The Role of the Municipality in Investment Activities

Abstract

Against the background of modern global challenges, investment activities have gained relevance, especially in developing countries. Accordingly, for the economic growth and development of the country, it is important for the state to take measures that contribute to the optimization and modernization of investment relations. Therefore, the country's leadership should pay great attention to attracting foreign investment, which will be aimed at social protection of workers, introducing technological innovations, and not at using cheap labor. From the point of view of sustainable and stable development of the country, investments should be aimed at overcoming and mitigating the difficult economic situation in the long term, and not remain a market for cheap labor for investors. At the present stage, the main problem of the municipalities of the regions of Georgia is the economic situation, which is manifested in low GDP per capita, high unemployment and a high proportion of socially vulnerable population.

One of the subjects of active discussion in political and public circles of any country is economic development, social situation, devaluation of the national currency and inflation. The best way to avoid this situation is investment. The role of foreign investment is especially important for developing countries, since domestic investment is currently in deficit, to which is added an unstable financial situation – a factor that hinders the country's economic growth and the standard of living of the population. Accordingly, the inflow of foreign investment into the country is hindered by high interest rates on bank loans, conflict regions, underdevelopment of the stock market and a number of other factors. However, foreign investment is associated with high technological innovation, complex tasks and significant requirements. Accordingly, Georgia naturally leaves the niche of attracting foreign investment.

Based on the above, when investing in local governments, the government should plan and develop the concept of a large infrastructure project, since before making investments, the investor takes into account the ratio of two types of factors: institutional and personal at the municipal level: the influence of the government on the process of choosing a place for investment, the country's development potential by various indicators and its international image.