By upgrading the capacity of its multi-modal infrastructure and preparing facilities to serve growing world demand for high-technology goods and services, Thailand expects investment and development across various industries to thrive over the coming decades.
Building on its strategic location in the middle of the Indo-China region, the accelerated pace of economic integration in the Greater Mekong Subregion (GMS) and the subsequent improved flows of goods, services and people across the region are creating new opportunities for Thailand’s manufacturing, tourism and services industries.
When the Boten–Vientiane Railway (China–Laos railway) opens for service in December 2021, it will mark a significant advancement in the Trans-Asian Railway1 in its quest to become a fully-integrated transportation platform linking Asia and the Pacific.
At 414 km long, the Boten-Vientiane Railway connects China’s Yuxi-Mohan Railway in the North with the existing meter-gauge railway, which runs from Boten in Northern Laos to Vientiane, before crossing into Thailand at Thanaleng, and continuing to Nong Khai in Thailand’s Northeastern region, and finally to Bangkok. The railway will shorten transportation times from Yunnan to Nong Khai to 15 hours, compared with two days via road.
Besides lowering costs and improving the efficiency of logistics, the rail route will increase GMS access to Chinese markets and create new opportunities for tourism and the services sector. Thailand’s plan for the construction of a high-speed train route linking Bangkok initially with Nakhon Ratchasima, due to open in 2026, and then later with Nong Khai, due for completion in 2028, will enhance Thailand’s capacity to take advantage of better connectivity across the GMS market and China. The construction plan will include warehouses and transportation yards to facilitate goods transportation. A study conducted by the Bank of Thailand showed that the railway will reduce logistics costs from Yunnan to Nong Khai by half, boosting trade with Laos and China.
The private sector also expects collaboration under the Cambodia-Vietnam-Thailand Economic Corridor (CVTEC) to boost connectivity for trade and commerce, as well as for the meetings, incentive travel, conventions, and exhibitions (MICE) and tourism sectors. The CVTEC framework links Thailand’s industrial zone in the EEC to tourism destinations in Chanthaburi and Trat provinces; to Cambodia’s Kampot, Kep, Koh Kong and Preah Sihanouk provinces; and Vietnam’s Ca Mau and Kien Giang. The linkage of the three countries via rail, road and water represents an opportunity to develop high- value services such as in the MICE, medical and wellness sectors as well as in goods logistics.
Besides physical connectivity, the 7th GMS Summit Meeting2 included a commitment by the participants to push forward other mechanisms to help facilitate transport and trade flows across borders. These include the GMS Cross Border Transport Facilitation Agreement, which aims at streamlining the rules and regulations for cross-border trade, investment and tourism. The GMS members have also initiated a framework to encourage better integration of the energy sector focusing on power generation, transmission infrastructure, and power trade though power grid connection and the establishment of an integrated regional power market oriented toward clean and renewable energy.
The region also pledged to improve competitiveness by implementing measures for enhancing the food safety, security and environmental sustainability of agri-food production through value chain integration that favours small farmers, rural women and small and medium agri-enterprises and harmonised quality and safety standards. Moreover, tourism in the GSM should be boosted by promoting the region as a single tourist destination backed a well-coordinated marketing campaign and connected tourism infrastructure.