Thread: Thailand is desperate for its US$43 billion Eastern Economic Corridor to pay off

A tech hub braided with airports, ports and high-speed rail lines to lure the brains and billions of Asia to Thailand - or a cripplingly expensive white elephant from a government struggling to reset Southeast Asia's second-largest economy? Nearly four years after its inception, opinion is divided on the country's US$43 billion Eastern Economic Corridor (EEC).


The project, which promises an investor's paradise of green smart cities and tax-free industrial zones powered by 5G technology, is Thailand's most ambitious investment scheme. Driven by the government and its big-business allies such as energy giant PTT and the CP Group conglomerate, the vision for the EEC is to pull companies and technology from China, Japan, Hong Kong and Singapore to the kingdom's eastern coast on the Gulf of Thailand, transforming it into the gateway to the vast Southeast Asian market.


Electric cars, robots and fruit will spill out from its transport points, according to the EEC's glossy marketing literature, while high-end visitors seeking medical and wellness tourism will pour in as scruffy cities are transformed into green oases.

"This is the year we will reap what we sowed when we started," EEC secretary general Kanit Sangsubhan told This Week in Asia, predicting that US$10 billion to US$13 billion in government and private money would be pumped into infrastructure and urban development over the next 12 months.


Its backers promise the EEC will be a spinal point on Beijing's Belt and Road Initiative, allowing Thailand to surf China's grand ambitions for the region and soar up the value chain with the addition of 450,000 new skilled jobs, while booking in increases to the country's gross domestic product for decades to come.


Alibaba, Great Wall Motors and Huawei are among the A-list Chinese companies to have bought in so far, building bases and bringing in expatriate staff. Alibaba owns the Post.


"Chinese investment has already landed," Sangsubhan said. "The high-speed train construction will be done by a Chinese company (namely China Railway Construction Corporation) ... the building of the seaport will also be led by China Harbour Engineering Company." More companies are expected to pile in once Covid-19 restrictions are lifted and borders reopen.


When China's foreign minister Wang Yi visited Thailand in October, the countries agreed to establish a "fast lane" travel corridor to facilitate the flow of people, and a corresponding "green lane" for goods.


In anticipation, land prices near the U-Tapao International Airport - set for a US$10 billion upgrade to become an international hub - and close to Leam Chabang, the country's biggest port, are soaring.


The airport and port flank Pattaya - the colourful resort city in Chonburi province - which is also hankering after a refit following the pandemic's decimation of its tourist-based economy.


With Thailand's overall GDP for last year expected to contract 6 per cent due to Covid-19, and amid record unemployment and a still-roiling pro-democracy movement, Prime Minister Prayuth Chan-ocha is desperate for a win. The ex-army chief, a divisive figure in the country, seized power in a 2014 coup and pushed through legislation for the EEC without any political opposition, well before elections in 2019 saw him return as a civilian leader.


But while the government is banking on the project, uncertainty on its direction and impact is mounting.


"I wish the EEC can provide a legacy for this government, but I'm afraid it will become a white elephant," said Pavida Pananond, an associate professor at the Thammasat Business School, who warned that it was no longer of use to Thailand if foreign companies arrived for tax breaks and cheap labour.


"Foreign direct investment of the future will not be the same model that drove Thailand forward in the 1980s and 1990s," Pananond said, referring to the years when billions were spent turning the country into a car and electronics manufacturing base. "The supply chain is going to be much more digital oriented and more value added ... it needs technology and high-skilled input."


Hooking onto China also comes at a price. Prayuth has been pressed by Beijing to push through delayed multibillion-dollar high-speed rail lines that would link southern China to the EEC, while residents of Chonburi province are increasingly concerned that their home is about to be reshaped without their consultation as the kingdom is hungry for foreign cash at a time when Covid-19 has frozen investment.

"There's almost zero communication about what we're going to get from it," said Krid Kanjanakit, a Pattaya resident and business owner. "We don't know the timelines, when they're going to start, finish or how we can prepare for it."


Ultimately, analysts say, the lack of transparency could see taxpayers' money flow into the pockets of Thai conglomerates and foreign middle managers rather than to those who live in the area. The game is rigged against locals, according to veteran pro-democracy politician Chaturon Chaisang.


"For a project this big there has not been enough transparency and information. Local people aren't going to benefit, investors will buy up land before the project starts and then they'll change it to an industrial zone, which is much more valuable," he said.


But with the economy stumbling anew over a partial lockdown imposed to curb the country's second wave of Covid-19, Thailand has few choices - and the promise of hundreds of thousands of jobs in avionics, logistics, robotics and health care have some hoping for better pay and prospects once the project takes off.


"There's a risk of people coming in and taking Thai jobs," said Kanyanat Muenyuth, a 19-year-old vocational college student in Pattaya who studies marketing. "But the economy is in trouble, so it's also an opportunity."



As the coronavirus pandemic bites, Thailand is desperate for its US$43 billion Eastern Economic Corridor to pay off

Oh but of course, the political situation doesn't matter, does it Thailand? And foreign investment doesn't matter, does it yellow shirts?

Yes, yes, I see the future..

If they're serious about needing $43bn to save the country, I know some bloke wot recently hit the jackpot.

Its all kicking off in myanmar at the moment . Why spend that amount of money on a project that size when both countries arent to be trusted?

Originally Posted by misskit

the promise of hundreds of thousands of jobs in avionics, logistics, robotics and health care have some hoping for better pay and prospects once the project takes off.

Who else remembers Thailand 4.0, the big idea of which the EEC is one element? It all kicked off about 4 years ago. One recognised issue was educating Thai people to the enter the workforce in those areas: avionics, logistics, robotics. In fact there were 10 targetted industries that were going to lead Thailand to the sunny uplands of the new economic model. I don't know where these leaps into a more modern education system are being taken, certainly not in the Isan secondary schools I have seen.

Kanyanat Muenyuth, a 19-year-old vocational college student in Pattaya who studies marketing might be lucky and get a job as a security guard on the gate of a Chinese robotics factory.

It is all a bit sad. They are pouring a lot of concrete but it is a flexible and highly educated workforce that these companies need.

https://www.boi.go.th/upload/content/Thailand,%20Taking%20off%20to%20new%20heights%20@% 20belgium_5ab4e8042850e.pdf

Originally Posted by misskit

A tech hub braided with airports, ports and high-speed rail lines to lure the brains and billions of Asia to Thailand

Wasn't Phuket the last huge 'Tech-Hub'? That went well.

Oh, it's also going to be the 'Start-Up Hub' and the 'Medical Hub', apparently.


It will eventually be the 'Hub Hub'

The most significant economic thing happening in Thailand from a foreign investment perspective is Chinese companies taking over where American companies have closed shop- as best I can see. Such as Great Wall, which has taken over the manufacturing premises of GM Chevrolet. You will be seeing more Chinese vehicles on the road. Who would have imagined, as recently as 25 years ago, that you would have seen Chinese manufacturing companies investing overseas to take advantage of the lower labour costs? They'll be taking over Nike next.

Originally Posted by sabang

Who would have imagined, as recently as 25 years ago, that you would have seen Chinese manufacturing companies investing overseas to take advantage of the lower labour costs?

Oh yes, that's been going on for a while - you've been out of the area for a few years now but Chinese businessmen in Malaysia and Singapore have been complaining about the high cost of labor for years . . . as well as the high cost of housing and living in general . . . and the worst for entrepreneurs and businesspeople is the power of large GLCs which have their IP logged and protected while the others don't.

Our 'new' neighbours here have/had an electronics company near Beijing and had to leave because school is shite rort-learning and indoctrination, their business was suffering due to the above-mentioned labour, electricity, GLCs and export costs . . .

Originally Posted by sabang

They'll be taking over Nike next.

Called Nike!