Transport link whets ASEAN’s appetite

A proposed ‘south-south’ corridor hailed as a major transport route between China and the lower Southeast Asia region has been approved at a summit in Cambodia.

The route, which will also link the much-anticipated Tavoy (Dawei) port in Burma to Malaysia, was given the nod this week at the fourth Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS), cargonewsasia.com report. ACMECS is a grouping of five countries focusing on regional economic integration, similar to BIMSTEC.

China is also in talks with Ital-Thai, the company behind the $US8.6 billion Tavoy project, to buy one of the three bays in the port.

Economies of the Association of Southeast Asian Nations (ASEAN) bloc will be keeping a keen eye on China’s 12th five-year economic plan, which is expected look towards inclusive growth in the region. The development of its south and western provinces will also require greater connectivity, and such developments could prove extremely lucrative to ASEAN businesses.

Prospects for the Tavoy port and the associated economic corridor were being eagerly seized by Thai firms such as Ital-Thai, Amata Corporation Plc., and Bangkok Bank. They had looked to provide start-up capital for the projects, which included an ambitious deep-sea tanker port and a chemical and industrial hub. Taiwanese, Japanese and Chinese firms are also rumoured to be interested in investment.

Companies were being urged to seize this opportunity, in which Thai business would prosper from Chinese growth via a port on Burmese soil, and where Burmese input would be minor, save for cheap labour and dividends for the generals.

But for Burma, foreign-built infrastructure could help get nascent labour-intensive industries such as garment manufacturing – which are being held back by restrictive investment policy and unreliable infrastructure – off the ground.

The corridor would also likely connect with a proposed $US6.6 billion Chinese-funded railway project from Nohng Khai in northeastern Thailand to Malaysia, via Bangkok.

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