Capital flight is the sudden, large-scale movement of wealth or capital from one country to another. It typically occurs when investors or wealthy individuals become concerned about their country's economic or political situation and transfer their assets abroad.
Major causes include political instability, high inflation, weak governance and corruption, high tax rates, and fears of currency devaluation.
Capital flight can be devastating for an economy — it depletes foreign reserves, weakens the currency, reduces investment, cuts employment, and increases poverty.
Capital flight is a serious problem in Bangladesh. Reports from organizations like Global Financial Integrity (GFI) highlight significant outflows through illegal channels such as trade mis-invoicing and informal money transfer systems (hundi). The government is taking steps to combat this, including strengthening anti-money laundering laws.