The billions of dollars sent to Vietnam from overseas each year fund new homes, expand businesses and support extended families and these funds - called remittances - are a vital link between those who have left Vietnam and those left behind and they're becoming an increasingly popular way for Viet Kieu, or overseas Vietnamese, to invest in their homeland.
So said U.S. newspaper USA Today in an article on August 18. The paper cited data from the World Bank and the International Monetary Fund as saying that from 2001 through 2008, the annual amount remitted to Vietnam more than tripled, to 7.2 billion USD, about 8 percent of the country's GDP. Last year, however, remittances to Vietnam fell to an estimated 6.8 billion USD amid the global economic downturn.
The newspaper quoted Daniel Mont, senior poverty specialist in Vietnam for the World Bank, as saying "We would expect that as the world economy recovers, and as the Vietnamese government promotes more (jobs) overseas, that remittances would go up."
Overall, remittances to developing countries, including Vietnam, are expected to increase 6.2 percent this year and 7.1 percent in 2011, the World Bank says. For low- and middle-income countries - which received 335.8 billion USD in remittances in 2008 — these funds not only raise the standard of living, but help finance countries' imports and plug their trade deficits, said Ahmad Ahsan, the World Bank's lead economist for the East Asia and Pacific region.
"In many poor countries, remittance flows have become significantly higher than foreign investment flows," added Ahsan.
According to the paper, in the U.S., Wells Fargo now offers this service to 15 countries in Asia and Latin America. The bank has a footprint in some of the most diverse markets in America, so it makes sense to offer customers the ability to send money back to their homelands, said Daniel Ayala, Wells Fargo's head of global remittance services. Among the countries the bank serves, the average amount remitted per transaction is highest in India, at 1,662 USD, followed by Vietnam, at 1,369 USD.
What's unique about Vietnam, said Ayala, is that money sent from overseas is often used to support extended family - rather than just immediate family - as well as to fund businesses. "There's a high level of entrepreneurial support by Vietnamese nationals to their families," he added.
In recent years, a growing number of Viet Kieu are also sending money back for charitable causes, including those related to health care and education, said Mark Sidel, a law professor at the University of Iowa who has studied these flows. The funds come predominantly from the Vietnamese diaspora living in the US, but also from countries such as Australia, France and Canada.
"Remittances and investment have helped to provide several billion in inflows to Vietnam each year" as Viet Kieu increasingly reconnect with their homeland, said Sidel. "There's no reason to think it won't grow."./.
