The new government will face serious challenges in accelerating the development of the country’s flagship Eastern Economic Corridor (EEC), which was launched with the vision of creating a next-generation growth area.
The EEC was launched in 2018 by the first Prayut Chan-o-cha government and further developed during Prayut’s second term in office. The EEC covers three provinces, namely Chonburi, Rayong and Chachoengsao on the eastern coast of the country, and aims to realize the Thailand 4.0 strategy to promote sustainable economic growth
The EEC was developed as follow-up to the previous largest development project, known as Eastern Seaboard Development Program (ESB), initiated by former prime minister Prem Tinsulanonda’s government in 1982.
The ESB has proved to be a great success and has played a key role in driving Thailand’s industrial and economic development until today, though its side-effects, such as pollution and violation of the land rights of the local communities, cannot be completely ignored.
The Prayut government embarked on an equally ambitious plan — to develop new S-Curve industries in the EEC — along with investments in high-speed railway, airports and port expansion.
Some progress
Taking stock of the implementation of the EEC initiative so far, the Thailand Development Research Institute (TDRI) found the greatest progress to have been made in worker training.
Short training courses for personnel in science and technology and highly skilled engineering helped 9,600 people augment their skills. The government provides a 50 per cent subsidy and companies could apply for tax reduction at 2.5 times the actual cost incurred in sending their employees to attend the training courses.
There also has been focus on development of precision medicine. The EEC Office has been working with the Health Systems Research Institute for establishing the whole Genome Sequencing Center to collect the DNA of 50,000 Thais for building a genomics library, the key to further research and service in the fields of precision medicine and pharmacogenomics.
The project aims to build a database of the genome as part of efforts to develop and facilitate research in modern treatment for ailments such as cancer, diabetes, heart disease, stroke, hypertension and rare diseases. As of March this year, the genome sequencing of 10,000 people had been completed, according to the TDRI.
Meanwhile, EEC secretary-general Chula Sukmanop reported in June that phase three of the expansion of the port of Map Ta Phut is expected to open for services by 2027 as planned, which would increase its capacity to receive more LNG tankers in line with the investment plan.
Project delays
Infrastructure projects have also faced delays. The contract to build a high-speed railway connecting three international airports — Don Mueang, Suvarnabhumi and U-Tapao — was signed in 2019 with services scheduled to open the next year, but it is now delayed to 2028. Construction work has not started yet. In comparison, the high-speed rail between China and Laos has opened since 2021, while construction had started in 2016.
Meanwhile, EEC chief Chula reported in June that the construction of phase three of Laemchabang port to expand its capacity so it could handle more containers, was facing some hurdles. It could open for service in 2027, a year later than the original plan.
New S-Curve industries
Investment between 2019- 2022 in targeted industries inside and outside the EEC amounted to 1.2 trillion baht, according to the TDRI. However, 80 per cent of investments are in existing S-Curve industries comprising electrical and electronics (24%), automobiles and parts (22%), petrochemical and chemical industry (15%), agriculture and food processing (15%). New S-Curve industries have drawn very little investment — robotics (0.3%) and aviation (0.8%).
The TDRI concluded that the EEC had facilitated more investment in existing industries, but failed to attract new investments in new S-Curve industries.
Agenda for new government
Heightened geopolitical tensions between China and the United States have played a part in drawing some investment into Thailand, especially in the EEC areas. But some local business leaders expressed their concern over Thailand’s political stability and cautioned that foreign investors may opt to remain on the sidelines because of the delay in the formation of the new government.
Saowaruj Rattanakhamfu, research director for Innovation Policy for Sustainable Development at the TDRI, urged the new government to further throw its support behind the EEC and lure investment in the corridor. But the new government also needs to review the targeted industries and adjust according to the changing environment.
The new government needs to accelerate investment in infrastructure projects, and may need to review the high-speed rail contract previously signed with private companies. “The high-speed rail is an important infrastructure, as convenient transport would be a key to draw foreign direct investment to the EEC and attract high-skilled workers,” said Saowaruj.
“Review of the contracts should be done in a transparent manner and should be based on the country’s best interests,” she said.
While many may focus more on economic development, others are worried about the impact of the pollution generated by industries concentrated in the three provinces.
“The new government needs to take into account the pollution problem,” she added.
By Thai PBS World’ Business Desk
