Was Capital Fleeing Southeast Asia? Estimates from Indonesia, Malaysia, the Philippines, and Thailand

Abstract

Capital flight is the movement of capital from a resource-scarce developing country to avoid social control. It is measured as the net unrecorded capital outflow, or the residual between officially recorded uses and sources of funds. For Indonesia, Malaysia, the Philippines, and Thailand, we estimated total capital flight at US$ 658 billion (in 1995 prices) over the period 1970–2000. Including imputed interest earnings, we estimated the stock of capital flight at US$ 1 trillion as of 2002. The figures mean large amounts of lost resources that could have been utilized in the four countries to generate additional output and jobs.