capital is moving in the wrong direction

May 9, 2015

...capital is moving in the wrong direction. A liquidity shortage is being exacerbated by the volatility of capital flows, forcing developing countries to maintain higher foreign exchange reserves than previously deemed necessary. According to the latest IMF data, 2001 will be the second year in a row when there has been a net outflow of capital from the developing countries to support consumption in the West. Overall, they are expected to have a current account surplus of $20 billion after $60 billion in 2000.

 

Source: Bowring, Philip, "From Poor to Rich: Capital Is Flowing in the Wrong Direction," International Herald Tribune, 12/12/01.

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