 21 - Theoretical and Practical Interpretation of Investment Attractiveness

And the third region, in contrast to the “growth poles,” has limited prospects for
economic growth and reaches its “peak” in 10-15 years, that is, high investment
attractiveness: due to limited labor, land, water and other resources. , additional investments
are required.. “attracting” will not work.
“Problem regions” are an unhealthy investment environment, a lack of investment,
despite the availability of production resources. With an increase in investment attractiveness,
the largest of them can become “growth poles”, and smaller ones - “growth points”. The
largest group includes regions with “uncertain prospects”, the fate of which depends on the
management skills of the region.
The second component of the attractiveness of the investment environment is
investment risk. Its level reflects the likelihood of loss of investments and income from them.
In a given region of the republic, this risk can be macroeconomic (trends in the economic
development of the region), financial and monetary (balancing the regional budget and the
finances of enterprises), political (mental state of the population, mood, compliance of local
governments with the law based on the results of presidential and parliamentary elections),
determined by socio-legal (level of social equality), environmental, criminal and other factors.
In the region, it is customary to characterize financial risks as the overall balance of
mutual internal debt of the region and enterprises. When analyzing financial risks, the main
attention should be paid to the following factors: the financial state of the region in the
republican budget (donor, recipient); gross regional product; financial guarantees provided to
investors and other factors. The economic risk of a region is determined, first of all, by the
composition of the region's economy. When analyzing the economic risks of a region, the
following factors can be used: the weight of unprofitable enterprises; growth rate of the cost
of the consumer basket; share of the territory in the gross national product, etc.
The social risk of the region determines the possibilities for creating and developing
production facilities and attracting new labor force. Therefore, to assess social risk, it is
customary to use the following factors: availability of housing and social infrastructure;
income level of the population; state of the regional labor market; the health status of the
region's population and the level of medical care; demographic and environmental status, etc.
In general, the level of investment attractiveness of a territory is determined by the
ratio of investment risk and investment potential, that is, based on the current situation and
further prospects for the development of the territory, the risks associated with investing in
this territory are covered. income that can be obtained from investments.
It should be noted that the number of factors that shape the investment attractiveness
of a region is theoretically unlimited. For example, today even the percentage of people
infected with HIV can be one of the factors of investment attractiveness. However, indicators
of investment attractiveness include only factors that are significant for investment, that is,
factors influencing the formation of regional investment activity.
In the investment process, the relationship between the subject (investor) and the object
(investment object) (investment in order to obtain investment income) occurs in a certain
environment (investment environment). The systematic approach allows us to explain in
detail the essence of the investment process and the practical expression of its basic concepts.
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