SPRINGBOARD TO INDUSTRY
The Eastern Seaboard Development Plan marked the shift in Thailand’s economy from agricultural to industrial, writes Boonsong Kositchotethana
The launch of the Eastern Seaboard Development Plan (ESDP) was a tipping point for Thailand to overhaul its vulnerable economy in the early 1980s after facing an oil crisis, debt problems, a trade deficit and globalisation.
The mega-development, which covers the provinces of Chachoengsao, Chon Buri and Rayong, became a powerful springboard to launch Thailand into a new industrial era, shifting from its traditional heavy dependence on primary commodities that no longer served its economic agenda.
The ESDP was the aspiration of former prime minister Prem Tinsulanonda, who sought to strengthen the country’s competitiveness by laying a solid foundation to fuel industrialisation and systematically extend economic activities away from Bangkok to the countryside.
The move created significant employment opportunities outside the capital, mitigating the pressures and concentration of urbanisation in Bangkok.
The ESDP was mapped out following the discovery of natural gas in commercial volumes in the Gulf of Thailand in early 1973. But it was not until Erawan, the country’s first producing gas field, then operated by Union Oil of California, came on stream in 1981 that the plan was set in motion.
The ESDP encompassed five undertakings: the Map Ta Phut port project, an industrial-urban complex; Laem Chabang deep-sea port, covering water resource development; a water pipeline project; a railway connection; and road development.
The plan became a cornerstone of Thailand’s national economic and social development blueprint in the 1980s. Development during the 1980s and early 1990s focused on two key areas.
First was Map Ta Phut in Rayong province, where natural gas from the Erawan field came ashore through a 425-kilometre submarine pipeline. This site was meant to be a world-class heavy industrial zone.
The other priority was Chon Buri’s Laem Chabang complex, which was destined to guide exports oriented towards light industry with its new commercial seaport.
Natural gas from the Gulf of Thailand spurred a chain of global petrochemical industries and others to open branches in the country. These companies relied not only on methane as fuel but also other gaseous components such as ethane and butane extracted from the stream at gas separation plants built in the neighbourhood.
The Eastern Seaboard has been home to diverse industries such as petrochemicals, chemicals, rubber and plastics, oil refineries, power plants, electronics, cars and spare parts as well as a whole range of manufacturing.
The ESDP has been regarded as a showcase for Thailand’s economic success and a case study to illustrate how the government, political leadership, technocrats, central economic agencies and the private sector collaborated in realising a gigantic undertaking.
Many industries that Thailand champions, such as automotive, food and petrochemical, have their roots in the ESDP.
The Board of Investment reports Thailand has spent over 420 billion baht in the ESDP, with public investment going to infrastructure and supporting facilities. Private investors, both domestic and overseas, are responsible for industrial establishments.
The Eastern Seaboard has made a tremendous contribution to the economy, with rapid economic growth from 1986-96 when the average GDP rate was as high as 9.25%, said former prime minister Pridiyathorn Devakula.
Thailand’s GDP in 2011 was four times the figure when the ESDP was developed. The percentage of the country’s population below the poverty line has decreased from almost 45% in 1988 to 8% in 2011, according to a study by the Policy Research Institute under Japan’s Finance Ministry.