VietNamNet Bridge - Warning about the wave of millionaire emigration, economists say that millionaires are taking foreign currencies abroad, creating problems for Vietnam to control the foreign currency outflow.

The head of the Vietnam Economics Institute Tran Dinh Thien spoke recently about the issue at a workshop on Vietnam's economic performance.

Thien stressed that this is a meaningful indicator, saying that money has been transferred abroad not only for outward investments and overseas business, but also to serve strategic migration of millionaires.

The report about Vietnam’s economy in the first quarter of 2016 by the Vietnam Center for Economic and Policy Research (VEPR) released on April 12, pointed out unusual happenings in the payment balance after the China devalued the yuan in August 2015.

The overall balance shifted from equilibrium to a big deficit of $6.6 billion in the third quarter of 2015, mostly caused by the reverse of the financial balance. 

Warning about the wave of millionaire emigration, economists say that millionaires are taking foreign currencies abroad, creating problems for Vietnam to control the foreign currency outflow.

However, there were not big fluctuations in the foreign direct investment (FDI) and foreign portfolio investment (FPI).

The reverse was caused by a new factor, deposits overseas, which increased sharply to $7.3 billion.

Meanwhile, the foreign exchange positions of commercial banks had not seen big changes. 

“This was abnormal,” said VEPR’s head Nguyen Duc Thanh on Infonet.

Dinh Trong Thinh, an economist, said that the wave of millionaire emigration began many years ago.

In 1990s, Thinh witnessed many dollar millionaires who left Vietnam with wives and children for the US and Russia to settle down there, and there are no signs that the movement is slowing.

Thinh said it was now necessary to find solutions to prevent and fight corruption and smugglers who earn big money from their illegal activities and then try to transfer the money abroad.

He blames ‘foreign currency bleeding’ on legal loopholes in foreign currency management policies, noting that $9 billion transferred abroad in 2013 alone, if the figure is true, is an alarming level.

He went on to say that if Vietnam cannot control the ‘foreign currency migration’, this would have serious consequences.

The cash outflow from Vietnam was once mentioned by Vu Quang Viet, former senior researcher at the UN.

He said that $33 billion went out abroad through illegal ways in 2008-2013, noting that the outflow seemed to be stronger after 2008.

Over $9 billion went abroad in 2009, while the figure slightly decreased in 2010 but rose again to $9 billion in 2013. 

The expert said that smuggling and corruption were behind the figures. 

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