The new government can expect to face multiple challenges in implementing the ambitious Eastern Economic Corridor (EEC) initiative if it is truly to lift the economy to the next level, in the eyes of the business community and residents of the region.
Chachoengsao province has recently become a hot spot for landuse disputes as farmers protest against EEC development plans. Photo/The Nation
Orapin Sermpraphasilp, chairperson of the Federation of Thai Industries of the Eastern Region, noted that the necessary laws are in place and a dedicated EEC Office has been established. Businesspeople have high hopes that the government will speed state investments in the required infrastructure and facilitate private investment too.
She said the private sector is seeking further incentive to support the retraining of workers who will be needed in the region.
Manufacturers are prepared to work with the Labour Ministry in setting up training centres within their plants, but have asked for a 200-per-cent tax credit on their investments.
“We expect the new government to consider our proposed tax incentives to enable industries to upgrade production and technology to ‘Industry 4.0’ standards,” said Orapin.
The business community estimates the EEC will need about 400,000 skilled workers over the next five years. Orapin warned that the government would be unable to achieve its goal of establishing five new “s-curve” industries without a sizeable skilled labour force.
The s-curve industries are robotics, aviation and logistics, biofuel and biochemical, digital, and comprehensive medical.
State investments will meanwhile be huge in the needed infrastructure – a high-speed railway, a “smart city” and the expansion of the East’s airport and seaport facilities.
Another area posing challenges is research and development of new technology. Orapin said the business community plans to establish an R&D fund, possibly financed by large corporations, which she said would deserve tax allowances in return.
The fund would back small and medium-sized enterprises seeking to upgrade their operational efficiency and technological capacity.
Waste management poses a further obstacle. Private firms face significant hurdles obtaining licences to operate their own waste-treatment facilities, and toxic waste and pollution are chronic issues for the eastern industrial parks.
Orapin believes the region needs more treatment plants to deal with the situation and help prevent illegal dumping.
With China and the United States engaged in a tariff and trade showdown, foreign investors have begun channelling money to the EEC, an attractive alternative bet. “We’ve also witnessed foreign investors in recent months seeking Thai products they can export to the US,” said Orapin.
Their first choice in alternatives to China, however, remains Vietnam, which offers far better incentives than Thailand, she said.
Vietnam, like Thailand, lets foreigners lease in industrial zones for up to 99 years but, unlike Thailand, it attaches no strings, she pointed out.
Stanley Kang, chairman of the Joint Foreign Chambers of Commerce in Thailand, is worried about rising land prices, the shortage of skilled labour and red tape, which he said together make the EEC less attractive compared to industrial parks in Vietnam.
“The challenges are how Thailand can mount an adequate skilled workforce and how its ‘ease of doing business’ ranking can be improved so that licence approvals become much easier,” Kang said.
Saowaruj Rattanakhamfu, a senior research fellow at the Thailand Development Research Institute, added that the new government should take the issue of local participation seriously. The project initiated by the junta-led government was criticised as a “top-down process” and communities in the region feel shunted aside, said Saowaruj, whose research focuses on the EEC.
The new government has to make sure that citizens in the area also benefit, she said. Otherwise the massive investment would be of little use to the country. Lawmakers have to take into account income disparity and find ways to help disadvantaged people.
Hundreds of easterners staged a protest against the EEC at one point, worried about possible adverse effects.
Saowaruj is also concerned because the coalition government led by the Phalang Pracharat Party lacks stability.
“I wonder how efficiently they will be able to do their job,” she said. “Judging from the delay just setting up the government and their small majority in Parliament, they face a serious challenge in carrying out their work in a timely and productive fashion.”
Rangsan Somboon, a fishermen’s leader in Laem Chabang, said communities close to the seaport there – a key component of the EEC initiative – have already been hit with land expropriation for new roads.
The EEC blueprint calls for the port to be expanded to accommodate more ships laden with imports and exports. Rangsan reckons that 95 of the 103 families who earn a living by farming mussels will be adversely affected by the expansion.
He’s also worried about other fishing communities across Chon Buri province. Representatives of 18 groups will meet soon and collate information for both the government and the opposition, he said. But the junta-led government never paid much attention to local communities left in precarious circumstances, he said.
“We’re pinning our hopes on opposition MPs to bring the issues to Parliament for debate,” Rangsan said.
The chief concern for Pornapa Kuaycharoen, director of Land Watch, is the new city-plan bill, which she fears might hurt both farmers and the ecology in and around the Bang Pakong wetland.
The first draft envisioned the Bang Pakong delta included in a residential zone rather than remaining a green zone. Residents have so far been afforded little say at public hearings on the bill, Pornapa said.
Luxmon Attapich, deputy secretary-general of the EEC Office, offered some solace to concerned parties, saying the high-tech industries coming to the region would not need large properties, so any impact on nature or residents would be limited.