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Regional Connectivity &Thailands Investment PlansTuesday 13th November 2012, 10.30 AMAt St. Regis BangkokDr. Porametee VimolsiriDeputy Secretary-GeneralNational Economic and Social Development Board (NESDB)

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Agenda1Regional Connectivity and Sub-regional Cooperation2Thailands Investment Plans16 October 2012# www.nesdb.go.th2

Major Projects : ASEAN & National Single Window ASEAN Highway SKRL Road and Railway linking Dawei Information superhighways ASEAN Power GridInstitutional People to People Master Plan on ASEAN ConnectivityRegional Connectivity and Sub-Regions Physical

Connect economically and socially to mutually benefit from regional cooperationEnsure trust with neighbors Narrow development gapProvide development support in form of equitable development partnerships. 16 October 2012# www.nesdb.go.thIn Thailand national well-being has been in concern for development since the 8th National Economic and Social Development Plan(1997-2001)

3Geographically, Thailand is in the center of ASEAN, its location is close to most ASEAN member countries.In recent years, ASEAN economic importance for Thailand in terms of trade, investment and tourism, has been increasing.

Trade Liberalization among the member countries of ASEAN, makes ASEAN No.1 export market for Thailand since 2002, and Thailands second largest import market since 1997 (only second to Japan). Thailand has had a trade surplus with ASEAN since 1993.Foreign Direct Investment (FDI) from ASEAN is accounted for 20 percent of total FDINumber of ASEAN tourists traveling to Thailand is accounted for 30 percent of total foreign tourists (Malaysian tourist is the highest).

Shared resources/ trade partnership leads to cost reduction. ASEAN Community: Prospective Advantages from Economic Partnership16 October 2012# www.nesdb.go.th

Economic Corridor and Special Economic Zone Development Yangon/Thilawa SEZ

KunmingUdon ThaniKota BerdanaKota PutraMalaysiaLao PDRVietnamPR ChinaHuaysaiMekong River

NanningMae SaiTachilekCambodiaMekong RiverSadaoWEDongha(tourism)Hue(World Heritage)Danang(Deep Seaport )MawlamyineSavanh-SenoSEZTak

Lao BaoSEZDansavanh

KhonKaenNakornsawanPhnom PenhHo Chi Minh CityVungtau(Deep Seaport)AranyaprathetPoipetTratKoh KongDawei SEZ (Deep Seaport)

BangkokKanchanaburi

ThailandChiangSaenNong KhaiChiang KhongChiangRaiMukdahanICD LadkrabangMyanmar

ESB(Deep Seaport)SouthernEconomicCorridorVientianeOpen to Western Markets16 October 2012# www.nesdb.go.th5Economic Corridor and Regional Integration Linkages Development at Border Area

Under the GMS co-operation framework, Thailand has develop the transport and logistics infrastructure connecting the North-South, East-West and Southern Economic Corridor. Furthermore, to link the trade and economic with other countries, Thailand set direction to develop border cities and special economic zones as follows; Position and develop border cities to serve the industrial, agriculture and tourism sector linking to the neighboring countries and the region Establish trade facilities at the special economic zone and border cities in order to be the trade gateway link with neighboring countries Connect the special economic zone and border cities to the central business areas of Thailand in order to link Thailand production supply chain to neighboring countries effectively

Thai Laos China High-speed Train Train connecting sub-regionSingapore - KunmingBorder Economy DevelopmentDeep Sea Port and Dawei Industrial Estate Development

Trilateral Exchange in Traffic Right between Thailand Laos PDR China and 4th Mekong River Crossover Bridge

ASEANPolitical-Security CommunityEconomic CommunitySocio-Cultural CommunityHat Yai Sadao Motorway

Regional Connectivity SituationKey Infrastructure Development connecting to neighboring countries16 October 2012# www.nesdb.go.thKey Initiatives: Transport and Logistics Development Linkages to the neighboring countries

Thailand plays an instrumental role in supporting the connectivity of ASEAN countries with construction, technical assistance, and finance through ASEAN co-operation framework and other sub-regional frameworks such as GMS, IMT-GT, BIMSTEC, etc. During the past decade, there are several key initiatives of Thailand which are Establishing the rules and regulations to support the cross-border movement. Thailand developed trilateral Exchange in Traffic Right between Thailand Laos PDR China and 4th Mekong River Crossover Bridge. Thailand developed the cross-border trade agreement between Laos, Cambodia Promoting the establishment of Dawei industrial estate development and deep sea portThailand set a plan to connect the infrastructure; road transport, telecommunication and Electricity and Gas Pipeline system link to the project areaConnect Railway Link to the ASEAN framework co-operation plan Thailand connected the rail network according to the ASEAN framework co-operation (Singapore Kunming Rail Link: SKRL) and also prepared a plan to develop High Speed Train connecting to neighboring countries. Development the quality of border facilityThailand has improved the congestion of border facility at Hat-Yai and Sadao and prepare the plan to construct the motorway road connecting to neighboring countries.

6The linkage will be an effective link within the region corresponding to "ASEAN Connectivity"Power up investment opportunities along GMS Southern Economic CorridorBuild up a strong connection between ASEAN countries.New Logistics Short Cut of the Region Distance to India from Vietnam, Thailand and Cambodia through Dawei port could be shorten to 3,500, 2,500 and 3,000 km. reduce from distance through the Strait of Malacca: 4,200, 4,500 and 4,200 km. Distribution Center & Production BaseEffective Link for ASEAN ConnectivityThe linkage will profit traders both from Myanmar and Thailand;Because of the link to ASEAN highway system, Dawei could emerge as a trading hub linking Southeast Asia with the Indian Ocean, the Middle East, Europe and Africa, spurring growth in ASEAN region.The linkage will attract rising FDI flow into the region and create the most complementary production bases in the region.Thailands Opportunities for Industrial Production Base Expansion Source: Italian-Thai Development LtD and Siam Commercial Bank

132 km300 kmDawei

Source: * DHL Interview in The Nation March 5, 2012, **UNESCAP report16 October 2012# www.nesdb.go.thThe forth factor which needs to be taken into account for the 2nd plan design is Thailands Opportunities for Industrial Production Base Expansion . It cannot be denied that one of the most talked about topics during the past months is Dawei Deep Sea Port Development in Myanmar. The port will bring about the opportunities for Thailand to expand its industrial production base through the Dawei- Laem Chabng Linkage. Comes with the linkages are the following advantages. Effective Link for ASEAN Connectivity Dawei mega project when completed and linked with ESB; will be a regional effective link corresponding to the plan for greater "ASEAN Connectivity"; the linkage will power up investment opportunities along GMS Southern Economic Corridor. The linkage through infrastructure and development will also create stability in the region and build up a strong connection between ASEAN countries.New Logistics Short Cut of the Region. By its linkage to ESB, it will considerably shorten sea freight and voyage distance for nations in ASEAN. For example, distance to India through Dawei port could be shorten to 3,500, 2,500 and 3,000 km. for Vietnam, Thailand and Cambodia compared to the distance through the Strait of Malacca which are 4,200, 4,500 and 4,200 km. respectively. Distribution Center & Production Base Dawei mega project will also profit traders from Myanma and Thailand. Because of the link to the ASEAN highway system. Dawei could emerge as a trading hub linking Southeast Asia with the Indian Ocean, the Middle East, Europe and Africa, spurring growth in the entire ASEAN region. The linkage will attract rising FDI flow into the region and create Dawei - ESB as the most complementary production bases in the region.

7Myanmar-Thailand Joint Mechanism

RailwayPortPower PlantWater Works & Waste Water SystemTelecom Industrial Estatequality of life & community relocationRoadPriority Projects 16 October 2012# www.nesdb.go.th(1) toll road, (2) railway connecting between Dawei and Thai-Myanmar border, (3) Dawei deep seaport, (4) industrial estate, (5) power plant, (6) water supply and waste water system, (7) telecommunication, and (8) peoples quality of life and community relocation8

Agenda1Regional Connectivity and Sub-regional Cooperation2Thailands Investment Plans16 October 2012# www.nesdb.go.th9Vision: Building Economic Partnership within the Region

Strategic Location Trade & Investment OpennessCompetitive EconomyEnhanced Connectivity & Efficient LogisticsGoal: Strengthening role of Thailand in regional trade and investment Increasing cross border trade and investment from Thailand to neighboring countries up to 15% (Trade) and 10% (Investment) per year Creating supply chain linkages with the region Decreasing domestic and international transaction cost and improve its standard

Strategy:To promote Transport and Logistics linkages at subregional levelTo create Investment and production basesTo prepare for ASEAN Community To build economic partnership within the region in HRD and labor movement To Jointly cooperate on preventing of drugs protection, communicable diseases control, terrorism and natural disasters. To promote environmental friendly cooperation activities (GMS, IMT-GT, ACMECS, BIMSTEC)(ASEAN)Asia PacificASEAN+3ASEAN+6 APEC

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3Thailands Regional Perspective 16 October 2012# www.nesdb.go.th

Economic RestructuringPhysical-Connectivity Development in ThailandBalancing economic structure for quality and sustainable growthRegional ConnectivityCooperating with countries in the region for economic and social security Infrastructure and logistics system development Modernization of information technology and Communications Economic legal and regulatory reforms Development of water supply provision capacity Energy securitization Develop the network of transportation and logistics systems under different regional frameworks Create standards of service and facilities at the borders Integrate area-based development plan with neighboring countries

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Shift the Rank of Thailands economic competitiveness to 16th in the IMD rankingRank among the worlds top ten countries for the ease of doing businessInfrastructure Development TargetInterconnect regional supply chains that can facilitate economic development over a period of timeIncrease in Thailands cross-border trade and direct investment with neighboring countries to reach 15 percent and 10 percent per annual respectively

Reduce logistics costs to be lower than 15% of GDPIncrease the proportion of the Rail transport to 5%Increase the proportion of the renewable and the alternative energy consumption to the final energy consumption to be at least 19% Reduce energy import by at least 3%

16 October 2012# www.nesdb.go.th12Financing for Reconstruction and Future Development Plan

More private participation & involvement Total 72.064 Billion USDDevelopments Financing SourceInfrastructure Sector Developments FinancingTo upgrade administration of government projects and to stimulate the use of a more innovative private sectors technology.

16 October 2012# www.nesdb.go.ththe Reconstruction and Future Development Plan and the directions of the nations infrastructure development, it is expected that nearly 72,000 million US dollars will be needed with the major spending going towards transport and energy infrastructure development. In term of the developments financing sources, infrastructure projects will be financed through different channels including government budget and loans, PPP and State Own Enterprises revenue. As you all can see that the partnership with the private sector in infrastructure development is being promoted, as the PPP scheme is included in the plans financing sources of which 18% coming through the scheme. Private participation on government infrastructure projects will allow for the upgrade of government projects administration and the stimulation of the use of a more innovative private sectors technology.

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Infrastructure Development Telecom Border Town DevelopmentTransport Land Transport Network Development Connecting Main Economic Zones & Cities in the Region and GMS Energy

Efficiency + Shift Mode + Tackle Impact from Flood Motorway and highway Linking with EWEC , NSEC, SEC for economic expansion and AEC Railways Development Master Plan 2010-2015 (176,808 mil. baht) Intermodal facility and NSW High speed Train linking GMS (742,000 mil. baht) Develop Mass Transit Networks within the capital perimeter

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Infrastructure Development : Road and Bridge Projects Western side of EWEC in Myanmar Rehabilitation of 18 km. Road (Myawaddy-Kawkareik) New construction of 28 km. road (Myawaddy-Kawkariek/mountainous area section) Rehabilitation of 1st Mae Sai bridgeRoute No. 11 in Lao PDR 82 km. Under construction, will be completed in 2014The 4th Mekong bridge (T-L-PRC) Under Construction, will be completed in 2013 Poo Doo Pak Lai route (L) Ban Hwouk Muang Kob (L) Road link new border crossing points at Aranyaprathet (C)

Parts of Economic Corridors in Thailand Expansion of 2-lane to 4 lane highways Maintenance. Infrastructure linking Dawei (M) - Motorway Bang Yai-Kanchanaburi 97 km. : Details design complete. Searching for fund.- Kanchanaburi-Border 70 km. Preparing for F/S and Detail Design.

Future

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Infrastructure Development : Railway Projects RouteFromToDistance(KM)Amount(Mill. USD)NorthBang SueChiang MAi7457,300North-EastBang SueNong Kai6153,100EastMakkasanRayong3302,300SouthBang SueHuahin 2252,600

Proposed GMS Railways Routes Nong Khai Thanalang (Rail) - Completed Construction 6 km. Aranyaprathet Poipet (Rail) Missing link 6 km. in Thailand, in process for budget allocation.

MOU on High Speed RailSKRL Development Cost of Construction R1 (1.09) R2 (5.32) R3 (2.29) R4 (6.28) $billion 16 October 2012# www.nesdb.go.thInfrastructure Development: Airport and Port Projects TelecomBorder Town DevelopmentTransport EnergyAir Transport : Suvarnabhumi Airport to become a key airport of the region. Improve capacity and quality services to handle a volume traffic of 65 million people/year. Utilize information and communication technology to enhance to international standard. Maritime Transport : Laem Chabang port to be one of major ports in ASEAN. Modernize management of Laem Chabang Port Information technology system to be upgraded to E-Port with connection with other international ports

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TelecomBorder Town DevelopmentTransport EnergyInfrastructure Development : Energy Renewable Energy Technology shall be developed. A search for new energy sources both domestic and aboard.Cooperation with potential neighboring countries Energy Security for ThailandLink with Dawei

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EnergyBorder Town DevelopmentTransportTelecom Telecommunications Infrastructure Development ICT System Infrastructure Development : Telecommunications High speed internet and broadband networkNational Single Window

ICT supporting trade logistics

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Special Border Economic Zone

Urban UtilitiesSBEZFacilities & CCAInfrastructure DevelopmentEnergyTransportBorder Town DevelopmentTelecom

Cross Border Facilities Chaing KhongMae SaiMae SotKanchanaburiNakhon PhanomMukdahanAranyaprathetPotential Border Town

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www.nesdb.go.thThank You for Your Kind Attention16 October 2012# www.nesdb.go.th21Back up16 October 2012# www.nesdb.go.thSummary of 6 Development StrategiesCreation of quality Human capital and Society11th PlanEconomic RestructuringManagement of Natural ResourcesGood Governanceand implementation of 11th PlanCreation of Justice in Society (Strategy 1)Creation of Learning Society (Strategy 2)Strengthening of Agriculture sector and food & energy security (Strategy 3)Restructuring of the economy towards quality growth and sustainability (Strategy 4)Regional Connectivity (Strategy 5)Preparation for effects of Climate Change and Transfer to low-carbon & environmentally friendly society (Strategy 6)11th National Economic and Social Development Plan16 October 2012# www.nesdb.go.th

Economic Restructuring to Regional ConnectivityCreation of Regional ConnectivitySubregionConnectivity/Logistics developmentSupply chain development along economic corridorsASEANAsia-PacificPreparation for ASEAN Community, esp. human capitalTo constructively participate in cooperation frameworksStrengthening of Agriculture sector and food & energy securityRestructuring of Trade and Investment Sectors Investment to develop STI, Infrastructure, and Energy security

To create linkages in investment, production and value chains in markets with potential To expand investment abroadTo promote SMEs to have quality growth To develop national resources as strong production base for agricultural sectorTo increase production efficiency and to generate additional value for production chainTo generate food and energy security and to develop renewable energyTo create enabling environment for economic restructuringTo develop infrastructure and logistics systemTo secure power supply adequately Economic Restructuring16 October 2012# www.nesdb.go.th

1st MOU signed in 2008 Framework Agreement signed in 2010 Sign 2nd MOU signed in July 2012Scope of Cooperation is in process.Joint Committee and Master plan on Dawei Development will soon be developed.CooperationTotal Area :204 sq kmLocation :Taninthayi District Distance :132 kmfromThai-Myanmar border202 kmfromKanchanaburi342 KmfromBangkok472 kmfromESB

Investment : approximately 9,000 mil. USD(exclude resettlement cost) Concession :60 years + possible extensionLand Lease :Up to 75 years Full Capacity of Dawei Port (in 2037 est. )200 mil. Ton per year or 14 mil. TEU compared to capacity of LCB port stage II which is 7.7 mil.TEU per year (not include container ports D1, D2, D3)100,000 DWT compared to 80,000 of LCB port 25-40 meter-depthcompared to 14-16 meter-depth of LCB port Overview of the Project16 October 2012# www.nesdb.go.th

Corridor Development between Dawei Project and Laem Chabang SeaportBasic Infrastructures Development in Myanmar e.g. Road and Port Border Development , Trade and Transport FacilitationDomestic Development: Enhance Current Logistics Infrastructure and Economic area 12316 October 2012# www.nesdb.go.th26

Cross Border MovementSharing of Benefit & CostNegative EffectsFinancing Private Sector management and facilitation of cross border trade and investment

Urban Vs rural areas Advance Vs less- develop countries Financing of infrastructure investment and maintenance Managing of the negative effects of infrastructurePublic-private risk sharing Some of Key Measures to Overcome the ChallengesChallenges of Infrastructure Development linking Asia and GMS Transform Transport Corridor to Economic Corridor Development Cross Border Transport Agreement ASEAN Infrastructure Fund Public and Private Partnership (PPP)

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