Problem

Net outflow of capital from countries

Other Names:
Negative net transfer of financial resources from countries
Foreign private investment income outflow
Non-repatriation of export proceeds
Excessive repatriation of profits by foreign investors
Nature:

Investment of foreign private capital in a developing country is purchased by payments from income, which results in an effective outflow of capital from the developing to the developed countries.

Incidence:

[Developing countries] No estimates of the outflow of financial resources from developing countries are available on a comprehensive basis, but it has been estimated that in the late 1980s there was a net flow of funds from South to North of over $50 billion per year. In Latin America, foreign investors transferred one third of the profits within the first 5 years, between one half and two thirds in the second 5 years, and thereafter continue taking about 90%, converting the investment into a drain on, instead of contributing to, the monetary reserves of the country. Between 1982 and 1987, the imbalance was $190 billion outflow to $40 billion of external financing.

Problem Type:
D: Detailed problems
Related UN Sustainable Development Goals:
GOAL 8: Decent Work and Economic GrowthGOAL 11: Sustainable Cities and CommunitiesGOAL 12: Responsible Consumption and ProductionGOAL 16: Peace and Justice Strong Institutions
Date of last update
22.05.2019 – 15:49 CEST