Thaksin's master infrastructure scheme is back - and it might make the
country the hub of Southeast Asia
The news that Thailand recorded
the fastest growth in the fourth quarter of 2012 since the country began
compiling economic data in 1993 is focusing attention on a country suddenly on
the move after more than a half decade of political and economic crisis.
The record 18.9 percent gross
domestic product fourth quarter year-on-year growth is admittedly coming off a
low base from the disastrous floods that inundated the center of the country in
late 2011, crippling the extensive foreign-owned assembly industries north of
Bangkok. Nonetheless there is a growing feeling that at least for now Thailand
has put behind it the internecine infighting that paralyzed the country for
more than six years.
It also seems the extensive
development plans that former Prime Minister Thaksin Shinawatra was planning
before his 2006 ouster in a royalist coup are again underway in the hands of
his sister, Prime Minister Yingluck Shinawatra, who is running the country as
his proxy while he remains an international fugitive on corruption charges.
Under Thaksin, for instance, the
Thai government entered talks with Laos and China about rail links connecting
the southern province of Yunnan with Laem Chabang, the container port that
serves Bangkok. The coup led to a long series of interim governments that
largely ignored those plans in favor of ultimately pointless political battles
designed to keep Thaksin at bay.
But with Yingluck's Pheu Thai
Party winning a substantial enough victory in 2011 national elections to form a
government, Thaksin's master plan reemerged. Then came the floods. Sensibly
enough, the first major public works beginning this year are a Baht 350 billion
(US$11.7 billion) water resource management scheme designed to mitigate massive
flooding. Some Baht 99 billion of that is to be spent this year.
Beyond that, however, the Asian
Development Bank is assisting on a series of projects designed to make Thailand
the hub of a mainland Southeast Asian regional complex connecting Myanmar, now
that the country is emerging from its economic isolation, as well as Laos,
Cambodia, Vietnam and other countries throughout the region. It is all part of
the drive for Asean "connectivity" ahead of the region becoming an
economic community after 2015.
With the ADB's help, a Greater
Mekong Subregion Highway Expansion Project will upgrade hundreds of kilometers
of two-lane national highways to four-lane divided standard. The project will
also assist Thailand's Department of Highways in implementing a Strategic
Intercity Motorway Network along three corridors radiating out from Bangkok to
a distance of 200-250 km.
This interconnectivity, running
rail and road lines out into the subregion, would make Thailand the hub for
delivery of fruits, vegetables and a wide range of other natural resources from
throughout Southeast Asia, substantially enhancing Bangkok's importance as a
regional hub to supplement its role as a center of car and electronics
manufacturing. The track gauge is expected to be compatible with China's
high-speed rail system, although it will be fast rail rather than high-speed.
As it stands now, according to an
analysis by the Hong Kong-based Asianomics financial research firm, the
government envisions 55 projects costing Baht 2.27 billion (around 20 percent
of 2012 GDP) that are due for completion by 2020, with about 70 percent to be
financed with debt. That is estimated to take the public debt to GDP ratio to
around 60 percent by 2020.
The current government is pushing
for a law in parliament that would commit future governments to complete the
scheme. This attempts to get around previous roadblocks that stalled Thaksin's
plans after the change of government. Pheu Thai enjoys a majority in the
500-member House of Representatives with 265 seats to the opposition Democrats
with 159 and other parties trailing.
The key is whether Pheu Thai has
the muscle to push the plans through. Given its current parliamentary majority,
it should be able to do so.
But there are wild cards, most
importantly Thaksin's plan to return to the country, which seems to be on hold
because it would likely bring virulent opposition protests back to the streets.
He "advises" Yingluck remotely on his iPhone (she has her own ring
tone on the phone) and is in constant touch with Thai political figures from
his bolt-hole in Dubai. He has said he understands he may not be able to return
any time soon (unless he is willing to go to prison) and is willing to stay
abroad for the good of the country.
So far Yingluck has sailed on
without serious trouble. Most political observers give her credit for astutely
handling the pressures of governing. On the streets, the royalist Yellow Shirt
People's Alliance for Democracy and other groups have mounted occasional
rallies but they do not present a major threat.
"Among the political,
economic and media classes, the awareness of the impending Asean single market
is strong," according to the Asianomics report. "Many of them regard
the event itself as being overhyped; tariffs have already been reduced over a
wide range of products and free trade between the nations is more the norm than
the exception.However, in Thailand at any rate, the rallying cry of the AEC
[Asean Economic Community] - not to mention the opening of Myanmar - is seen as
an opportunity to focus attention and spur government spending on improved
infrastructure."
Obviously development of this
magnitude in Thailand raises questions, as it would elsewhere in Southeast
Asia. Not for nothing did previous governments describe the country's system as
"buffet democracy," in which scores of politicians regard any
development as a chance to sample graft from the table. With Baht 2.3 trillion
in spending on the line, the opportunities for enrichment are liable to be
enormously tempting.
Nonetheless, despite the caveat
that anything can happen, formidable public policy plans are underway in
Bangkok, and if works out, Thaksin and his sister may have found an energetic
economic and foreign policy blueprint to put the country at the forefront of
Asean.
John Berthelsen
Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Health care and Life Science with expertise in ASEAN 's area. We are currently changing the platform of www.yourvietnamexpert.com, if any request, please, contact directly Dr Christian SIODMAK, business strategist, owner and CEO of SBC at christian.siodmak@gmail.com. Many thanks.
No comments:
Post a Comment