The main sources of regional investment around the world are: public investment (national and regional); private domestic investment; private foreign investment; foreign state and interstate investments.
Public investments in the region include:
funds of the state development budget (republican and regional); investments of state-owned enterprises and organizations, ministries and departments, extra-budgetary funds, carried out outside the planned investment program; tax incentives and investment credits provided to enterprises and other economic entities, as well as loans from state financial structures.
The regional development budget is a key institution of state participation in the sphere of regional reproduction relations. In the regional budget, sources of investment are divided into gratuitous and repayable. Gratuitous investments, mainly state resources, are directed to the production and social sphere. Repayable resources include state loans (foreign loans and the issue of securities), state investment loans and credits, provided under state guarantees.
Principles of development budget for the development of the region:
clear definition of structural relationships between production and social areas of investment in the economy of the region; concentration of state investment resources for the implementation of strategically the most promising projects; scientific substantiation of the structural coefficients of distribution of state capital investments by districts and cities of regional subordination in order to level out sharp territorial differences in the provision of social benefits, and consequently, in the standard of living; wider use of tools and methods of economic and mathematical modeling, which are now practically not used for public administration of the economy in the regions.
An important direction in solving the problem of insufficient investment resources is to stimulate private investment of the population, since in countries with developed market economies, the population is a traditional supplier of monetary resources to the stock and credit markets, where both entrepreneurs and the state demand for them.
The funds of the population directed to investments are essentially savings, which can be divided into three groups:
1) current savings of the population, which have the most liquid character. These include cash, demand accounts, “plastic money”, cheque books. These types of savings are by definition not potential sources of investment;
2) savings for the purchase of durable goods or real estate are formed when citizens save money for the purchase of goods with a price exceeding the amount of current income. To accumulate savings of this type, they are placed in savings bank accounts and term deposits;
3) contingency savings (and old age) are long-term in nature. They can be placed in the form of purchases of corporate securities, stocks and bonds, other long-term financial assets.
To activate private investment of the population, a well-thought-out regional income policy is needed, which includes the following three blocks.
The first block is fundamental, associated with an increase in the level of income and directly leading to an increase in private investment. It is no coincidence that the Republic of Belarus is pursuing and actively implementing a policy of steadily increasing the level of income of the population.
The second block is designed to provide incentives for the creation of long-term savings and, in addition to purely economic mechanisms, should include certain propaganda and ideological attitudes. Each person must be sure that the state is interested in his income and savings and guarantees him this right, that his money can bring real income, and his property will multiply as a result of free choice of investments. The initial criterion for the savings rate should be 15-20% of annual income (taking into account inflation), which is a standard indicator for the middle class of the United States and other developed countries of the world.
Of course, the fulfillment of all these requirements is possible only in conditions of a stable political and economic situation, the absence of abrupt changes in course, as a rule, accompanied by huge financial losses for the population.
In this regard, the choice made by the population of the Republic of Belarus at the Republican referendum on October 17, 2004, which creates objective prerequisites for the long-term and confident development of the country, is very thoughtful and useful for the investment process in the country.
The third block is related to the development of an asset management system, and it is important to take into account that this is the sphere of state interests and state guarantees. The state is interested in the fact that savings are directed mainly to real estate, securities and bank deposits, i.e. were in circulation, and not in “cubes” in the form of foreign currency, gold, etc. In our country, great attention is paid to the development of the asset management system, since the country’s leadership pays great attention to the construction of housing, lending to the population for the purchase of real estate and durable goods, the policy of attracting savings of the population of Belarus to banks, which have increased several times in recent years.
Successful implementation of the investment budget requires the definition of the following sectoral investment priorities.
1. The structural relationship between the production and social directions in the investment programs of the region, which determines not only the structure of public investments, but also the dynamics of the reproduction process.
2. The ratio in the development of the real and financial sectors, since the policy of priority support for the real sector of the economy (industry, agriculture, construction) is extremely important for any regional economy. At the same time, it is necessary to consider very dangerous the trend of hypertrophied development of the financial sector and the service sector, accompanied by the deindustrialization of countries and their regions in transition to the market. Proponents of this very negative concept of “development” actively appeal to the experience of the United States and some other countries, where the service sector creates up to 60-70% of GDP. However, it is important to be clear that with a GDP, for example, of the United States reaching 9 trillion. USD, this country can afford the “luxury” of having such a deformed structure of the national economy, since the third of GDP that falls on the share of material production corresponds to a huge in absolute terms amount of 2.5-3 trillion. USD. If the transition to the market and developing countries with their more than modest GDP, imitating the leaders of the world economy, significantly reduce the share of the real sector of the economy in it, then this share in monetary terms may be so small that there will be a threat of an elementary shortage of material goods (food, clothing, essential goods, etc.). All this, in turn, will inevitably lead to the oppression of the service sector and the disruption of financial circulation and, as a result, will cause the primitivization (“zairization”) of the national economy and the loss of the country’s economic independence.
In addition, the financial, speculative in fact, the US market is the main tool for withdrawing financial resources from developing countries to the center (according to some scientists, the Wall Street stock exchange and financial fraud on it are almost the main source of US income). And since the monopoly on this instrument of generating speculative income has long been defined, other countries will simply not be allowed to use it. On the contrary, according to the prevailing trends in the world, these developing and transition countries are called upon to finance the center and be donors of resources for it, adopting the rules of the game established by large capital in the “free” financial and exchange market. It is therefore a deep and very naïve misconception that countries in transition will also be allowed to share in the profits of this global game.
3. The largest item of the production part of investments should be the cost of construction and development of industrial facilities and production infrastructure – roads and railways, communication lines, electricity and energy supply, warehouses, etc.