Thailand pushes "Eastern Economic Corridor"
The "Eastern Economic Corridor" refers to Thailand's establishment of economic zones in the three provinces of Chachoengsao, Chonburi, and Rayong on the eastern coast to attract new industries by vigorously developing infrastructure and implementing a series of preferential investment policies.
Thailand’s Minister of Industry Utama, who is in charge of the “Eastern Economic Corridor” project, said at the seminar that the government’s goal is to invest at least 1.5 trillion baht ($43 billion) in Chachun Sao and Chonburi within the first five years of the project’s implementation. And the construction of infrastructure in Rayong Province, including the expansion of U-Tapao International Airport, Lan Chabang Port, the construction of a high-speed railway from Bangkok to Rayong, the completion of multiple railway lines and highway construction in the region, and the construction of hospitals. He said that some of these projects will be used Many government budgets will be public-private joint ventures.
If the time span is enlarged to 10 years, the government's investment in the Eastern Economic Corridor will increase to 2 trillion baht. In terms of corporate investment, it is expected that the same scale of 1.5 trillion baht will be generated, mainly focusing on target industrial investment of 500 billion baht, infrastructure investment of 400 billion baht, new industrial cities of 400 billion baht, and health tourism-related industry investment of 200 billion baht.
Wu Dama said that the government hopes to develop ten major industries in the "Eastern Economic Corridor": airport, new automobiles, smart electronics, advanced agriculture and biotechnology, food processing, tourism, robotics, healthcare, biomaterials and information technology.
He also introduced the progress of the current project, including that the government has organized the establishment of the Eastern Economic Corridor Committee to promote the implementation of the project. The specific implementation plan is expected to take effect in the second quarter of this year.
The head of the Investment Promotion Committee of Thailand introduced at the seminar the preferential policies for investment promotion in Thailand’s newly revised investment law, such as biotechnology, nanotechnology, advanced material technology and digital information technology companies that are exempted from investing in Thailand for 13 years. Income tax, etc. In addition, some technology-type enterprises have a series of preferential measures in terms of land use, government services, personnel visas, and enterprise research and development.
The focus of this seminar is how Thailand can achieve the economic strategic goal of "Thailand 4.0". Thai Prime Minister Prayut explained at the opening ceremony that Thailand must fully enter the 4.0 era, that is, through innovation and technology application to develop high value-added industries, promote the transformation and upgrading of Thailand's economy, overcome the middle-income trap, and enhance Thailand's competitiveness.
In addition to the "Eastern Economic Corridor" and preferential policies for investment promotion, Thailand also proposed the construction of smart cities at the seminar, that is, the development of e-commerce, electronic payment, etc. to achieve the so-called "4.0" goal.
Related practitioners proposed at the meeting that, in order to achieve economic transformation in Thailand, in addition to vigorously building infrastructure, it must also strengthen education, cultivate high-level talents and accelerate development.
It is reported that the Eastern Economic Corridor (EEC) covers Chachoengsao, Chonburi and Rayong, and is an extension of the East Coast Industrial Development Zone, focusing on ten target industries, including the first wave of S-curve industries (First S-curve) The new wave of S-curve industry (New S-curve) is an important deployment for the development of industry in accordance with the "Thailand 4.0" strategy to make it the main engine of Thailand's long-term economic development. The former is an industry that has certain strength in Thailand, including modern automobile industry, smart electronics industry, high-end tourism and health tourism, agriculture and biotechnology, and food processing industry; the latter is an industry oriented to the future development of Thailand, covering robotics (20.440, 0.22) , 1.09%), aviation and logistics, biofuels and biochemistry, digital industry, all-round medical industry. In addition, there is a second wave of S-curve industries (2nd S-curve), which are industries that need adjustment and improvement, including the fashion industry (covering textiles, clothing, leather, jewelry) and the material industry (covering metals, alloys, Glass, cement and ceramics).
At present, the government has made preparations from the following three aspects, including: 1) The hardware infrastructure integrates the industrial supply chain from upstream to downstream in the Eastern Economic Corridor through various transportation modes connected with each other, and uses highways and high-speed rails. Connected with Bangkok, connecting neighboring countries and the world through ports, airports, railways, and highways; 2) Software infrastructure is laws and regulations, and the "Eastern Special Economic Zone Law" was drafted as the main law, which is managed by the Eastern Special Economic Zone Policy Committee. The management of the Eastern Economic Corridor is more flexible and operations are more efficient; 3) The Board of Investment Promotion (BOI) will give investors greater preferential rights, but the scope and conditions of the relevant preferential rights are still not clear enough, and the Investment Promotion Committee needs to clearly point out Which industries are encouraged in specific areas of the Eastern Economic Corridor It is expected that after the completion of the above three aspects, the Eastern Economic Corridor will have great potential in attracting foreign investment.
The Kaitai Research Center expects that the Eastern Economic Corridor will benefit existing investors in Chachoengsao, Chonburi and Rayong more than new investors in the short to medium term. It is expected that most of the investment will come from existing investors who want to expand the first wave of S-curve industries, while investment in the new wave of S-curve industries will still be limited, because these are new industries in Thailand and the investment costs are higher. The Kaitai Research Center predicts that the proportion of investment in the first wave of S-curve industries (First S-curve) that apply for investment preferential rights in 2021 will increase from 33% from January to August 2016 to 38%. The proportion of investment in the new S-curve industry will be close to 9%, while the proportion of investment in other industries will drop from 58% to 53%.
From a long-term perspective, it must be recognized that relying solely on the preferential rights and interests of the Investment Promotion Committee may not be sufficient to attract investors. Labor is also an important factor. Thailand must cultivate talents who can meet the needs of the industry to attract investors. For positions that require highly skilled personnel, the problem can be solved by temporarily hiring foreign experts, but the conditions for investors to transfer technology and train Thai employees should be stipulated. Other factors that affect investors’ investment decisions include: the continuity of government policies, the country’s level of R&D and innovation, and the degree of completeness of information technology infrastructure. These factors need to be further improved to help attract investment and the country's sustainable development.