EEC seen as solution to ‘middle-income trap’

The government’s flagship Eastern Economic Corridor (EEC) is expected to play a key role in helping Thailand overcome the “middle-income trap” by 2029.

The EEC Policy Committee, chaired by the prime minister, yesterday said investments in the EEC were expected to hit an average of 500 billion baht a year between 2022 and 2026, and predicted an economic growth contribution of 1.5 percentage points per year.

Outlays from private investment prospects in the EEC are predicted to stay at 2.2-2.5 trillion baht over the next five years. Of the total, about 200 billion baht would come from investment in the Eastern Aviation City, city development around U-tapao airport, and development around the main high-speed rail stations linking three airports.

Investment in targeted industries is estimated at 400 billion baht a year, of which 250 billion would be normal annual investment, with the remainder from new S-curve industries such as electric vehicles, digital, medical services, logistics, smart farms and food, said the EEC Office.

“The EEC will be a core investment destination in Thailand over the next five years and is expected to help enable the country to escape the middle-income trap by 2029,” said Kanit Sangsubhan, secretary-general of the EEC Office.

A middle-income trap is defined as a situation in which a country successfully lifts its economy from a least-developed or low-income nation to a middle-income one, but remains at that level without much prospect of becoming an advanced, rich country.

According to Mr Kanit, annual investment in the EEC from 2027 onwards is likely to reach at least 600 billion baht a year.

He said his office is organising roadshows to draw investors to the economic zone.

The EEC Office projected Thailand’s overall economy would grow by 4% in 2022, while the three EEC provinces — Chon Buri, Rayong and Chachoengsao — are expected to see GDP growth of about 5-5.5% this year.

The real GDP growth rate of the EEC provinces was reported at 2% in 2021, up from a contraction of 7.8% in 2020 and growth of 0.2% in 2019.

The EEC Office said total investment in the EEC between 2018-2021 tallied 1.7 trillion baht, 80% of which was private investment and 20% public investment.

Targeted industries attracted 925 billion baht, while infrastructure projects accounted for 655 billion and integrated projects among state agencies contributed 82 billion.

Mr Kanit said average investment between 2018-2021 was 260 billion baht a year, with the proportion from the three EEC provinces of the nation’s total increasing to an average of 52% during the period, up from 36% in 2017 before the EEC was implemented.

The EEC has played a key role in human resource development, with the economic zone having supplied 14,467 skilled workers to the country, he said.