Thailand’s Eastern Economic Corridor (EEC) is arguably the most ambitious connectivity project in mainland Southeast Asia, and has the potential to connect the Asia Pacific region with the Indian Ocean Rim and beyond.
From the Eastern Seaboard to the Eastern Economic Corridor
Thailand has long benefited from its strategic location at the heart of mainland Southeast Asia to drive its economic development. During the 1980s, the Thai government initiated the “Eastern Seaboard” project, to fast track national economic development and promote growth of industry, manufacturing, and exports. The Eastern Seaboard went on to become one of the region’s resounding success stories, resulting in large foreign investments in the automotive industry, manufacturing, petrochemical and heavy industries at Map Ta Phut, as well as logistics and shipping at Laem Chabang. Between the 1990s and 2000s, Thailand’s exports grew from USD 30 billion to 70 billion, mainly to Southeast Asia, Japan, Europe and the US.
The start of the 21st century has been marked by a dramatic shift in the global economic landscape: the rapid rise of China and India, and the emergence of mainland Southeast Asia as an investment destination. To capitalize on this reality, the Thai government initiated the EEC, building upon the success of the Eastern Seaboard, with the vision of creating a next-generation “growth area” to realise the “Thailand 4.0” strategy to promote sustainable economic growth based on the so-called “New S-Curve” industries with research, innovation, and the digital economy at their core.
The EEC project includes three main activities:
- Upgrading of Thailand’s transport and logistics infrastructure in order to provide a solid connectivity platform to link the EEC region with markets of the Asia Pacific, the Indian Ocean Rim, and beyond
- Establishing areas of concentration for investments in the “New S-Curve” industries, such as “EECi” to promote innovation, and “EECd” to promote the digital economy. A new EEC Office has been established to facilitate investments and provide novel incentives in addition to those offered by the Board of Investment (BOI)
- Creating areas for sustainable economic and social development through the use of new and environmentally-friendly technologies to enhance quality of life.
A number of major global firms have established and expanded investments in the EEC area to take profit from the new incentives under the EEC Act with new rules on land ownership to generous tax and non-tax measures. Since its launch in 2016, the EEC has already attracted over USD 53 billion of investment promotion applications.
New Infrastructure for New industries
The highlight of EEC plans for upgrading transportation and logistics infrastructure are the three “flagship” infrastructure megaprojects:
- High - Speed Rail linking Bangkok’s international airports at Don Mueang and Suvarnabhumi with the emerging aerospace hub at U-Tapao International Airport. Construction by a consortium of Thai, Chinese and Japanese contractors will soon start. When completed by 2025, this will seamlessly link Bangkok with the future “Aerotropolis” at U-Tapao
- Upgrading of the Laem Cha Bang deep sea port (Phase 3) to handle cargo capacity of 18.1 million TEU a year using the automated system and advanced full-scale services
- Developing U-Tapao International Airport and its “Aerotropolis” where investments in aerospace and aviation related industries are promoted. The Thai government has been in discussions with major international aerospace firms to develop aircraft maintenance and related facilities.
This USD 650 billion upgrade is being undertaken through public - private partnership, and will support the EEC’s vision of becoming ASEAN technological, manufacturing and service hub with strong connectivity to its neighbours, the ASEAN region, and beyond.
Smart Industries, Smart Cities
The EEC aims to bring innovation to improve the quality of living, through “7 Smarts” solutions – Smart Mobility, Smart People, Smart Living, Smart Economy, Smart Governance, Smart Energy and Smart Environment. The overall plan is to create a “Livable Smart City” for its residents and investors where technological integration, low carbon emission, a circular economy, and access to good public healthcare and education will not only create an environment suited for innovation, but also for sustainable living.
The EEC’s plans to create a hub for innovation (EECi) is already taking shape in Wang Chan Valley, with the creation of a world class international research institution – KVIS. It is envisioned that the Valley will be the core for the development of the region’s smart living environment.
The Digital Park Thailand (EECd) is also moving ahead after Thailand’s 5G spectrum auction was settled in February 2020. This will spearhead the country’s adoption of 5G as Thailand aims to be the first ASEAN country to harness such technology, and support the country’s digital technology development while aiming to attract digital businesses, particularly e-commerce and related logistics services.
One very relevant area for future development is biomedicine, which will complement Thailand’s strong public health system, ranked 6th in the 2019 World Health Care Index. It is foreseen that the EEC will further develop research and development capabilities in genomic science through the new ambitious venture “Genomics Thailand” genome sequencing center, and advance Thailand’s role as the region’s medical hub.
With 2 million skilled workers already in the EEC area, the Thai government aims to further enhance the productivity of its workforce to be ready for the Fourth Industrial Revolution (4IR), by promoting cooperation with foreign partners, such as Carnegie Mellon University (USA), Les Roches Institute (Switzerland) Pearson Education (UK) and Kosen College (Japan) to develop international-standard curriculum to reskill and upskill laborers to meet the needs of the industries.
Southeast Asia’s New Engine of Growth
The Asia Pacific, and Southeast Asia in particular, is expected to continue its rising trajectory in the coming decades. Being one of the world’s most connected regions, it is well suited to take advantage of new opportunities emanating from the growth of the digital economy and e-commerce. Thailand’s EEC project is envisioned as Southeast Asia’s hub for the new growth industries of the future, while providing an environment supportive of innovation and manufacture of the new products of the future. With plans for new infrastructure and new incentives to support further investments, the EEC will be the most attractive area in which to invest and do business for those with a future looking perspective.
For further information, visit the EEC website https://www.eeco.or.th/
Department of International Economic Affairs
Ministry of Foreign Affairs of Thailand