ASEAN Logistics Hub on Maritime Silk Road

Member countries of ASEAN, comprising of Brunei, Kampuchea, Indonesia, Laos, Malaysia, Myanmar, The Philippines, Singapore, Thailand and Vietnam, make up the ASEAN Economic Community (AEC) and support each other’s economic de- velopment without intervening into each other’s political affairs.
Nevertheless, the total GDP of each member country varies greatly from one another. For example, Singapore’s income per capita is 49 times that of a Laotian. It is also 10 times that of a Thai and 5 times that of a Malaysian. The ASEAN Economic Community will have to solve this income discrepancy in the near future.


While a certain major world power is practicing the policy of encirclement of China by supporting conflict in South China Sea. President Xi Jinping of China responded with the policy to develop economies along the Maritime Silk Road. In order to create peace in the Asia-Pacific Region, large-scale infrastructure projects and double track rail system are being proposed to link the southern part of China all the way south to Singapore.
By building the Kra Canal in order to create an open and direct access from ships navigating from the South China Sea to the Indian Ocean would provide an impetus for trade development and economic growth, the necessary foundation for long-lasting peace.
It is known that large-scale infrastructure projects will trigger a redistribution of wealth which will a favorable impact in the short- and long-term. The development of the Kra Canal will also have an important impact on international political relations in the following way:

1. The Kra Canal will help reduce conflict situations in the Pacific Ocean re- gion. The project will open up to investments coming from different countries. For instance, China and Japan will join hands to develop large-scale investment projects in which both China and Japan may reap benefits. In the case of the Kra Canal, both countries stand to gain from a new international sea lane of communication. The Kra Canal is a very large project that needs to have the cooperation of every country.
2. The Kra Canal will help to reduce shipping congestion and tension in the Straits of Malacca. In the future, it is expected that the Kra Canal would even help to accelerate the economic development of the upper parts of ASEAN (Myanmar, Laos, Kampuchea and Vietnam) as well as Thailand. It will help to reduce income disparities among ASEAN countries themselves, thus creating a win-win situation for all.
3. India is on a rapid economic development path in an attempt to rise above the state of impoverishment. India would like to develop a high-speed double track rail system nationwide. India has adopted a Look East policy that encourages joint investment projects between India, ASEAN, China and Japan. The Kra Canal will be able to support the growing economic development in India.


4. Western countries are heavily involved in waging war in the Middle East. These same countries are in a state of bankruptcy. They are heavily indebted but still choose to finance wars in a major way. The BRICS countries (Brazil, Russia, India, China and South Africa), known their rapid economic development, have joined forces to create a new monetary system alongside the International Monetary Fund (IMF). China has also set up a new bank for investments in large projects called the Asian Infrastructure Investment Bank (AIIB), creating an alternative to the World Bank. This new bank’s policy is to provide loans to developing countries.
Both the BRICS Bank and the AIIB have already begun to replace the IMF and the World Bank simply because the latter institutions have stopped supporting development. One only has to consider the extremely strict conditions demanded of Thailand by the IMF when the financial crisis erupted in 1997. The Kra Canal project will be able to choose to borrow from the AIIB without the strict conditions which are often the obstacles to investment in development.


5. The change that has occurred in world politics, the end of the Washington Consensus and the Multi-polar World, will create a more favorable environment for the Kra Canal to exist in a new situation. Thailand now has the opportunity to choose to be neutral and to not always fall under the limitations set by western nations. The freedom to choose will allow Thailand to create “Special Economic Zones for Peace and Neutrality.” Knowing how to balance world powers is an altogether well-known strategy to Thailand that should be brought into play for the Kra Canal project.

The Increased Economic Importance of the western coastline of Thailand

1. Phuket, Phangna, Krabi and Trang are internationally well-known touristic destinations. When natural disasters strike as when huge tsunami waves hit the coasts on the Andaman Sea in 2004, the Phangna Naval Base was extensively damaged. Navy vessels from the Gulf of Thailand took several days to navigate through the Malacca Straits before they could reach the disaster sites to help the injured.

2. The fishing industry of Thailand, ranking third in the world in terms of number of shipping vessels, very often is confronted with serious problems when passing through the territorial waters of other nations. The Andaman Sea is no less bountiful than the Gulf of Thailand and the naval fleet of Myanmar is larger than that of Thailand. Therefore, Thailand has difficulty defending its interests, especially its fishing vessels, in the Andaman Sea.

3. With Myanmar opening its market to the world, Thailand has the intention to expand economic cooperation with its neighbors. In the future, Thailand and Myanmar will most likely explore mutual benefits in exploiting the riches of the sea in the same that it is already doing with Malaysia. The Royal Thai Navy will definitely have to shoulder increased responsibilities in safe- guarding its interests in the Andaman Sea.

By digging the Kra Canal, Thailand will be able to better defend its national interests along the western coastline. It would be an excellent way of breaking out of the confined area of the Gulf of Thailand. It means using the strategic geographic location of Thailand to expand its economic opportunities and national interests on the international level, according to the Sea Power principles of Alfred Tayer Mahan. According to Alfred T. Mahan, sea power consists of six factors:

1. Geographic position

2. Physical conformation

3. Extension of territory

4. Number of population

5. National character

6. Character of government


Construction of the Kra Canal would transform the geographic location of a country that is relatively closed, into a situation where the country would be open to the great ocean. This would increase the national security of Thailand. First Lieutenant Amornthep summarized the following in his thesis:
1. The Kra Canal must be built on the major axis of the current sea line of communication. Alfred T. Mahan reasons that a country that is situated on the main sea line of communication will stand to gain more benefits than any other country.
2. The geographic location of the Kra Canal lies on the maritime route linking the Indian Ocean and the Pacific Ocean. Even though the shipping time saved is only 44 hours when compared to the route via the Malacca Straits, the Kra Canal will place Thailand in a more advantageous position from the vantage point of national security and economic development. (5)