Work Benches With Drawers

Vietnam's regional focus for industrial development is in the Southeast. Prospective investors and government bodies are planning for what is hoped to be the boom of the Mekong Delta in 2020. The delta is one of Southeast Asia's largest food exporting regions, producing the tropical fruit for much of the region. Currently, Ho Chi Minh City (HCM) is the most developed city in the southeast; however, in less than a decade, HCM City will be just one of several urban centers for the production of economic, industrial, commercial, science and technology, transport and international exchange services. By all projections, in 2020 this region will be known to the world as a robust industrial sector.

Global Industrial

Vietnam's government is investing heavily to dramatically improve its transit systems and energy production. The national and provincial roads currently are undergoing upgrades and expansions, to creating access from HCM City to the rest of the country. As HCM and the Mekong Delta region will be the driving force behind the new economy's infrastructure, moving goods and people quickly around the country will be a critical component. Even more importantly, the regions industrial capacity, coal, thermal and hydroelectric power stations will be the driving forces fueling the economy. Power stations are now being constructed and will be ready by 2015.

The current shortage of skilled labour in the rural areas of the Mekong Delta are predicted to end by 2020. According to the Ministry of Labour, vocational training in the area has developed rapidly in recent years, with the addition of 11 vocational training colleges and 20 vocational secondary schools. Unemployment dropped to 14.13% in 2008, down 6.45 points in only three years. The continuing trends in labour development and growing infrastructure and commerce are expected to dramatically reduce unemployment and unskilled labour.

The increased opportunities for more foreign-owned companies to invest and operate in Vietnam is leading to higher interest in Vietnam company formation from entrepreneurs all over the world. While company registration processes can be difficult at times, the requirements have become more consistent. Company incorporation agents are another way to improve efficiency of setting up your business in Vietnam.

The Mekong Delta had an average GDP of 12.1% between 2006 and 2009. With investors flocking to the country and with the economic development that is expected, the increase by 2020 will be significant. Plans to improve the infrastructure are expected, connecting the Mekong Delta to the entire country of Vietnam. Most importantly, to the rest of the world, the industrial activity in Mekong Delta will be on the map by 2020.

Healy Consultants is a leading corporate services firm, headquartered in Singapore, and specialising in company incorporation, including helping clients to complete Vietnam company registration. For more information, visit http://www.healyconsultants.com.

The man on the street is scared. He is terrified that the job he left Friday afternoon will not be there on Monday morning. He fears that the rising cost of food, fuel, and shelter will continue to consume him and his credit cards in one fell swoop.

Global Industrial

The woman in the boardroom is also trembling at the thought of her economic lifeline being cut. Where will she get the short term funds that she needs to cover next weeks payroll? How will she cover the costs of the raw material order she just placed with her supplier in China? Where is all the equity in her plant and machinery that was so prevalent just 12 months ago, and can she continue to operate this business from the meager savings she has squirreled away over the previous five years?

Everywhere you turn, the connectivity to the global banking system is becoming more clear. The financial crisis being discussed on Capital Hill and Wall Street is starting to become a reality to Main Streets across this and many countries worldwide. A global debt economy is only as efficient as the rules which govern it. As we are getting a glimpse of, the rules which governed our system were lax. They were lax for a number of reasons, but the underlying theme is no doubt greed. A system which rewards with spoils beyond gluttonous imagine can only survive for so long before it devours itself.

This is the point we are at. The system of buying, selling, and insuring debt instruments became extraordinarily complex when institutions began splitting these instruments into pieces and packaging them with other pieces of debt which shared seemingly similar characteristics (tranches). To make the transactions even more complicated, the seller would insure the tranche (to protect the balance of the debt instrument he was left holding), and the buyer would insure the tranche against losses which may be realized down the road. Since there was "insurance" involved in the selling and buying, multiple parties were able to hold the same debt instrument on their books as an asset. When the debt instrument failed through a default by the borrower or an action of the market (in terms of credit default spreads and credit swaps), the insurers were unable to cover the losses. This inability of insurers to cover the magnitude of losses created by a slumping real estate market has created a domino effect which now threatens the stability of our financial markets.

Rather than relying on insurance to cover losses, banks must rely on capital reserves. As their capital reserve requirements increase in response to a rising default rate on the money they have lent out to the business owner, the homeowner, the automobile purchaser, the credit card user, the amount of money available to finance new lending becomes strained. Banks therefore tighten their lending policies to protect the instituion from failure. You can probably tell from the headlines that some have been more successful than other at this, lately.

Despite long standing banking relationships with its valued customers, banks around the globe are becoming miserly when it comes to parting with their cash supplies. The banking regulations which still exist and are being enforced, require banks to hold a certain level of cash or its equivalent on hand as a reserve against losses, as such, new loans can only be written when old ones are paid down.

When you finally find a bank willing to lend you money, be prepared to pay higher interest rates. Loan terms will also begin to contract. For most commercial borrower's, this means terms of 3 to 5 years versus the 10 to 15 year loans which were commonplace just last year. Forget about borrowing at competitive rates for speculative development projects these days, as only near stabilized projects with only the best credit quality tenants will even be considered by most mainstream lenders.

There are always those willing to lend you money in tough economic times, most however will charge you extraordinarily high interest rates with several points, offer loan to value ratios of 50 percent or less, and have some extremely restrictive loan covenants in the deal. These are loans for desperate borrowers and should be scrutinized thoroughly before being considered by anyone.

Dave Brown is a state certified general real estate appraiser with more than 20 years of industry experience. He is a key associate in a New England based multi-disciplined real property valuation and consulting company, and a consultant to a major global financial institution. Check out his firm's offerings at [http://www.valuemyasset.com] or contact the firm directly at ivsvalues@gmail.com

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