Sino rail deal nothing to be proud about

Sino rail deal nothing to be proud about

When Chinese engineers lay the foundation work for the Thai-Chinese railway project later this year, I can imagine a flurry of applause, and some celebrations. Our leaders may feel pride in the project that is aimed at boosting the country's economy.

But the 179-billion-baht project, which stretches 252.5km from Bangkok to Nakhon Ratchasima, has drawn tremendous criticism. Especially the use of Section 44 special powers of the interim charter that remove legal and technical barriers to favour selected contractors.

Needless to say, the Prayut Chan-o-cha government is pinning its hopes on this project helping to accelerate economic growth. It also hopes there will be more investment, with an improvement in the country's competitiveness.

Paritta Wangkiat is a reporter, Bangkok Post.

It is to be part of a series of infrastructure development projects the state is investing in to help propel the economy, while private investment is almost nil because of a lack of confidence on the part of private investors who worry about political instability.

After a decade of slowdown, the Thai economy gained momentum in 2016 as growth reached 3.2%, increasing from 2.8% in 2015 and just 0.9% in 2014, according to the 2017 United Nations Economic and Social Commission for Asia and the Pacific report. It is expected to go up a bit next year to reach 3.4%.

On the one hand, the 2014 coup has brought "peace and order" to society as daily demonstrations, which sometimes turned violent, came to an end through military measures. On the other hand, the putsch caused applications for foreign direct investment (FDI) to plummet.

Board of Investment reports show that FDI net applications were worth over a trillion baht in 2014. But they dropped to 107 billion baht in 2015, then 301 billion in 2016. FDI appears to have rebounded slightly this year, but its value can't compare with that of pre-2014 figures. Investment by top investors such as Japan, the US and China showed a similar trend. Private investment has been flat for the past three years with only 0.4% growth in 2016.

As mentioned earlier, to boost growth, the regime has heavily pushed transport and infrastructure development projects, while giving a reluctant guarantee on the next election to entice long-term confidence from investors.

With special powers, it's easy to build or expand infrastructure.

But it'll not be that easy to stabilise the economy in the long run if the government is addicted to a quick process that bypasses checks and balances in the absence of transparency.

In the case of the Sino-Thai railway project, there is concern about quality as the project is going ahead with the absence of checks and balances while other contractors cannot compete in what was supposed to be a fair fight.

Section 44 insults tax payers, depriving them of the right to examine the deal.

At the same time, the regime is pushing the Eastern Economic Corridor (EEC) that aims to promote innovative and high-tech industry in a similar way.

Introduced in 2015, the EEC will feature new infrastructure such as ports, roads and railways to make the eastern region an industrial hub.

As the country's top technocrats were drafting a bill for regulating investment within the EEC, the military regime waved its Section 44 wand again to clear legal barriers and provide a quicker way for investors to gain approval for environmental impact assessment reports.

Through special powers, these projects may lift economic growth. But that does not guarantee inclusive growth and a better quality of life for people. Instead, I would not be surprised if a only a few in the private sector benefit.

The regime may think economic success will legitimise its stay in power, allowing it to infringe on the right to freedom of expression and people's participation.

Slogans like "Stability, Prosperity, Sustainability" and "Stronger Together" that appear on the government's weekly television programme that seem to project Thailand as a place of openness and a friendly country for both foreigners and locals is only rhetoric.

While the government boasts of increasing growth figures, it is obvious we are far from having quality growth. The gap between the rich and poor is high. Thailand was ranked the world's most unequal nation after Russia and India by Global Wealth Report 2016. Around 58% of Thailand's wealth is in the hands of just 1% of the population.

If such a situation continues, by the time the engineers apply the final touches to the railway's construction, I think we have little, if anything, to take pride in.

Paritta Wangkiat


Paritta Wangkiat is a Bangkok Post columnist.

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