NAMA : UMI KALSUM

NIM : 041273954

TUGAS 1 BAHASA INGGRIS NIAGA

Untuk TUGAS 1 ini anda akan diberikan pilihan topik untuk membuat sebuah essay
dengan panduan sbb:
1. Buatlah essay dengan paling tidak 3 paragaph (1 buah paragraph awal, 1 buah
paragraph
2. isi dan 1 buah paragraph penutup).
3. Tulislah jawaban anda dalam rentang antara 150-200 kata.
4. Jawaban essay diketik dan dikirimkan ke Forum Tugas dalam bentuk Word dalam
waktu 2 minggu.

(B. Foreign investor is the most responsible if Capital Flight happens in a country.)
Do you agree or disagree with the statement?

Jawab :

I agree, because the occurrence of capital flight is a form of concern for investors, this
can be caused by political instability in a country, so that investors move their capital to a
safer place. One of the main reasons that is strongly suspected as a source of capital
flight is inflation which has implications for investors' distrust to invest their capital in a
country. If inflation occurs, the owners of capital will invest their capital abroad so that it
will cause an increase in capital flight.

Another cause of capital flight is unrealistic interest rates in developing countries and
often accompanied by unstable currency exchange rates. In other words, to prevent
capital flight abroad, the determination of interest rates at home must take into account
interest rates abroad and the estimated rate of depreciation of the domestic currency
against foreign currencies.

Research conducted by Rana and Dowling (1988) found that the inappropriate use of
debt in developing countries is suspected to indicate the occurrence of capital flight,
meaning that some of the debt is transferred back abroad. Supported by several studies
conducted by Collier et al. (2001), Boyce and Ndikumana (2002) and Beja et al. (2003).
These studies show that foreign debt has a positive effect on capital flight. In addition,
Beja (2007) emphasizes that short-term capital inflows and foreign debt in developing
countries are the main causes of capital flight.