Economy & Tech
Is the Thai Prime Minister's KRA Landbridge Idea Feasible?
The proposed Kra landbridge would be costly but offer an interesting bypass to shipping through the Malacca Strait if Chinese participation can be limited.
Lately, Thai Prime Minister Srettha Thavisin has been pitching the idea of a landbridge across the Kra Isthmus in Thailand. While the Kra landbridge is not a new idea, it seems to have acquired renewed traction since he took over as prime minister earlier in August 2023.
As a shipping bypass to the Strait of Malacca, the idea was originally proposed way back in 1677. Then-Thai monarch Narai the Great of the Ayutthaya Kingdom wanted to join the Gulf of Thailand and the Andaman Sea.
The proposed landbridge would cut down traveling time between the Gulf of Thailand and the Andaman Sea. By running through the Isthmus of Kra, it would provide an alternative to the Strait of Malacca, which accounts for 25% of the world's goods trade.
Nevertheless, the project would be prohibitively expensive. Costs are estimated to run up to ฿1 trillion THB ($27.7 billion USD). The project would involve a 90 km (55 mile) railway and road bridge between ports in Chumpon and Ranong in Thailand.
Why is the Thai PM Pitching This?
The new prime minister is keen to attract foreign investments into his country. While, of course, the project is costly and will involve a lot of planning (besides difficulties in execution), it is certainly feasible in the long term.
In addition, as concerns about environmental pollution grow, this land bridge would cut down on greenhouse gas emissions. That is because it would cut down on the total distance between the Andaman Sea and the Gulf of Thailand.
As per PM Srettha, "This will be a global mega-project, which will shorten the duration of goods transport via the channel of the Malacca Strait by six to nine days".
It is worth noting here around 70,000 to 80,000 vessels transit annually through the Straits of Malacca. There is concern that it could reach its full capacity by the end of the decade. In addition, there is concern about a hypothetical closure of the Straits of Malacca for any reason. Experts estimated such a closure would cost shipping $65 million USD a week.
Besides, a landbridge across the Kra Isthmus undoubtedly makes for a better idea than a canal that would separate the country.
What Should Be the Role of India and Japan?
Since Thailand would be unable to execute this project on its own, the Thai Prime Minister has been pitching the project abroad at various forums. PM Srettha also doubles up as the country's finance minister. In that capacity, he took the plan to the Belt and Road (BRI) Forum in China and Saudi Arabia. Later, he pitched the same to members of the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco on November 12.
From the public and private sectors, both India and Japan have reasons to become involved. If this major project were to get into the hands of Chinese companies, it could be disastrous for the Japanese economy.
All Chinese companies are under varying degrees of monitoring and control by the Chinese government. If they gain management of the project, it would allow them to keep tabs on the kinds of cargo being ferried to and from Japan and other countries. In addition, they could gather intelligence on shipping not only from Japan but from other like-minded countries too.
Besides, New Delhi has the tri-service naval command in the Andaman and Nicobar Islands. Therefore, any Chinese activity in the vicinity of the Kra isthmus would be detrimental to India's interests.
Challenges
That said, quite a few challenges remain ahead.
First is the fact that goods would have to be offloaded and then reloaded at both ends of the landbridge. Tangentially, this raises the issue of Thailand's political stability. Parts of Southern Thailand have seen insurgency in the past.
Second, the present route has served China and the East Asian countries well. They may need a compelling reason to seek a change and invest in a new route.
Third, after the COVID-19 pandemic, the economies of many countries are still seeking to recover. Hence, they may not be in a position to invest in this kind of massive project.
Fourth, the cost-benefit ratio may not yet support the project. While the Panama and Suez Canals enable ships to cut down on thousands of kilometers, by contrast, the Kra landbridge would save a transit of only approximately 1,200 km.
What Lies Ahead?
Interestingly, China has been trying to bypass the Straits of Malacca in various ways. However, its interest in this project seems low. This could be because the BRI has been hit with financial and reputational problems in some of the countries it made loans to. Therefore, the Chinese may be loath to take such a huge risk again.
Hence, Indian, Japanese, and even American firms should take a close look at this project's feasibility, both in the short as well as the long term. Japan already has large-scale investments in Southeast Asia. A project such as this could be a good way to get back into the development sweepstakes.
On the other hand, India has what is known as the "Act-East Policy." Under this policy, India has been actively looking at Southeast Asia. New Delhi would like to develop the Sabang Port in collaboration with Indonesia. That area is not very far from India's Andaman and Nicobar chain of islands.
Thailand is keen that this should not be a China-only project. Hence the investment opportunity presents a great chance for India, Japan, and the US.
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Author: Rupakjyoti Borah
Dr Rupakjyoti Borah is a Senior Research Fellow with the Japan Forum for Strategic Studies. The views expressed here are personal.
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