Stratfor: regional infrastructure progress key to Thai growth

Thailand’s unique geographical position at the heart of mainland Southeast Asia means that its prospects for a high-growth future depends in part on less-developed neighboring countries building better infrastructure for greater connectivity, according to a paper released last week by United States-based Stratfor, a security analysis firm.

The type of infrastructure that would propel Thailand forward is best exemplified by the Thai-led Dawei industrial zone project in Myanmar, a multi-billion dollar development that includes a deep water seaport, industrial estate and road and rail transportation links with Thailand’s own industrial estate and deep water seaport in Laem Chabang. Joining the two will connect transport between the Indian Ocean with the Gulf of Thailand and provide an alternative to shipping through the Straits of Malacca.

Stratfor noted that Japan’s recent commitment to become a full partner in the project will help “connect the Thai core to Myanmar to the west. Dawei’s importance, besides assisting with Myanmar’s economic emergence, is its part in Thailand’s broader strategy to take advantage of its neighbors’ rising economic clout for its own sustained growth and regional power.”

Stratfor, short for Strategic Forecasting Incorporated, is a highly respected global intelligence company based in Austin, Texas founded in 1996 by George Friedman. The company has been known for making highly accurate predictions and analyses, especially during the Balkans conflict and in the aftermath of the September 11 terrorist attacks. Its services and analyses are mainly available through subscription.

Thailand, with its comparatively mature economy, will have a difficult time posting the high growth rates of its less developed neighbors such as Myanmar, Laos, Cambodia and Viet Nam because they are growing from a very low base. The recent launch of the 10-nation ASEAN (Association of Southeast Asian Nations) Economic Community, or AEC, which lowers trade and investment barriers between the member nations, should work to Thailand’s advantage.

“The vast differences in gross domestic product and development among the ASEAN members, combined with the community’s lack of enforcement mechanisms, mean that integration will be difficult and uneven,” Stratfor wrote.

“However, though the mountainous mainland portion of Southeast Asia, including Thailand, continues to suffer from a dearth of cross-border infrastructure, the region will be comparatively easier to pull together. Projects such as Dawei are an example of efforts to overcome the region’s geographic divides — with Thailand taking the lead,” the security consultancy said.

Thailand is also preparing to launch several Special Economic Zones along its borders to capitalize on trade, investment and labor with neighboring countries. “Thailand is trying to push outward to harness the growth of other Southeast Asian countries for its own benefit. The Asia Highway network — running from Bangkok, north across the Thai border at Mae Sot and to Tamu, Myanmar, where it crosses into India — launched a new spur in September. In mid-December, Cambodia and Thailand signed an agreement to complete another secondary track connecting the Thai and Cambodian rail systems by 2016,’’ Stratfor wrote.

“Dawei [is an] exemplary part of Bangkok’s larger campaign to connect with the region,” Stratfor wrote.