Overseas remittances fall, worrying real estate developers

Last update 14:00 | 09/02/2017
VietNamNet Bridge – Kieu hoi (overseas remittances) to Vietnam unexpectedly decreased in 2016, raising concerns among real estate developers as kieu hoi are an important source of capital for the property market.


 
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According to Izumi Devalier from HSBC (Hong Kong and Shanghai Banking  Corporation), 70 percent of kieu hoi are poured into business.

According to the State Bank, one-fifth of kieu hoi in 2015, or $2.5 billion, flowed into the real estate market.

According to Nguyen Hoang Minh, deputy director of the State Bank’s HCMC Branch, only $5 billion of kieu hoi had been remitted to the city by the end of 2016.

In general, the volume of kieu hoi to HCMC accounts for more than 50 percent of total kieu hoi to Vietnam. This means that the total kieu hoi volume to Vietnam in 2016 was no more than $10 billion. The figure was much lower than the $12.2 billion in 2015.

Kieu hoi (overseas remittances) to Vietnam unexpectedly decreased in 2016, raising concerns among real estate developers as kieu hoi are an important source of capital for the property market.

For many years, kieu hoi has been considered an important capital source like FDI (foreign direct investment) and ODA (official development assistance).

According to the Central Institute of Economic Management (CIEM), in 1999-2015, Vietnam received $120 billion worth of kieu hoi and was among the biggest kieu hoi receivers in the world.

The State Bank’s HCMC Branch estimated that the real estate market attracted 52 percent of kieu hoi volume in 2014. The figure reduced to 21.6 percent in the next two years, but it is still an important source of capital for the real estate market.

Many reasons have been cited to explain the $2 billion decrease in kieu hoi in 2016. The US dollar has become more attractive in the US thanks to a higher interest rate. Meanwhile, the US is the source of 60 percent of kieu hoi to Vietnam.

The kieu hoi flow from the EU, Japan, South Korea and Malaysia also decreased because of the difficulties overseas Vietnamese workers met in the year.

Tran Thi Mai Huong from the Hanoi National Economics University has urged the government to apply measures to encourage kieu hoi flow to Vietnam, including low service fees and preferences for kieu hoi recipients.

A CIEM report showed that 30 percent of kieu hoi in 2012-2013 was put into investment and production, while the figure dropped to 16 percent in 2014 and then surged to 70 percent in 2015.

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This entry was posted in Kiều hối - Overseas remittance, Viet kieu and tagged by Trần Đình Hoành. Bookmark the permalink.

About Trần Đình Hoành

I am an attorney in the Washington DC area, with a Doctor of Law in the US, attended the master program at the National School of Administration of Việt Nam, and graduated from Sài Gòn University Law School. I aso studied philosophy at the School of Letters in Sài Gòn. I have worked as an anti-trust attorney for Federal Trade Commission and a litigator for a fortune-100 telecom company in Washington DC. I have taught law courses for legal professionals in Việt Nam and still counsel VN government agencies on legal matters. I have founded and managed businesses for me and my family, both law and non-law. I have published many articles on national newspapers and radio stations in Việt Nam. In 1989 I was one of the founding members of US-VN Trade Council, working to re-establish US-VN relationship. Since the early 90's, I have established and managed VNFORUM and VNBIZ forum on VN-related matters; these forums are the subject of a PhD thesis by Dr. Caroline Valverde at UC-Berkeley and her book Transnationalizing Viet Nam. I translate poetry and my translation of "A Request at Đồng Lộc Cemetery" is now engraved on a stone memorial at Đồng Lộc National Shrine in VN. I study and teach the Bible and Buddhism. In 2009 I founded and still manage dotchuoinon.com on positive thinking and two other blogs on Buddhism. In 2015 a group of friends and I founded website CVD - Conversations on Vietnam Development (cvdvn.net). I study the art of leadership with many friends who are religious, business and government leaders from many countries. In October 2011 Phu Nu Publishing House in Hanoi published my book "Positive Thinking to Change Your Life", in Vietnamese (TƯ DUY TÍCH CỰC Thay Đổi Cuộc Sống). In December 2013 Phu Nu Publishing House published my book "10 Core Values for Success". I practice Jiu Jitsu and Tai Chi for health, and play guitar as a hobby, usually accompanying my wife Trần Lê Túy Phượng, aka singer Linh Phượng.

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