Of AEC trucks, trains, and automobiles, part 1/3

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Of AEC trucks, trains, and automobiles, part 1/3

Over the time we have been covering the upcoming ASEAN Economic Community (AEC) (due for inauguration at the end of 2015), it has been interesting to gather data, information, and, not the least, opinion from a variety of sources. As will have become quite clear, there are those keen to gloss over the potential pitfalls, others who are excited by the prospect but can see plenty of teething problems, and still others who can see nothing beyond advantages for a select few.

The truth lies almost certainly between a variety of these opinions: some concerns will be quickly allayed, others will fester for years after the advent of the economic community, and there may well be problems and concerns arising that have yet to be considered at this juncture.

In the following article, we look at what the Southeast Asia analysts at Credit Suisse have to say, especially with regard to some of the proposed infrastructure plans being mooted by the Thai government.

‘If the single market linking ASEAN economies does get established‚ and a significant

amount of difficult political wrangling remains ahead for that to happen‚ it should in theory serve as another shot in the arm for Thai exports.

But for the strongest of Southeast Asia’s mainland economies to see meaningful gains in regional exports, Thailand will have to spend a lot of money on new roads, rail and other key infrastructure‚ and so, eventually, will its neighbours,’ notes Credit Suisse economist Santitarn Sathirathai.

The Thai government has been well aware of the need to improve and drastically upgrade parts of its transport infrastructure if it hopes to take full advantage of the growing economies of its neighbours Myanmar, Laos, Cambodia, and Vietnam.

If Thailand cannot provide the required transit infrastructure for these economies, they will be looking for other ways and near neighbours to help with their burgeoning economic needs and Thailand will be left behind.

Sadly, Khun Santitarn believes Thailand’s most ambitious infrastructure goal of building four high-speed rail lines linking Bangkok to Chiang Mai, the Dawei port in Myanmar, and the Malaysian, and Lao, borders is simply not viable within the seven year time-frame it has suggested.

He notes, ‘Unlike in rail-friendly Europe and Japan…Thailand does not have multiple large cities with large passenger bases to fill those high-speed trains. Other than Bangkok…the country does not have a single city with more than 600,000 people, compared to the population centres of several million that act as successful high-speed rail hubs in China, Spain and Japan. [Thailand’s] largest cities may also be too

far apart to make high-speed rail appealing.’

Next issue: the technical issues of high-speed rail for Thailand

 

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