BENEFIT ( New Inter-Asia Trade Route )
As mention in the Economic Feasibility of the Kra canal, it can be seen that the Straigts of Mallacca is the only point linking the Pacific Ocean and the Indian Ocean . In the past, importance was always placed on Europe and the Atlantic Ocean . However, the fact is, the Pacific Ocean and the Indian Ocean can be linked to be a communication of the Asian continent, which contain more than 2/3 of the total world's population. Population means enormous economic power, not useless consumers who are an obstruction to development. On the contrary, modern industrial and agricultural communities regard population as the producer that leads to economic expansion. At present, the Southeast Asian region is developing rapidly. China and India have policies to open their countries for external investment. It is expected that the Pacific Ocean and Indian Ocean region has a high potential for economic development compared with those in the Atlantic Ocean or other regions. Economists and institutions for national economic development expect that the future of the economy will depend on the growth of this region. Thus, the Kra canal will become the link between the Pacific Ocean and the Indian Ocean and enhance the importance of southeast Asia especially Thailand , in commerce and industry.
For many poeple, a canal is build to facilitate navigation only. Actually, the construction of the Kra Canal is the building up of a national economic base in Thai territory and under Thai sovereignty. Such an economic structure will encourage Thailand 's production effectiveness and that of the countries in this region. Since it is a huge project, the Kra Canal will become a center for other developments of basic economic development turning it from an agricultural community to a modern industrial community. With these concepts, we can determine the industrial development as result of the Kra Canal as follows:
1. Industry Related Directly to the Canal Construction
The construction of the canal requires to excavate and remove a lot of soil from the canal route which is approximately 102 kms. in length(Route 5) but the depth and the width will depend on the size of vessels. TAMS' report published in 1973 mentioned that the amount of soil to be excavated and remove from the canal route would be more than 3,800 cubic meters. This amount of soil would be excavated if we decide to construct a two-lane canal (with each canal lane at 170 meters wide and 26 meters deep), to allow two 250,000 dwt tankers to pass each other. Construction materials, such as, cement, steel as well as materials for constructing roads will be required during the constructing roads will be required during the construction. In addition, a lot of communication equipment are also needed to be installed. At present, Thailand can produce such materials and their production capacities can be increased easily. However, we still need to purchase from foreign countries, heavy earth moving machinery for soil excavation and their removal. Since there is a tremendous countries, heavy earth moving machinery for soil excavation and their removal. Since there is a tremendous amount if soil excavation and removal during construction, foreigners can be convinced to invest in Thailand , to produce these heavy earth moving and excavation machinery. After the canal construction has been completed, Thailand shall by then has an established industry to produce these heavy earth moving and excavation machinery. And, with the convenience of sea transportation, these machinery can be sold for export to foreign countries.
2. Development of Songkla Port and International Trading
Songkla is suitable to be developed into a deep-sea port. In TAMS' s feasibility study, Songkla is the most suitable place to be developed into an important port like Hong Kong and Singapore . After World War II was over, there was a plan to use Songkla as a navy base in Southeast Asia . Recently, the government constructed the a deep-sea port in Songkla for 2in Songkla for 20,000 dwt, this port can be further developed and will become important due to the expected increase of commerce and navigation.
2.1 Commercial potential of Songkla Port
Within a range of 2,400kms. around Songkla Port are many countries with a combined population of more than 1,200 million. International trading in this area is estimated to value at around US$ 28,000 Million a year. It is estimated that when the Kra Canal is inaugurated, the new Songkla Port may obtain around 10% profit from trading activities out of total trading volume (which is about US$28,000 Million). This means that Songkla Port be developed like annual income of no less than US$1,000 Million. It is feasible that Songkla Port be developed like Rotterdam Port in the Netherlands . At present, Rotterdam Port has an income of about 50% of the gross national product.
2.2 Development of Songkla Port as a Trans-Shipment Center
Most of the ports in Asia are shallow situated at the mouth of rivers and the gulf. To the West are Burma , Bangladesh and India . To the East are Indonesia , Vietnam and numerous seaports in China . The Kra Canal will change the geographical features and make Songkla suitable as a trans-shipment center, i.e. transferring cargo from large vessels to smaller ships and deliver them to the smaller ports within the region. Songkla Port should be developed into a large port that can provide services to about 10,000 vessels a year. It should also include a ship building and maintenance industry like the other modern ports.
2.3 Industrial Development Along the Canal
The Thai government should prepare a plan to develop industries around the Kra Canal , tourism and other services that are suitable to the local geographical features; i.e. in consideration to the natural resources in the South of Thailand. There are a lot of natural resources in that area. Therefore, the Government should conduct a thorough survey in order to make use of those resources for the industrial development around the Kra Canal .
However, the industrial development along the Kra Canal should not be limited to industry that utilized only domestic raw materials. Other industries which use imported raw material from foreign countries can also play an important role in the industrial development. The geographical features and location of the Kra Canal can enable it to become a center for the processing of raw materials brought in from the Middle East , India and Australia . And, the reprocessed materials or semi-finished products can then be re-exported to countries like Japan , Taiwan and Korea .
2.3.1 Industry Utilizing Domestic Resources
This category of industry consists of mainly small and medium size industry and local industry such as:
- Mineral and metal industries.
- Rubber industry.
- Aggro industry.
2.3.2 Industry Utilizing Foreign Resources
This category of industry consists of large scale industry that requires a large amount of investment. Private companies comprising of Thai nationals and foreigners will play an important role in developing such industry; especially industry that concerns ready-made products and semi ready-made products for export. These industries include:
-Oil refining, petrochemical and plastic industries.
- Chemical industry.
- Wood processing and furniture making industries.
- Pulp and paper industry.
2.3.3 Tourism and Related Service Industry
2.4 Job Creation from the Kra Canal Project
In the feasibility study Fusion Energy Foundation, the Kra Canal will be an important catalyst in the creation of jobs and employment. It is estimated that in the next 20 years, this project will provide jobs and employment for 3 to 5 million people.
2.4.1 Creation of Jobs During the Canal's Construction
Employment is created from the initial stage of construction. And employment will increase continuously until the construction of the canal is completed. In the initial stage of construction, there may not be as many jobs. However, as construction develops into full swing, a lot of jobs are expected to be generated by construction activities on the canal. The seaports and industries are expected to commence development at the large stage when the construction of the canal is almost complete. These development of industries and the seaport as well as ongoing maintenance on the completed action of the canal will generate more jobs. It is estimated that:
- During consideration of the canal,there will be estimated for 25,000 people
- Jobs will also be created from the production of materials and machinery used in the construction of the canal. It is estimated that more than 40% of the canal's construction costs will be spent as local expenditure worth US$500 Million a year for 10 consecutive years. Thus, there will be jobs for not less than 125,000 people.
2.4.2 Creation of Jobs After the Canal's Construction
If the construction of the canal began in 1989 (for completion by 2001), there would be 30,000 jobs available for the operation and maintenance of the canal. Industries mentioned earlier could create an additional 150,000 jobs including those from the construction, operation and industrial development project. In the next 5 years (by 2006) there would be about 250,000 jobs for mid-level and high-level workers. After an additional 10 years (by 2011), the expansion of navigation and construction, housing and industrial estates, etc. There should be around 1,00,000 kinds of jobs which can support 3 million people.
Job creation is very important for the future of the country. Jobs from the industrial sector will affect labour development and the quality of workers resulting in a more efficient labour force. The Kra Canal Project will bring workers from the agricultural sector to the industrial sector. At present, more than 90% of Thai population has only a lower elementary level of education. 82% or 20 million people have an elementary level of education. Industrial development and the construction of the graduates or equivalent will increase the number of more educated people. The number of secondary school graduates or equivalent will increase from 1.2 million to 4 million in the next 10 years.
To raise the education level of the population does not mean going to school only. We can raise the level of education through increase skills by job training. We can start with construction jobs which do not require advanced technology and then develop into machinery production and finally electronics. Thus, the Kra Canal will become a main "on-the-job training place" to raise the education of our labour force. The labour force will improve and eventually will become a skilled labour force will improve and eventually will become a skilled labour force in a short time.
The Kra Canal will have an important impact on the economic structure of the country. It is widely known that more than 75% of Thai labour is involved in the agricultural sector but these people can only contribute about 25% of the gross national product (GNP) whereas the 25% involved in the industrial sector share 75% of the GNP. The Kra Canal Project will draw population from the agricultural sector to the industrial sector and will decrease occupations in backward agricultural sector to maintain production capacity. In the future, Thai agriculturists may be as efficient as those in the U.S. i.e., one agriculturist can produce food for 100 people.
Labour development is necessary for Thailand. We need to improve this issue together with providing jobs for the labour working in the Middle East. These workers are well qualified. We spent a lot of investment developing them but now they help develop other countries instead. The Kra Canal will create many jobs, maybe enough, for the more than 100,000 people who are now working in the Middle East. It is hoped that these people will come back and play an important role in developing our country.
2.5 Real Estate Development for Industry and Housing
The construction o fthe Kra canal to link the Gulf of Thailand and the Andaman Sea not only attracts investors from various industries but the Thai government can also provide real estate development to support people living around the canal. The construction of Route 5 will raise the price of estates between Songkla and Satool, not only in the canal area but also in the adjacent provinces, especially those situated along the coasts of the Andaman Sea and the Gulf of Thailand .
From the study by TAMS, we primarily need about 50,000 rai of estate at the month of the canal on the Andaman Sea coasts for industry, housing and commerce. At the same time, 61,250 rai of estate on the Gulf of Thailand will be required for industrial development and housing. This real estate development will have working capital of 55,625 million baht. The government can use 20,000 million baht of this as investment capital for the construction of the canal.
It is estimated that the expansion of industry and housing for a population of 3.5 million will also expand real estate development by at least 10 times hat of the initial stage. This will cover an area of no less that 1,000,000 rai and raise a working capital of more than 500,000 million baht over the nest 20 years. Thus, the government will gain benefi from the net profit of no less than 100,000 million baht and can use that amount to pay debt resulting from the construction.
However, real estate is an important issue. The government must have strict measures to prevent real estate speculation around the canal area from the beginning of the project because it will cause a problem of unrealistically expensive real estate. A problem in estate on the east coast now comes from the deep-sea port and industrial development project at Laem Chabang and Map Ta Phut.
Although it is said that Bangkok is not Thailand , we cannot deny the fact that many rural people come to live or work in Bangkok , which causes a social problem that needs to be resolved urgently. The government cannot force them to stay in one place because they needs to be resolved urgently. The government cannot force them to stay in one place because they need to seek economic opportunity but also redistribute the density of population from Bangkok to the South. It will create a balance of population dispersion. The social problems arising from the population density of bangkok will be solved gradually.
2.5.1 The Kra Ccanal VS Maritime Development
It's fact that transportation by sea has been necessary for the international trading and world trading for the past 30 years. International trading by sea has been increasing rapidly not only in oil cargo but also in dry cargo. From 1950-1980, the amount of dry cargo increased by more than 400%. Currently , more than 80% of world international trading is done by sea.
For a development country like Thailand , international trading by land and by air amounts to very little. Sea transportation is inevitable is international trading. Transportation expenses expense aare an important factor affecting production costs and these in turn affect Thailand 's competition in the world market.
In sea transportation, the navigation route is related to the transportation fee stipulation. As we can see from the fact that is our starting oping, destinaiton, an ship are the same but the route taken is different, the expense of the shortest route will be less than of the longer route.
If we consider the importance for the navigation only, the Kra Ccanal will be of great benefit for world navigation, Thailand and navigation in the Asian region as a whole. The Kra Canal will offer a new short cut from the west coast of Malay Peninsula compared with the current navigation via the Str. of Malacca, the Sunda Strait or the Lombok Strait . In addition, I will give a lot of economic benefit.
2.5.2 The Maritime in Thailand
2.5.2.1 definition
Maritime, according to item 4 of the 1971 Maritime Promotion Act, means trasportation by sea marine insurance of anything related to navigation, navigation, dock and port business. It also covers any other business directly related to or a part of the above mentioned businesses.
International sea trading cannot exist without transportation and navigation, These two factors are important elements of maritime. In addition, a seaport is another important factor in making international sea trading complete and in full cycle.The seaport plays and important part in linking the network of international sea trading and facilitating the delivering of cargo to land. It is also acts as a station for delivering imported and exported cargo rapidly and efficiently.
Other business such as marine insurance, dock business and other directly related to or a part of business stated in the law are further components that make maritime complete as in the defined meaning.
2.5.2.2 Types of navigation
World Navigation for trading is separated into 2 kinds:
- Tramp navigation
Tramp navigation means unscheduled navigation of no specific routes Vessle issue in this king of navigation are
(a) fluid tankers (b) dry cargo vessels (c) mixed type vessels which contain both fluid and dry cargo.
- Linear navigation.
This is scheduled navigation of specific routes. Vessels used in this kind of navigation are
(a) conventional (b) container (c) semi-container
At present, the container plays a great role in international transportation. Liners have changee from conventinal to container.
2.5.2.3 The International Transportation Structure of Thailand
Sea transportation in Thailand at present has 11 routes as follows;
1) The ASEAN Route runs between Thailand-Brunie-Indonesia-Malaysia-Philippines-Singapore
2) The Far East Asia Route runs between Thailand-China_Taiwan_Hong Kong_Korea-Japan
3) The South Asia Route runs between Thailand-Bangladesh-Burma-India-Sri Langa-Maldives-Pakistan
4) The Australia Route runs between Thailand - Australia - New Zealand - Papua New Guinea
5) The Atlantic Europe runs between Thailand-European countries Atlantic
6) The Mediteranean Route runs between Thailand-Mediteranean countries
7) The Red Sea and Persian Gulf Route between Thailand-countries in the Red Sea and Persian Gulf
8) The Africa Route runs between Thailand and African countries
9) The South America Route runs between Thailand and South America
10) The East America and Middle America Route runs between Thailand and East America and middle America
11) The South America Route runs between Thailand and South America
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