What’s on Srettha’s mind?

On October 17, Srettha, who was then in Beijing for the Belt and Road Summit, posted on Twitter (X) a doodle of a map of Thailand with a part of the peninsula highlighted. He wrote: “I tried to draw Landbridge’s route for railway operators in China to make it easier to understand. It gives an image of the project of two piers but counted as one. The project will reduce the problem of double handling. Hurry and draw and talk to understand. Even though the picture didn’t come out very pretty, the communication was effective.” (Google translation from the Thai)

ผมลองวาดเส้นทางของ Landbridge ให้กับทางผู้ประกอบการรถไฟในประเทศจีนให้เข้าใจง่ายขึ้น ทำให้เห็นภาพของโครงการสองท่าเรือแต่นับรวมเป็นหนึ่ง โครงการจะลดปัญหาการจัดการซ้ำซ้อน (Double Handling) ได้ครับ

รีบวาดรีบคุยให้เข้าใจ แม้ภาพออกมาไม่ค่อยสวยเท่าไรแต่สื่อสารได้ผลดีเลยครับ 🙂 pic.twitter.com/1Dozo765Sw

— Srettha Thavisin (@Thavisin) October 17, 2023

On October 25, the Prime Minister said in a speech, “This may be one of the largest megaprojects in the world, which would make Thailand an attractive country for investment… The government will push for this project to be formed during our term,” The Bangkok Post reported.

What is the Prime Minister talking about?

What Srettha has been referring to is a centuries-old Thai dream: to reduce the sailing distance between the Indian Ocean Region and the waters of East Asia. The proposed route would cut across the Isthmus of Kra, and would provide an alternative to the longer and congested shipping route through the Strait of Malacca — the narrow sea lane that passes between Malaysia, Indonesia, and Singapore, and carries 25% of the world’s traded goods.

Srettha is not suggesting that a canal — like the Suez Canal or the Panama Canal — be cut through the isthmus to join the seas on either side. Instead, he is proposing a “land bridge” across the 90-km-wide strip, with two large-capacity ports or shipping terminals on either side, joined by an east-west economic corridor including an oil pipeline.

What is the history of this idea?

The earliest proposal to bringing the two seas of Thailand together came from the Thai monarch Narai the Great of the Ayutthaya Kingdom in 1677. Almost 200 years before the opening of the Suez Canal across the isthmus that joined Africa and Asia revolutionised the maritime commerce of Europe, King Narai had envisioned a canal across the Isthmus of Kra.

“For the Ayutthaya King, the primary motivation for constructing a sea link between the eastern and western coasts of Thailand was to facilitate rapid troop movement between these two water bodies so as to defend the nation from hostile actions by the then Burmese kingdom,” Sripathi Narayanan wrote in the paper, ‘Isthmus of Kra: Connecting the Malay Peninsula by Rail and Canal’, published by the New Delhi-based think tank Indian Council of World Affairs.

Narai the Great sought help from the French, who sent an engineer to survey the location of the project. This engineer concluded that the canal was not feasible, and the King gave up on the project.

However, the attraction of the idea persisted, and Britain and France carried out several studies between 1843 and 1883 to find a way to construct “a maritime channel of communication that could link the Gulf of Thailand and the Andaman Sea”, Narayanan wrote. A canal would suit the colonial interests of both these countries in the region.

The idea continued to excite countries and businesses in the 20th century, but was constrained by financial considerations. Finally, in 2021, the Thai government came up with a new proposal — a “Thai Land Bridge” instead of the Kra Canal.

What is Srettha’s aim, and how can Thailand benefit?

Not many details are available, but the 90-kilometre land bridge is expected to comprise road and rail networks to transport goods to and from deep sea ports on each coast.

It “would provide an alternative route cutting approximately 1,200 kilometres and 2 to 3 days from a journey through the busy Strait of Malacca, saving transport costs, reducing the risk of piracy and easing pressure on a waterway forecast to exceed its capacity in the next ten years,” according to an article published by Lowy Institute’s The Interpreter.

The Bangkok Post report quoted the Prime Minister as saying the project will reduce transport time by 6-9 days. According to Srettha, over the past decade, the GDP of Thailand had grown by only 1.8% per year on average, while household debt had increased from 76% of GDP to 91%, the report said.

Analysts have pointed out that demands for the Kra Canal or land bridge gain momentum whenever worries arise over Thailand’s economy. The project is supposed to create 280,000 jobs in the southern provinces of Ranong and Chumpon, and the state planning agency estimates the project could improve economic growth to 5.5% annually, a recent Reuters report said. As of now, Thailand’s economy is forecast to grow 2.8% in 2023 and 4.4% next year, the report said.

The project, if it comes to fruition, will also significantly strengthen the country’s position as a swing power in Southeast Asia.

And what challenges would the project have to overcome?

Building a land bridge through the Isthmus of Kra may not be as difficult as cutting a 90-km-wide piece of land to create a canal, but there are still many challenges.

Getting finances is the first problem. The Thai government has estimated that the project could cost around 1 trillion baht ($27.44 billion), and the PM appears to be banking on China for investments.

In 2015, an agreement was signed between the China-Thailand Kra Infrastructure Investment and Development company and Asia Union Group, to build the Kra Canal. While nothing came out of the deal, China has taken a lot of interest in the project in recent years.

Being able to avoid the Strait of Malacca would mean savings of time and energy and potential cuts in China’s trade costs. It will also “afford better control over the waterways… [and] offer Beijing an option to deploy naval assets quickly in the Indian Ocean if needed… [and] potentially improve China’s surveillance capability in the region,” according to a paper by Manoj Kewalramani, Kunaal Kini, and Anirudh Kanisetti. (‘The Kra Canal: What Does It Mean For India?’, Takshashila Institution)

However, getting deeply involved with China could have ramifications for Thailand’s relations with the United States, Japan, and India. Also, several China-backed infrastructure projects — such as the Pokhara airport in Nepal and Hambantota port in Sri Lanka — have struggled with issues of viability. In 2020, when the China-backed Kra Canal was still on the table, an internal Indian assessment concluded the project could end up as a “white elephant”. The assessment also flagged dangers of environmental damage, and a possible negative impact on marine ecology and tourism.