Big infrastructure investment planned for Northeast
With the aim of addressing economic disparities and national competitiveness, Prime Minister Prayut Chan-o-cha unveiled a comprehensive development plan last week that includes a $2 billion infrastructure program for Northeastern Thailand, the most populous region of the country, and will include airport expansions, high-speed trains, new roads and water management.
The Prime Minister announced the plan during a mobile Cabinet meeting in the province of Nakhon Ratchasima, also known as Korat, which is considered the gateway to the Northeast, a region often referred to as Isan. The region is the largest and most heavily populated part of the country that trails in development constrain national competitiveness.
Isan, however, has been experiencing an overall economic acceleration during the past decade, with Reuters reporting that average monthly household income rose 40 percent between 2007 and 2011, the largest increase of any region. Evidence suggests the trend is continuing, the news agency reported, although average incomes are still lower than in Bangkok by a wide margin. Private investment has also expanded with shopping centers and high-rise condominiums cropping up in northeastern cities and towns.
To sustain and advance the momentum of this growth, the Prime Minister laid out a plan that includes renovating and expanding airports in Khon Kaen and Buri Ram, sea and river ports in Nakhon Phanom and Trat, building the Thai-Sino Bangkok-Korat high-speed rail line, the Chira-Khon Kaen double track rail line and several new motorways.
In addition, several new infrastructure elements will link the region to the Eastern Economic Corridor, the advanced development zone on the Eastern Seaboard that is a showcase for Thailand 4.0, the national policy to develop Thailand into a more innovative and high-tech economy.
Many of the Isan projects will follow a public-private partnership model, giving investors an opportunity to take a stake in a region with strong growth potential.
An important component of the program is a water management plan to address floods and droughts – perennial problems for farmers and others in the region. The northeast is an arid plain with poor soil quality, and is routinely hit by large tropical storms from the South China Sea during monsoon season.
Looking forward, part of the region’s strong potential lies in its location. Isan borders the emerging economies of Laos and Cambodia, and its high-speed rail lines will link up with lines originating in southern China, providing a conduit for travel, trade and investment on multiple fronts.