Page 48 - Theoretical and Practical Interpretation of Investment Attractiveness

In our opinion, these discussions are directly related to the concept of "investment
capacity." The investment potential of a business entity should be understood in terms of the
aggregation of investment resources available to the subject from its own funds and borrowed
funds. Investment potential does not reflect the profitability of the company's activities, but
rather the resources that determine its capabilities for investment.
The second and third interpretations of the "investment potential" category are of
particular importance. These directions define various types of investment potential: the first
refers to potential investment, while the second refers to the real meaning of investment
potential.
The potential investment of a business entity determines the scope of investment
resources. The real, tangible investment potential of a business entity indicates its ability to
achieve maximum results from the existing resources and to realize the investment potential.
Real investment potential indicates the efficiency of the company's activities and determines
its competitiveness. The investment potential and investment capacity of a business entity are
two elements of investment attraction.
Successful implementation of any project requires investment resources. However,
having resources alone is not enough. It is also necessary for the company to use them
effectively. Therefore, the first task in any business is to make the most efficient use of
existing resources.
The models and methods for assessing risks in countries and their regions are diverse.
In developing markets, investors may face various political, external, corruption, civil unrest
and disorder, fluctuations in exchange rates, inflation, and various other uncertainties.
Therefore, in order to succeed in developing markets, it is necessary to take into account all
these factors. In academic discourse, this consideration is referred to as "country risk."
The description of risk can be categorized, and it can be identified based on factors
(political, economic, financial, social, etc.) that underlie it. Effective management of risks
requires both conceptual and practical solutions. Firstly, it is important to quantify the various
risks. Secondly, it is necessary to specify the methods of measuring these risks precisely.
In the global practice, there are numerous methods and models for assessing these
risks. For example, "familiarity breeds contempt," "big types," "Delphi forecaster," PSSI,
Ecological Approach, ASPRO/SPAIR, ESP methods, I. Walter models, V. Tikhomirov
models, Prince models, among others.
Here, we will look at the basic rating agencies and the methodology used to assess
country risk.
Bank of America World Information Services. Bank of America assesses the
country risk level for 80 countries based on 10 economic indicators. Each indicator is scored,
and the final score (the average score for all indicators) ranges from 1 (lowest risk level) to
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80 (highest risk level) .
Business Environment Risk Intelligence (BERI) S.A. In this methodology
(developed for 50 countries), the country risk is assessed by averaging three indices - political

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