DIRECTIONS OF RISK OPTIMIZATION IN THE MECHANISM OF INTERACTION OF STATE AUTHORITIES OF UKRAINE WITH DEVELOPMENT PARTNERS IN THE CONDITIONS OF EUROPEAN INTEGRATION
Abstract
The article is designed to identify current problems of interaction of public authorities of Ukraine with development partners in the context of European integration and promising areas for their settlement. The article assesses the impact of international technical assistance and foreign direct investment on the dynamics of the country ‘s risk indicator as one of the general indicators of development. When choosing a policy in favor of receiving assistance, it is important to ensure a transparent mechanism for the implementation of relevant programs and projects and control over the targeted use of international technical assistance. In this context, the choice of strategy by the government is paramount: to improve the business environment by making it more attractive to investors, or to seek assistance that, despite all the benefits, clearly does not guarantee development.
It is noted that in contrast to international technical assistance, foreign direct investment has the following obvious advantages. First, they shift a significant share of risk from the domestic investor to the external investor. Secondly, it is the only external financial resource that directly affects the formation of fixed capital - an important factor in economic growth. In turn, by generating profits in the private sector, they potentially contribute to the repayment of the country’s external debt, which undoubtedly reduces the country’s level of risk.
Unlike foreign investment, international technical assistance does not stimulate reform to the extent officially declared by international organizations. In this context, it is very important for the government to choose a strategy: to improve the business environment by making it more attractive to investors, or to seek help that, despite all the benefits, clearly does not guarantee development. It is also important when choosing a policy in favor of receiving assistance to ensure a transparent mechanism for the implementation of relevant programs and projects and control over the targeted use of international technical assistance. The control by the authorities will allow to identify the weak cities of the state’s development, to direct aid to those who really need it, and not to the corrupt goals of politicians and foreign development agencies.
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