Thailand: No post-election obstacles seen for EEC

  • On the junta’s flagship Eastern Economic Corridor (EEC) development scheme, experts said on 20 Mar 19 that most infrastructure projects will continue regardless of which political parties form the post-election government as they are all in favour of infrastructure development.
  • At least three major political parties – the Democrat, Pheu Thai and Future Forward – have vowed to study the details of the project and proposed investment to ensure the scheme is worth continuing. All three have agreed in principle, however, that the development policy itself is sound.
  • In addition, the Constitution obliges the incoming government to adhere to the 20-year national strategy, which includes several flagship infrastructure projects launched by the current government, as such no party could scrap it, said Burin Adulwattana, chief economist and strategist at Bangkok Bank.
  • However, Chatchart Sittiphan of Pheu Thai has said the next government would have to be careful about the investment aspect since the EEC project is vast, involving a huge amount of money.
  • Meanwhile, Obboon Thirachit, director of Fitch Rating (Thailand), said the EEC Act “should provide comfort for investors” about the continuity of the projects, but said that investments in some projects could be slower than expected due to the government formation process.
  • Nevertheless, he said the threat to investment inflow was the risk of political instability that could follow the election. A high possibility of a relatively weak coalition government may emerge, leading to the government’s inability to formulate policies.
  • That aside, Thai firms bidding on EEC projects, as well as Chinese and Japanese investors in the manufacturing sector, still do see the potential for growth in the EEC.
  • Burin said development of the EEC in the next decade would reinvigorate private and public investment, which has been lacklustre in the past decade, and would help Thailand avoid the “middle-income trap”.

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