Thailand Mega Project for GMS connectivity The 9 th GMSARN International Conference 2014 Athibhu Chitranukroh Office of Transport and Traffic Policy and Planning Ministry of Transport, Thailand November 12 th , 2014 Palace Hotel Saigon, Ho Chi Minh City, Vietnam
Agenda : Thailand Mega Project for GMS connectivity Part 1: Trend of the future - Globalization & Global value chain - Urbanization - Critical Factor Part 2: Basic Fact of the GMS Part 3: Thailand - Logistics challenges - Infrastructure development program - Key projects Part 4 : Impact to the regional economy
Trend : Globalization & Global Value Chain Effects of McDonalds and Starbuck’s franchises on global trade Source : The McGraw Center for teaching and learning
Trend : Globalization & Global Value Chain : iPhone
Trend : Globalization & Global Value Chain : Boeing 787
Trend : urbanization • 50% global GDP generated by 600 cities • Yr. 2025 : 40% global GDP will be generated by emerging markets
Trend : urbanization Urban population • Yr. 1900 : 2 of 10 people live in urban • Yr. 2010 : 5 of 10 people live in urban • Yr. 2030 : 6 of 10 people live in urban • Yr. 2050 : 7 of 10 people live in urban Social : • Lack of jobs -> crime • Pollution -> disease • Traffic -> quality of life Environment : cities consume • 2 / 3 global energy • 60% water • CO 2 70%
Trend : urbanization Better Urbanization leads to higher-quality growth for all people - Urban & Transport infrastructure
Trend : urbanization
Trend : critical factor - Globalization & Global Value Chain - urbanization “Connectivity”
GMS : Basic Fact 11
Basic fact : the GMS 6 economies : Cambodia, China (Yunnan & Guangxi), Lao PDR, Myanmar, Thailand, and Viet Nam Area : 2.55 million sq.km. Population : 329 million people GDP : $ 969.93 billion China (Yunnan & Guangxi ) GDP $ 322,045 million Pop 93.4 million Myanmar Lao PDR GDP $ 51,925 million GDP $ 7,891 million Pop 61 million Pop 6.51 million Viet Nam GDP $ 122,722 million Thailand Pop 88.8 million GDP $ 345,649 million Pop 64.4 million Cambodia GDP $ 12,861 million Pop 14.8 million source : ADB & Bank of Thailand
Basic fact : the GMS GMS Compare to > USA Population 329 million GDP size 969.92 Billion USD = 3 Times Thailand = 20% of China FDI 276.35 Billion USD Ranked 6 th globally next to = Tourist 38.6 million France Spain USA China Italy Energy consumption 286,806 ktoe > South Korea CO 2 per capita 1.21 T/person < India = 1.6 t/people World = 4.9 t/people USA = 16.4/people source : ADB, Bank of Thailand, Wikipedia
Basic fact : the GMS : GDP per Capita by region Assumptions for IDE-GSM prediction : • Population & Productivity growth rate. • Inter-industry & Inter-regional labor movement is allowed. • international immigration is prohibited . 2012 2030 Source : Satoru KUMAGAI(IDE-JETRO/MIER)
Basic fact : the GMS : GDP per Capita by region 0 100 200 300 400 500 600 700 800 2012 2030 2030 2012 Low 4 152 (26%) (1%) Lower-Middle 309 314 (44%) (53%) Upper-Middle 188 101 (27%) (17%) High 199 27 (5%) (28%) Low Lower-Middle Upper-Middle High Source : Satoru KUMAGAI(IDE-JETRO/MIER)
Basic fact : the GMS : infrastructure & economic corridor R1: Southern Economic Corridor (SEC) Bangkok – Aranyaprathet – Poipet – Pratabong – Phnom Penh-Ho Chi Minh – Vung Tau R3B R2: East-West Economic Corridor R3A (EWEC) 1,320 km Malamang – Mae Sot – Tak – Sukhothai – Phitsanulok – Khon Kaen – Mukdahan – Savannakhet – Lao Bao – Dong Ha – Danung R2 R3 North-South Economic Corridor (NSEC) R1 R3A : Via Lao: Chiang Rai – Chiang Kong – Huay xai – Luang Namtha – Bohan – Chiang Rung – Kunming ( 1,090 km ) R3B : Via Myanmar: Chiang Rai – Mae Sai – Takelek – Chiang Tung – Chiang Rung – Kunming 16
Thailand and its connectivity China Vietnam 2 3 1 4 Thailand – Lao PDR (11 projects) 27 5 1. Friendship Bridge 4 ( Chiang Khong - Huay Sai ) Myanmar 6 2. R3A in Laos 7 3. Huay Kon – Pak Beng Lao Lao 4. Hinhway No.13 North – Sang Kha Lok 8 5. Phu Du – Pak Lai 9 6. Highway No. 11 Lao PDR 23 7. Bridge across Huang River, Tha Li, Loei 22 8. Friendship Bridge 1 (Nong Khai – Thanaleng) 10 9. Road access Ban Woen Tai Pier 26 10. Friendship Bridge 3 (Nakhon Panom – Kham Mouane) 11 11. Friendship Bridge 2 (Mukdahan – Savannakhet) 25 Thailand Thailand – Cambodia (3 projects) 24 12. Road No. 67 Chong Sa Ngam – Siem Reap 13 . Road No. 68 Chong Chom – Kralanh 14. Road No. 48 Ko Kong – Sre Ambel 21 12 Thailand – Malaysia (5 projects) 20 13 Cambodia 14 15. Bridge across Kolok River, Tak Bai 1 6 . Bridge across Ko Lok River 2, Sungai Kolok 17. Bridge across Ko Lok River 3, Bu Ke Ta 18. Nathawi – Ban Pra Kop 19. Kuan Sa Taw – Wang Pra Chan Thailand – Myanmar (8 projects) 19 18 20. Phu Nam Ron – Thailand-Myanmar border 21 . Kanchanaburi – Dawei 17 22. Friendship Bridge (Mae Sot) operating 16 23 . Friendship Bridge 2 (Mae Sot) 15 constructing 24. Myawaddy – Dawna Foothill 25. Dwana foot print – Kawkareik planning 26 . Kawkareik – Thaton Malaysia 27. Friendship Bridge (Mae Sai) 17
Border trade of Thailand 207-2012 CAGR 2007-2012 = 10.5% 910,499 890,668 Value in Million Baht 770,114 708,375 310,515 353,524 633,803 283,624 551,798 297,737 import 267,687 231,663 export 580,153 556,975 486,490 410,638 366,116 320,135 18 Source: National Statistic Office
Border trade by country Value in Million Baht Myanmar Lao PDR Growth 9.8% CAGR Growth 180,471 14.0% 164,375 29.9% CAGR 132,016 19.8% 101,660 97,450 49,395 Cambodia Malaysia 560,655 515,923 Growth -8.0% 370,022 CAGR 10.9% CAGR Growth 16.3% 28.3% 82,089 63,977 34,929 19 Source: National Statistic Office
Border trade by country Order in rank Economy export import • Natural Gas • Diesel • • Benzene Animals Myanmar • Beverage • Tiber product • Metal • • Diesel Copper • • Car & part Timber Product • • Computer Vegetable Lao PDR • • Benzene Chemical • Grain • Construction Machine & tools • • Engine Vegetable • • Sugar Iron Cambodia • • Beverage Aluminum product • • Cosmetic Vegetable oil • Rubber tire • Copper • • Rubber Machine • • Rubber Product Computer part Malaysia • • Computer Media • Electronics • Timber Product • Car & parts 20 Source: National Statistic Office
Thailand : Logistics Challenges 21
Capital expenditures to total fiscal budget 1990-2013 Capital expenditures/ total fiscal budget (%) 45 41.1 38.8 40 34.1 35.5 33.6 35 30.6 27.3 28.4 28.3 30 25.2 25.5 26.3 25.2 24.5 24 24.1 24 25 22 21.9 21.1 18.4 18.7 20 16.4 15 12.6 10 5 0 22 Source: Ministry of Finance
Infrastructure in transportation is similar to a skyscraper’s foundation 23
The 2012-2013 rankings of global competitiveness on infrastructure (Thailand vs Asian countries) Quality of overall infrastructure : • Quality of roads • Quality of railroad infrastructure 119 • Quality of port infrastructure • Quality of air transport infrastructure • Available airline seat km/week, millions 98 92 • Quality of electricity supply • Fixed telephone lines/100 pop. • Mobile telephone subscriptions/100 ppp. 49 29 27 22 16 4 2 Singapore Hong Kong Japan South Taiwan Malaysia Thailand Indonesia The Vietnam Korea Philippines 24 Source: The Global Competitiveness Report, World Economic Forum 2012-2013
The 2012-2013 rankings of competitiveness on road, rail, port and airport (Thailand vs Asian countries) road rail port airport Singapore 3 (1) re 5 (6) e 2 (2) e 1 (2) Hong Kong 8 (4) ng 3 (2) g 3 (1) g 2 (1) Japan 14 (22) an 2 (3) n 31 (37) n 46 (54) South Korea a a a 17 (14) 10 (10) 20 (25) 26 (22) Taiwan 21 (16) an 11 (8) n 29 (30) n 44 (53) Malaysia 27 (21) sia 17 (20) sia 21 (19) sia 24 (29) Thailand nd nd nd 39 (36) 65 (57) 56 (43) 33 (28) Note: numbers represent rankings in 2012-2013, numbers in bracket represent rankings in 2010-2011 25 Source: The Global Competitiveness Report, World Economic Forum 2012-2013
Thailand has lost its momentum in attracting FDI (USD million) (USD million) (USD million) (%) Avg.FDI/year CAGR* 2004-2012 FDI 2004 FDI 2012 2004-2012 1 1 Singapore 36,610 24,390 56,651 11% 4 2 Indonesia 9,904 1,896 19,853 34% 4 2 Thailand 8,181 5,859 8,607 5% 3 3 Malaysia 7,033 4,624 10,074 10% 5 5 Vietnam 5,960 1,610 8,368 23% CAGR* = Compound annual growth rate 26 Source: UNCTAD
Thailand Infrastructure Development Program THB 2 trillion program for infrastructure development for 2015-2024 27
The three strategies for infrastructure development programs 1st Strategy 2nd Strategy 3rd Strategy Modal Shift Connectivity Mobility Promote the modal Develop transport Develop and upgrade shift from the higher infrastructure and transport facilities & cost to lower cost multimodal facilities to infrastructures to modes-i.e. from truck support connectivity to increase mobility. to rail or IWT. the sub-region and AEC. 28
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