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Regional Connectivity &Thailand’s Investment Plans

Tuesday 13th November 2012, 10.30 AM

At St. Regis Bangkok

Dr. Porametee VimolsiriDeputy Secretary-GeneralNational Economic and Social Development Board (NESDB)

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Agenda

11Regional Connectivity and Sub-regional Cooperation

22 Thailand’s Investment Plans

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Major Projects : ASEAN & National

Single Window ASEAN Highway SKRL Road and Railway

linking Dawei Information

superhighways ASEAN Power Grid

Institutional

People to People

Master Plan on ASEAN Connectivity

Regional Connectivity and Sub-Regions

Physical

Connect economically and socially to mutually benefit from regional cooperation Ensure trust with neighbors Narrow development gap Provide development support in form of equitable development partnerships.

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Geographically, Thailand is in the center of ASEAN, its location is close to most ASEAN member countries.

In recent years, ASEAN economic importance for Thailand in terms of trade, investment and tourism, has been increasing.

Trade Liberalization among the member countries of ASEAN, makes ASEAN No.1 export market for Thailand since 2002, and Thailand’s second largest import market since 1997 (only second to Japan). Thailand has had a trade surplus with ASEAN since 1993.

Foreign Direct Investment (FDI) from ASEAN is accounted for 20 percent of total FDI

Number of ASEAN tourists traveling to Thailand is accounted for 30 percent of total foreign tourists (Malaysian tourist is the highest).

Shared resources/ trade partnership leads to cost reduction.

ASEAN Community: Prospective Advantages from Economic Partnership

• Expanded/increased opportunities for trade, investment, tourism and employment

• The competitive edge of the

entrepreneur is enhance

• Improved confidence and image

from the integration.

• Increased trade facilitation

among member countries

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Economic Corridor and Special Economic Zone Development

Yangon/Thilawa SEZ

Kunming

Udon Thani

Kota BerdanaKota PutraMalaysia

Lao PDR Vietnam

PR China

Huaysai

Mekong River

Nanning

Mae Sai

Tachilek

Cambodia

Mekong RiverSadao

WW EEDongha(tourism)

Hue(World

Heritage)

Danang(Deep

Seaport )

Mawlamyine

Savanh-SenoSEZ

TakLao Bao

SEZDansavanh

KhonKaenNakornsawan

Phnom Penh

Ho Chi Minh City

Vungtau

(Deep Seaport

)

Aranyaprathet

Poipet

Trat

Koh Kong

Dawei SEZ (Deep

Seaport)

Bangkok

Kanchanaburi

Thailand

ChiangSaen

Nong Khai

Chiang Khong

ChiangRai

Mukdahan

ICD Ladkrabang

Myanmar

ESB(Deep

Seaport)

SouthernEconomicCorridor

Vientiane

Open to Western Markets

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Thai – Laos – China High-speed Train

Train connecting sub-regionSingapore - Kunming

Border Economy Development

Deep Sea Port and Dawei Industrial Estate Development

Trilateral Exchange in Traffic Right between Thailand – Laos PDR – China and 4th Mekong River Crossover Bridge

ASEAN

Political-Security Commun

ity

Economic

Community

Socio-Cultural Commun

ity

Hat Yai – Sadao Motorway

Regional Connectivity SituationKey Infrastructure Development connecting to neighboring countries

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The linkage will be an effective link within the region corresponding to "ASEAN Connectivity"

Power up investment opportunities along GMS Southern Economic Corridor

Build up a strong connection between ASEAN countries.

New “Logistics Short Cut” of the Region

Distance to India from Vietnam, Thailand and Cambodia through Dawei port could be shorten to 3,500, 2,500 and 3,000 km. reduce from distance through the Strait of Malacca: 4,200, 4,500 and 4,200 km.

“Distribution Center & Production Base”

“Effective Link for ASEAN Connectivity”

The linkage will profit traders both from Myanmar and Thailand;

Because of the link to ASEAN highway system, Dawei could emerge as a trading hub linking Southeast Asia with the Indian Ocean, the Middle East, Europe and Africa, spurring growth in ASEAN region.

The linkage will attract rising FDI flow into the region and create the most complementary production bases in the region.

Thailand’s Opportunities for Industrial Production Base Expansion

Source: Italian-Thai Development LtD and Siam Commercial Bank

132 km

300 km

Dawei

Source: * DHL Interview in The Nation March 5, 2012, **UNESCAP report

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Myanmar-Thailand Joint Mechanism

Railway

PortPower Plant

Water Works & Waste Water

System

Telecom

Industrial Estate

quality of life &

community relocation

Road

Priority Projects

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Agenda

11Regional Connectivity and Sub-regional Cooperation

22Thailand’s Investment Plans

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Vision: Building Economic Partnership within the Region

Strategic Location Strategic Location

Trade & Investment Openness

Trade & Investment Openness

Competitive EconomyCompetitive Economy

Enhanced Connectivity & Efficient Logistics

Enhanced Connectivity & Efficient Logistics

Goal: 1. Strengthening role of Thailand in regional

trade and investment2. Increasing cross border trade and

investment from Thailand to neighboring countries up to 15% (Trade) and 10% (Investment) per year

3. Creating supply chain linkages with the region4. Decreasing domestic and international

transaction cost and improve its standard

Strategy:5. To promote Transport and Logistics linkages

at subregional level6. To create Investment and production bases7. To prepare for ASEAN Community 8. To build economic partnership within the region

in HRD and labor movement 9. To Jointly cooperate on preventing of drugs

protection, communicable diseases control, terrorism and natural disasters.

10.To promote environmental friendly cooperation activities

(GMS, IMT-GT, ACMECS, BIMSTEC)

(ASEAN)Asia PacificASEAN+3

ASEAN+6 APEC

1 2 3

Thailand’s Regional Perspective

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Economic Restructurin

g

Physical-Connectivity Development in Thailand

Balancing economic structure for quality and sustainable growth

Regional Connectivity

Cooperating with countries in the region for economic and social security

Infrastructure and logistics system development

Modernization of information technology and Communications

Economic legal and regulatory reforms

Development of water supply provision capacity

Energy securitization

Develop the network of transportation and logistics

systems under different regional frameworks Create standards of

service and facilities at the borders Integrate area-based development plan

with neighboring countries

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• Shift the Rank of Thailand’s economic competitiveness to 16th in the IMD ranking

• Rank among the world’s top ten countries for the ease of doing business

Infrastructure Development Target

• Interconnect regional supply chains that can facilitate economic development over a period of time

• Increase in Thailand’s cross-border trade and direct investment with neighboring countries to reach 15 percent and 10 percent per annual respectively

• Reduce logistics costs to be lower than 15% of GDP

• Increase the proportion of the Rail transport to 5%

• Increase the proportion of the renewable and the alternative energy consumption to the final energy consumption to be at least 19%

• Reduce energy import by at least 3%

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Financing for Reconstruction and Future Development Plan

More private participation & involvement

Total 72.064 Billion USD

32%

18%

50%

SOEs and Loan

PPP

Government

Development’s Financing Source

Infrastructure Sector Development’s Financing

To upgrade administration of government projects and

to stimulate the use of a more innovative private

sector’s technology.

65%6%

22%

2% 5%Land Transport

Air and Marine Transport

Energy

Telecommunication

Utility

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Infrastructure Development

Telecom Border Town Development

Transport

Land Transport Network Development Connecting Main Economic Zones & Cities in the Region and GMS

Energy

Efficiency + Shift Mode + Tackle Impact from Flood

Motorway and highway Linking with EWEC , NSEC,

SEC for economic expansion and AEC

Railways Development Master Plan 2010-2015 (176,808 mil. baht)

Intermodal facility and NSW

High speed Train linking GMS (742,000 mil. baht)

Develop Mass Transit Networks within the capital perimeter

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Infrastructure Development : Road and Bridge Projects

Western side of EWEC in Myanmar Rehabilitation of 18 km. Road

(Myawaddy-Kawkareik) New construction of 28 km. road

(Myawaddy-Kawkariek/mountainous area section)

Rehabilitation of 1st Mae Sai bridge

Route No. 11 in Lao PDR 82 km. Under construction, will be completed in 2014

The 4th Mekong bridge (T-L-PRC) Under Construction, will be

completed in 2013

Poo Doo – Pak Lai route (L) Ban Hwouk – Muang Kob (L) Road link new border crossing

points at Aranyaprathet (C)

Parts of Economic Corridors in Thailand Expansion of 2-lane to 4 lane highways Maintenance

.

Infrastructure linking Dawei (M) - Motorway Bang Yai-Kanchanaburi 97 km. : Details design complete. Searching for fund.

- Kanchanaburi-Border 70 km. Preparing for F/S and Detail Design.

Future

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Infrastructure Development : Railway Projects

Route From ToDistance

(KM)Amount

(Mill. USD)

North Bang Sue Chiang MAi

745 7,300

North-East Bang Sue Nong Kai 615 3,100

East Makkasan Rayong 330 2,300

South Bang Sue Huahin 225 2,600

Proposed GMS Railways Routes

Nong Khai – Thanalang (Rail) - Completed Construction 6 km. Aranyaprathet – Poipet (Rail) – Missing link 6 km. in Thailand, in

process for budget allocation.

MOU on High Speed Rail

SKRL Development

Cost of Construction – R1 (1.09) R2 (5.32) R3 (2.29) R4 (6.28) $billion

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Infrastructure Development: Airport and Port Projects

TelecomBorder Town Development

Transport Energy

Air Transport :

“Suvarnabhumi Airport to become a key airport of the region.”

Improve capacity and quality services to handle a volume traffic of 65 million people/year.

Utilize information and communication technology to enhance to international standard.

Maritime Transport :

“Laem Chabang port to be one of major ports in ASEAN.”

Modernize management of Laem Chabang Port

Information technology system to be upgraded to “E-Port” with connection with other international ports

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TelecomBorder Town Development

Transport

Energy

Infrastructure Development : Energy

Renewable Energy Technology shall be developed.

A search for new energy sources both domestic and aboard.

Cooperation with potential neighboring countries

Energy Security for Thailand

Link with Dawei

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EnergyBorder Town Development

Transport Telecom

Telecommunications Infrastructure Development

ICT System

Infrastructure Development : Telecommunications

High speed internet and broadband network

National Single Window

ICT supporting trade logistics

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•Urban Infrastructure

•Special Border Economic Zone

Urban Utilities SBEZ Facilities & CCA

Infrastructure Development

EnergyTransportBorder Town Development

Telecom

•Cross Border Facilities

Chaing KhongMae Sai

Mae Sot

Kanchanaburi

Nakhon Phanom

Mukdahan

Aranyaprathet

Potential Border Town

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Thank You for Your Kind Attention

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Back up

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Summary of 6 Development StrategiesCreation of quality Human capital and Society

11th Plan

Economic Restructuring

Management of Natural Resources

Good Governance

and implementation of

11th Plan

• Creation of Justice in Society (Strategy 1)

• Creation of Learning Society (Strategy 2)

• Strengthening of Agriculture sector and food & energy security (Strategy 3)

• Restructuring of the economy towards quality growth and sustainability

(Strategy 4)• Regional Connectivity

(Strategy 5)• Preparation for effects of

Climate Change and Transfer to low-carbon & environmentally friendly society (Strategy 6)

11TH NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT PLAN

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Economic Restructuring to Regional Connectivity

Creation of Regional Connectivity

Subregion

1. Connectivity/Logistics development

2. Supply chain development along

economic corridors

ASEAN Asia-Pacific

Preparation for

ASEAN

Community, esp.

human capital

To constructively

participate in

cooperation

frameworksStrengthening of Agriculture sector and food & energy security

Restructuring of Trade and Investment Sectors

Investment to develop STI, Infrastructure, and Energy security• To create linkages in investment,

production and value chains in markets with potential

• To expand investment abroad• To promote SMEs to have quality

growth

• To develop national resources as strong production base for agricultural sector

• To increase production efficiency and to generate additional value for production chain

• To generate food and energy security and to develop renewable energy

• To create enabling environment for economic restructuring

• To develop infrastructure and logistics system

• To secure power supply adequately

Economic Restructuring

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• 1st MOU signed in 2008

• Framework Agreement signed in 2010

• Sign 2nd MOU signed in July 2012

• Scope of Cooperation is in process.

• Joint Committee and Master plan on Dawei Development will soon be developed.

Cooperation

Total Area : 204 sq kmLocation : Taninthayi District

Distance : 132 km from Thai-Myanmar border

202 km from Kanchanaburi

342 Kmfrom Bangkok

472 km from ESB

Investment : approximately 9,000 mil. USD(exclude resettlement cost)

Concession : 60 years + possible extension

Land Lease : Up to 75 years

Full Capacity of Dawei Port (in 2037 est. )

• 200 mil. Ton per year or 14 mil. TEU compared to capacity of LCB port stage II which is 7.7 mil.TEU per year (not include container ports D1, D2, D3)

• 100,000 DWT compared to 80,000 of LCB port

• 25-40 meter-depthcompared to 14-16 meter-depth of LCB port

Overview of the Project

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Corridor Development between Dawei Project and Laem Chabang Seaport

Basic Infrastructures Development in Myanmar e.g. Road and Port

Border Development , Trade and

Transport Facilitation

Domestic Development: Enhance Current Logistics Infrastructure

and Economic area

1 2 3

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Cross Border Movement

Sharing of Benefit & Cost

Negative Effects

Financing Private Sector

• management and

facilitation of cross border

trade and investmen

t

• Urban Vs rural areas

• Advance Vs less- develop countries

• Financing of infrastructure investment and maintenance

• Managing of the negative effects of infrastru

cture

• Public-private risk sharing

Some of Key Measures to Overcome the Challenges

Challenges of Infrastructure Development linking Asia and GMS

Transform Transport Corridor to Economic Corridor Development Cross Border Transport Agreement ASEAN Infrastructure Fund Public and Private Partnership (PPP)