Eastern Corridor fosters Thailand 4.0

THAILAND is planning to spend US$43 billion over five years to embrace the new technologies inherent in Industry 4.0. The chosen area covers three provinces in its Eastern Corridor, to host 10 industry sectors, two major ports and three international airports, all  inter-connected by high-speed rail . . .

BANGKOK -- Things aren't looking good in Thailand -- the baht has been appreciating strongly against the dollar, causing a plummet in exports, the World Economic Forum has downgraded Thailand in its most recent global competitiveness index, and the Kingdom's convoluted and sometimes-volatile politics remain uncertain.
Yet Thailand has more going for it than its current difficulties suggest. The Eastern Economic Corridor is the main reason for that.
A three-province zone adjacent to Bangkok, the Corridor, or EEC as it is more commonly known, is becoming a showcase for what policymakers want Thailand to look like in the not-so-distant future.
Planned EEC infrastructure projects will change Thailand's economic and infrastructure landscape in the next five to 10 years, according to Finance Minister Uttama Savanayana.
That infrastructure includes renovated and expanded deep-sea ports, refurbished highways, a new international airport, and industrial and digital infrastructure to facilitate trade and advanced industries.
Uttama spoke in October at the signing of an agreement to build a high-speed rail network linking Bangkok's two international airports, Suvarnabhumi and Don Muang, with U-Tapao, the international airport currently under construction in the Corridor.
Along with U-Tapao, both the Government and the private sector are investing in an aerospace and aviation industrial estate, with THAI Airways and Airbus partnering in the building and running of what they tout will be the region's best aircraft maintenance, repair, and overhaul centre.
Aerospace and aviation make up just one of 10 industry sectors the Government is supporting and promoting as part of Thailand 4.0, a 20-year national strategy to transform the Thai economy from one reliant on assembly-line manufacturing to one driven by research and development, innovation, higher technologies and green industries.
The other nine supported industries are: next-generation automotive, intelligent electronics, advanced agriculture and biotechnology, food processing, tourism, digital, robotics, logistics, biofuels and biochemicals, and medical.
When Thailand first began to industrialise, the Eastern Seaboard -- made up of the provinces of Rayong, Chonburi, and Chachoengsao -- became the preferred location choice for manufacturers, and home to a wealth of industrial estates.
That infrastructure is now ageing, with Eastern Seaboard industries mostly at the 2.0 level.
While an upgrade is definitely required, the question is whether the EEC is the best way to realise Thailand 4.0. Thailand's political Opposition doesn't think so.
Thanathorn Juangroongruangkit, leader of the Future Forward Party, the third-largest party in Parliament, has slammed the Government's commitment to the EEC. He says it doesn't address the needs of people living in the three provinces, and won't improve their lives.
Some residents of the area agree, and have protested, saying there has been no public participation in the planning and no public hearings held by the Government to determine how the Corridor should be developed.
EEC plans call for "smart cities" and "green communities", but residents say they aren't seeing any of that, and still have problems accessing basic utilities.
An even larger question is whether the EEC will propel Thailand to the ranks of the more highly-developed upper income countries, as policymakers claim, or exacerbate the already deep disparities in earnings and wealth apparent in Thailand.
These disparities have underpinned much of the discontent and unrest that has plagued Thailand for years.
In response to public disquiet, Thailand's Board of Investment has for some years been offering generous incentives to industries to set up shop in provinces far from the Eastern Seaboard - hoping to even out development geographically, and to reduce income disparities.
Sadly, the policy has never met with great success, and, with the advent of the EEC, it appears to have been basically abandoned. The Board of Investment now touts the Corridor as the best place in which to locate.  It may very well be. Clustering industries is a time-tested method for accelerating development, and that is what the EEC is meant to do.
"While opposition to the EEC is understandable," Wichit Chantanusornsiri, senior economics reporter at the Bangkok Post, wrote in a comment, "no other development project has had such potential to transform the country's development. In recent years, so-called disruptive technology has forced countries to adapt to the new digital era, or risk losing competitiveness and become technological laggards. Thailand is in the same position."
If the current Government or its allies can maintain power for the next few years, the EEC debate will be over.  The Eastern Economic Corridor will have received enough investment and created enough new infrastructure to make it simply senseless to abandon it.
Having said that, however, Thai politics has entered an era in which the future is neither clear nor predictable.  While the surface seems relatively placid, discontent with the governing powers is bubbling below, and there is no telling when, or if, some spark will ignite another round of turmoil, resulting in new leaders with different ideas taking charge.
That may give some investors pause, but it should be noted that, putting the vicissitudes of Thai politics aside, virtually every Government, whether elected or not, has been friendly to investors. Pulling the rug out from under investment is not part of Thailand's track record.
The odds are high, therefore, that the EEC's development will continue unabated.
With cutting-edge infrastructure, logistics and connectivity, the Corridor should help Thailand become more competitive again, and give it an edge over regional rivals such as Vietnam.
It remains to be seen whether the high-tech green development expected to take place in the EEC will then multiply out to other regions of the country. But clearly, the EEC is Thailand's best bet to get to the next level of development, and it should prove to be a worthwhile place in which to invest.