Alternative methodologies for economic evaluation of strategic investment projects

The authors compare UNIDO methodology and traditional methodology of evaluating effectiveness of investment which was widely spread in the Soviet time. The latter has been undeservedly forgotten, but at the same time it is a pragmatic alternative for the UNIDO methodology. The article depicts the basic drawbacks of the UNIDO methodology. The main one is its inconsistency of interests of an economic entity to the growing production and cost savings. If an economic entity implements this methodology, it is likely to face great risks of various nature. The traditional approach makes calculations significantly simpler, increases their accuracy and reduces risks. The author points out the basic provisions of the classical methodology, such as evaluation of the efficiency of capital investments, basic indicators of economic effectiveness of investment, production tasks which require evaluation of economic effectiveness of investment. Use of the traditional approach makes it possible to significantly reduce the costs for preparing the feasibility study of an investment project. The author considers the criteria of effectiveness of the traditional methodology which are adapted to the modern practice. The main advantages of the classical methodology are its focus on economic result which corresponds to the trend on the economic growth and social results in realization of national projects. Classical methodology of evaluating the effectiveness of investment projects can become a competitive alternative of a widespread UNIDO methodology. The alternative can be of interest for the federal executive bodies (for example, for the Ministry for Economic Development of the Russian Federation) in evaluating effectiveness of the national investment projects.