This research is an attempt at explaining and analyzing capital flight from
Southeast Asia. The research surveys the literature on the meanings and
measurements of capital flight. ''Was capital fleeing Southeast Asia?'' is
answered using the residual method. Next the issue ''Why was capital fleeing
Southeast Asia?'' is addressed. The examination is done using direct and
indirect linkages between capital flight and external borrowing. ''Should
Southeast Asia worry about capital flight?'' is the third issue of the research.
Counterfactual calculations using a planning method and multiplier method
explore what the effects is capital flight was regulated and the funds were
used in productive domestic activities. Finally, ''What is to be done?'' Policy
guidelines are discussed that could lead to restrain, reduce,and reverse capital
flight.