Centred in the middle of the Greater Mekong

Subregion (GMS) with direct access to the

Gulf of Thailand and the Andaman Sea,
Thailand is located in a strategic geographic
position with key trade routes throughout
the region. The Government of Thailand is
taking full advantage of the nations geographic
location as it prepares to launch a series of
aggressive infrastructure development projects
aimed at improving regional connectivity.
Ultimately, these infrastructure developments,
coupled with carefully-planned industr y
clusters and investment incentives, form part
of the Governments long-term mission to
move Thailand away from a labour-intensive
economy to a new, value-added position
higher up the supply chain.
Thailands central location within the GMS
puts the nation between the planned north-
south pan-Asian freight railway network and
East-West Economic Corridor that stretches
from Viet Nam to Myanmar. The long-awaited
pan-Asian railway will stretch from Kunming
in southern China all the way to Singapore,
and pass directly through Thailand.
The Asian Development Banks (ADB) East-
West Economic Corridor between Viet Nam,
Thailand, and Myanmar also provides another
opportunity for further trade. According to
former Board of Investment (BoI) Secretary-
General Dr. Atachka Sribunruang, an example
of Thailands project to link Myanmar with
western Thailand includes a highway

connecting Myanmars long-delayed Dawei
deep-sea port with Thailands popular Laem
Chabang deep-sea por t on the Eastern
Seaboard.
Road transportation is the most developed
mode of transport in Thailand and strongly
supports border trade between neighbouring
countries Malaysia, Myanmar, the Lao Peoples
Democr ati c Republ i c and Cambodi a.
According to the Thai Ministry of Commerce,
Thailand maintains a high level of cross-
border trade with an annual average growth
rate of 13 per cent in cross-border trade
compared with the international average of
8 per cent annual growth.
Thailands ports also provide trade routes
across international waters to markets in
Europe, India and the United States, with key
ports such as Laem Chabang and Bangkong.
Thailands largest port, Laem Chabang, is
ranked twenty-third in the worlds top
container por ts by the World Shipping
Council and ships 6 million Twenty-Foot
Equivalent Units (TEUs) annually.
Earlier this year, Prime Minister Yingluck
Shinawatra unveiled an ambitious US$ 67
billion plan to increase public spending on
several large-scale infrastructure projects
from 2013 to 2020 as part of the National
Development Strategic Plan. The Plans
objective is to lift Thailands economic growth
annually during the next decade and ultimately
transform the nation into a higher value-

added economy. According to industry
research giant Business Monitor International,
the project includes plans to expand 45
highways from two to four lanes and double-
track rail networks by 2,773 km, which would
allow trains to travel in both directions at the
same time.
One of the largest projects is the construction
of four new high-speed railway lines from the
Bangkok to the provinces of Nong Khai,
Chiang Mai, Rayong and Padang Besar. These
routes, stretching throughout Thailand, are
expected to improve supply chain connectivity
as goods produced in manufacturing estates
away from city centres can be efficiently
transpor ted to Thailands key por ts and
shipped to Europe and the United States.
UPDATE 3/2013
22 GREATER MEKONG SUBREGION
REGIONAL CONNECTIVITY TO
AID THAILANDS TRANSFORMATION
Contributed by: Lisa Vongchingtrong*
*Lisa Vongchingtrong is a summer analyst at Tractus Asia Ltd., a leading Asian FDI advisory firm. Additional information about Tractus can be obtained from the
companys website: www.tractus-asia.com.
http://thailand.ahk.de
The Government of Thailand is partnering
their aggressive infrastructure development
programme with investment programmes
desi gned to i mprove the countr ys
compet i t i veness. Accor di ng t o t he
Gover nments most recent annual
Competi ti veness Repor t, i nvestment
programmes of more than US$ 72 million
are already in place to increase development
and transform the nation into a value-added
economy. Government efforts to attract
investment also include advantageous BoI
i ncent i ves and an ext ensi ve cl ust er
programme for key industries.
BoI plans to refocus its strategy for future
growth by promoting new regional industrial
clusters with the aim of increasing Thailands
competitiveness. When a draft of this plan
was introduced to investors in 2012 it
included de-zoning the investment areas of
the country and establishing knowledge-
based and industry-focused clusters. The
introduced plan was initially met with negative
feedback from investors, and BoI is in the
process of revising the strategy. However,
exact details of the new strategy have not
been released yet.
Companies in targeted sectors that currently
receive incentives are, however, unlikely to
be affected by the new changes. The sectors
expected to experience high growth include
automobiles, electronics, food processing and
medical device industries, among others.
Thailand is taking full advantage of its geographic location to give itself a competitive edge over
other nations and drive its transformation into a value-added creative economy. Investment in
infrastructure and regional connectivity will improve trade routes and reduce logistic costs and
time. At the same time, further development of industrial estates and clusters as well as
supportive incentives from BoI, such as corporate tax reductions, give Thailand a competitive
advantage in addition to a geographic edge in the GMS.
GREATER MEKONG SUBREGION 23
BMW increases local engagement
ASEAN has identified the automotive industry as a key driver to industrialise the member
countries, create employment and strengthen educational programmes. In Thailand, BMW
Manufacturing is seen as a business partner that brings the latest technical expertise and
high-end technology to the country. We feel a deep responsibility to support educational
activities in order to enhance the competitiveness of Thailand. To demonstrate our
commitment to the region, BMW has increased its local engagement. Mr. Peter Wolf,
Managing Director - BMW Manufacturing (Thailand) Co., Ltd.
German luxury car manufacturer BMW operates a large assembly plant in Thailand,
producing all core BMW series models, both for domestic markets and regional export.
BMW is investing in expanding its capacity in Thailand following the announcement of the
ASEAN Free Trade Agreement.
Thailand is ASEANs automotive hub and produces 2.5 million cars annually, with about
half being manufactured for export. The domestic automotive cluster features agencies such
as assemblers, components and module makers, and educational and technical institutions
to assist the industrys high-value supply chain.