Srettha touts land bridge project

Srettha touts land bridge project

Reworked vision does not include canal

An artist's interpretation of a deep-sea port in the land bridge project.
An artist's interpretation of a deep-sea port in the land bridge project.

The proposed land bridge project will be the world's largest megaproject, helping to elevate the Thai economy in the medium to long term, says Prime Minister Srettha Thavisin.

During a speech delivered on Wednesday at an Economic Reporters Association meeting, Mr Srettha said the project between the Gulf of Thailand and the Andaman Sea will reduce the transport time by 6-9 days, as well as cut logistics costs by bypassing congestion in the Malacca Strait.

He said this version of the project, which has been rumoured about for four decades, will not dig a canal in the Kra Isthmus of Thailand, instead connecting the two coasts with infrastructure such as an oil pipeline to support the growth of complementary industries such as petrochemical factories and gas separation plants.

China, which wants to build a locomotive factory that would be the largest production base outside the mainland, can export to India and the Middle East with the land bridge, said Mr Srettha.

"This may be one of the largest megaprojects in the world, which would make Thailand an attractive country for investment," he said.

"The government will push for this project to be formed during our term."

Mr Srettha said the economy needs a major stimulus because over the past 10 years Thailand's GDP grew by only 1.8% per year on average, while household debt increased from 76% of GDP to 91% at present.

Thailand has among the highest household debt-to-GDP ratios in Asia and ranks No.10 globally.

He said some Thai workers in Israel chose not to return to Thailand because their salaries there are higher than they can earn here. This reflects the country's economic problems, said Mr Srettha.

The government is trying to come up with measures to solve economic problems in the short, medium and long term, he said.

Short-term measures include a debt suspension scheme for 2 million small farmers, reducing energy costs, such as the power tariff to 3.99 baht per unit, and the implementation of a 20-baht flat fare for the Red and Purple mass transit lines.

As for medium and long-term measures, the government has made significant progress on free trade agreement (FTA) negotiations with many countries, as there were none in the past 10 years, said Mr Srettha.

Many multinational companies that want to relocate their production bases abroad are overlooking Thailand, not because of the proposed minimum wage hike from 400 to 600 baht, but rather the lack of infrastructure and FTAs, he said.

Thailand's minimum wage over the past decade increased by only 12%, from 300 to 337 baht per day, said Mr Srettha.

He said attracting foreign direct investment (FDI) is another important component of the nation's economic development.

In less than two months since taking office, Mr Srettha has visited several countries and invited foreign companies to invest in Thailand, particularly 10 large Chinese conglomerates.

On his next business mission abroad, he said he will bring along a delegation from the private sector.

Mr Srettha emphasised investment in infrastructure is very important as he wants to see Thailand become a hub for manufacturing FDI.

China is the top foreign investor in Thailand's electric vehicle (EV) industry, with Chinese EV manufacturers increasing investment in the country based on the government's comprehensive incentives and robust infrastructure, with modern transport facilities such as upgraded communications and IT networks, a stable electrical system and an accredited healthcare system, he said.

"Thailand has great potential to attract investment, but we have to go out and attract investors," Mr Srettha said.

Regarding the 10,000-baht digital wallet scheme, he said the policy is part of a larger stimulus effort.

The Thai economy has expanded at a slower pace recently than the economies of Vietnam, Indonesia and Malaysia, said Mr Srettha.

The government has listened to the concerns and feedback from all sides about the digital wallet scheme, including taxpayers and citizens, he said.

The budget for this project is roughly 540 billion baht and it is a one-time measure, not an annual expenditure, said Mr Srettha.

"This policy may be viewed as a populist policy or an attempt to distribute money to gain political favour," he said.

"However, the government is also proceeding with FTA negotiations and supporting the land bridge project."

Mr Srettha said next month he plans to attend the Asia Pacific Economic Cooperation summit to promote and support business matching between Thai and foreign investors.

He said he is scheduled to meet Apple chief executive Tim Cook.

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