Vietnam loses $33 billion in illegal foreign-currency outflows: expert
Vietnam loses $33 billion in illegal foreign-currency outflows: expert
Vietnam has witnessed a drain in foreign currencies over the years, with one expert saying that $33 billion flowed out of the country between 2008 and 2013 because of illegal transfer of funds and embezzlement.
Dr. Vu Quang Viet, a former high-ranking United Nations’ specialist, was quoted in a local newspaper as saying that the figure has shocked government officials and economists.
In the newspaper article, Viet quoted statistics from the international payment balance sheet to prove that $33 billion flowed out of Vietnam illegally in the years from 2008 to 2013.
The outflow has been stronger since 2009, when $9 billion left Vietnam. Though the figure decreased slightly in 2010, it bounced back again to $9 billion in 2013.
Two reasons have been cited to explain the heavy drain of $33 billion over the last few years.
First, rich Vietnamese have illegally transferred funds abroad. Second, money was sent abroad to pay for smuggled imports from China.
Viet warned that a dollar drain is a big threat to Vietnam. He said smuggled import turnover reached $11.7 billion in 2013, which was equal to 10 percent of Vietnam’s total import turnover. The figure was arrived at by subtracting the difference between Chinese exports to Vietnam, as reported by the Chinese customs agencies, and imports from Vietnam, as reported by Vietnamese customs agencies.
Smuggling puts Vietnam’s national economy in danger. Some analysts have even warned that smuggling may push farmers and small businesses into bankruptcy.
Corruption in Vietnam is also believed to be a reason behind the flow of foreign currency abroad.
State officials who do business illegally transfer funds abroad rather than keep the black money in Vietnam.
According to Viet, the increasingly high money drain is reflected in the high volume of kieu hoi (overseas remittances) to Vietnam.
Overseas remittances to Vietnam are the money sent by overseas Vietnamese, either expat workers or permanent residents, to their relatives in Vietnam.
In recent years, Vietnam is one in ten countries receiving the largest amount of overseas remittances. In 2015 alone, the overseas remittances is estimated to reach $13-14 billion. According to the State Committee for Overseas Vietnamese, there are currently five million Vietnamese living and working abroad.
However, analysts note that these remittances, or kieu hoi, do not only include that kind of money, but also money remitted to Vietnam to be laundered.
The money travels around the world before returning to Vietnam after the money laundering process.
An economist, when asked about the issue raised by Viet, noted that Viet’s view was worth considering because he is a famous statistics expert.
