What’s the Impact of Viet Kieu Investment in Vietnam?

How does Viet Kieu investment compare to other forms of foreign investment or foreign aid flows?

This is the other big issue. If overseas Vietnamese were considered a single entity, how would our investment dollars stack up against the large projects funded by South Korea, Taiwan, Japan, or the US? Just using remittances as a proxy (due to the lack of transparency and availability of data on actual OV investment capital), it is clear that FDI has only ramped up in the last few years. The increasing amounts of remittance flow below are likely as much a reflection of improved reporting (traceable electronic transfers, tax policy, etc.) as they are an increase in actual capital flow. More interesting, one can see the impact at the Great Recession has had on both investment and remittances.

It is difficult to separate how much of FDI already includes Viet Kieu sources (especially from the United States, Canada, and Australia). Furthermore, one can draw many interesting observations from identifying the source of these foreign investments. The large investments from Taiwan, South Korea, and Japan clearly indicate the desire amongst these countries to reduce their manufacturing and portfolio dependence on China—but that is a topic for another article.

Where does it come from?

Again, using remittance as a proxy, the flow of capital is roughly proportional to where overseas Vietnamese reside. Overseas Vietnamese living in North America make up 48% of the 3.75 million Vietnamese diaspora, but send home 63% of the wealth.  Factors include not only overall wealth, but the degree to which overseas Vietnamese feel obligated to send money home. It is not hard to predict that a decline in overall Vietnamese emigration and increasing assimilation will lead to a decline in overall remittances over time.