Investment funds in Republic of Kazakhstan

1.1. The essence of investments

The term “investment” from Latin “invest” means input capital in order to receive definite benefit. According to the Law of RK “about investments” investments are “ all kinds of property (except goods for personal consumption), including subjects of financial , also rights for it, which is inputted by investor into charter capital of juridical entity or increasing of fixed assets that used for entrepreneurial activity.

In Kazakhstan’s economy the term “investment” has become to use with crossing to market relations. In conditions of centralized directive economy only one concept used – “capital inputs”. However, the practice shows that conception “investment” has much wider meaning, because it expresses all kinds of financial, property and intellectual values, which input in the entrepreneurial sphere for getting definite economic profit.

Capital inputs are just part of investment and directed to basic capital.

There are different approaches for “investment” conception.

“Investments represent itself all kinds of assets that are inputted in economic activity for getting income”.

“Investment activity is a refusal from using incomes for current consumption, but to form capital and expected expansion of consumption in the future”.

“In the macroeconomic level, investments are aggregation of all inputs in property and stocks in country’s economy”.

“Investments are acquisition of assets, for example securities, art, deposits in banks for receiving financial profit or increasing of capital”.

From these definitions we see that the main aim of investments is profit. That’s why investment is senseless, if it doesn’t give such result.

Consequently, economic content of investments in conditions of market economy consist in combination of two sides of investment activity: expenses of resources and receiving results.

Functions and role of investments in the state’s economy

There are main functions of investments:

1) Promotion of development of production or forming internal supply of goods and services ;

2) Indemnity of threadbare main funds and using raw materials for renewal of production process;

3) Development of human potential, new technologies and materials;

4) Creating the basis for future economic growth.

On the macroeconomic level investments are basis for developing national economy and increasing effectiveness of production by:

1) Renovation and reconstruction main manufacturing funds of enterprises and non-production spheres;

2) Acceleration of scientific-technological progress, improvement of quality and providing with competitiveness of native produce;

3) Creation of necessary base of raw materials;

4) Reduction of costs of production

5) Increasing and improving structure of export;

6) Solving social problems, including problems of unemployment.

On the microeconomic level, investments need for achieving following goals:

1) Renovation of basic production funds that under influence of competition and scientific-technological progress;

2) Introduction new forms and methods of labor’s organization;’

3) Fulfilling environmental-protective activities;

4) Preparation of qualified specialists;

5) Acquisition of securities and input means to assets of other enterprises;

6) Acquisition of controlling shareholding.

Consequently, investments as economic category play important role in the economy’s development. Due to investments aggregate demand, labor force and common income are increase.

1.2. Types of investments

Along with that in economic theory there are different approaches to definition “investment”; also we have different classifications of investments.

There are:

1) By direction of investments;

2) By forms of investments;

3) By possibilities to manage the objects of investments;

4) By terms of investment activity;

5) By degree of risks.

Depending on direction of investments, there are 4 types of investments:

- Real investments;

- Financial investments;

- Investments to nonmaterial assets;

- Intellectual investments.

Real investments are investments to basic capital, means for supplement turnover means. It is capital inputs that directed to construction of new, reconstruction and expansion of manufactures. It has capital basis, that’s why production capital increases.

Financial investments are investments of moneys to securities, deposits, other financial instruments, but also granting loans, credits. It has financial basis, that’s why money capital increases.

The volume of financial investments depends on degree of well-development of national financial market and its institutes. Financial investment activity contributes to growth of real investments significantly. That’s why we can say that both of them are supplementary, but not competitors.

Investments for nonmaterial assets include acquisition of rights to use property rights (for example, rights to use land plot), acquisition of patent, license.

Intellectual investments are investments to human resources (to social

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