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Dollar drain threatens Vietnam’s monetary security
2/17/15
Vu Quang Viet, a renowned economist and former statistics expert for the United Nations, wrote in a recent article that $33 billion had been sent abroad illegally over the last six years. In his article published on Dat Viet, he said that foreign currency sent abroad from 2008 to 2013 showed signs of smuggling and embezzlement.
Government agencies still have not made any responses to his conclusion, which has caused a public outcry.
Vietnam pursues a very strict policy to control foreign exchange and remittances, making it difficult to bring large amounts of foreign currencies abroad through official channels.
Those who want to send foreign currencies abroad have to follow complicated procedures to prove the legal origin of the money and explain the reasons, which must be legal and are only allowed in certain cases.
Nguyen Tri Hieu, a renowned banking expert, said that it is not a surprise that money “goes abroad” due to money washing and corruption, but he said no one knows how much.
In 2013, Vietnamese agencies reported that the country imported $28.8 billion worth of products, but Chinese agencies reported a much higher figure - $34 billion. Vietnam reported that its export turnover in the year was $12.8 billion, while China said $16.2 billion.
According to Hieu, the differences in the statistics show that large amounts of money have been sent abroad, and similar amounts have come to Vietnam through smuggling.
Hieu said that when he was in California he saw Vietnamese on many occasions paying hundreds of thousands of dollars in cash for houses and villas.
The flow of money happens as follows: If A, a Vietnamese living in Vietnam, wants to send money to B, his relative in the US, he gives local currency to C, also in Vietnam. C then will order D, his relative in the US, to pay B an amount of dollars equal to the sum of local currency C received in Vietnam. Under this scenario, C and D are financial partners.
An analyst noted that Vietnam was strengthening control of overseas remittances to Vietnam, but it still had not paid attention to controlling cash flow abroad.
Meanwhile, there are many unofficial channels through which money can be sent abroad which cannot be controlled in open markets, as Vietnam is now a member of many free trade agreements.
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