Money sent “home” to Vietnam may reach 6.8 billion dollars

VietNamNet Bridge – The Ministry of Finance (MOF) has forecast overseas remittance – money sent by overseas Vietnamese - would reach $6.8 billion this year, with the majority of the sum arriving in the final months of the year.

 

The sum of $6.8 billion estimated by the ministry, showed a slighter decrease in overseas remittance this year than in previous forecasts.

 

In 2008, overseas remittance was $7.2 billion, or 8 percent of Vietnam’s GDP.

 

Overseas remittances, or kieu hoi, is understood as the money sent by overseas Vietnamese (Viet kieu) to relatives in Vietnam to support lives and business plans. Statistics regarding overseas remittances are closely watched by government agencies responsible for managing foreign exchange flows and the national budget.

 

Statistics show that in the first six months of the year, Vietnam received $2.83 billion of overseas remittance. Meanwhile, overseas remittance service providers have all confirmed they have not seen sharp decreases in overseas remittance in the last months as previously worried.

 

Vietnam ranked 10^th among the countries which received most overseas remittance in 2008, according to a report of the World Bank released in July 2009.

 

However, in early 2009, international institutions all gave warning that the overseas remittance would decrease due to the global economic crisis.

 

The number of Vietnamese overseas workers has been decreasing considerably. The Ministry of Labour, War Invalids and Social Affairs in early September reported that only 45,000 Vietnamese workers went working abroad in the first eight months of the year. Meanwhile, Vietnam strives to take 90,000 workers abroad this year.

 

Prior to that, local newspapers reported that Vietnamese workers had to return home because of fewer jobs in Malaysia, Taiwan, Japan, Czech and Slovakia.

 

The World Bank warns the total overseas remittance in the world would decrease by 7-10 percent this year.

 

Meanwhile, the State Bank of Vietnam earlier this year predicted remittance would decrease by 20 percent from the previous year. Reuteurs quoted Nguyen Quang Huy, director of the Forex Management Department under the State Bank of Vietnam as saying Vietnam would have $5.8-6 billion of overseas remittance only in 2009.

 

Currently, Vietnam has been relying on several sources to earn foreign currencies, including foreign direct investment (FDI), official development assistance capital (ODA), exports, and overseas remittance.

 

Governor of the State Bank of Vietnam Nguyen Van Giau has also expressed concerns about difficulties in gaining foreign currency. Giau said that the export revenue is forecast to decrease by 9.9 percent due to the export market narrowing. The registered FDI capital has decreased due to investors’ financial difficulties, while the number of foreign tourists, who can bring foreign currencies to Vietnam, has dramatically decreased.

 

Vietnam is seeking $2 billion loans from foreign sources, including the $500 million loan from Asia Development Bank, $500 million loan from Japan and one billion dollar from the World Bank.

 

Phuoc Ha