Debate over Thailand’s plan to 'scrap' Kra Canal is much ado about nothing

For those observers who closely follow the long-running saga of Thailand’s Kra canal, recent media reports will have come as no surprise.

The three-centuries old idea to cut a canal across the Isthmus of Kra in southern Thailand is unfailingly resurrected whenever the Thai economy hits the skids, as it has done since the onset of the Covid-19 pandemic.

Advocates of the canal (or other Kra transportation initiatives such as road, rail and oil pipelines) invariably argue that the project will create thousands of jobs and revitalise the country’s economic prospects.   

But this time the story has a slightly different twist: That the “cancellation” of the Kra canal project, and its replacement with a road and rail link, is not only a major set-back for China, but a strategic gain for India.

The Kra canal issue resurfaced at the end of August when Bloomberg published a story which quoted Thailand’s transport minister Saksiam Chidchob.

The minister trotted out the old argument that since the Straits of Malacca had become “quite congested”, an alternative route was needed to bypass one of the world’s busiest waterways.

But instead of a canal — construction of which would have a catastrophic impact on the environment — Mr Chidchob revealed that the government had thrown its weight behind an alternative initiative: Building two deepwater ports on either side of the isthmus linked by a highway and railroad.

According to the minister, the government had earmarked US$5.3 million (S$7.25 million) for a feasibility study to examine the 100km “land bridge” idea.

The story quickly gained traction. American academic Salvatore Babones argued in an article in Foreign Policy that the Kra canal proposal was a part of China’s Belt and Road Initiative (BRI) and that it would fit “neatly into Beijing’s plans to encircle India”.

India had responded, he noted, by beefing up its military presence in the Andaman and Nicobar Islands in the Bay of Bengal and “these have the potential to quarantine the proposed Thai canal”.

The article contained the usual tropes about the canal, including that its construction would undermine Singapore’s prosperity and hamper Bangkok’s counter-insurgency campaign in the Deep South as it would “split” the country in two.

Bizarrely, the Australia-based don went on to posit that should a future Thai government move to cut this “string” in China’s so-called “string of pearls”, Beijing might support an independence movement in the Deep South and seize control of the canal.

Piggy backing on this story, the Indian media had a field day.

Without citing any sources, the TV channel WION declared that Thailand had “scrapped” the Kra canal plan and that, together with the Thai government’s decision to defer payment on two Chinese-manufactured submarines, this signalled that Beijing was “losing allies” in the Indo-Pacific region (even though Thailand is not a treaty ally of China).

Meanwhile the Hindustan Times reported that  the unbuilt waterway “would pose a risk to India’s long-term maritime security”, while The Economic Times noted New Delhi would welcome Bangkok’s decision to push back against China as the Kra canal “could be threat to its security interests in the Bay of Bengal”. 

India’s Twitterati re-tweeted these stories with unalloyed glee at China’s supposed strategic misfortunes.

Unfortunately the narrative suffers from two major flaws.

First, you cannot scrap a plan that was never been approved. Since seizing power in a military coup in 2014, Prime Minister Prayuth Chan-ocha has been ambivalent at best about a Kra canal.

In response to calls by a group of businessmen and retired generals to build the canal, Mr Prayuth said it was not a priority for the government and then fobbed them off by asking the national economic planning agency to examine their proposal.

Since then Mr Prayuth has been preoccupied by the March 2019 elections, holding a shaky coalition together and dealing with Covid-19.

The Kra canal has not even been on his radar.

Second, China has never officially promoted the Kra canal as a BRI project.

Moreover, even if China were interested in providing the estimated US$30 billion in funding to build the canal, it would be unlikely to find popular support in Thailand as the controversies surrounding the Chinese-built High Speed Rail link and submarines have shown.

If the “Thai canal” is to find widespread support it must be seen as being a wholly-owned Thai-initiative and not a Chinese one.

Mr Chidchob’s proposal itself is not new and makes little economic sense.

Unloading goods at one port, transporting them across the country by rail or road, and then uploading them at another port increases rather than reduces transportation costs.

In the early 2000s, a proposal to build an oil pipeline across the Kra Isthmus floundered because it too was economically unviable. Moreover, at a time of global economic crisis, the initiative is unlikely to find any potential investors.

So what explains the Indian reaction?

Writing in Foreign Policy about erroneous reports of a Chinese fighter aircraft being shot down by Taiwan — which also garnered a lot of attention in India — the magazine’s deputy editor James Palmer astutely noted that due to Sino-Indian border tensions, the Indian audience is “primed for news of both Chinese aggression and Chinese failure”. 

And, more importantly perhaps, why has the proposal for a Kra transportation system popped up again?

A cynic might note that at a time of economic stringency, a US$5.3 million feasibility study provides opportunities for expense claims and fact-finding missions to exotic locations. 

ABOUT THE AUTHOR:

Ian Storey is a senior fellow at the Iseas–Yusof Ishak Institute. This piece first appeared in Iseas Commentary.