What the Future Holds for Money Transfers to Vietnam
June 23rd, 2010Money streaming into Vietnam has a huge impact on whoever receives the cash. Whether it be a low-income family in the Southern Delta to big-name banks in Saigon, transferred cash offers a big boost to the country’s economy.
Approximately 11.2% of Vietnam’s GDP (gross domestic product) is from money transferred into the country. Though this may appear to be a low figure, it is huge compared to Mexico which is the highest recipient for money transferred in, yet just 4% of the country’s GDP is due to remittance.
Since restrictions placed on money transfers to Vietnam are so few and far-between, many foreigners began investing in savings or businesses in the area, which in turn sparked the economy. In major cities you will find new buildings and businesses those investors have begun pouring their money into with the help of unlimited tax-free transfers.
However, don’t be confused in thinking migrant workers who transfer funds do not have an equal affect on the country, because the 3+ million Vietnamese people working in over 40 countries do make a difference. According to the United Nations, about $8 billion was transferred over in 2008 and approximately 70%-80% came from migrant workers. Most often the money came from the children working overseas.
Most of the cash transferred over comes from mostly California (40%) and Texas (11%). And since the 1970s when the Vietnam War began, the political refugee count rocketed to 1.2 million, leading to even more people who are forced to figure out ways to send money to Vietnam.
There are ways to wire and both the country and individuals can bolster the economy by using a formal corridor in competition with others – such as financial institutions or online banks for their transfer needs.
Take for example the ATM debit card that you can purchase on the web.Not only do you eliminate the hefty fees you’d normally pay when wiring overseas, you also get the convenience of taking care of it on your own with just a computer as opposed to a third party.
Thanks to options like these, people are having to pay less to complete the transfer. This lowers the cost all around – not just with online companies – since other businesses are forced to compete for customers. This has a much greater impact than you may think considering more cash is ending up in the pockets of those who need it in Vietnam.
And in this economy, you better believe that’s important. Because of the troubled economy, many expected money transfers to drop, but with America’s recent troubles the money keeps coming. In the United States interest rate is about 5% while Vietnam boasts an attractive 11%, drawing the attention of savers everywhere.
Luckily, 2009 ended much better than expected when it came to money transfers. Unfortunately this won’t keep up seeing as how the world is in the middle of a financial crisis.
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