Once used primarily to support family members, overseas remittances in Vietnam are now being used to bolster economic endeavors in the country.
According to VnExpress, Vietnam’s overseas remittances are no longer primarily used to support family members. Last year, for instance, just 6% of Saigon’s remittances were meant for family support while 72% of the money went into establishing and expanding local businesses, according to central bank data. Another 22% of remittance money was used to invest in real estate.
So far this year, the southern hub has received US$4.4 billion in overseas remittances, Nguyen Hoang Minh, deputy head of the State Bank of Vietnam’s local branch, told VnExpress. That figure is expected to reach US$5.8 billion by the end of 2016, or 45-55% of the national remittance total.
This is not just a trend in Saigon but nationwide. According to central bank data, 27-30% of remittances between 2010 and 2013 went into businesses in Vietnam, one of the top remittance-receiving countries in the world. In 2015, however, that figure was 70.6%.
In total, Vietnam’s overseas remittances, more than half of which come from the United States, are equal to as much as 8-10% of the nation’s GDP. The Central Institute for Economic Management has counted US$120 billion in remittances sent to Vietnam between 1999 and 2015, reports VnExpress. According to Bloomberg, World Bank statistics showed a 900% in last year’s remittance total compared to 2000.
Though remittances help to provide Vietnamese with new economic opportunities, some experts fear the country’s overseas income may decline in future, as the prospect of rising interest rates in the US and the downfall of the Trans-Pacific Partnership are giving Vietnamese-Americans fewer reasons to invest in Vietnam.
[Photo via Thanh Nien]
