International scientific journal
“Interpretation and researches”
Volume 2 issue 22 (44) | ISSN: 2181-4163 | Impact Factor: 8.2
194
IMPROVING THE QUALITY ASSESSMENT OF INVESTMENT PROJECTS
IN A FAST-CHANGING ENVIRONMENT
Makmhudkhodjaev Avaz Yunusjanovich
Independent researcher of Samarkand institute of Economy and service
Annotation.
The article examines the content, nature, features, functions and
role of investments in economic development. Macro and micro economic functions
of investments are classified and described. The need to classify the functions of
investments at the public, economic and private levels is justified. The role of
investments in fixed assets in the development of the manufacturing and processing
industries was assessed, the dynamics of investments in fixed assets was analyzed.
We studied the share of investments in fixed assets through centralized and
decentralized sources of financing and considered investment projects implemented
in our country at the expense of these funds. Based on the results of the study, general
conclusions were formed and recommendations were developed aimed at attracting
and effectively mastering investments in fixed assets.
Keywords:
investments, investment projects, fixed assets, functions, intensive
development, manufacturing industry, financing, centralized funds, decentralized
funds, investment activities, foreign investment, investment climate, gross domestic
product, modernization, investment resources, tangible values, intangible values,
risks.
Introduction
World practice shows that the development of a country's economy through
investments contributes to intensive development. As the President of the Republic of
Uzbekistan noted, "Any state that has pursued an active investment policy has
achieved stable growth of its economy. Therefore, it is no exaggeration to say that
investment is the driver of the economy, or, in Uzbek terms, the heart of the
economy" .
In recent years, Uzbekistan has adopted a number of legislative acts and set
priority tasks to increase investment activity, actively attract and effectively absorb
foreign direct investment, implement investment projects within the framework of
public-private partnerships, and modernize fixed capital. In particular, in order to
increase the investment attractiveness of our country, increase the volume of foreign
direct investment, and accelerate the transformation processes of large companies and
commercial banks with a predominant state share, while introducing modern
corporate governance mechanisms, the "National Investment Fund of the Republic of
Uzbekistan" was established. The main task of this Fund is to place the Fund's shares
International scientific journal
“Interpretation and researches”
Volume 2 issue 22 (44) | ISSN: 2181-4163 | Impact Factor: 8.2
195
on leading foreign stock exchanges and to participate in the processes of attracting
investments in the Fund's assets and their privatization.
The high probability of unfavorable development of innovative investment
enterprises requires expanding sources of financial resources. It is necessary to
evaluate investment projects and consider investment flows in general, taking into
account modern trends caused by various negative factors. Regarding the first, it
should be noted that although it is problematic to assess the quality of investment
projects, it is important to bring the assessment results to a reasonable level.
However, the lack of financial resources, fierce competition in the global capital
market necessitate the development of specific state innovation and investment
programs that would most effectively accumulate and use available financial
resources to protect the country's economy from various shocks, primarily the impact
of the coronavirus pandemic.
To develop state programs that lead to effective results, while having effective
mechanisms of financial control and management in the changing conditions of their
implementation, modeling methods are widely used in world practice, with which
you can determine the optimal value of economic stimulus instruments of investment
policy. At the same time, despite the general similarity of the principles of modeling
investment and economic programs, their goals are different. The goal of state
investment policy is social security, and the task of this investment policy is to
increase production efficiency.
It should be noted that the absence of a clear model of state regulation of the
investment market leads to a weakening of economic development. This significantly
reduces the effectiveness of investment policy and makes it dependent on the
interests of investors who can influence government decisions. The costs can be very
high. The model of state investment policy makes it possible to identify the necessary
and sufficient conditions for ensuring the continuous positive development of the
country's economy until 2035. Stimulation should be carried out within a narrow
"corridor" of corrective management decisions that respond to changes in the socio-
economic situation both in the country and in the world. At the same time, ineffective
spending and their negative impact can be minimized.
Modeling investment programs in Uzbekistan is associated with limited
financial resources, in particular, with the prevention of risk factors caused by the
coronavirus pandemic, which forces the state policy in this area to focus on more
effective and rapid compensation measures. At the same time, investment activity is
determined by the factors that shape the investment market. Among them, the general
demand for investment flows occupies a special place, the essence of which lies in
the varying degrees of attractiveness, reliability and economic feasibility of the areas
of their use.
International scientific journal
“Interpretation and researches”
Volume 2 issue 22 (44) | ISSN: 2181-4163 | Impact Factor: 8.2
196
The demand for investment resources, of course, should include an assessment
of all their potential consumers and investment objects, the selection of rational and
promising investment projects. The practice of selecting attractive investment objects
and forming investment programs has shown the importance of demand and the
development of methods for its assessment.
To determine the real need for investment capital, you need to consider the
economically justified The main characteristic of the qualified requirement is an
investment project, which, in addition to a business plan, consists of qualitative and
quantitative parameters. The latter is assessed depending on the level of
modernization, development of the territory, production and social infrastructure.
Several indicators can be used for this. One of them is the indicator of the distribution
of investment volumes by regions and years. At the same time, it characterizes only
the investment activity of the investment market of the region in comparison with the
average indicator for a given year. In addition, quantitative parameters can be
determined using the indicator of the saturation of the region with investment - the
level of concentration of investment capital, as well as the volume of investments
accumulated per unit of area or per person of a given region over a certain period.
The measure of these volumes is the gross fixed capital formation. Other similar
measures (for example, gross national product, state budget revenues, household
deposits and foreign investments) are of secondary importance compared to the
volume of accumulated investment capital and the population, although, if they are
correctly taken into account, these indicators can increase the accuracy of the
calculations.
The indicator of the level of concentration of investment capital in terms of
content is close to the indicator of its actual gross capital formation, which includes
the costs of acquiring and improving land, buildings, machinery and equipment. The
volume of investments characterizes the scale of investment processes, which are
directly related not only to investment objects, but also to the presence or absence of
human resources and appropriate infrastructure necessary for their implementation.
The methodology for determining the quality of concentrated investment capital
is developed on the basis of an assessment of the production cycles of enterprises and
an analysis of the existing costs of operation. This method is often used to study the
"investment attractiveness" of enterprises.
Taking into account the cycle of the enterprise, depicted in Diagram 1, within
the framework of its activities, it is possible to create a model of the movement of
resources. However, the movement of resources does not clearly show how much
investment capital plays in its activities. However, before revealing the place of
investment capital, we decided to explain the movement of funds using mathematical
tools and show the movement of funds.
International scientific journal
“Interpretation and researches”
Volume 2 issue 22 (44) | ISSN: 2181-4163 | Impact Factor: 8.2
197
You can use the category of investment demand. This is an analogue of the
effective demand for goods, only in the first case it is provided for money, and in
return for it an investment product is provided. To obtain resources, the recipient
forms a scientifically and economically justified offer, the implementation of which
allows the investor to receive capital gains from the invested funds.
In any case, the process associated with the release of innovative products
contributes to profitable work, i.e. means making a profit from the production of
products.
Keynes envisaged the possibility of obtaining a negative value of the latter under
the following conditions: during the specified period, production costs increase, while
the increase in the volume of products does not end and it is not sold. This can also
happen when the integration processes in the industry are so far advanced that
entrepreneurs produce a large part of the equipment they need, and the overall
indicators are characterized by specific investments.
This statement is also justified in relation to the current situation of science-
intensive enterprises, which, in the conditions of a decrease in product sales, are
unable to compensate for the sharp increase in production costs. At the same time,
their main products are mainly science-intensive technologies and scientific
developments used for their own needs, that is, enterprises produce their own means
of production, in fact, invest "in themselves". This reduces the investment
attractiveness of these enterprises and leads to negative operating costs, since the
amount of investment costs (↓↑З_ат^инв 1) increases by a corresponding amount. It
follows that an enterprise at stage 7, all other things being equal, has the maximum
investment risk and the greatest development potential.
Figure 2. Investments in fixed assets, trillion soums
0
50
100
150
200
250
300
350
400
2018 yil
2019 yil
2020 yil
2021 yil
2022 yil
2023 yil
124,2
195,9
210,2
239,6
266,2
352,1
International scientific journal
“Interpretation and researches”
Volume 2 issue 22 (44) | ISSN: 2181-4163 | Impact Factor: 8.2
198
Source: Compiled based on statistical data from the Statistical Agency under the
President of the Republic of Uzbekistan (4.INVESTMENT AND CONSTRUCTION
WORKS (1).pdf.).
During the analyzed period, investments in fixed assets had a steady growth
trend. Because such dynamics are observed in all intervening years. This situation is
positive from the point of view of modernization and further development of
production sectors, in particular, manufacturing industry, mining industry, electricity,
gas supply, housing construction, agriculture. However, today there are serious
problems associated with the effective development of industry. The main of them is
“the high level of physical obsolescence of fixed assets (on average 50%)”.
This, in turn, negatively affects the competitiveness of manufactured products.
At the same time, this situation leads to a decrease in the level of competitiveness of
industrial enterprises, inefficient use of material and raw material resources. In this
regard, the establishment of the task of ensuring an average annual growth of
investments in fixed capital of about 7 percent in the "Uzbekistan-2030" strategy
requires a further increase in the volume of investments in fixed capital and the
modernization of fixed assets. In turn, the growth of GDP creates a favorable and
reliable environment for attracting investments in the renewal, technical re-
equipment, and modernization of fixed capital.
The share of investments in fixed capital financed from centralized sources of
financing in the total volume of investments amounted to 12.7 percent in 2023, which
decreased by 14.8 percentage points compared to 2019, while 87.3 percent of total
investments in fixed capital were absorbed from decentralized sources of financing,
which increased by 14.8 percentage points compared to 2019 (Figure 3).
During the 4th stage, as a rule, the majority of funds for fixed capital come from
direct investments, and if the company does not have its own growth potential, as
well as from portfolio and loans, if it has its own investment potential and appropriate
development prospects.
Analysis has shown that the duration of the 4th stage is different for raw
material and innovative enterprises. This is because for raw material enterprises it is
usually determined by the time of development of deposits and can last several
decades; in cases requiring science, the period for the development of a particular
product model is from 2 to 5 years. Despite the longer raw material cycle, the
innovative production cycle is a more efficient system compared to the enterprises of
the raw material industry, since at each subsequent stage of development the amount
of operating costs (↓↑З_ат^инв 2) is added to the amount of accumulated profit
(↓↑З_ат^инв 3). It is this process that ensures technical progress. In the commodity
industry, such a combination is almost absent, since the mine closure eliminates a
large part of the operating cost. This process is presented in Figure 2.
International scientific journal
“Interpretation and researches”
Volume 2 issue 22 (44) | ISSN: 2181-4163 | Impact Factor: 8.2
199
The duration of the first stage (1 and 1 •) in innovative enterprises is not the
same. In the first stage (1), innovators have a flatter curve, which is explained by the
additional costs and time spent on advertising their products and capturing a share of
the market. This can take many years and often requires a large amount of money
compared to investment in fixed assets (for example, advertising of goods). For raw
material enterprises, on the contrary, in the first stage (1 •) the graph curve slopes
sharply upwards, since their competitively priced products have a stable demand
from the first day of production.
It should be noted that in the second stage (2 and 2 •) the volume of production
becomes more innovative (or scientifically intensive), the enterprise begins to grow
rapidly and “explode” in a short time, after which it quickly becomes obsolete and a
new stage of development begins. In raw material enterprises, the opposite is true: in
the second stage, the graph curve becomes almost horizontal and continues until the
raw material extraction site is closed.
Scheme 2 shows how the accumulation of operating costs (Z_at^inv 3), which
ensures the overall growth of income, occurs. In addition, with expanded repetitive
production, part of the enterprise's profit is reinvested in other facilities. However,
only money is reinvested in the raw material sector, and in more innovative (or
knowledge-intensive) enterprises, part of the operating costs are recovered. This word
can be compared to the well-known logical formula: "If two people exchange apples,
each of them will have an apple; if two people exchange ideas, each of them will
have two ideas." indicates its dependence on its own characteristics.
LIST OF REFERENCES:
1. Constitution of the Republic of Uzbekistan. December 8, 1992. www.lex.uz.
2. Law of the Republic of Uzbekistan on Investments and Investment Activities.
December 25, 2019. www.lex.uz.
3. Tax Code of the Republic of Uzbekistan December 25, 2019. www.lex.uz.
4. Budget Code of the Republic of Uzbekistan. December 26, 2013.
www.lex.uz.
5. Law of the Republic of Uzbekistan “On Investment and Mutual Funds”.
August 25, 2015. www.lex.uz.
6. Resolution of the President of the Republic of Uzbekistan No. PP-4135 “On
the Organization of the Activities of the Ministry of Investments and Foreign Trade”.
January 28, 2019. www.lex.uz.
7. Zubchenko L.A. Foreign Investments: Textbook. - M.: KNIGODEL. 2006.
8. Klaas Eklund. Effektivnaya ekonomika: the Swedish model. - M.:
Ekonomika, 1991.
9. Tkachenko I. Yu. Investment: Flying. posobie. - M.: Academy, 2009.
International scientific journal
“Interpretation and researches”
Volume 2 issue 22 (44) | ISSN: 2181-4163 | Impact Factor: 8.2
200
10. Samuelson P.A. Economics: Pierre. English - M.: BINOM, 1997. - 783.
11. Keynes Dj.M. Obshchaya teoriya zanyatosti, protsenta i deneg: Per. English
- M.: Getos ARV, 1999.
12. Margolin A.M. Investment. - M.: RAGS, 2006.
13. McConnell KR, Brew SL. Economics, principles, problems and politics. T.
2. - M.: Respublika, 1992.
