VTV.vn – Remittances are a crucial source of capital for economic development. Ho Chi Minh City has recently introduced new policies to effectively attract this resource in the near future.
Remittances have always been considered a significant source of capital for Vietnam’s economy, not only helping to stabilize the lives of citizens but also supporting investment projects. However, in Ho Chi Minh City—one of the largest economic centers in the country—the actual volume of remittances still falls short of expectations. The city is currently implementing several new policies to more effectively attract remittances in the near future.
Existing Challenges
Although Ho Chi Minh City consistently leads the country in attracting remittances, accounting for an average of 38-53% of Vietnam’s total remittance inflow, the city still faces many obstacles in maximizing this resource for development.
One major challenge is effectively leveraging remittance inflows. Most remittances sent to Ho Chi Minh City are primarily used for personal consumption or family support rather than being invested in production, business, or more effective investment channels such as the stock market, real estate, or infrastructure development projects. This limits the potential for creating added value for the economy from remittances.
Additionally, there is a lack of specific incentive policies for overseas Vietnamese investments, especially in strategic sectors like high technology or startups. This reduces Ho Chi Minh City’s competitiveness compared to other countries in attracting remittances for long-term goals, rather than focusing solely on consumption or real estate. Investment infrastructure is also a concern, as the current financial services and facilities do not adequately meet investor needs, leading to concerns about long-term profitability and efficiency.
Moreover, although Vietnam in general and Ho Chi Minh City in particular have made significant administrative reforms, the investment environment still needs further improvement to become more attractive and competitive. Overseas Vietnamese investors require a transparent, stable environment with clear mechanisms to protect their rights, ensuring peace of mind when investing in projects in Vietnam.
Unlocking the Potential of Remittances
To address these limitations, Ho Chi Minh City has recently introduced several new policies and initiatives to attract remittances, especially in the context of ongoing global economic challenges.
Specifically, the city has proposed allowing overseas Vietnamese who do not reside in Vietnam to open accounts at domestic banks. This policy helps overseas Vietnamese manage their finances and transfer money home more easily. They can choose to hold deposits in foreign currency or VND and are allowed to transfer principal and interest in foreign currency, providing greater peace of mind when sending money back to Vietnam.
The city is also developing flexible and diverse financial products to attract remittances. For example, parallel accounts are being considered, with one account for relatives in Vietnam to use and another accessible only by the sender from abroad. This approach offers convenience and enhances the financial management and long-term investment capabilities of overseas Vietnamese.
In addition, Ho Chi Minh City is directing remittance inflows towards production and business activities instead of short-term consumption. Investment channels such as the stock market, state-owned enterprise equitization, or public infrastructure projects like hospitals and schools are strongly encouraged. This helps maximize the potential of remittances and promotes economic and social development.
Looking Towards Future Growth
Economic experts also recommend that Ho Chi Minh City should issue overseas Vietnamese bonds with terms of 5 to 10 years to attract remittances into infrastructure and social development projects. Bonds with attractive interest rates and stable investment conditions will become a reliable investment channel for overseas Vietnamese, helping not only to increase foreign exchange reserves but also to contribute to sustainable economic development.
Despite many difficulties and challenges, Ho Chi Minh City still has great potential to attract and utilize remittance resources effectively. With new policies and an improved investment environment, the city hopes that remittance inflows will continue to grow strongly in the coming time, contributing to the city’s economic and social development.