How do direct investments differ from portfolio investments and what are their benefits? Direct and portfolio investments: basic information, differences. What is more important: direct or portfolio investments?

There is probably no person in the world who does not accumulate material wealth, in particular money. But the purpose of accumulation can be twofold. Some use accumulated finances only for themselves, for their own personal purposes. And the latter use their savings to produce new goods or give them to another person in order to receive even more income. The additional income received can be expressed both in money and in commodity form. This second case is called investment. A person who invests his savings is called an entrepreneur, and the income received becomes an asset. To this end, direct and portfolio investments in Russia gradually began to gain momentum.

They depend on the objects in which they invest money. And depending on this, two groups of investments can be distinguished: direct and portfolio investments.

The first type of investment means investing capital in objects that create real assets of tangible and intangible properties. In this case, the assets will carry out the operational activities of economic entities.

Direct investments can be divided into:

• Material or material.
• Intangible or potential.

Potential investments are used to obtain various intangible benefits. For example, such as advanced training of personnel, obtaining a trademark, conducting scientific work, etc.

And direct material investments are, in turn, divided into several types:

• Strategic investments - they are aimed at creating new jobs, new enterprises in other regions. Or for the investor to purchase work complexes in another field of activity.
• Basic investments. Their main activity is the expansion of existing enterprises. Creation of new ones in the same field of activity and in the same region as before.
• Current investments. They support the ongoing production process. The main activity of these investments is replacing fixed assets, carrying out various types of repair work and replenishing your stock of current and tangible assets.
• Innovative. They are divided into two groups. The first is designed to modernize an existing enterprise in full compliance with all market requirements. The second group of innovative investments is designed to help provide the investor with security in the full understanding of this term.

Direct and portfolio investments are extremely popular in the global economy.

The second type of investment is investing in various financial instruments, in particular securities. This type of investment can take various forms - investing in equity or debt securities; in addition, this type of investment can also include contributions to bank deposits. It is also advisable to mention international direct and portfolio investments.

According to experts, portfolio investments are either speculative in nature or investment-oriented. If portfolio investing is of a speculative type, then most often this means that the investor wants to receive income for a specific period of time.

If the investment is focused on a longer period, then, as a rule, the investor expects to participate in the management of the investment object. That is, it implies the purchase of this enterprise in the future.

Both types of investment imply that the intended investor has a fairly large amount of finances. Typically, those investors who do not have enough cash will organize various partnerships or mutual funds to jointly participate in portfolio investments.

Portfolio and direct investments can also be made abroad. However, in some cases, local authorities may impose certain restrictions on those areas of production in which foreign investors intend to make direct investment.

Various investment risks

There are internal and external investments. Internal is when an investor invests money in his own production, external is when he invests capital in other economic entities.

By terms, investments are divided into:

• Long-term – validity period of three years or more.
• Medium-term – from one to three years.
• And short-term - the capital investment period is less than a year.

But these terms may change somewhat if inflation in the country is high.

Based on the degree of reliability, investments are divided into reliable and risky. The most risky ones include investing in the field of scientific research and development. Indeed, in this area it is almost impossible to assess the future result and how much will have to be invested to obtain this result. Therefore, investments are mainly carried out according to government programs.

From this follows the division of investors into two groups:

• Private investors, including foreign ones.
• State and municipal investors.

In most cases, the volume of both direct and portfolio investments implies impressive amounts, so large investors do not risk investing their money without a preliminary analysis of efficiency, especially if the investment object is unfamiliar to them. Sometimes independent analysts are even hired to assess the effectiveness of future capital investments.

Foreign direct investment has become the material basis for the globalization of business activity, the spread of multinational firms and corresponding changes in the structure of the modern world economy.

Foreign direct investment (FD) - these are long-term investments abroad in material or financial assets with the aim of obtaining business income (profit), which provide a foreign investor control over objects in which capital is invested.

Control over investment objects is the main characteristic feature

PP, which distinguishes them from another type of international investment - portfolio investment. The share of foreign participation in the capital of a company, which determines its status as an enterprise with foreign direct investment and ensures the right to control it, is different in different countries: in the USA, a foreign investor must have at least 10% of the company's ownership, in the UK and France - at least 20 %, in Germany - 25%, in Australia and Canada - at least 50%, according to IMF standards, this share should be at least 25% of capital.

In international practice, there are three groups of direct foreign investors: subjects:

- private investors-entrepreneurs - focused on quickly making a profit, invest primarily in small and medium-sized enterprises with a higher degree of risk, but are easier to control compared to large companies, give preference to investments in non-monetary form (equipment, technology), the creation of new enterprises rather than acquisitions active;

- transnational corporations - international companies, which include the parent company, its subsidiaries and associated enterprises abroad, are large long-term investors who, in order to maximize profits, seek to obtain new markets for their products, gain access to resources, invest (like entrepreneurial investors), mainly in non-monetary form;

- institutional investors - financial intermediaries (banks, investment and insurance companies, international financial organizations - the European Bank for Reconstruction and Development, the International Finance Corporation), which raise funds mainly through the sale of shares, make medium-term investments (5-7 years), buying large blocks of shares in companies; Unlike private investors and TNCs, in addition to maximizing profits, institutional investors may have other goals - restructuring enterprises, accelerating transformation processes in the economies of recipient countries.

Foreign direct investment is usually made to production assets foreign enterprises: the capital exporter organizes or expands production on the territory of the country receiving capital. Unlike flow indicators of the periodic ebb and flow of foreign capital, foreign investment reflects the accumulation and use of assets by economic entities of different countries in the national economy of a certain country over a certain period, and therefore refers to indicators of reserves. their amount can grow regardless of whether new capital is imported or not.

In the System of National Accounts, foreign direct investment includes:

- initial investment of own capital abroad - acquisition or merger of companies, creation of joint ventures, branches, subsidiaries and associate companies1, acquisition of more than 10% of the company’s shares;

- reinvestment - part of the income of the investment object is not distributed or transferred to the direct investor, but is reinvested in its development;

- intra-corporate capital transfers in the form of loans, subsidies and loans between the direct investor and branches, subsidiaries and associated companies.

The nature, intensity and effectiveness of investment processes depend on investment climate, formed in the recipient state.

climate - this is a set of political, economic, social and legal factors that determine the conditions for implementation, efficiency and degree of risk of business activity, and, consequently, the degree of attractiveness of the national economy for foreign investors.

climate define several groups factors:

- socio-political situation and its prospects (political stability, continuity of political power, the degree of government intervention in the economy, the pragmatism of state policy, the efficiency of the state apparatus, the tendency to nationalize foreign property, traditions of compliance with international agreements, corruption of government officials, etc.);

- economic situation and its prospects (general state of the economy, rate of economic growth, market infrastructure, customs regime and regime for the use of labor, stability of the national currency, fiscal burden, interest rate, level and dynamics of inflation, etc.);

- foreign economic activity and its prospects (the state of the balance of payments, the degree of inclusion of the country in the world economy and integration processes, protection and regulation of the activities of enterprises with the participation of foreign capital - provision of state guarantees, insurance of foreign investments, settlement of investment disputes, etc.).

World practice shows that PPs have many benefits compared to other forms of economic cooperation. In particular, the import of direct entrepreneurial capital allows the host country to increase production capacity, create additional jobs, increase employment and income in the national economy, attract new technologies, advanced management and marketing methods. Increasing production and employment, creating new ones, incl. joint ventures, expands the taxpayer base and increases budget revenues of the recipient country. Emergency situations stimulate competition, in particular by undermining the positions of local monopolies, reducing prices and improving the quality of products that replace imports and obsolete locally produced products. Unlike foreign loans, emergency situations do not become a burden of external debt, but, on the contrary, contribute to its repayment. Examples of the positive consequences of NN in the world economy include the post-war revival of the German economy based on the Marshall Plan, the technological breakthrough of Taiwan and South Korea, and the revival of economic growth in the post-socialist countries of Central and Eastern Europe.

At the same time, AI also carries a number of potential threats for a certain territory or the state as a whole. These include the economic and political dependence of the recipient country on the donor country, the displacement of national producers and suppliers of resources from the market, the displacement of national producers from the most profitable industries, the location of environmentally harmful industries on the territory of the host country, the consolidation of an irrational (mainly raw materials) structure of the economy and things like that. However, global experience shows that, in general, the benefits of AI far outweigh the negative consequences associated with them.

This conclusion is confirmed by the scale of the GS in the world economy. In 2010, the global volume of accumulated imported AI reached 19 trillion. dollars exported by AI - 24 trillion. dollars True, the annual volumes of AI have decreased under the influence of the global financial and economic crisis. In particular, the influx of AI in 2010 was 15% below the pre-crisis average and almost 37% below the peak in 2007. Despite the predicted recovery, in 2012 there was a decrease in AI volumes by 18% to 1.3 trillion. dollars. In the future, experts predict a gradual restoration of the positive dynamics of AI: in 2013 to 1.45 trillion. dollars, 2014 - up to 1.6 trillion. dollars, in 2015 - 1.8 trillion. dollars. However, UNCTAD experts note that there are still significant risks for such a growth scenario. At the very least, AI flows are still lagging behind global industrial production and global trade, which have recovered to pre-crisis levels and are growing.

More than half of the total volume of AI currently occurs in developing countries. This is due to higher rates of economic growth, primarily in large developing countries (China, India, Brazil), and the markets they have with constantly growing effective demand. When choosing an investment direction, international investors consider the most important factors: the development of transport and infrastructure (63%), the state of the telecommunications infrastructure (62%) and the transparency of the political, legal and regulatory environment (62%). The top three in terms of investment attractiveness in 2012 included the USA ($168 billion), China ($121 billion), Hong Kong ($75 billion). Russia took 9th place with a volume of $51 billion. Main countries -investors in 2012 were the USA - about 329 billion dollars, Japan - 123 billion dollars, China and Hong Kong - 84 billion dollars each.

AI is of particular importance for countries with transitional economies that lack financial resources for modernization and acceleration of economic development, incl. and for Ukraine.

In accordance with the regulatory legal acts of Ukraine, foreign direct investment can be carried out in the following forms:

Creation of joint ventures with varying shares of foreign participation or acquisition of shares of existing enterprises;

Creation of enterprises wholly owned by foreign capital, or acquisition of existing enterprises by a foreign investor;

Acquisition of real estate or movable property by direct receipt or in the form of securities (stocks, bonds, etc.);

Acquisition of land use rights and use of natural resources in the country;

Cooperation with foreign partners on the basis of an agreement with national business entities without creating a legal entity (agreements on industrial cooperation, joint production of certain products, etc.).

As of January 1, 2013, the accumulated volume of PP in the Ukrainian economy amounted to 72.8 billion dollars, per person - 1.6 thousand dollars. In 2011, PP receipts in Ukraine amounted to 7.2 billion. dollars, in 2102 increased to 7.83 billion dollars. Despite the gradual increase in the volume of emergency situations in Ukraine, its investment attractiveness remains relatively low. The country's investment climate (low GDP growth rates, inflation, corruption, delays at customs, delays in VAT refunds, etc.) does not attract investors. According to the European Business Association (EBA), the level of investor confidence in the Ukrainian market in 2011 dropped to a record low.

Over the past 5 years, the main investors in terms of the number of projects in Ukraine were the USA, Germany, Russia and France, and in terms of investment volumes - the EU countries and Russia. The areas of emergency in Ukraine are structurally significantly different from other countries in Central and Eastern Europe. If 50% of the region’s PP is carried out in production, 25% falls on professional services and software, then in Ukraine PP is dominated by the financial sector (28.5% in 2012), 17.3% of foreign investors’ funds are concentrated in metallurgy, 14.2% - in real estate transactions, rental, engineering and services to entrepreneurs, 7% in retail trade. To attract large volumes of private equity, Ukraine must improve fiscal stability, especially in areas such as investment and protection of property rights, development of financial markets and business deregulation. Investors expect greater transparency of investment activities in Ukraine, in particular, a reduction in corruption, bureaucracy, and pressure from tax and other regulatory authorities.

Along with foreign direct investment, a significant part of international capital flows moves in the form of portfolio investment.

International Portfolio Investments - is an investment of capital in foreign securities that does not give the investor the right to real control over the investment object.

These investments are often called “passive”, in contrast to the “active” direct investments of foreign investors. A portfolio investor does not seek to manage the activities of the enterprise in which funds are invested, but only claims to receive income in accordance with the acquired share of the portfolio of the investment object, which in international practice usually does not exceed 10%. Unlike foreign direct investment, which covers both financial and non-financial assets, portfolio investment includes only financial assets. Portfolio investments are characterized by higher liquidity, volatility and sensitivity to financial market conditions. They are not tied to specific economic sectors, industries or firms. Compared to them, foreign direct investment is more sustainable, since it is focused on long-term goals and long-term control over the investment object in a certain area of ​​the economy.

The determining factor for the movement of international flows of portfolio investment is motive for diversifying the asset portfolio. Portfolio theory is based on the fact that economic entities are risk averse, so they try not only to maximize the return on their assets, but also at the same time reduce the risk of their maintenance. In particular, the risk of owning stocks or bonds is associated with the possibility of bankruptcy of the company that issued them, significant fluctuations in their market price, and the likelihood of receiving lower than expected income. In an effort to maximize income and minimize risks, investors evaluate their ratio for each asset and form an investment portfolio.

An international investment portfolio may include:

- stock securities without a specified circulation period, certifying the owner's membership and equity participation in the authorized capital of the joint-stock company, his right to participate in management, to receive part of the profit in the form of dividends, to participate in the distribution of property in the event of liquidation of the joint-stock company;

- debt securities, which include bonds, promissory notes, promissory notes, treasury bills, bank certificates of deposit, bankers' acceptances, financial derivatives2.

The benefits of portfolio investment Compared to PPs, they include their higher liquidity and high mobility, due to both higher liquidity and the simplicity of the purchase and sale procedure, the ability to protect money from inflation and obtain speculative income. Disadvantages of portfolio investment consider a high level of risk (with the exception of government bonds), which applies not only to income, but also to the entire invested capital; lower level of profitability (the dividend on the most profitable common shares per unit of invested capital is only 40-50% of the profitability of the private enterprise); the absence in most cases of the opportunity to influence the level of profitability of securities and their market value; a potential threat of destabilization of financial markets and the economy as a whole through the speculative nature of their movement.

In the general flow of international capital, the volumes of portfolio investment are large volumes of foreign direct investment. The annual volume of portfolio investments in 2010 amounted to 47-49 trillion. dollars, which exceeds the amount accumulated since the end of the 19th century. imported and exported PP. The rapid growth of portfolio investments is explained by the fact that, on the one hand, their organization and placement abroad is increasingly carried out by institutions that do not have significant financial resources and extensive information about the state of the global securities market (trust and insurance companies, pension funds, banks and other financial institutions), and on the other hand, by the fact that portfolio investments are often used not so much as an additional source of profit, but rather to penetrate highly monopolized industries, large and major corporations.

Over 90% of international portfolio investments are carried out between developed countries, which is due to the presence of developed financial markets with infrastructure that allows them to quickly service powerful capital flows, established traditions and guarantees that participants in their markets will fulfill their financial obligations, stability and transparency of tax legislation, and low political risks. . Portfolio investments from countries that are developing are characterized by instability and are predominantly a form of legal and illegal "capital flight" - their spontaneous unregulated movement abroad for the purpose of a reliable and profitable investment, avoiding expropriation, taxation, losses from capital inflation, characteristic of states in a state of economic and (or) political crisis.

According to the target orientation, investments are divided into two main types: direct and portfolio.

Direct investments

Direct investments are long-term investments of capital and other valuables in the authorized capital of enterprises and companies, in new buildings, equipment, material production and sales of products, and inventories. They are divided into foreign deposits and investments in the domestic economy.

Portfolio investment

Portfolio investments are investments in the purchase of shares, bonds, industrial securities, bills. They are formed in the form of a portfolio of securities and generate profit through interest or dividends. A portfolio is a collection of various securities that are managed as one whole.

Key differences between direct and portfolio investments

1.Direct means active management of the financial and production process, portfolio means passive receipt of interest.
2. The income of portfolio investments is lower than direct ones.
3. The risk in working with portfolio investments is usually lower.
4. Portfolio investments are characterized by higher liquidity.
5. Direct investments are usually designed for a longer period of capital investment.
6. It is more expedient to make direct investments in one company, while for passive income generation with portfolio investments, larger profits can be obtained from investments in the assets of different enterprises and companies.
7. The size of direct investments is much larger than portfolio investments, since in these cases investors themselves exercise control.

Naturally, any type of investment has one goal - making a profit. But, since direct investments allow you to directly influence the course of the invested business, and even more so to participate in the operational management of the company, in recent years there has been a clear trend towards a decrease in portfolio investments and, accordingly, an increase in direct investment. Although, of course, business schemes often arise in which the influence on the operational management of production by investors can be seriously limited even with direct capital investments.

Direct investments	Portfolio investment
Direct investment involves the direct, direct participation of the investor in investing capital in a specific investment object, be it the acquisition of real assets, or the investment of capital in the authorized capital of an organization. The objects of direct investment are, as a rule, equipment, buildings, and know-how.	Indirect (mediated) investments involve the investment of investor capital in investment objects through financial intermediaries (institutional investors) through the acquisition of various financial instruments. The objects of portfolio investment, as a rule, are various securities, bank deposits, and foreign currency.
Direct investors are companies and entrepreneurs who invest in the acquisition of equipment, buildings, know-how in order to organize production and make a profit from such direct investments. Although in joint stock companies there is no such division into portfolio and direct investors. There are minority shareholders and majority shareholders. Large, medium, small.	A portfolio investor is a person or institution that purchases a financial instrument for its investment portfolio, that is, a certain set of investment instruments. Portfolio formation is associated with the tasks of risk diversification across different financial assets. Therefore, an investor who purchases a small block of shares or securities of an enterprise is not a direct, that is, a strategic investor, but is a portfolio investor.
Direct investments can also be made at the expense of financial (portfolio)	Briefcases - they can’t
Cannot be carried out through the secondary securities market	They can be carried out through the secondary securities market, but cannot turn into direct ones, since they go only to the owners of shares, and not to the enterprise. Yes, but not related to direct ones in any way
When forming the Authorized Capital, there is a relationship between direct and portfolio funds. Portfolios ultimately turn into direct ones. Often real investments cannot be made without issuing shares, i.e. without financial investments. Financial investments are an essential part of planning direct, real investments.

From the foregoing, we can conclude that financial investments are a link in the transformation of savings into real investments and serve as one of the most important channels through which savings enter production, and at the same time they can act as a relatively independent form of investment.

54. The role of scientific and technological progress in the development of the world economy.
STP is a continuous process of discovering new knowledge and applying it in social production, allowing for a new combination of existing resources in the interests of increasing the production of high-quality final products at the lowest cost. In a broad sense, scientific and technological progress refers to the creation and implementation of new equipment, technologies and materials, as well as the use of progressive methods of organizing and managing production.

There are two main forms of NTP:

1. Evolutionary, involving the gradual improvement of equipment and technologies; economic growth is ensured through quantitative indicators;

2. Revolutionary (scientific and technical - scientific and technological progress), manifested in a qualitative update of equipment and technologies, a sharp increase in labor productivity; economic growth is achieved through qualitative changes.

As evidenced by the practice of developing scientific and technical potential, sources of R&D financing play an important role: where the share of private investment averages 60% or more, a positive trend in the growth of investments in R&D and their high efficiency remains. This trend is characteristic of almost all OECD member countries: an increase in private investment against the background of a decrease in the share of investment from the state budget. So in the United States, private investment accounts for more than 60%, budgetary investment accounts for an average of 20–25%, and the rest comes from charitable foundations and grants. According to experts, the effectiveness of the US innovation system is due to clearly formulated tasks on a national scale, a high degree of intellectual property protection within the framework of state innovation policy (stimulating active patenting), a large share (~ 50%) of venture capital in the total volume of R&D financing, close ties between TNCs and universities. The American model in the field of R&D practically extends to all OECD countries, where, in addition to the United States, the leading EU countries occupy a stable position (Table 23).

At the same time, at the turn of the XX/XXI centuries. and in the development of the 2000s. The share of the group of developing countries is noticeably increasing, especially in the Asia-Pacific region. Here the leading role belongs to the PRC. The share of R&D expenditures in China's GDP is constantly growing: the period from 1996 to 2009. costs increased 3 times from 0.6% to 1.7%, respectively. The shift towards increasing R&D spending in China, along with government policy, is due to investments by TNCs in their foreign subsidiaries, which is explained by the increasing professional level of China's scientific personnel and their relatively low cost compared to developed countries.

As for Russia, the scientific and technical sphere here is noticeably inferior to developed countries in terms of the scale and intensity of innovation. Russia accounts for just over 1% of global spending on science, although research organizations employ more than 6% of the world's scientific workers. Funding for scientific research is carried out mainly by the state (more than 60%), while the share of the domestic business sector does not exceed 15%. Russia spends less on science than Japan by 8–9 times, Germany by 4 times, and the USA by more than 20 times. The reduction in internal costs for science is accompanied by a reduction in the number of scientific organizations (primarily industry ones) and the number of workers employed in them.

Plan

1. The essence and forms of international capital movement

2. Direct and portfolio foreign investments

3. Free economic zones

4. International lending. Global debt crises.

Topic: “International capital movements”

Plan

1. The essence and forms of international capital movement

For hundreds of years, world trade has occupied a position in international economic relations. However, at the end of the 20th century. free movement of capital becomes the absolute leader.

Formed monetarist philosophy- technology for creating an open global financial space that does not recognize national borders and sovereignties. It was especially evident in the creation of global financial pyramids. There has been a replacement of production practices with redistribution ones. Previously, the main profit was obtained in the process of real production, now it is obtained as a result of games with exchange rates. The virtual “financial economy”, or the production of money for the sake of money (usury, interest on loans), is condemned by Christianity and Islam as contrary to human nature.

International capital movement is a determining element in the functioning of the world economy. At the beginning of the 21st century. The annual currency turnover amounted to over 400 trillion dollars. and 80 times higher than world trade in goods. The average daily market turnover is over 5 trillion. dollars. According to the Bank for International Settlements, over the past few years, bonds worth 5.3 trillion have been issued annually in the world. and issued bank loans worth $9.8 trillion. World trade, which developed dynamically after the Second World War, began to give way to the movement of capital. On average, in the 90s, world exports of goods and services amounted to 5 and 1.2 trillion US dollars, respectively.

The international movement of capital is determined by the movement of one of the factors of production, the economic preconditions of which in one country are more effective than in other countries.

International investment varies according to sources of origin, nature, time and purposes of use.

Foreign investments can be different in nature and form.

By source of origin foreign investments differ as follows:

State capital investments (official) are funds from the state budget that are sent abroad or received from there by decision either directly from governments or from intergovernmental organizations. These are government loans, loans, grants, assistance, the international movement of which is determined by intergovernmental agreements. This also includes loans and other funds from international organizations.

Private capital – these are funds from non-state sources placed abroad or received from abroad by private individuals (legal entities or individuals). This includes investments, trade loans, interbank lending; they are not directly related to the state budget. But the government keeps their movements under review and can, within its powers, control and regulate them. In practice, there are very subtle methods of converting public funds into private investment.

By placement period Foreign investments are divided into short-term, medium-term and long-term.

By nature of use Foreign investments are either loan or business.

Loan investment means lending money to earn a profit in the form of interest.

Entrepreneurial investments are directly or indirectly invested in production and are associated with obtaining a certain amount of rights to receive profit in the form of a dividend.

By purpose Entrepreneurial investments are divided into direct and portfolio investments.

Historically, the export of capital was formed as the export of capital from a small number of industrialized countries to more backward ones.

The constant development of the world economy has turned the export of capital into a necessary condition for the efficient functioning of the economy of any country. At the same time, not only industrially developed countries, but also moderately developed and developing countries export capital. Moreover, each country is both an exporter and an importer of capital. The movement of capital has turned from one-way to forward-looking. The actual global capital market has emerged as part of the global financial market.

Money market determines the relationship between supply and demand for short-term means of payment. This is usually an international commercial loan provided for the purchase of goods and payment for services. The movement of short-term capital thus includes all credits, or borrowings, agreements on which are concluded on the international foreign exchange market.

Medium- and long-term loans, being part of the global credit market, at the same time constitute an integral element of the global capital market.

World capital market regulates the movement of long-term assets in the form of investments. The movement of long-term capital includes all movements of capital provided to foreign countries for a long period and return payments - interest, principal.

Reasons for the export of capital

The most important reasons for the export of capital to obtain greater profits are:

1. Over-accumulation of capital in the country from which it is exported.

2. The discrepancy between the demand for capital and its supply in various parts of the world economy.

3. Possibility of monopolizing the local market.

4. Availability of cheaper raw materials and labor in the countries where capital is exported.

5. Stable political situation and generally favorable investment climate.

Direct and portfolio foreign investments.

Investments(capital investments) a set of costs of material, labor and monetary resources aimed at the expanded reproduction of fixed assets in all sectors of the national economy. Investments are a relatively new term for the Russian economy. Within the framework of the centralized planning system, the concept of “gross capital investments” was used, which meant all the costs of reproduction of fixed assets, including the costs of their repair. The concept of investment also covers the so-called real investments, which are close in content to our terms “capital investments” and “financial” (portfolio) investments, that is, investments in stocks, bonds, and other securities.

Portfolio investments are represented by securities appearing in the portfolio of the country that provided the capital. These are stocks and bonds placed in major financial centers. The purchase of securities in this case is not accompanied by the establishment of control. The main goal is to generate income, and therefore the size and dynamics of portfolio investments are influenced by the difference in interest rates paid on bonds in individual countries. All portfolio investments can be divided into stakes of enterprises in the amount of less than 10% and debt securities (bonds, bills, etc.).

Portfolio investments are an important source of attracting foreign capital to finance bond issues issued by major corporations, public and private banking institutions.

Direct investments - These are investments in production that give the investor the right to control the management of enterprises in the country receiving the capital. In international practice, such investments are called foreign investment. Non-controllable payments, borrowings and purchases of securities are defined as movements of capital.

The growth of portfolio (speculative) investments is stimulated by the needs of diversification and the desire to avoid taxation. Direct investment is increasing with the increasing mobility of modern production technologies and the development of joint ventures.

To attract foreign investment, individual economic preferences are no longer enough; it is necessary to create competitive regional economic conditions, including political, social and production and economic factors. It must be remembered that portfolio (speculative) and direct investments behave differently in local markets. speculative investments quickly come and go if the financial market is poorly developed, direct investments are made through the purchase of property or part of it, for example an individual firm or company. German entrepreneurs prefer to invest abroad - direct investments, while American businessmen, geographically distant from many local markets, rely on portfolio investments. The world leader in attracting foreign investment, especially in information technology, is the United States.

In the process of economic globalization, the importance of foreign direct investment (FDI). At the end of the 20th century. their share in foreign capital investments amounted to more than 30%. FDI has become one of the leading forms of international economic relations, and the role of direct investor is most often played by transnational corporations. In the modern world, the main method of placing FDI, especially in industrialized countries, is cross-border M&As - transcorporation transactions for the merger and acquisition of foreign companies.

Investment climate - a set of political, economic and sociocultural conditions for attracting foreign or domestic capital, real business conditions in a given place. For example, the investment climate in Russia is assessed as unfavorable.

The use of foreign investment allows:

· Revitalize the economy

· Gain access to advanced technologies and management methods;

· Counteract the increase in the state’s external debt by providing funds to repay it;

· Stimulate the development of society’s own productive forces;

· Promote efficient production and economic growth, its integration into the global economic system through industrial and scientific and technical cooperation.

Indirect benefits of foreign investment include:

· Attracting new technologies, equipment and know-how;

· Opportunity to train specialists, managers and entrepreneurs who are proficient in modern technologies of management and production organization;

· Activation of the export potential of the donor country;

· Development of regional resources.

3. Free economic zones.B In the world practice of foreign economic activity, there are different models of territorial and economic management. In this series of complex formations there are also economic structures that are known as free economic zones (FEZ). Various types of such zones are called “islands” of the world economy, “windows” for the influx of foreign investments, technologies, and management skills into numerous regions and countries. Finally, many economists see the SEZ as a prototype of a new “open door” policy to the global economic system.

SEZs as compact territorial entities can be called both ancient and modern. Their roots go back to ancient times and at the same time enrich their practical activities with new content of modern civilization. “Free economic zones,” according to American scientists M. Frazier and R. Ren, “are one of the oldest and at the same time the newest ideas of mankind in the field of economic development.”

Even in the era of hoary antiquity, the ancient Phoenicians, Egyptians and Chinese used free economic zones to develop foreign trade. At that time, the zones acted in the form of free harbors and ports. Carthage became the first free port in 814. BC. In the 13th century, free trade zones began to function. History captures the prototype of the free zone on the ancient land of Polotsk.

Free economic zones are international economic formations. They have become global in nature, covering almost all countries of the world, including rich and poor. With their help, a very intensive integration of entire regions into the system of world economic relations occurs.

Free economic zones are areas of very high concentration of trade, financial, industrial, and technological connections. They are centers of a high level of development of market relations, entrepreneurship, a place for improving technology and management mechanisms. At the end of the twentieth century, these phenomenal formations became a significant factor in the world economy and represent unique commercial centers that accelerate global trade turnover and stimulate foreign trade.

SEZs, at the newest stage of their development, are regularly and powerfully carrying their baton into the new millennium, penetrating into all spheres of the world economy. According to Western experts, by the beginning of the 21st century, over 1/3 of world trade turnover will pass through free economic zones.

The goals of countries creating SEZs may be different. Some countries use zones as an economic integration mechanism, while others use them to attract foreign technology. The UK, for example, began to create free airports (in Liverpool, Birmingham, Cardiff, Southanton, Prestich and Belfast) in 1981 with the aim of expanding employment opportunities and attracting activities that could boost economic conditions at the national level. Post-socialist countries in SEZs are testing elements of the market mechanism of the market economic mechanism. In the United States, a 1934 law required zones to facilitate and encourage foreign trade by exempting foreign goods from tariffs upon entry into the United States.

As we can see, a few examples are enough to verify the difference in the goals of creating a SEZ. However, despite the differences between these goals, they also have some commonality, within which economic, social and scientific and technical goals can be distinguished.

Economic:

o deeper inclusion of the national market into the global economic system;

o attracting foreign and national investments for the development of highly profitable production;

Social:

o comprehensive development of backward regions;

o increasing the number of jobs and ensuring employment of the population;

o education and training of qualified national workers, engineering, economic and managerial personnel;

o saturation of the national market with high-quality goods.

Scientific and technical:

o use of the latest foreign and domestic technologies;

o introduction to new forms of managerial work;

o attracting experience and scientific and technical centers;

o increasing the efficiency of used production facilities, infrastructure and conversion complexes.

All these and other goals of organizing a SEZ can be realized under a whole system of conditions created for foreign investors and the host country. In this regard, we will name the most important conditions for the normal functioning of the SEZ:

o political stability in the country creates an overall favorable investment climate. As practice has shown, it can be decisive in attracting foreign investment;

o the presence of a well-developed legislative framework that guarantees the rights and stimulates the activities of foreign and domestic investors;

o availability of developed infrastructure (industrial and commercial);

o a very important condition is the natural geographical environment.

The most important stimulator for the development of SEZs is the system of benefits for investors, who, before investing capital, carefully study the conditions of benefits provided to them.

Each country or one or another of its regions, when creating a SEZ, determines its own set of benefits. At the same time, as practice shows, the system of benefits established in the SEZ is quite individual and is related to the programs and projects implemented on its territory. However, in the economic literature there are four main groups of benefits:

fiscal benefits, stimulating the development of certain entrepreneurship inputs. They apply to taxes on profit, income, property and the level of tax rates. Their scope includes issues of permanent or temporary tax exemption for entrepreneurs;

financial benefits in the form of establishing low prices for the use of land, industrial premises, infrastructure facilities, and utilities. Financial benefits are the provision of various forms of subsidies from budget funds and preferential government loans;

administrative benefits usually provided by the administration of the FEZ in order to simplify the procedures for registering enterprises, entry and exit of foreign citizens and the provision of various services. The simplicity of administrative procedures is always positively assessed by the investor, and sometimes is decisive in attracting foreign capital to the zone;

foreign trade benefits. They are mainly related to the introduction of a simplified procedure for carrying out foreign trade transactions, as well as the reduction or abolition of export-import duties.

All of these benefits can be applied in various combinations.

The classification of SEZs is not just a list of them with a brief description, it is the evolution of their development, formation and functioning.

o Warehouse and transit zones (the most ancient, the simplest)

o Free customs zones

o Free Trade Zones

o Export production zones

o Complex zones

o Free scientific and technical zones

o International zones

o Program zones