The development of a modern economy is impossible without powerful investment tools. Investments in various industries contribute to the creation of a favorable environment for participants in business processes, and also make the state attractive to foreign entrepreneurs. However, managing cash flows as an investment requires serious planning and does not always bring the expected result. The success of such processes is determined by the investment policy, its strategy and the effectiveness of the implementation of direct functions. In the current crisis, the reliability of the strategic development model is of particular importance in business projects. Accordingly, the importance of investments as an instrument of market operations is increasing not only domestically, but also on the global platform.
Investment Policy Overview
The investment policy of the state should be considered as a whole complex of goals, functions and measures that are interconnected and aimed at ensuring the efficient distribution of capital investments. As the final result that should be achieved in the course of the implementation of the planned actions, we can note the optimal state of the economy and its individual areas. Experts judge this status by several criteria that are selected depending on which areas of investment policy are used. The universal criteria for evaluating such activities include the growth of market activity indicators. The increase in these characteristics can be judged by the activities of the main participants in the manufacturing sector, including the population, representatives of business communities and government agencies.
The essence of the investment process
The process of investing funds is closely associated with the manufacturing sectors, as well as with the transformation of income into capital in order to return value. At the same time, public investment resources must make a kind of economic cycle - from the form of material resources, capital is transformed into a commodity, which, in turn, can take on a production or monetary form. The flow of money into the development and reproduction of the main state funds is made in the form of investments. In the course of economic development, such investments stimulate the renewal and qualitative improvement of fixed assets that affect the general structure of production. In other words, investment policy not only participates in the mechanisms of economic management, but also performs the most important tasks of the regulator of the pace and direction of development. From this point of view, sources of investment can be considered as multipliers, the effect of which can be favorable if investment volumes increase. Of course, a negative effect of the multipliers is also possible if the volume of investments is reduced due to the deterioration and quality parameters of production.
Investment Goals
The main goal of state policy in investing is to create an enabling environment that helps attract new investors and increases the efficiency of the use of financial resources. Actually, this task cannot be considered final, since it in itself acts only as a tool for the further development of the social environment and the economy as a whole.If strategic goals are considered, then among them will be the encouragement of entrepreneurship at different levels, the creation of jobs, the development of a credit system, the reduction of inflation, etc. At the same time, the goals of investment policy cannot do without creating conditions that reduce risks for external and domestic investors. For example, in order to get the same positive effect from investment, sometimes government support is also used, which reduces the impact of adverse factors on the investment climate.
Implementation of investment policy
The implementation of the functions of investment policy is implemented through various forms. In particular, the state can fulfill the tasks of an organizer of investment and financial processes, a participant in market relations and an investment manager. As an organizer, the state provides a number of functions, including systematic minimization of investment risks, development of investment opportunities, increasing export potential, improving the economic structure, recapitalization of the banking industry, etc. As for the managerial function of the state, the implementation of the investment policy consists in managing risks in the development of new areas of socio-economic development. As a participant in investment and financial processes, the state seeks to provide increased income from property, as well as reduce the cost of borrowing.
Investment Policy Management
The management concept in this case is based on studies of individual investment projects in terms of their effectiveness. For example, to decide on a particular contribution, specialists take into account inflation factors. This is one of the most important aspects that is taken into account when planning. The fact is that inflation affects several factors of investment activity. So that the result does not lead to negative consequences, experts evaluate the current potential of material resources for the contribution, the real value of assets, as well as the possible drop in the level of income within a specific project. Also, the investment policy department may use instruments to account for the riskiness of operations. The development of projects that reduce the likelihood of negative consequences is also practiced. In each case, the management system involves the implementation of a set of measures, which include the attraction, distribution and accumulation of capital resources.
Investment Policy Efficiency Criteria
The main indicator that indicates the effectiveness of the investment policy is the growth of investment. Here we can note an increase in gross domestic product, an increase in household income and consumption. As a rule, in parallel with these processes, risks are minimized in the economic sector, economic relations are strengthened in market relations between various participants, and the structure of financing of production capacities is stabilized. A good investment policy is also characterized by ensuring socio-political stability, in which there is a favorable growth dynamics of economic indicators. Along with this, certain industries are developing, including the banking system, industry and agriculture, the stock market, etc.
Principles of Investment Policy
Among the basic principles of investment policy, they note focus, multivariance, efficiency and flexibility. Separately, it is worth noting safety as one of the main principles. It affects both environmental and financial aspects. Adhere to these guidelines should be the regulators of investment at all levels of government.As for the federal authorities, at this level, investment activity and investment policy should ensure the free distribution of financial resources, goods and services. On the basis of this principle, a unity of conditions for legal and financial regulation is formed.
Investment policy of the Russian Federation in modern conditions
At the present stage of development, the global economy is in the context of the internationalization of investments. Given these circumstances, Russia is a priority area, involving an increase in the attractiveness of domestic investments. Of course, the domestic market cannot yet be compared with the performance of European markets, but the intensive formation of investment policy taking into account the needs of modern entrepreneurs should best unlock the potential of the Russian sector. According to experts, the main tools that will help to reach a new level of investment attractiveness may be the introduction of effective information links, improving social infrastructure, as well as political stability.
The value of the investment climate
Not the least place in increasing attractiveness is the characteristics of the investment climate. Actually, it determines how attractive this or that platform is for participants in economic processes. Despite the difficult economic situation, the investment policy of Russia continues to focus on major strategic tasks. In this regard, changing the investment climate for the better is one of the main goals. Even a change in the situation in individual sectors with the attraction of new capital resources can affect the overall picture of the economic process.
The role of investment policy in the economy
The fact that investment economic instruments have long been ignored by Soviet and Russian financiers is making itself felt today. Depreciation of production capacities, obsolescence of infrastructure networks, unsatisfactory level of healthcare and education - all this is becoming a heavy and overwhelming burden for the economy, which should also provide conditions for new investments. Against such a background, the development of investment policy seems difficult, but it is precisely this direction in the future that could favorably affect the economic situation of the country. And this process was already launched several years ago, when modern tools and methods for solving infrastructure problems became a priority.
Conclusion
Usually, the quality of financing of key sectors of the state economy and the provision of social needs depend on the effectiveness of the economy. In turn, investment policy acts as its engine and stimulator, contributing to the growth of well-being of the population. Therefore, considering possible directions of economic growth, it is necessary to focus on factors of investment attractiveness. The creation of favorable conditions for investment, an effective financial management system and a minimum level of risk - these and other factors create a good platform for the successful development of the domestic investment market.
