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Similar to the Philippines, Vietnam has a high population of its citizens living and working abroad who send money home each year. These remittances form a significant part of the Vietnamese economy. Nearly 1.4 million people born in Vietnam are living and working abroad, and a sizable proportion of these people contribute to Vietnam remittances on a regular basis. 80,000 Vietnamese immigrants leave Vietnam each year to work abroad, as the income abroad is usually 2-3 times higher than what a similar job would pay in Vietnam.
Impact of Remittances on Families
Approximately 88.7% of Vietnamese households receive remittances from migrant workers. Without these remittances from their loved ones, many Vietnamese families would be substantially worse off than they are now. Instead, with an average of $1,369 per transaction from the USA to Vietnam, many Vietnamese families are enjoying a significantly higher standard of living than they had previously.
Impact of Remittances on Societies
The impact of an increased standard of living, and general literacy of Vietnam as a result of all these remittances, is obvious on a societal level. As the country continues to grow, the benefits of a better-educated population become more evident in the form of a well-trained workforce that is equipped to handle whatever challenges an expanding economy may pose.
How Remittances Help the Vietnam Economy
Despite the rapid economic growth that it has been experiencing in recent years, Vietnam is still very much a developing country, both socially and economically. The average monthly salary in Vietnam is $185, a mere fraction of what it is in the USA, and 1 in 5 lives below the poverty line in Vietnam. During the pandemic, the impact of remittances on the Vietnamese economy became more pronounced: According to state media, remittances to Vietnam hit $15.7 billion in 2020.
Vietnam remittances not only provide Vietnamese people with a means to better their lives; it also increases their disposable income, which in turn contributes to the growth of the Vietnamese economy. As people have more money, they tend to spend more, which then creates economic growth. Some more entrepreneurial recipients use the extra cash they obtain from remittances to start up small businesses, which in turn contribute to the growth of the Vietnamese economy as a whole.
Vietnamese-Americans and Their Remittances Back Home
1.3 million Vietnamese-Americans are currently living in the United States, and successfully operate over 222,000 businesses! As one of the most visible minorities in the United States, many Vietnamese-Americans are highly educated, and a significant proportion earns more than the median income in the United States.
While many of these immigrants left Vietnam after the Vietnam War to seek refuge in the United States, most of them have not forgotten their homeland. On average, 18% of Vietnamese-American income is sent back to Vietnam.
The money sent from overseas has gone a long way in helping Vietnam to build its economy, especially after the devastating impact of the Vietnam War. Thanks to many remittances from overseas Vietnamese, Vietnam is clearly developing at a faster pace. Today, online remittance has also allowed money transfer to take place quickly and easily, so it is not difficult to predict that remittances from the US to Vietnam will increase in the coming years.
Vietnam Economic Facts: Vietnam Remittances InfoGraphic
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