1.5trn Baht and counting: Thailand's eye-catching economic vision
Three of Thailand’s provinces are undergoing major transformations to create one of ASEAN’s economic hubs, and Business Review Asia paid a visit to find out more.
The sheer ambition present in Thailand’s Eastern Economic Corridor (EEC) project is enough for anyone to sit up and take notice.
In May, the Thai government announced plans to create a new ‘Special Economic Zone’; a 13,285 sq km area searing through the eastern seaboard provinces of Chachoengsao, Chonburi and Rayong, where a number of large-scale investments are to be undertaken.
Through these efforts to transform the logistical infrastructure in its most important districts, alongside some attractive tax incentives, the country is courting business from the world’s biggest companies.
The scale is enormous, with at least 1.5trn worth of public and private Thai Baht (US$43bn) expected to be spent on the EEC over the next five years. The numbers only tell a part of it, however, for Thailand is a nation not just eager to be one of ASEAN’s success stories, but keen to create a culture of innovation in its economy.
At the heart of the EEC
Keeping ahead of the game when it comes to technology is at the core of the EEC project, as Secretary General Kanit Sangsubhan explains.
“We set up the EEC because technology disruption is sweeping across the world now. If you cannot follow the trends, you will be in trouble,” he comments from his department’s offices in Bangkok.
“Now, what we're trying to do is to predict what new industries can prosper in Thailand. We're talking about, for example, the electric vehicle market. Thailand has a big base for automobiles already, so how can we upgrade it to suit the new trend of electric vehicles?”
The next-generation automotive industry is just one of Thailand’s initial target areas for development, along with intelligent electronics, advanced agriculture and biotechnology enterprises, food processing industries and tourism.
Following on from these are five new industries it hopes to see grow in the region: advanced robotics, modern aviation, healthcare services, biofuel and biochemical industries and digital technology industries.
Innovation even has its own sub-category within the EEC project, with a specific EECi region dedicated to fostering the best talent through research and development and education partnerships with leading institutes, such as the Vidyasirimedhi Institute in Rayong.
“Our university was one of the first to help the government in creating its next-generation man-power to support the EEC,” says its Director, Dr Pailin Chuchottaworn.
“We never think, though, that with this one alone we can change the country. Actually what we consider ourselves as is a discipline. The meaning is that if we find success in what we are doing, we will create a wave of change to our system. With this change being in place at Thai universities, the country will benefit.”
The major projects
One of the biggest expenditures in the EEC is taking place at U-Tapao International Airport, a combined civil and military airport built by the US during the Vietnam War in the Ban Chang district of Rayong, around 175km south of Bangkok.
Some 200bn Baht (US$5.7bn) is being spent to evolve U-Tapao into a world-class centre for passenger and logistics aviation. A second runway will be installed by 2021, along with a new terminal building and an upgraded Maintenance, Repair and Overhaul (MRO) centre. Airbus and national carrier Thai Airways are invested in its development after a signing a Memorandum of Understanding in March.
“At this stage, we operate and provide services just for passengers but in the near future we will add more activities concerned with the aero-industry and the growth of the industry in the area,” says Woralpol Tongpricha, the airport’s Director.
“We will add better logistic operations inside the airfield with the MRO activities and we will provide some part of that area for investors who provide services in terms of aircraft maintenance. The training centre is vital for the growth of the aero-industry as well, so a lot of the training activity will be located in the centre at U-Tapao.”
As one of the logistical hubs of the EEC, the travel time from U-Tapao to Bangkok is set to be halved with the construction of state-of-the-art transport systems from Rayong’s south coast right up to Donmuang International Airport on the outskirts of the capital.
High-speed trains will link U-Tapao to Donmuang via Bangkok’s main passenger airport, Suvarnabhumi, a project set to cost 158bn Baht (US$4.5bn). The motorway connecting Rayong to Bangkok will be extended and expanded, while double-track rail lines are to be built to better serve Thailand’s key industrial zones and connect three major ports at Laem Chabang, Map Ta Phut and Sattahip.
Laem Chabang’s deep sea port itself is the subject of an 88bn Baht (US$2.5bn) upgrade. Currently among the top 25 ports of its kind in the world, the implementation of its Phase 3 plan – five major new terminals – will increase annual container capacity to nearly 19mn twenty-foot equivalent units (TEUs), elevating it into the top 15.
Already the country’s main through point for imports and exports, the government hopes to see Laem Chabang develop further into the ‘Rotterdam of ASEAN’, the region’s primary gateway.
These vast swathes of investment into the EEC all make up part of Thailand’s wider aim to stand out among a group of equally ambitious nations in Southeast Asia. The next stage of its long-term economic model is ‘Thailand 4.0,’ or the creation of an innovation-driven society. Sangsubhan believes it will be achieved in cooperation with its neighbours, however, rather than in competition with them.
“We’re not in the competitive mode so much, we're talking more about cooperation,” he concludes.
“We compete but it's a healthy kind of competition, to obtain new technologies. That's what we need, but it's not about competing for the business. We can get along well.
“With the EEC, we'll call for cooperation with our neighbouring countries. The question is ‘how can we spread the development of this region from the EEC to the likes of Myanmar or Cambodia?’ That's our aim.”
Business Chief Legend: Ho Ching, CEO of Temasek
Ask Singaporeans who Ho Ching is, and the majority will answer the ‘wife of Prime Minister Lee Hsien Loong’. And that’s certainly true. However, she’s also the CEO of Temasek Holdings, Singapore’s sovereign wealth fund, and one of the world’s largest investment companies.
Well, she is until October 1, 2021, as she recently announced she would be retiring following 16 years as CEO of the investment giant.
Since taking the reins in 2004, two years after joining Temasek as Executive Director, Ho has gradually transformed what was an investment firm wholly owned by Singapore’s Government into an active investor worldwide, splashing out on sectors like life sciences and tech, expanding its physical footprint with 11 offices worldwide (from London to Mumbai to San Francisco) and delivering growth of US$120 billion between 2010-2020.
Described by Temasek chairman Lim Boon Heng as having taken “bold steps to open new pathways in finding the character of the organisations”, Ho is credited with building Temasek’s international portfolio, with China recently surpassing Singapore for the first time.
As global a footprint as Ho may have however, she has her feet firmly planted on Singapore soil and is committed to this tiny city-state where she was not only educated (excluding a year at Stanford) but has remained throughout her long and illustrious career – first as an engineer at the Ministry of Defence in 1976, where she met her husband, and most notably as CEO of Singapore Technologies, where she spent a decade, and where she is credited with repositioning and growing the group into the largest listed defence engineering company in Asia.
It’s little wonder Ho has featured on Forbes’ annual World’s Most Powerful Women list for the past 16 years, in 2007 as the third most powerful woman in business outside the US, and in 2020 at #30 worldwide.
But it’s not all business. Ho has a strong track record in Singapore public service, serving as chairman of the Singapore Institute of Standards and Industrial Research and as deputy chairman of the Economic Development Board; and is a committed philanthropist with a focus on learning difficulties and healthcare.
As the pandemic kicked off, she not only led active investments in technology and life sciences, with German COVID-19 vaccine developer BioNTech among the most recent additions to Temasek’s portfolio, but through the Temasek Foundation – the firm’s philanthropic arm which supports vulnerable groups close to Ho’s heart, handed out hand sanitiser and face masks.
So, you would be forgiven for thinking that at age 68, Ho might simply relax. But in March 2021, just as she announced her retirement from Temasek, Ho joined the Board of Directors of Wellcome Leap, a US-based non-profit organisation that’s dedicated to accelerating innovations in global health. Not ready to put her firmly grounded feet up yet it seems.