Building Asean infrastructure could ruin Thailand

In order to “take its rightful place in the new Asian economy”, the Thai government is being told to implement major infrastructure projects or else “the Asean connectivity plan might fail”, warns former Asean secretary-general Surin Pitsuwan.

The government has earmarked Bt2.5 trillion to upgrade the country’s infrastructure. The investments are aimed at enhancing the country’s position before the inauguration of the Asean Economic Community in 2015.

However, when Portugal joined the European Union, its government hoped that it too would move from being an inward-looking rural nation to a small Atlantic powerhouse. There was no housing bubble as in Spain, no tax evasion on a massive scale as in Greece. But Portugal, egged on by the banks and pressured by European Union officials to “take its rightful place in Europe”, overspent on infrastructure. The economy was unable to keep up with the rest of the EU, and then cash flow into the country dried up, and its debt to GDP ratio went from 48 per cent in 2000 to 129 per cent this year and it had to be bailed out.

The problem is that the Asian market is much more price-competitive than Europe, and Thailand’s trade competitors will be much more cost-efficient because their citizens and businesses will not be saddled with this huge debt. The only people who will be happy are the World Bankers with their massive commissions.

Thailand risks following in the footsteps of Portugal and potentially losing its sovereign nation status to the World Bankers by allowing them and Asean to pressure it to launch major infrastructure projects. Failure of the Asean connectivity plan “would have a negative impact on the Asean Economic Community” (Surin again). 

But what about Thailand? What is good for Asean might not be good for Thailand.

Sebastian Woods

Chiang Mai