Monday, 29 July 2024 – In this webinar, Professor Ruth Banomyong, Chairman of the Advisory Board to the Thai Minister of Commerce, spoke about the evolution of the Kra Canal project from its inception as a deep canal into its contemporary landbridge form, analyzing its potential impact and obstacles.
REGIONAL ECONOMIC STUDIES PROGRAMME WEBINAR
This webinar examined the evolution of the Kra Canal project from its inception as a deep canal into its contemporary landbridge project, analyzing its potential impacts and obstacles. Dr Archanun Kohpaiboon, a Visiting Senior Fellow with ISEAS – Yusof Ishak Institute, served as the moderator for the event.
Professor Ruth started the presentation with a brief introduction of the Kra Canal. Originally conceptualised as a deep canal, the Kra Canal intended to bypass trade routes through Singapore, through a shortcut between the Andaman Sea and Guld of Thailand. In its contemporary iteration, the Kra Canal project has evolved into a landbridge project – featuring two deep sea ports on the eastern and western ends of South Thailand connected by a transportation rail.
In the next part of his presentation, Professor Ruth delved into the economic and political debates surrounding the project. On the economic front, the Kra Canal is laden with doubts over its high costs of capital, challenges in project funding, and chiefly, uncertainties over the economic benefits the project could bring. In the political domain, the project raises questions over the balance of power in the region and domestic concerns over environmental and social impacts of the project.
Professor Ruth shared that the primary allure of the project lay in its potential to improve trade efficiency through cost savings in the form of reduced inventory and transportation costs because of shortened transportation time. This would benefit shipping companies. On the national economic front however, Professor Ruth cautioned that trade bypass had limited contributions to the Thai national economy and its shipping industry due to limited value add.
Two primary concerns of the project – economic benefits and environmental impact – were raised as particular obstacles to the actualisation of the project. To date, economic benefits of the project has yet to be verified. Professor Ruth attributes this to a lack of transparency in findings and the private agenda of firms who have commissioned existing studies. There are also concerns about the impact on wildlife and marine biodiversity, sustainability and climate change that the project may cost.
To summarise the feasibility of the project, Professor Ruth raised two key questions that the project must answer:
- Is the Kra Canal landbridge cheaper than existing trade routes through the Straits of Malacca?
- Does the Kra Canal landbridge really save transportation time?
In the Q&A session, Professor Ruth answered questions pertaining to potential investors of the project, highlighted the operational challenges of the project, rooms of improvement for Thailand’s logistic infrastructure, and the current state of the project.