The Thai government’s plan to transform the Kingdom into a transport and services hub for Southeast Asia presents huge opportunities for Thai business. A central feature of this plan is the development of the Dawei deep-sea port in Myanmar, linking India, Africa and Europe with China, Southeast Asia and other East Asian countries via Thailand.
The plans for Dawei are hugely ambitious, and the opportunities are tremendous. This special economic zone is planned to house the largest industrial estate in Southeast Asia, while the deep sea port will become a major hub for trade across Asia, cutting down transport time and improving shipping security.
The development of Dawei has been slow to get off the ground — in part because of the ambitious nature of the plan. However now it appears to have received fresh impetus as Japan has agreed to become a partner in the project.
A key element of the Dawei development will be a 472-kilometre rail link between Dawei and the deep-water port of Laem Chabang on Thailand’s Eastern Seaboard. The Eastern Seaboard is Thailand’s major industrial zone, contributing around two-thirds of the country’s economic activity. Its current mix of industries ranges from oil refineries and manufacturing to tourism; in the future, heavy industry is expected to shift to Dawei.
Laem Chabang handles 54% of Thailand’s imports and exports, and even without the Dawei development is due to reach the limit of its capacity in 2019. Meanwhile, pressure will increase as new transport links are being built between the Eastern Seaboard, northeastern Thailand and the country’s neighbours, such as China, Vietnam, Cambodia and Laos, as these countries will also be sending exports and imports through the Thailand port.
The Thai government will therefore need to move quickly on the third phase of development for Laem Chabang, as otherwise bottlenecks at the port will severely cramp Thailand’s development. This phase will require land reclamation and will have various environmental impacts, so the authorities will need to consult closely with the local people to ensure the development goes smoothly. Let’s hope this happens quickly.
One problem with Laem Chabang is that transport to and from the port is by roads that are already heavily congested. To ease the congestion, a twin-track railway is being built from the Northeast which will connect the port with Saraburi and Chachoengsao. Meanwhile, four roads currently leading to the port will be expanded and a new motorway will be built from Pattaya to Laem Chabang.
Such transport improvements, the expansion of Laem Chabang, and the development of Dawei will greatly boost the national and local economies in both Thailand and Myanmar. There will be tremendous opportunities in many sectors and industries so businesses should be alert to these and carefully prepare themselves for the coming changes.
Virasak Sutanthavibul is an Executive Vice-President with Bangkok Bank. Meeting the Challenges appears every two weeks. Questions, comments or suggestions can be sent to email@example.com. For more in this series please visit www.bangkokbank.com