World News

Thai junta tells Japan investors $45-billion development plan to go ahead

BANGKOK (Reuters) - A $45-billion plan to redevelop Thailand’s industrial east will go ahead regardless of whoever takes power after elections, the military government told hundreds of Japanese investors on Monday.

The ruling junta, faced with weak exports and sluggish domestic demand, has focused on promoting investment to help revive growth in Southeast Asia’s second-largest economy, which lags regional peers.

The military government hopes the Eastern Economic Corridor (EEC) development project, worth 1.5 trillion baht ($45 billion), will lift growth to about 5 percent a year by 2020, from the latest government estimate of 3.5 for 2017.

“Regardless of which government is in office, or when the election will be held, the EEC plan will continue, with certainty,” Prime Minister Prayuth Chan-ocha told a gathering of 570 investors flown in from Japan.

“It is law, an act embedded within the 20-year national strategy, and supported by the national development plans.”

The junta has branded its 20-year strategy a guide for policymaking long after elections expected next year, at the earliest. The strategy has fueled concern among critics that the army plans to cement its grip on power, whoever wins an election.

Japan was Thailand’s biggest investor in 2016 with more than 57 billion baht ($1.7 billion), most of it going into the automobile industry.

Thailand, known as the “Detroit of Asia,” is a regional base for some of the world’s top carmakers, such as Toyota Motor Co. The government now wants to establish its own equivalent of Silicon Valley in the EEC.

“The digital innovation created there can go into supporting the automotive industry,” Pichet Durongkaveroj, the Minister of Digital Economy, told Reuters. “We aim to be a manufacturing hub for electric vehicles.”

Reporting by Patpicha Tanakasempipat and Pracha Hariraksapitak; Editing by Matthew Tostevin and Clarence Fernandez