EEC’s success requires political stability

The Prayut government is betting heavily on the success of Thailand’s Eastern Economic Corridor (EEC) development 
programme, which it hopes will usher 
in new momentum for private 
investment in the country.
The programme includes a special economic zone that spans Rayong, Chon Buri and Chachoengsao provinces, 
serving as an crucial extension of the Eastern Seaboard Development programme successfully implemented three decades ago.
The new EEC agenda will for the first time allow the use of foreign currencies such as the US dollar inside the special economic zone, boosting Thailand’s attractiveness as a venue for international investment in Southeast Asia. The agenda also includes a high-speed train line to link the three international airports of Suvarnabhumi and Don Mueang in Bangkok and the eastern region’s U-tapao, which will be upgraded to serve both foreign tourists and cargoes.
Several hundred billion baht have been earmarked for this massive EEC development programme, with the Japanese recently becoming the first major target group of foreign investors invited to observe multiple EEC sites. The visitors were reportedly quite enthusiastic. More than 500 Japanese executives from both large companies as well as small and medium-sized enterprises were part of the official delegation led to Thailand by Japan’s Ministry of Economy, Trade and Industry.
Chinese and other nationalities will also be invited to invest in the EEC programme, which focuses on the new growth industries driven by digital and other leading technologies, such as 
e-commerce, logistics, aviation, electric automobiles, smart electronics, robotics, agriculture, food, bio-tech and medical services, tourism, bio-fuels and 
bio-chemicals.
To ensure the development 
programme’s sustainability, the 
government has proposed an EEC development bill for enactment by the National Legislative Assembly.
However, foreign investors, especially the Japanese – who have the most potential to invest in the programme – will think hard about Thailand’s political stability before proceeding with multibillion-baht projects in the country. Implementation of big investment projects takes years, so they must be reassured that the political future will be conducive to foreign investment.
EEC legislation alone might not be sufficient. More importantly, Thailand ought to be preparing for a smooth 
transition towards a democratically elected government in the near future. A credible political road map for the years after the National Council for Peace and Order is crucial, and Thailand needs to hold a general election to restore democracy.
In the early 1980s, then-premier General Prem Tinsulanonda was successful in launching the Eastern Seaboard Development programme as the country’s new driver of economic growth. That growth continued throughout his combined eight years in office.
For General Prayut, the road ahead appears to be more challenging, but the EEC development blueprint is no less crucial than the preceding Eastern Seaboard project. This is evidenced by the fact that the country’s economic growth rate of only 3-4 per cent per annum is lagging behind that of our regional neighbours. In other words, the Thai economy has performed well below its actual potential, largely due to political and other internal structural factors.
Hence, the country needs a big and powerful magnet to drive growth towards 4-6 per cent per annum over the next 2-3 decades, as benefits from the previous round of development have subsided.