INVESTMENTS: FACTORS AND RISKS

Abstract

The article deals with the issue of measures aimed at the socio-economic development of the country by increasing its investment attractiveness. It is emphasized that investments play an important role at all stages of economic and social development. In periods of political and economic instability, the role and importance of investments, and their impact on production, infrastructure, employment, and other spheres of life are growing. It is investments that become the most important tool for solving numerous urgent problems and active integration of the state economy into the world economic space. Investment policy has a decisive influence on the activity of any sphere of the national economy. Investment attractiveness is one of the main aspects of stable development of the territory, and business entities are one of the driving forces of economic growth not only in one region but also in the state as a whole. The author reviewed the factors influencing the attraction of foreign direct investments. It is noted that before the start of the war in Ukraine, the “investor attraction” package looked convincing. The following advantages are highlighted: excellent infrastructure, relatively inexpensive skilled workforce, educated personnel, high investment income, and convenient logistics. Among the disadvantages are the challenges of the law enforcement and judicial system, systemic corruption, the high level of bureaucracy in permitting processes, and the closure of certain industries for foreign investment. After February 24, war risks were added, among them: logistical obstacles, the possibility of destruction or seizure of assets, infrastructure problems, the impossibility of attracting foreign loans and insurance, and force majeure circumstances of payments. Current political factors indicate that budget funds are limited; the possibilities of legislative, normative, customs and other regulations are constrained by the framework of uncertainty; the possibilities of state regulation lie only in the area of development and implementation of deterrence or support measures. The components, each characterized by a whole group of investment risk indicators, are considered: economic risk; social risk; financial risk; managing risk; environmental risk; criminal risk. The ways to improve the country’s investment attractiveness are outlined.