Capital Flight

When capital leaves a country, it...flees.

Capital flight happens when people in one country start moving their assets to another, in a big hurry (the financial capital is "in flight" so to speak).

Think situations like wars, currency losing value...just anything that causes major economic unease or loss in a country. When those situations occur, people start moving their assets elsewhere to shield them from issues in their home country and protect themselves from financial harm. The issue runs that, with no money being kept "at home," home will start to suffer with lack of investments made in local businesses, lack of power behind banks...there's just no money circulating, because "nobody is home."

This outcome may be the reason that some countries ban variations of capital flight, and don't allow assets to be moved outside its borders. Still, it happens, legal or not.

In the case of some countries (such as Argentina), capital flight becomes the norm for years due to inflation. (Their new denomination, the "Go Ahead And Cry For Me" did not do well.) Money is worth more if it's transferred elsewhere, outside of high inflation areas where, if it remains, it loses big value over time.

Note that, in this realm, there exists "human capital flight," when people who have a good education in their home country add value to it as professionals...but then bail and go to another country seeking more opportunity.

Unfortunately, the two of these scenarios often go together...with no money moving around the country, there isn't any money to keep the best and brightest at home either.