Thai Govt Betting Big on Eastern Economic Corridor

Originally aired on Channel NewsAsia on April 10, 2017

My latest report for Channel NewsAsia focuses on the Thai government's big bet on the Eastern Economic Corridor that looks to transform the provinces of Chachoengsao, Chonburi and Rayong into a high-tech, high-earning and hyper-connected industrial zone.

TRANSCRIPT

It’s all quiet on Thailand’s Eastern seaboard, somewhere between Pattaya and Rayong. But this area could soon see some major changes and many Thais are pinning their hopes on it becoming an economic powerhouse. 

Thailand’s economy grew by only 3% last year. That is not good enough in the eyes of the military government and that’s why they’re spending billions of Baht on big infrastructure projects. One of these projects is the Eastern Economic Corridor.

The Eastern Economic Corridor - or EEC - includes huge upgrades of existing facilities such as the deep sea ports in Laem Chabang (1) and Map Ta Phut, an expansion of the U-Tapao Airport to offset rising passenger numbers at both airports in Bangkok. All of that will be linked up by new roads and railways to create infrastructure for a number of new industrial zones.

“During the past 3-4 years, Thai investors actually expanded production OUTSIDE of Thailand: CLMV (Cambodia, Laos, Myanmar, Vietnam), this region. The main productions are labor-intensive industries, outdated industries in particular," says Amonthep Chawla, Senior Vice President & Head of Research Office at CIMB Thai Bank. 

"But locally, we tend to have this kind of potential to relax our labor shortages, to come with the high-tech industries, with the higher-value added industries. Going forward, this EEC is the main hope for Thailand and the Thai investors are going to come back to invest in this region.”

The government of Prime Minister Prayuth Chan-ocha is betting heavily on this project, as public investment in infrastructure projects is seen as a key driver of economic growth.

The EEC aims to attract big investors and Thai officials are targeting a joint public and private investment 43 billion dollars in the first 5 years. International corporations such as Toyota, Bridgestone and Google have already shown an interest in the EEC.

But it’s not just enough to build roads, tracks and factories and hope that business will flourish all by itself.

"What we have lacking along the way - and that is also proven everywhere in Thailand - is that we’re lacking in inter-connectivity. We didn’t build the infrastructure that supports the train station. If we want this project to succeed, then we probably have to have some kind of land development project along with the train development as well," says Sumet Ongkittikul, Research Director for Transportation and Logistics Policy at the Thailand Development Research Institute.

Nevertheless, the Thai government is optimistic that all these infrastructure projects will pay off in the long run and also stimulate the economy of entire region.

“We would like to emphasize that is not just for Thailand - actually. Of course, it is for Thailand, but it is - we have designed it so the EEC could serve the neighboring countries as well, in particular the CLMV (Cambodia, Laos, Myanmar, Vietnam) and also ASEAN as a whole,” says Uttama Savanayana, Thailand's Minister of Industry.

But the EEC has just been launched and it will still be some time before these quiet parts in East Thailand are transformed into a busy industrial zone.

Saksith Saiyasombut, Channel NewsAsia, Sattahip, Chonburi Province