A very old idea has resurfaced in Thailand. In a direct pitch to Chinese Premier Li Qiang and Chinese investors at the Belt and Road Forum (BRF) held in Beijing last week, Thai Prime Minister Srettha Thavisin touted the benefits of a large “land bridge” linking the Indian and Pacific Oceans. In particular, he encouraged Chinese foreign investment in Thailand by talking up the benefits associated with the project, in terms of cost, distribution, and a favorable location for new factories astride the two oceans.
The proposed land bridge would cut across the narrow Isthmus of Kra in southern Thailand, linking Chumphon province on the Gulf of Thailand with Ranong province on the Andaman Sea. It would consist of a 90-kilometer rail and road system that would facilitate the transportation of goods between deep sea ports that would be constructed on each side, bypassing the Strait of Malacca and shortening the shipping time from the Pacific to Indian oceans by approximately four days.
The new Thai government, anxious to spur economic development, is seeking foreign investment of up to $28 billion for the land bridge. When completed, the government claims, the project would create as many as 280,000 jobs and boost economic growth by 5.5 percent. While on the surface, Srettha’s land bridge across the south sounds quite promising, the mega-project has unknown environmental and human consequences and would put Thailand’s traditional “bamboo” diplomacy at grave risk.
The environmental impacts of the land bridge project are still unclear as the Srettha government has yet to properly conduct an environmental impact study. The land bridge is similar to previous plans for a “Khlong Thai” canal, a modern-day version of a scheme proposed in the 17th century by King Narai of Ayutthaya. Both ideas have drawn their fair share of concerns, including from two groups from Songkhla and Satun provinces, who warned that “environmentally destructive stimulus measures are unnecessary,” partially because of the number of people that make use of the natural services ecosystems contribute to their livelihoods, such as food, water, and natural regulation of climate, soils, and vegetation.
Thailand has a history of exploitation of its natural resources, which has threatened the long-term health of its prized biodiversity. The only upside to the project is that the planned construction of oil and gas pipelines across the Kra Isthmus has been abandoned after the realization that the long-term economics were untenable.
The more recent history of the land bridge and the southern canal projects are also troublesome. Srettha has given a green light to a concept that was floated under the previous Prayut Chan-o-cha government, and touted by disgraced former Transport Minister Saksayam Chidchob, who hid shares in a construction company through a nominee. (Between 2015 and 2017, the company was awarded contracts through the ministry worth 440 million baht or $12 million.) Part of the reason why the Prayut government was unable to get the land bridge project off the ground was because of the assessed potential price tag of 1 trillion baht ($27.4 billion), which is why Srettha leaned heavily on Chinese investors while in Beijing.
However, neither the Kra Canal idea nor the land bridge was the brainchild of the Prayut government. During the Thaksin Shinawatra era, the idea was floated by then-Deputy Prime Minister Gen. Chavalit Yongchaiyudh, who also engaged the Chinese, but the project collapsed amid corruption charges and financial mismanagement. Eventually, the idea vanished with the September 2006 coup. Prayut also punted on the canal option as he worried about domestic political reaction, such as negative public sentiment if the project were approved at the same time that Thailand was attempting to purchase submarines, in a context of spiraling public debt.
Leaning so heavily on China would also be problematic. China’s reputation as an economic development partner in South and Southeast Asia is decidedly mixed. The financing of large-scale infrastructure projects has increased its sphere of influence in some areas, but has raised concerns both domestically and internationally. Sri Lanka’s Hambantota Port is a prime example. With Colombo struggling to meet its international debt obligations, a controlling stake in the port was leased for $1.12 billion to a state-owned Chinese firm for 99 years. The Gwadar Port, funded by China in Pakistan has raised similar concerns among Western countries, who worry about China using the facility for military purposes.
For the land bridge to not become a geopolitical concern, Srettha needs more than just Chinese investors; he needs to build assurance and confidence from Western partners as well. In this respect, the optics of his meetings with Russia’s Vladimir Putin and Saudi Arabia’s Mohammad bin Salman at the BRF were not good. China could benefit from the leverage gained by contributing a bulk of the financing for the land bridge project, complicating Thai diplomacy, which has traditionally sought to balance between the great powers.
Srettha knows that China has been willing to invest in Thailand, evidenced by the $10.1 billion in foreign investment applications that have been filed by Chinese firms for the year to August, but the risk is that Thailand creates a dependence, where the Chinese electric vehicle and technology companies that would likely relocate to southern Thailand as a result of the land bridge put Thailand in a vulnerable position and alienate alternative partners like India, Japan, and the United States. This is all the more pertinent given the pivotal role that a Kra land bridge would play in global flows of trade.
The new Thai government has been actively courting investment, which has made up the bulk of its foreign policy objectives so far, but the land bridge raises far too many questions. Economic diversification requires a long, hard look at the Kingdom’s position as a gateway between the East and the West, and the development of sound economic strategies that go beyond recycling old ones for the sake of expediency, populist politics, or short-term gains. Instead, Thailand needs sustainable, practical development policies that won’t overburden the state with crippling debt or alienate key populations in the South.
