Experts believe that the total overseas remittance to Vietnam may reach 10 billion dollars this year.
Overseas remittance, or kieu hoi in Vietnamese language, is understood as the money remitted by overseas Vietnamese people to their relatives in Vietnam. This is considered a very important source of foreign currency which can be mobilized to use for the economic development.
In the past, “overseas Vietnamese” referred to the people, who were settling down in foreign countries. Since they had better lives than their relatives in Vietnam, they remitted money to the relatives to help them upgrade the daily lives.
However, “overseas Vietnamese” nowadays also means-the Vietnamese workers who are temporarily working in foreign countries under the government’s labor export program as well. Meanwhile, the remitted money has been not only spent on the daily lives, but also used for investments.
Experts still keep optimistic about the overseas remittance this year, despite the global economic crisis, saying that the threshold of 10 billion dollars proves to be within reach.
The amount of dollars remitted to Vietnam for investment projects has decreased. As a reward, the remittance from Vietnamese workers overseas has increased.
Phan Huy Khang, General Director of Sacombank, said the overseas remittance going through Sacombank has increased by 17 percent so far this year, reaching 1.3 billion dollars.
Khang said Sacombank is now focusing on the US, Australian and Canadian markets, where the Vietnamese owned money remittance institutions have partnership relation with SBR, a subsidiary of Sacombank.
SBR, with its large network, can deliver overseas remittance at 400 transaction points throughout the country. It expects to see the overseas remittance to go through the bank reaching 1.7 billion dollars this year.
The Dong A Bank’s overseas remittance company said it has delivered one billion dollars to clients so far with 60 percent of overseas remittance coming from the US, Canada and Australia.
The bank has also noted the considerable increase in the overseas remittance from Taiwan, South Korean and Japan, the markets where there are many Vietnamese workers.
A report by the Ministry of Labor, War Invalids and Social Affairs showed that of the four million overseas Vietnamese, 400,000 Vietnamese workers are living and working in 101 countries.
If every worker remits 2500 dollars a year to his relatives in Vietnam, the country would have one billion dollars worth of capital a year which can be mobilized for the economic development. This explains why Vietnamese overseas companies now tend to establish relations with the partners in the markets where there are many Vietnamese workers.
Overseas remittance keeps rising in unfavorable conditions
Earlier this year, some experts expressed their worry that the overseas remittance may decrease this year due to the global economic crisis–which leads to the lower income of overseas Vietnamese.
They also thought that overseas Vietnamese would not have reasons to remit money to Vietnam at this moment, because it’s not the right time to make investment: the real estate market has been frozen for a long time, while the dollar deposit interest rates have been curbed at two percent.
However, contrary to all predictions, the remitted money volume has been increasing steadily. The decline in the remitted money from familiar remitters has been offset by the increase in the remitted money from overseas Vietnamese workers. Meanwhile, the number of workers has been increasing rapidly thanks to the government of Vietnam’s open labor export policy.
If Vietnam has 10 billion dollars in overseas remittance this year, it would have the amount of foreign currencies which is triple the rice export turnover (3.5 billion dollars a year) and equal to 10 percent of the 2012’s total export turnover, expected to reach 108 billion dollars.