Examples of how a remittance helps Vietnam economy

In the article How remittance helps the economy in Viet Nam we know that remittance can not only helps Vietnamese people to upgrade their lives but also can help to develop agriculture, education and startup’s community.

In this essay, let’s list out the examples of these helps in Vietnam’s economy.

First, remittances can support the poor village to become modern and become a village of houses and cars.

On the Tet holiday in 2020, more than 42 million USD in remittances were sent to Tet in the rural district of Nghe An.

Mr. Phan Minh Khue - Director of Yen Thanh District Statistical Office said: Tet is the time when the number of remittances sent by children working abroad to their homeland is the highest in the year, estimated at about 1/5 of the total amount remittances of the whole year, with 42 million USD (Tet in 2019 Yen Thanh's remittance amount is 35 million USD).

With the number of remittances sent home in 2019 was about 210 million USD, an increase of 10% compared to the previous year.

This number of remittances has turned the poor countryside into a land with many houses and cars and developed it into a true middle-class area.

Second, remittances can help to eradicate illiteracy in Vietnam.

Illiteracy has always been a huge problem for people living in poor rural areas in Vietnam, today there are still 1.49 million people who cannot read in poor rural or mountainous areas.

I have heard many stories about illiterate people suffering from a lot of unfair treatment in society.

For example, if you want to be a worker in a factory, you still must graduate from high school, if you want to be a technology driver or a shipper, you also have to be literate to read the information on the app thoroughly and understand it all.

Moreover, people who are illiterate are often the ones who are most tempted to engage in social evils such as prostitution, robbery, etc.

Thanks to remittances from compatriots abroad, more volunteer schools have been opened, more children can go to school, and illiteracy can be more easily eliminated.

The best example of this support of remittance is every year, Yen Bai province pays attention and allocates funds to maintain the work of illiteracy eradication. It is estimated that this amount of money is about 1.2 billion VND per year.

Third, remittances can support and fund startups as angel investors before seed funding.

As FinFan wrote in the article Startup seed funding – What are the difficulties for founders after startup seed funding? we discuss the difficulties that startups have when they run their companies after receiving the first large of money from seed funding.

 

Therefore, before seed funding, startups need money from angel investors to develop the services/products to satisfy and have a place in the hearts of customers.

At this stage, most of the capital contributors come from relatives and friends (possibly abroad) because startups are still quite young and have not proven their capacity in the market.

And at this stage, sometimes the not-so-high amount of angel investors will be able to support startups in the difficult early stages when there is a lack of capital, a lack of human resources and a lack of customers.

The best example of this support of remittance to startups is the case of an IT company that specializes in website programming of someone I know as mentioned in the article “Examples of remittances in developing countries”.