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"It is controls that lead to capital flight," he says.
These doubts don't just fester; they lead to capital flight that in turn aggravates the very doubts that prompted them.
Instead, they would have to replace an existing currency with another one a process that would immediately lead to capital flight and the collapse of the local banking system.
For instance, Saowanee Suwannacheep, the director of payments at Thailand's central bank, worries that the "legal infrastructure may not be ready yet", and wonders whether the greater ease of moving money might even lead to capital flight.
It is easy to be cynical, yet there has been a boom in the registration of private firms: 3.6m were created last year, almost double 2012's total.The high road of lower growthIn time, these reforms will lead to capital being allocated more efficiently.
A new paper by Sebastian Dullien for the European Council on Foreign Relations, a think-tank, argues that the market will be damaged regardless of what happens.The euro's break-up could lead to capital controls, trade barriers to keep out goods and border controls to limit economic migrants.
Similar(46)
Karl Marx argued that capitalism is unstable because it leads to capital overaccumulation and class struggle.
That, in turn, led to capital flight as depositors rushed to convert their pesos into dollars.
Sanctions have led to capital flight, a contracting economy, a fallen ruble, and the emigration of more educated Russians.
According to a survey by the Gaidar Institute, 43% of businesses say they have kept investment levels static and another 33% have invested even less than they did last year.The lack of opportunities has led to capital flight.
But this time, Mr. García promises not to try to nationalize the banks or to limit unilaterally the payments on the foreign debt, efforts that led to capital flight and a severe credit squeeze in the late 1980's.
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Justyna Jupowicz-Kozak
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