How remittance helps economy in Viet Nam
It has today around the world more than 150 thousand people live and work far from their hometown (Vietnam). Many of them often send money back home to their families.
Vietnam is a developing country, therefore this money that migrants send home – remittance - can not only help their relatives but also economic support can make.
In fact, remittances have surpassed foreign direct investment as a source of funding for a low and middle-income country like Vietnam since 2014, reaching US$3bn last year.
Besides the basic needs, remittances go a long way to help families prosper and to promote longer-term development in entire communities. Their potential as a source of investment is increasingly being recognized.
How can remittances impact investment and development in Vietnam?
First, how can remittances affect development?
Upgrade the life of migrants’ relatives to the next level.
According to the statistics of the World Bank, the GDP of Vietnam in 2022 was US$366,1bn, including around 1% of remittances from the diaspora (approximately US$3bn).
This money from migrants can help firstly the daily necessities just as: food, clothes, etc.
Moreover, it can help their loved ones upgrade their life to the next level. Many of them now can live in solid concrete houses instead of cottages and have motorbikes to ride or even cars to drive.
Helping education to develop
The most important thing is that education has been developing too. Remittances give the children of migrants a better condition to go to school. Nowadays the illiteracy rate in Vietnam has decreased proudly.
According to the statistics of UNICEF in June 2021, more than 97% of Vietnamese people can read and write.
Furthermore, 86,8% of Vietnamese adults finish secondary school. That contributes to a wide range of development in the working skills of the labor force of Vietnam.
Education helps reduce poverty. And reducing poverty is the first step towards building a more productive and more prosperous Vietnamese community.
Then how can remittances help investment in Vietnam?
Boost investment in agriculture.
Vietnam is still an agricultural country, so this sector always needs to be invested in. With remittances from the diaspora, Vietnamese farmers can get more money to buy equipment, seeds, and fertilizer, as well as reduce risk by purchasing insurance.
Furthermore, connecting with the modern knowledge of agricultural industrialization from abroad workers, remittances can give the farmers a chance to approach the new technology, which takes them less time and effort to increase both the quality and quantity of their agricultural products.
Helping Vietnamese Startup
From August 2022, Mr. Lanh, Vice President of Esuhai Co. – a company specializing in labor export to Japan – recommended the Vietnamese Government to promulgate a roadmap for increasing the educated specialized labor export by up to 10-30%.
This recommendation not only helps increase remittances from these workers to Vietnam but also increases the ability to learn modern technology, such as AI, blockchain, etc. for application in the Vietnam market. That can lead to the future of more technology start-ups being built in Vietnam in the next early years.
Remittances are important for the developing country of Vietnam. Because of this many diasporas want to know how to send remittances, how to pay remittances online and how long does payment remittances take. All of these questions will be answered in the next blog posts of FiFan.