INVESTMENT drawn to the proposed Eastern Economic Corridor (EEC) could push the country’s economic growth rate above 5 per cent by 2021, Siam Commercial Bank’s Economic Intelligence Centre (EIC) said.
Vithan Charoenphon, the head of service cluster at the centre, said that if the government’s flagship economic zone proceeds as planned, the GDP growth rate of more than 5 per cent would be achieved by 2021, enabled by a boost in foreign direct investment (FDI) and the EEC’s attraction for private and public investment in Thailand.
Thailand’s rate of growth in gross domestic product is in the range of 3 to 4 per cent a year.
In recent years, inflows of FDI have declined in Thailand, relative to those in other Asean countries.
“The EEC could play a part in attracting more FDI to a level that can see Thailand compete with other countries in the region. In the initial phase, no less than Bt10 billion of FDI will likely move into the country,” Vithan said.
Public investment is expected to rise 8.7 per cent this year, compared with last year's public-investment growth figure of 1.5 per cent. Private investment is forecast to increase 3 per cent from the previous year's 1.7 per cent, due partly to the government’s EEC policy, Vithan said.
The key thing is that the public sector has to ensure that the EEC really will materialise, he said. However, Vithan expects the EEC development - including big infrastructure projects and the regulatory requirements to smooth the way – will go ahead as planned.
He urged the government to ensure that attention will be given to upgrading skills in the workforce, so that there will be sufficient workers able to cope with the labour requirements of the 10 targeted industries that are at the heart of the government’s Thailand 4.0 policy.
He also said the government should be mindful of the environmental impact from an increase in the number of factories in the EEC and that safeguard measures should be put in place for the benefit of local communities.
The centre expects that industries covering aviation, logistics, digital businesses, and robotics and automation will be developed in the initial phase of the EEC plans.
In regard to the aviation industry, Thai business operators are expected to enter into the aircraft parts industry in the future as the planned maintenance, repair and overhaul centre (MRO) could prompt a doubling in the number of aircraft in the country. Currently, Thailand exports aircraft parts worth about Bt50 billion per year.
The digital industry will likely attract investment in Internet of Things (IoT), which could give an opportunity for Thai operators on the development of IoT solutions for industries. Thailand's IoT expenditure has been focused mainly on the manufacturing and logistics industries, while such outlays are minuscule in the agricultural sector.
If the agricultural sector applies IoT in water management and the control of diseases and pests, along with improving soil conditions, production will increase by 30-50 per cent per rai, the EIC forecasts. If the rice sector adopts IoT for such control methods, the production will rise to close to the world average at 480 kilogrammes per rai.
For the robotics and automation industry, the EIC expects Thai operators will become system integrators, providing professional services involving the design and procurement of automation systems for integration as required by end users.