Investment climate in Russia, ways to improve

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The investment climate in Russia and in all countries with a market economy is determined by many factors: economic, political, social, financial, geographical, legal. The attractiveness of a country or a particular region for investors depends on them, who carefully evaluate them when investing money.

Investment climate is the place where all investment processes take place and this concept is acceptable for countries with market economies. It is either favorable or unfavorable. Favorable - where the investor feels free, where he can work actively, freely and without risk to attract additional resources. Unfavorable carries many risks, there is a capital flight, which leads to a decrease in investment activity.

There are two reasons that affect the investment climate in Russia and other countries:

• objective, these should include climatic conditions, geographical location, availability of energy resources, geography of the place of investment;
• subjective (this is a purely human factor).

The investment climate of the country is directly related to the state policy in this direction, from economic and organizational measures to manage the country as a whole and tolocations.

The investment climate in Russia is gradually improving, the government has made many positive decisions, backed up at the legislative level. Everyone understands the need to move away from oil dependence and improve the diversification of the economy. There is a need to attract not only external, but also internal investments. This need is especially noticeable in the Asian regions of the country. Eastern regions should improve the investment climate in Russia. This is repeatedly mentioned by Vladimir Putin on the forums.

Dmitry Medvedev proposes to create an investment regime and tax differentiation in the Far East for this. He also made a proposal to create an investment fund for this region, which will improve the investment climate in the Far East.

The global economy is noticeably declining in development, all experts are talking about it. But

Russia is in the leading part of the list in terms of macroeconomic indicators. The country's accession to the WTO had a positive effect, this fact will increase the investment climate in Russia. At this time in Moscow there is an active discussion of the creation of the "International Financial Center". A difficult but necessary task has been set - from the 120th. places of attractiveness for investors to rise to the 20th., and within 2-3 years. This indicates the government's desire to improve the investment climate in Russia as soon as possible.

But investing in Russia remains a rather risky business. The technical equipment is outdated,even a powerful scientific potential does not attract investors much. The Russian economy is developing extremely slowly, it is required to actively act and improve the country's investment policy.

The investment climate today indicates a decrease in citizens' confidence in the state, which reduces domestic investment. Inflation and political instability also have an adverse effect on this.

Especial attention should be given to priority measures:

• understanding the ruling structures with parties and public organizations;
• eliminate corruption and crime;
• decrease in inflation;
• improvement of the tax base;
• pass bankruptcy law;
• provide benefits to investors.