Thailand says $61b project can link up with One Belt, One Road

BANGKOK • Thailand said a US$44 billion (S$61 billion) plan to add infrastructure and upgrade industry on its eastern seaboard can link up with China's Belt and Road initiative, as part of a push to encourage economic growth.

The Eastern Economic Corridor (EEC) project could be beneficial for China and the rest of South-east Asia, apart from bolstering Thailand's outlook, Industry Minister Uttama Savanayana said in a Bloomberg Television interview.

"It's very natural, logical and mutually beneficial for the EEC to link up with One Belt, One Road, and other regional initiatives like the RCEP or even TPP if that goes ahead," Mr Uttama said, referring to the Asean initiative known as the Regional Comprehensive Economic Partnership, and the struggling Trans-Pacific Partnership trade pact.

Thailand's economy has been subdued since the military seized power in 2014 and the government is seeking to speed up infrastructure projects to boost the outlook.

The eastern seaboard plan targets 1.5 trillion baht (S$61 billion) of investment from this year to 2021 for airport expansion, new railways and cities, port development and spurring modern industry.

Mr Uttama expects about 80 per cent of funding from the private sector and the rest from the government."We are pretty much on track," he said.

"So far this year, it has been a year of preparation for the EEC. We have been putting in place the overall plans. Next year, we are expecting to see actual investments taking place."

The EEC Act, which institutionalises the project and gives it a legal basis, will go before the National Assembly soon, Mr Uttama said.

South-east Asia's second-largest economy also realises it needs to upgrade workforce skills to support the EEC, he said.

The Belt and Road initiative is Chinese President Xi Jinping's signature plan to open trade routes and build infrastructure from Asia to Europe to Africa.

Last month, Mr Xi outlined plans to direct as much as 840 billion yuan (S$171 billion) to construct roads, railways, ports and pipelines in more than 60 countries. 

Thailand has been relying on exports and tourism to drive its economy as industrial overcapacity crimps private investment.

Growth lags behind neighbours such as Indonesia and Malaysia, with a stronger baht adding to risks by threatening to erode competitiveness.

Thailand has recently sought closer relations with China, such as in defence procurement and infrastructure development. 

The EEC plan covers Rayong, Chachoengsao and Chonburi provinces. Under the project, Thailand will aim to take on Singapore's dominance in aircraft maintenance, repair and overhaul as part of a US$5.7 billion upgrade of U-Tapao International Airport.

The EEC project also calls for US$4.5 billion investment in high-speed rail, US$11.5 billion for new cities and US$14 billion for industry, among others.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on June 23, 2017, with the headline 'Thailand says $61b project can link up with One Belt, One Road'. Print Edition | Subscribe