The “Support to Border Areas Development Project” funded by the Asian Development Bank will be carried out for six years in five provinces of Kon Tum, Gia Lai, Dak Lak, Dak Nong and Binh Phuoc, which are included in the Cambodia-Laos-Vietnam Development Triangle Area (CLV-DTA).

The project will support CLV-DTA objectives in Vietnam by improving critical transport infrastructure to increase connectivity to areas of high economic productive potential with domestic and international markets. It will enable the efficient provision of services, and the movement of goods and people.

Its long-term goal is to tap the potential of five provinces, making them a fast-growing, dynamic economic hub.

In the foreseeable future, the project is expected to improve incomes, especially those of ethnic minorities, facilitate farm produce’s access to domestic and foreign markets, and improve the capacity of planning and inter-provincial co-ordination. Under the project, a road corridor will be built to facilitate sub-regional integration and growth and raise farmers and entrepreneurs’ capacity to tap their strength in agricultural production and trade. Moreover, the project will allocate resources by rallying the involvement of the private sector in the country, the region and the world toward promoting the progress of the CLV development triangle.

The CLV-DTA was established in 1999 and is located at the junction of Cambodia, Lao and Vietnam. It covers 13 provinces in the neighbouring countries.

The CLV-DTA aims to boost infrastructure connectivity within the three countries; explore their potential in industries such as agriculture, forestry and tourism; and to build human resources the industries; and facilitate the flow of goods, people and investment capital.

In Ho Chi Minh City’s District 7, for example, housewife Minh Phuong can find imported products from Thailand, Japan and the US at supermarkets and shopping malls.

“These products are on many shelves at Lotte Mart and Giant near my house. Many smaller stores specialising in products from one country have opened in District 7, especially in Phu My Hung City Centre,” she said.

In the past, imported products were mostly clothes, footwear and cosmetics, but they now range from instant noodles to canned food and home appliances. Fresh fruit imports are also common.

E-mart, a South Korean shopping mall in Go Vap District, which opened late last year, has attracted many customers.

One consumer told Sai Gon Giai Phong (Liberated Sai Gon) newspaper said that her family visits the supermarket and has dinner there five times a week.

“The products are diverse while the price is competitive. The space and decor are clean and beautiful,” she explained.

At Metro An Phu in Ho Chi Minh City, the volume of Thai products increased from the day it was sold to Thailand’s Berli Jucker Public Company Ltd.

A source from Metro told Vietnam News that although Thailand products accounted for only 2 per cent of goods, the total number had increased after Berli Jucker’s acquisition.

A report from Sai Gon Giai Phong (Liberated Saigon) also found that Thai products dominated shelves.

Shopping malls like the Japanese-owned Aeon Mall and Korean-owned Lotte Mart also offer many Japanese and South Korean products.

Imported products are also being offered online, as e-commerce has developed rapidly in Vietnam.

Customers can easily buy fruit and fresh meat from Australia, the US and New Zealand by just picking up a phone and placing an order.

Technician Kieu Oanh said her news feed on Facebook has many daily notifications from sellers of imported fruit.

She said that buying imported fruit was a better alternative as local fruit had become more expensive and the quality varied from shop to shop.

On Ly Thuong Kiet Street in Ho Chi Minh City, the owner of a shop that imports 30 boxes of foreign fruits a day usually sells out by 2pm.

Daiso stores selling Japanese products and small convenience shops selling Thai products have also become more popular.

In Ho Chi Minh City, several shops selling Japanese products on Le Thanh Ton Street have opened to meet increased demand.

This is according to a new report by staffing firm Kelly Services.

Hit by the global slump in commodities and manufacturing demand, three sectors featured in last year’s top five list are out of this year’s ranking: oil, gas and petrochemicals; pharmaceuticals; and semiconductors.

IT tops the 2016 list with technology heads expected to command between S$13,000 and S$24,000 a month, according to the Kelly Singapore 2016 Salary Guide.

Ths firm said the Government’s aggressive infocomm sector development is behind the emergence of IT as one of the highest paying industries.

In terms of specific occupations, some of the hot jobs for 2016 are: compliance manager, fintech developer, big data developer, digital marketing manager and scientific and regulatory affairs specialist

Said Foo See Yang, vice-president and country general manager of Kelly Services Singapore: “Despite the challenges in the global economy, bright spots remain in the financial technology, big data, as well as digital marketing sectors where demand for talent will continue to rise throughout 2016.

“Professionals, managers, executives and technicians (PMETs) who have been hit hardest by the slowdown should look at upskilling and expanding their capabilities into new areas of growth to stay relevant.”

The firm also said that global economic volatility will lead to more employers turning to temporary and contract work arrangements to fulfil manpower needs.

“There is a need for a mindset shift by the Singaporean workforce to look beyond permanent roles, especially in the current economic environment,” said Foo.

According to the Management Board of HCM City Export Processing and Industrial Zone Authority (Hepza), from the beginning of this year, export processing and IZs have received a large volume of FDI capital. Of the total US$128 million poured into export processing and IZs in the first two months, FDIs accounted for $80 million and the remainder came from domestic companies.

Hepza also reported that the huge influx of FDI capital allowed the ratio of filled land in export processing and IZs in the city to reach 80 per cent.

The neighboring Binh Duong and Dong Nai provinces have also seen an increase in FDI. In the first three months of this year, Binh Duong Province granted licences to 28 FDI projects, with a total investment capital of over $680 million. After registering to add more capital, investors have actively expanded plans to build new factories in the Song Than 1, Song Than 2 and Nam Tan Uyen IZs.

By March 18, Dong Nai Province’s registered investment capital and newly added capital for FDI projects reached some $488 million, or a year-on-year increase of 311 per cent. Foreign investors have not only focused on developing industrial parks in Bien Hoa City but have also expanded land lease agreements and have invested in many factories and warehouses in new IZs such as Long Duc, Long Thanh and Bau Xeo.

Local experts attributed the increase in investment in IZs since October last year to the official conclusion of trade agreements such as the Trans-Pacific Partnership (TPP). Many investors from England, Japan, South Korea and Thailand have started investing in IZs.

In HCM City alone, investors have an ambitious plan to develop a Silicon Valley-style high-tech zone in District 9, with total investment capital of $1.5 billion.

By the end of 2016, the business results of five listed infrastructure development companies all showed a profit.

Accordingly, Long Hau JSC in the southern Long An province reported its revenue rose VND10.67 billion ($476,339). Of this figure, revenue from land leases accounted for VND6.69 billion. The company’s after-tax profits reached VND20.33 billion, or a 20-fold increase over the same period last year.

Sonadezi Long Thanh in Dong Nai Province reported its total revenue of $46.23 billion in the first half of this year. Of this figure, revenue from land leases in IZs accounted for $18.54 billion.

In the northern provinces, Vinh Phuc Infrastructure Development Company reported revenue of $33 billion in the first quarter of this year, or a 3.7-fold increase over the same timeframe last year.

The Thoi Bao Ngan Hang (Banking Times) reported that all businesses are now involved in infrastructure development in IZs, with four businesses expecting strong growth in profits this year. They are Tan Tao, Long Hau, Kinh Bac and Viinh Phuc.

With these high profit targets for this year, industry insiders have predicted that fierce competition between these companies will prompt them to offer new incentives to attract FDI enterprises.

Instead of concentrating on land leases only, as in previous years, they will take advantage of spending their own money to build warehouses, offices, retail space, serviced apartments and high-rise apartments.

Hepza reports that this tendency will see major growth in the next 1 or 2 years as the TPP officially comes into effect.

The current plan was approved in April 2014, and it is expected that Vietnam garment exports will reach between US$20 billion and $25 billion by 2020. However, in 2015, the garment sector already earned an export turnover of $27.5 billion. All the garment and textile businesses have actively taken advantage of opportunities through trade agreements such as the Trans-Pacific Partnership (TPP), Vietnam-Korea Free Trade Agreement (VKFTA), and Vietnam-EU Free Trade Agreement (EVFTA).

Vu Duc Giang, chairman of the Viet Nam Textile and Apparel Association (VITAS) said the industry was facing numerous challenges as many of its companies had closed down or halted production. Therefore, the industry wanted the Government to revise the plan as it was inappropriate and regressive. The Government should outline another long-term plan until 2040 to help the industry’s progress go in line with the country’s economic development.

According to VITAS, with the current growth, the sector has set export turnover at between $40 billion and $50 billion by 2020, instead of targets set in the current plan.

Vitas estimated that between 1988 and 2012, the sector attracted 1,551 FDI projects. Of this figure, there were 1,193 garment projects and 358 fibre production projects with a total investment of $3.5 billion. Thanks to the FDI influence, such businesses brought $2 billion into Vietnam to the garment sector in 2015.

As a result, the total export turnover of the garment sector reached $24 billion in 2014 and $27.5 billion in 2015, and it is expected to reach $31 billion by late 2016.

Giang said that apart from the five key export products, Vietnam also exported various kinds of fibre with an export turnover of over $3 billion annually and different types of fabric with a turnover of $1 billion per year.

Apart from the rapid production scale and strong export growth, the garment sector has also coped with unresolved shortcomings. These shortcomings needed to be handled soon to make the sector’s development sustainable.

VITAS has also proposed that the Government initiate policies to attract investments in this sector, including high-quality fibre production and dyeing projects.

In doing so, VITAS has also asked the Government to take a relook at industrial parks or key economic zones including those from the garment and textile sector.

Over the years, the garment and textile industry has not had specialised industrial zones to attract investments in textile and dyeing. As a result, the sector still relies on importing high-quality fibre for manufacturing export products, and it cost $15billion in 2015.

In addition, Giang said the Government needed to invest in infrastructure development, and create incentives for investors. Special attention should be paid to the production units and the origin of textile fibre and threads, and dyeing.

To obtain these, VITAS has asked the Government to pay great attention to investment in international quality waste water treatment plants.

She always works closely with her clients before planning their dream house and coming up with the perfect design.

“First, I offer my ideas, then I ask them to tell me everything they have in mind so that I can create a house that they will love,” said the director of SC Design and Construction Vidaly Chanthaphasouk.

She was recently honoured for her work in the industry and named an excellent entrepreneur at the 2nd AseanWomen Entrepreneurs Forum held in Hanoi, Vietnam, on March 4.

Vidaly studied engineering in Vientiane for five years before 2001, when she created a construction company.

“I loved painting houses when I was young, and I have a good idea of what people want in a house, but of course the end product must reflect the customer’s wishes,” she says, explaining that this is the focus of her work.

“Everyone, including me, wants a beautiful, modern house, but wants to save money, she added.

At present, she is working as a consultant for people who want to build their dream house while helping them to save money in the purchase of materials.”I try to understand and share ideas with customers so I can give them a worthwhile and good value design, even though there is strong competition in engineering and architecture right now.”

Of course, there are both Lao and foreign construction companies operating in Laos, but her company doesn’t focus too much on competition.”I’m more interested in giving customers satisfaction than on securing new projects,” she says with a smile.

But Vidaly said the growing competition will impact on her company and other construction companies, especially with the onset of the Asean Economic Community.

Most foreign companies who set up business in Laos use engineers from their home country for design and construction. Unfortunately this does not benefit Lao engineers, even though they are constantly improving their standard of work.

She hopes the government will issue strict regulations to encourage foreign investors to comply with Lao laws to ensure Lao engineers have a fair chance of being employed in their projects.

Vidaly said several design and construction companies are looking to partner with construction companies overseas to expand their opportunities.

Lao construction companies can also help their partners with consultation services to help them through the investment process in Laos, thus furthering their contribution to design and construction.

However, Lao engineers need to improve their knowledge of technology, English, and overseas investment laws as this will help them to compete with engineers in other countries.

The construction business will undoubtedly continue to grow over the next five years as Laos develops further, attracting even more foreign companies to Laos.

This should help to drive investment in the construction industry, with foreign companies spurring the growth process.

Vidaly has attended meetings with other Asean construction companies, and believes her company has the potential to grow through stronger connections with Asean members.

Recently, construction companies from Malaysia, Cambodia, and Singapore expressed interest in partnering with her company.

Lao companies have provided consultancy services to their partners to help them through the investment process in Laos, which will further drive cooperation.

One issue is that foreign construction companies can invest in Laos, but local companies are unable to invest overseas, partly because they lack basic knowledge of investment procedures.

Vidaly believes the Asean Economic Community will create new chances for companies to invest in other countries but says Lao firms must improve in all aspects of quality if they hope to expand overseas.

The Asean bloc has created joint investment regulations which will make it easier for companies to seek cooperation and investment opportunities.

Vidaly has been learning about investment overseas and this is a strong sign that she will be able to raise her company’s profile outside of Laos.

“If my company can be accepted in other countries, it will not only benefit me but also help other Lao engineers to improve their efficiency, which will result in more foreigners wanting to employ Lao companies,” she said.

The catalyst? The rise of crowdfunding, or peer-to-peer lending – an increasingly popular way for companies to tap the cash assets of thousands of individual investors looking for ways to earn interest on their savings.

While it has taken off overseas in countries like the United States, the wave is just starting to build here, with big institutional players finally acknowledging that this could be another way for companies to seek funding outside traditional bank lending.

Just last month, DBS Bank inked cross-referral agreements with two home-grown peer-to-peer (P2P) lending platforms to expand funding available to small businesses. The move was a landmark one, making DBS the first local bank to collaborate with such platforms in Singapore.

All of this, it seems, indicates a vote of confidence from big-name corporates in crowdfunding platforms – that they are much more than just a fleeting trend.

But are investors clearly aware of the risks involved?

BEAUTY IN SIMPLICITY

Most companies have a few options when it comes to funding their projects.

The traditional and still the most popular route is for firms to take loans from banks to finance their business. Another approach is for companies, especially those listed on stock markets, to borrow directly from the public. They typically issue bonds and pay a fixed interest rate, with a view to repaying the principal after a fixed period.

Crowdfunding takes the form of the latter, but with a small twist.

When companies issue bonds, they tend to borrow a huge sum of money, easily in the millions of dollars. Each bond in Singapore usually comes in tranches of S$250,000 (US$184,685) if it is targeted at institutional borrowers, and in much smaller tranches of S$1,000 if it is targeted at individual investors.

But crowdfunding allows firms to take very small loans, as little as tens of thousands of dollars. Likewise, investors can also lend very small amounts, as little as S$100 a pop.

Typically, a company puts out a sum that it needs to borrow and the platform, after carrying out its own screening process to accept the project, lists the request as a campaign. The company also states how much it is willing to pay in interest.

When the campaign kicks off, investors start to sign up and state how much they are willing to loan and what they expect to be paid for their money. The campaign ends when enough investors have pledged their cash, which gets transferred to the company. The firm then repays the investors through fixed monthly payouts.

For investors, this is a great way of generating yield on small amounts. Interest rates typically hit the double-digit range, anywhere between 10 per cent and 15 per cent, and the tenure of the loan also tends to be short, as little as six months.

For firms, they do not necessarily pay cheaper interest rates but it may mean easier access to funding which could take a long time to get approval from banks, especially in a slowing economy like today.

Another form of crowdfunding involves equity or securities, where accredited or institutional investors buy into or offer loans to a business and obtain shares in return. This process is regulated by the Monetary Authority of Singapore (MAS).

TAKING INVESTORS BY STORM

Over the past year or so, crowdfunding platforms of various sorts have mushroomed in Singapore.

There are at least 13 companies with a presence here – from more recognised names such as MoolahSense, CapitalMatch and CoAssets, to newcomers like EziFund, a real estate crowdfunding platform which made its debut on April 18.

Investors, for their part, have been lapping it up, taking the opportunity to look for yields on these crowdfunding platforms – and at breakneck speed.

A S$150,000 campaign for a lift installation and maintenance company on MoolahSense last month was fully funded in the span of just two minutes. Firms on Funding Societies have also managed to raise smaller sums in the likes of S$20,000 within just 30 seconds.

This is not surprising, given how some crowdfunding campaigns here come with interest rates as high as 25 per cent.

But the amount of money being poured into such campaigns and the speed at which this is happening may be cause for worry.

As Funding Societies co-founder and director Kelvin Teo himself puts it: “It’s an unhealthy herd mentality.”

He told The Straits Times that this trend means investors are taking less time to evaluate each loan before committing to it, which is why Funding Societies sends out a detailed borrower report to investors hours in advance for them to deliberate over, before opening up the loan for investment.

If anything, the slowing economy has not killed appetite for investments but whetted it, as investors rush into alternative asset classes that are accompanied by the promise of beefier financial returns.

This could explain why crowdfunding is such an easy idea to sell today, given the lacklustre performances of traditional investment assets such as bonds and equities.

HIGHER RETURNS, HIGHER RISKS

But when the rush for yield turns into a stampede, as it seems to be doing now, perhaps it is time to take a step back.

For one thing, there is no guarantee that firms which borrow through crowdfunding sites will repay the loans they took out from the public, as history has shown.

In May 2013, local start-up Pirate3D raised US$1.43 million through US crowdfunding platform Kickstarter when it promised its financial supporters low-cost Buccaneer 3D printers in return. The campaign was wildly successful, hitting the initial US$100,000 target in just 10 minutes.

The firm planned to ship the first 500 units of Buccaneer by December that year, but only managed to ship just 200 units as of last August, due to delays in the project, before ceasing operations.

Many of the firms which use crowdfunding sites tend to be small, which may be why it is hard for them to secure funding from the banks in the first place.

Even some of the bigger names, which are using peer-to-peer lending, are not in the best of financial health.

EpiCentre, for instance, rolled out three campaigns on MoolahSense for a combined S$1.5 million, offering investors repayments at an annual interest rate of 13.5 per cent. All three campaigns have been fully funded.

But take a closer look at EpiCentre’s parent company, EpiCentre.

The group fell into the red for the six months to December 31 last year with a net loss of S$753,000, down sharply from the net profit of S$232,000 in the same period a year ago, dragged down by smaller profit margins and higher borrowing costs.

Its net cashflow from operating activities stood at S$1.4 million, a far cry from the S$6.6 million previously.

The high yield it is offering is attractive but with high rewards come higher risks.

There are other smaller companies offering much higher yields for loans. The question is whether investors are truly and fully aware of the risks accompanying such endeavours.

To be fair, crowdfunding platforms have come up with their own systems of internal checks and proprietary measures to assess each deal thoroughly.

But they are not party to the transaction that takes place between firm and lender, which means they are ultimately not liable for the failure of a company or a project.

There are other risks as well.

The notes or securities in crowdfunding are illiquid, which means there is no secondary market for investors to sell their “assets” if they decide, at some point, that they want to opt out.

Such investment schemes are also not regulated by the authorities, which means that the investor will have few avenues for recourse should something go wrong.

BUYER BEWARE

Nobody can deny that the excitement surrounding crowdfunding today is compelling.

Corporate lawyer Robson Lee, a partner at Gibson Dunn, noted such platforms will create a good ecosystem that engenders new entrepreneurs while educating new investors on the dynamics, risks and rewards of investing in promising start-up enterprises.

“This will no doubt enhance the vibrancy of the Singapore securities market when the new enterprises eventually seek a listing on the Singapore Exchange,” he said.

But Lee also likened the crowdfunding process to an initial public offering, where a company raises capital by going public, except there would not be any prospectus regulation to protect public investors.

This puts many retail or mom-and-pop investors, who may not have the financial literacy and experience to make investments in illiquid assets, in a vulnerable position.

For now, the MAS regulates only securities-based crowdfunding platforms, which have to obtain a Capital Markets Services licence in order to operate here and service mostly accredited investors.

Crowdfunding platforms such as MoolahSense and Funding Societies do not come under regulation, and are open to the wider public.

The key here is that crowd-funding investors must know how to protect themselves. Most platforms advertise only the high rates of return for such lending activities. No one talks about the risks.

The authorities should insist that crowdfunding firms clearly warn of the risks of such investments, stating clearly that there is no guarantee that the money loaned will be returned to the lender.

After all, when things go wrong, it would be too late. It could take just one default for a lot of public money and trust to be lost and leave everybody poorer despite the higher interest.