Capital Flight From Russia After Ruble’s Convertibility

Ruble’s full convertibility is one of Russia’s great accomplishmentsin economic reform. It also represents Russia’s high potential inrevitalization. Ruble’s convertibility is a new engine for Russia’s economicgrowth and at the same time rapid economic growth makes Russia more appealingto foreign investment. Convertible Ruble lifts the barriers of capital flowin and out of Russia. According to the principal of international capital flow,international capital will flee out of the developing countries when theinternational financial market becomes volatile. So the capital flight fromRussia after Ruble becomes convertible draws widely attention.This thesis starts with the capital flight from Russia after Ruble’sconvertibility. Based on the studies of capital flight theory and estimation,analysis on the features and patterns of capital flight from Russia is given.According to the estimation method and Russian’s current status, arelatively more practical method is presented. After the estimation of capitalflight from Russia, I analyze the drivers of it and conclude that the maindrivers are unstable political environment, volatile macroeconomic,inappropriate economic reform program, fragile financial system, enormousdebt and corruption. After analysis, I conclude that capital flight from Russiaare featured by abnormal capital outflow and rational capital transfer.Another obvious feature is that part of the outflow capital flow back to Russia,and aslo money laundering accounts for large percentage of capital flight fromRussia. Impacts of capital flight are presented afterwards. Measures arepresented to cut down capital flight or even draw capital back.