Thailand gains support for regional infrastructure fund

Countries in mainland Southeast Asia have agreed to support the creation of a fund proposed by Thailand that could be used to finance their infrastructure development projects and increase the region’s connectivity and competitiveness.

Thailand made the proposal during the eighth summit of ACMECS, the Ayerwaddy-Chao Phraya-Mekong Economic Cooperation Strategy hosted by Thailand last week.

Thai officials said they would make the initial contribution to get the fund up and running by 2019, although an exact figure was not disclosed. Arthayudh Srisamoot, deputy permanent secretary of Thailand’s Ministry of Foreign Affairs said, however, that the figure would be substantial, because the group wants the fund to be operational and available to members as soon as possible.

ACMECS consists of Cambodia, Laos, Myanmar, Thailand and Viet Nam. The grouping was founded in 2003 by Thailand and is named after the three major rivers that course through the mainland: the Ayerwaddy (or Irrawaddy) in Myanmar, the Chao Phraya in Thailand, and the Mekong, which runs through all five. A committee with representatives from all five countries will be established to manage the fund.

Officials attending the summit said the fund would be useful in lessening member countries’ reliance on financing for infrastructure projects as alternative and more diverse sources in order to achieve balance and promote their own self-sufficiency and sustainability.

“Many of the countries in the region, while they welcome investment from certain countries, they want to keep a balance … not [to rely] on only one country,” Arthayudh said. “It is better to have some kind of understanding or common strategy within the ACMECS countries before we go out to other countries [for assistance].”

Aside from seeding the fund with cash, Thai officials said the fund would most likely be built up in part with bonds and other debt instruments issued in regional capital markets. In addition, the fund could be used for other purposes aside from building infrastructure should the management committee approve.

The fund will be available for projects pursued under ACMECS’ 2019-2023 Master Plan. The plan focuses on increasing connectivity among the five countries by upgrading the East-West and North-South economic corridors. Trade and logistics rules will be harmonized and infrastructure improved

Photo courtesy of http://www.mfa.go.th/main/en/information