Geopolitics & the Proposed Thai Canal

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Old Concept, Renewed Interest

Recently, a member of the National Committee for the study of the Thai Canal, Pakdee Tanapura, informed a Thai daily The Nation that the Beijing-based University of International Business and Economics was working with the committee for a pre-feasibility study of the canal.

Possible Routes of the Thai Canal

(Source: http://nextbigfuture.com/2014/10/economic-reasons-that-thai-canal-will.html)

Connecting the South China Sea with the Andaman Sea by cutting across Southern Thailand, the canal will lower expected congestion in the Malacca Strait over the next decade. Estimated to cost $20 billion, the canal will be about 100km long and 26m deep.

It will be the shortest sea route between the Pacific and the Indian Oceans that slashes voyage time by about 48 hours and voyage distance by around 1000km as compared to the current route through the Malacca Strait.  

Although the canal will improve the trade and the economy of Thailand, Myanmar, Vietnam, and Cambodia, it will divert traffic and therefore influence away from the strategically important Malacca Strait. Malaysia and Singapore stand to lose.

Past & Present

Way back in 1677, King Narai of Siam (Thailand) asked French engineer De Lamar to study the feasibility of a canal through the Kra Isthmus that is only 44km wide at its narrowest. The interior mountain chain however is 75m high. De Lamar cited technical un-viability.

Rugged Topography of the Kra Isthmus

(Source: http://thediplomat.com/2013/12/how-a-thai-canal-could-transform-southeast-asia/)

Since then, the idea of the Thai Canal, also called as the Kra Canal or the Kra Isthmus Canal, has regularly resurfaced but never really taken off. Courtesy: Thai political compulsions, environmental constraints, and a heavy dose of regional geopolitics.

This time, things are somewhat different. Chinese President Xi Jinping introduced the 21^st Century Maritime Silk Road concept in 2013 with the lofty goal of reviving traditional Asian maritime trade routes. 

Over 280 experts, officials, and scholars from 30 countries such as the U.S., China, India, Sri Lanka, Singapore, and Pakistan attended with overwhelming interest the Maritime Silk Road Seminar hosted by China on February 11 and 12 at its port city of Quanzhou.

Geopolitics: Winners & Losers

Over 90% of internationally traded goods are transported via ships. The Malacca Strait is a critical stretch for global maritime routes and therefore for the global economy because it is the passageway for:

·      25% of world’s trade 

·      15.2million barrels-per-day (bpd) of oil, second most prolific after the Hormuz Strait with 17million bpd

However, the strait is also one of International Energy Agency’s (IEAs) six ‘choke points’ i.e. narrow, high-traffic channels used for transporting energy resources. The strait is only 2.8km wide at its narrowest point of Philips Channel in the Singapore Strait making it prone to ship collisions and oil spills.

Furthermore the channel is only 25m deep. Piracy is a huge concern here and so is the annual haze created by Sumatran bushfires. An alternative route should be a welcome development.

Daily Transit Volumes through Maritime Oil Chokepoints

(Source: http://www.bunkerportsnews.com/News.aspx?ElementId=96353182-632f-429b-a288-899debed4662)

Myanmar, Cambodia, and Vietnam will gain significantly:

·      Vietnam receives 90% of its goods by sea and could compete with Singapore

·      Thai Canal will speed up Cambodia’s Greater Mekong Subregion Southern Economic Corridor (SEC) for economic development of its coastal cities

·      Myanmar gets a shorter sea route to trade with Southeast Asia

Japan, India, and China import large quantities of energy resources and will profit from the shorter route. The canal thrusts forward India’s ‘Look East’ Policy for greater engagement with Southeast Asia. Furthermore, the canal promotes better Indian relations with Vietnam, India’s major strategic partner in the South China Sea.  

China will further strengthen its position in the South China Sea by assisting Thailand with the canal. Its annual trade with ASEAN is nearing $500billion and China plans on taking this to $1trillion by 2020.

Nervous of the U.S.-India joint patrols in the Malacca Strait, the Chinese are keen to expand influence in the region. What better way than to control the canal? The Chinese are already building an aircraft carrier and a naval destroyer towards this end. And, India will want to contribute to the canal and counter the Chinese juggernaut.

But there is another side. Malaysia and Singapore stand to lose from the Thai Canal for it diverts traffic away from the Malacca Strait. And although the canal promises numerous economic benefits for Thailand, particularly for the Thai shipbuilding industry, it could intensify region-based ethnic tensions.

South of the proposed canal are five Muslim-majority districts where fissiparous sentiments are strong. It does not help that most separatists are Malay Muslims. Around 2006, Bangkok had cracked down on these separatists. The episode strained Thailand-Malaysia relations as Thailand had accused Malaysia of fueling these splinter groups.  

Finally

All said and done, the final call has to be taken by Thai authorities. Realpolitik will delay the project but that is always the case. The concept of Panama Canal was first mooted in 1513, the canal was completed only in 1914.

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