Southern Thailand’s struggle to attract foreign investors
The Southern Region Industrial Estate in Songkhla province of Thailand is unusually quiet. Long winding roads, usually bustling with heavy vehicles, are mostly empty. There are only two industrial estates in southern Thailand, the other being the Songkla Industrial Estate. In total, there are 67 industrial estates across the country. Sirianya Pornsuwankun, a tenant of the Southern Region Industrial Estate and owner of waste recycling company Nano Recycle, said doing business in southern Thailand is different from other parts of the country.
Some experts believe that southern Thailand struggles to attract foreign investors compared to the Greater Bangkok area and the eastern side, where the majority of the industrial estates are located. The perception of southern Thailand as unsafe due to ongoing insurgencies in the provinces of Pattani, Yala, and Narathiwat may have hampered economic growth. Last year, Thailand’s economy grew at 2.6%, significantly lower than other Southeast Asian nations like Malaysia and Indonesia, which registered 8.7% and 5.3% growth, respectively. The World Bank and Asian Development Bank have projected Thailand’s gross domestic product growth to be below 4% this year.
In hopes of stimulating the economy, politicians have made electoral promises to attract foreign investment to the region. The Democrat Party, which held a stronghold in the previous election mainly in southern Thailand, has ambitious plans for the region. Niphon Bunyamanee, the party’s deputy leader, envisions Hat Yai—Songkhla province’s commercial hub—as an economic powerhouse rivaling Singapore and Hong Kong. He believes Hat Yai’s strategic location near the Gulf of Thailand and the Malaysian border offers immense potential.
Prommin Lertsuridej, the head of the Pheu Thai Party’s economic affairs committee, said his party aims to establish a new business zone in Songkhla as a pilot project for the southern region. They hope to make business laws more accessible, create facilities for foreign and domestic investors to collaborate, and actively promote peace and prosperity in the region. Although he did not reveal specifics, Prommin claimed Pheu Thai has drafted the law for the proposed business zone, reports Channel News Asia.
Caretaker Prime Minister Prayut Chan-o-cha stated that he would push for more infrastructure in the south if he remained in power. Running for the premiership with the newly formed United Thai Nation Party, Prayut said his next government would do more to help southern Thailand, such as building a new highway and pushing forward other ongoing infrastructure projects. He cited dual-track trains linking Thailand with Malaysia and bridging the Andaman side to the Gulf of Thailand side to boost the economy.
Pita Limjaroenrat, leader of the Move Forward Party, also aims to improve southern Thailand’s connectivity. He wants to change Songkhla from a tourism-based economy to a creative one with better transport infrastructure.
Virot Ali, a political, economic, and development lecturer at Thammasat University, notes that southern Thailand lacks the significant investments and industrial estates found in other parts of the country, partly due to regional unrest. He asserts that investors would want the ease of connectivity when doing business, something southern Thailand still lacks. Virot believes that moving forward, the economy needs fresh ideas and fresh thinking.
Sinead Treewanchai, an economic lecturer at Prince of Songkhla University, posits that the industrial zones in Songkhla lack investors as the region is perceived to not have the human capital for capital-intensive products. Investors would likely opt for the Eastern Economic Corridor (EEC) instead. The EEC is a special economic zone spanning the three eastern provinces of Thailand: Chachoengsao, Chonburi, and Rayong.
Voters like Sirianya, the tenant at Southern Region Industrial Estate in Hat Yai, hope for a government that prioritizes the country’s interests. She stated that if political parties can unite, it would be good for the country, regardless of who becomes the prime minister.
