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The KRA CANAL AND BENEFITS FOR E-COMMERCE

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By Pakdee Tanapura

 

In September 2013, President Xi Jinping of the Peoples’ Republic of China announced the new Maritime Silk Road policy to pave the way for cooperation among countries of the Asia-Pacific region in the 21st Century. Later on, in order to make the cooperation more concrete, the Chinese leader came up with the
“One Belt One Road” idea. The President of China asked countries of the Asia-Pacific region sharing the same destiny to invest in infrastructure projects along the Maritime Silk Road.

In order to reach the set goal, the Peoples’ Republic of China founded the Asian Infrastructure Investment Bank (AIIB) as well as other financial organizations to pull together investment funds from various sources. The Chinese leader’s idea was widely welcomed by the international community.
More than 50 countries joined the AIIB and have become members within the  first six months following the founding of the new international bank. The Indian Prime Minister Modi has also thrown his weight behind the founding of the AIIB. He said that Asian countries need to develop their infrastructure and
also need to use the services of the new financial institution such as the AIIB because the existing international financial institutions have ceased to function since long. Prime Minister Modi was alluding to the World Bank and the International Monetary Fund (IMF), both of which are international financial
institutions under the influence of Western powers.

Because Thailand is situated at a strategic geographic location on the new Maritime Silk Road, at the center of ASEAN and at the junction point of the Pacific and Indian Oceans where around 3 billion people are making their livelihood. Therefore, the Asia Pacific region naturally represents the future development of
the region in the 21st Century. As new technologies set the stage for rapid communication around the world, digital marketing is allowing commercial partners to close deals in a matter of seconds. Transportation and logistics must, therefore, also be provided with high efficiency. Logistical support for increased trade must be both convenient and rapid.

 

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One could consider the following hypothesis: What kind of logistics must exist in order to link Shanghai, the trade and industrial center of China, with Mumbai, the trade and industrial center on the western coast of India, within 48 hours? Should this become possible, countries situated in the Asia-Pacific Region would
also be able to participate in the trade market of more than three billion people. Jack Ma, China’s wealthiest businessman, has shown that he is able to operate with modern digital marketing tools as well as take advantage of existing highly rapid logistics (high-speed train system). At present, he is able to reach out to a market of 300 million people in China. Jack Ma has become the third richest man in the world. In only 10 years, he has become the owner of a significant number of corporations, estimated at 130 billion U.S. dollars in the market.

 

By linking Shanghai in China to Mumbai in India, it will be necessary to use  Thailand as a midway transit point. Even if the Malacca Straits is at present the  most important Sea Lane of Communication (SLOC) in the region, it is, however, highly congested with ocean-going cargo vessels, large and small. It is estimated
that within 10 to 15 years from now, navigation in the Malacca Straits would reach such a critical point that it would not be able to handle the projected increase.
This situation should be considered a good opportunity for Thailand to open up a new Sea Lane of Communication by building the Kra Canal to connect the Andaman Sea to the Gulf of Thailand. This new maritime route will be the mega-infrastructure project, linking sea and land logistics and making transportation very convenient between Shanghai and Mumbai. If there is no Kra Canal, the vision of connecting Shanghai and Mumbai in 48 hours will just not materialize.

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