Columbia International Affairs Online: Policy Briefs

CIAO DATE: 03/2015

The rise of FDI income, and what it means for the balance of payments of developing countries

Miguel Pérez Ludeña

June 2014

Columbia Center on Sustainable Investment


FDI is now the largest external liability in developing countries and is being paid through outflows of FDI income, or profits of foreign companies. These profits have grown to a point in which they may play an important role in a potential balance of payments crisis.