Vietnamese Migration Fuels Remittance Industry Growth
By Chua Siew Joo
Aug. 14 – Vietnamese workers in Asia and the Middle East are sending money home like their counterparts in the United States, Australia and Europe.
It may be a sign that lives are getting better for these migrant workers as they are currently not only sending money back to their family but also investing in business.
The Dong A Money Transfer Company reported receiving remittances of US$631 million in the first half of 2008 and expects the figure for the whole year to be US$1.2 billion. Sai Gon Thuong Tin Bank and Vietcombank (VCB) reported remittances of US$420 million and US$730 million respectively.
Many banks and money transfer companies now consider guest workers headed for Asia and the Middle East as their target market.
These companies have been adopting aggressive marketing tactics to attract these workers; some even offering to lend money for flight tickets while others trying to contact them before they leave. Local companies also face stiff foreign competition.
Dong A Bank is collaborating with MoneyGram International to launch a complimentary service that allows remittances to be delivered directly to the receivers’ homes.
Vietnamese skilled labor has been in strong demand in countries such as the Middle East, especially in industries like mechanical engineering, construction and food processing. The Vietnamese employee is appreciated for his intelligence and hardworking attitude.
The Department for Overseas Labor Management under the labor ministry expects that the region, including countries like Qatar, Bahrain, Oman and the United Arab Emirates, to attract more than 50,000 Vietnamese workers in 2008.
The government plans to expand its migrant labor program in the Middle East with a set target of sending 100,000 workers abroad every year by 2010.
Nguyen Luong Trao, chairman of the Vietnam Association of Manpower Supply has stressed that labor export enterprises should analyze and forecast demands in each country so that they can meet requirements labor markets.
He went on to say that these offices should take the extra step of providing specific training for workers depending on the needs of the employers before they are sent out to the Middle East. Recently, Qatar has agreed to work with Vietnam vocational schools to train workers before hiring.
In 2007, the country sent out 85,000 of its workers abroad, with the majority to Malaysia, Taiwan, South Korea and other Asian countries. This labor outflows generate income and help reduce unemployment in Vietnam, where 1.5 million people enter the job market each year.
Sources cite that the government’s flexible foreign exchange management and preferential treatment by allowing overseas Vietnamese to buy houses in their homeland has increased overseas remittances.
However, in the context of sky-rocketing inflation during the last quarter, the government had recently reduced lending and deposit interest rates at banks in an attempt to cap costs.
The dong increased 1.5 percent between July and August and Vietnam’s benchmark bond’s five-year yield has dropped more than 3 percentage points since June 13. Amid such unstable times, the current migration wave stands to continue unabated with hopefully more Vietnamese guest workers becoming prudent with how to invest their money.
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