Table of Contents
The Kra Canal
- The Thai Canal, also known as Kra Canal refers to proposals for a canal that would connect the Gulf of Thailand with the Andaman Sea across the Kra Isthmusin southern Thailand.
- The idea of a Canal at the site has been proposed since 16th century and in modern times since the 1930s, but has never materialized due to high cost environmental repercussions and geo strategic obligation.
Importance
- Malacca Straits — the world’s busiest maritime lane, through which an estimated 84,000 ships carrying around 30% of global trade transit each year.
- The World Bank estimates over 140,000 ships will seek to transit the Malacca Straits annually by the end of the decade, far in excess of its capacity of 122,000 ships.
- The canal would provide an alternative to transit through the Straits of Malacca and shorten transit for shipments to China from West Asia by 1,200 km
- It is thus envisaged that such a canal would improve transportation in the region, similar to the Panama Canal and Suez Canal.
Benefits for shipping
- The canal will enable ships to bypass the Malacca Strait thus saving 1200 km
- Ships could reduce up to 72 h of sailing time.
- Shipping and logistics companies would welcome the reduced operating and voyaging costs between East Asia and Europe.
- Reduce the risk of running into pirates and avoid congestion.
The Economic cost
- The proposed canal project is estimated to be completed within eight to ten years at the cost of $28 billion USD.
- Plans to build an economic zone alongside the canal – Thailand economy will get a boost
Benefits for China
- The possibility of the Kra Canal becoming a reality has been greatly increased by China’s Maritime Silk Road initiative
- The Kra Canal project would be connected to the various Chinese infrastructure and connectivity projects ongoing in the region.
- From China’s point of view, the Kra Canal offers a means to secure its expanding demand for West Asia’s hydrocarbons against overcrowding in the Malacca Straits
- Chinese companies are extremely interested in speeding up the project as over 80 percent of Chinese oil imports flow pass through the Malacca Strait.
- While the Chinese government has refrained from making any official claims, reports state that China and Thailand signed a Memorandum of Understanding (MoU) on the canal project in Guangzhou in 2015.
Geo strategic problem for India
- In theory, the Kra Canal could benefit India and the region by taking pressure off the overcrowded Malacca Straits.
- In practice, there’s reason to worry about what Chinese involvement in this project will mean for the balance of power in the Indian Ocean.
- The Kra Canal would offer an alternative to a route surrounded by the US allies and thus vulnerable to a blockade in the event of a geopolitical crisis
- Building strategic infrastructure, like China-Myanmar Economic Corridor and the Kra Canal allows Beijing to reduce its current dependence on the Malacca Straits and access the Indian Ocean directly.
Thailand’s Dilemma
- Thailand remains divided on moving forward on China’s proposal.
- Some in Thailand’s strategic establishment fear Chinese investment in the project will lead to an erosion of the country’s sovereignty
- The experience of Egypt and Panama, where the canals led to decades of foreign control.
- Environmental concerns.
- The economic viability of the canal is contested
- Kra Peninsula connects Thailand to the Malay peninsula.
- The southern portion of the country (south of the proposed canal) has seen an increasing divide between Thai Buddhists and Thailand’s Malay Muslims.
Security Challenge for Thailand
- A canal will divide the country physically and pose a security risk. It is feared that a canal would separate the four southern-most provinces from the rest of Thailand and allow secessionist movements to further develop
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