There are huge hopes, and quite rightly so, for the Eastern Economic Corridor (EEC) and the impact that it will have on the economy and future of Pattaya. For those of you who are unfamiliar with the project, it was a proposal agreed by the Thai cabinet in June 2016 and will see a large area stretching between Laem Chabang, Chachoengsao and Map Ta Phut – over 13,000 square kilometres, designated for industrial and economic purposes. This area will be key to Thailand playing a prominent role within ASEAN.
In their own words, the aim of the EEC is to drive the country forward with a more “value-based, innovative economy.” The area is already regarded as the Eastern Seaboard where lots of the country’s largest industrial estates are located. Many of these are connected to the automotive industry and indeed the area has been dubbed “the Detroit of the East”. Thailand’s Office of National Economic Development Board refers to the region as “Thailand’s major industrial production base, especially for petrochemical, energy, and automotive industries.”
It would be foolish to expect the area to experience massive changes overnight but many of the aims and objectives seem very realistic. It is predicted that in the region of $43 billion will be invested over a five year period with much of this being overseas investment that will undoubtedly bolster both the local and national economy. Of course, major improvements will need to be made to the infrastructure to facilitate this but this is a matter that is being addressed.
In order to attract this overseas investment, the government will need to offer serious incentives to encourage companies to move their operations to Thailand. In recent years the country has experienced political turmoil and countries such as Cambodia and Vietnam have sought to gain an advantage. However, thankfully from Thailand’s point of view, that all now seems to be in the past. The government have launched incentives and promotions via the Board of Investment’s (BOI), Investment 4.0 Policy which is anticipated to encourage new investment.
Thailand’s GDP and the EEC
The common but inaccurate perception of Thailand is that it is country that relies solely on rice for its GDP with tourism also playing a small role. However, the EEC will account for around 20% of Thailand’s GDP which, of course, smashes these misconceptions. Yes, rice is still the major source of the Kingdom’s income but industry is playing an increasingly important role. Much of the basic infrastructure is already in place such as road, rail and sea links so the potential is there for all to see.
With a key focus being on innovation, much must be made of the deep-sea port at Laem Chabang which could quite easily be developed into one of the main international transportation hubs within ASEAN. The EEC could also forge close associations with other major sea ports such as the Dawei deep-sea port in Myanmar, Sihanoukville Port in Cambodia, and Vung Tau Port in Vietnam.
The resulting impact of this is to create jobs and bring more people to the region. Initial figures suggest that this could be around 100,000 people per year until 2020. These people will need to find accommodation and Pattaya is one of the most obvious locations – especially with expats. As the focus of EEC is to encourage overseas investment, it would seem fair to assume that a good proportion of the workers will indeed be expats. With Pattaya having so much to offer international families, the impact of EEC on Pattaya can only be viewed as positive.
As we mentioned, serious improvements will need to be made to the local infrastructure. We have already witnessed large-scale improvements at U-Tapao Airport and the proposed high-speed rail-link will run directly through Pattaya. The benefits of the U-Tapao expansion are already being felt in Pattaya and the rail link is expected to have the same if not a greater impact on the city. We can, therefore, deem that the improvements for the benefit of industry also benefit Pattaya.
Anyone who has been to Pattaya recently will be more than aware that large-scale construction is taking place throughout the city. Hotels and condominiums are being built or proposed along with more shopping malls such as the Mega complex in East Pattaya along with Terminal 21 in North Pattaya. These are not just being built for tourists but also to cater for the anticipated swell in permanent residents moving to the city.
Great investment opportunity with 51 rai land plot in orange zone close to highway access
Are any particular industries being targeted?
The simple answer to this is ‘yes’, although the target segment is quite large. According to Thailand Business News, the aviation sector is seen as a key factor in the countries overall success. The automotive industry, petrochemicals and electronics have long since had an important role to play and this will be encouraged to an even greater extent. Greater efforts will be made to encourage investment in automation and robotics, and digital industries with “food for the future” also playing a role.
Medical and wellness tourism has seen a boom in Thailand in recent years and this will again be a focus and this is an area where Pattaya may once again reap the benefits of being right at the heart of the EEC. In fact, increasing tourism seems to be almost part and parcel of the plans to develop the EEC and may even go hand-in-hand.
It is understood that another deep-sea port, this time at Chuk Samet will be developed to cater for cruise ships and yachts, thus keeping them away from the industrial ports. Naturally, this will again be music to the ears of the hoteliers, real estate brokers and other businesses in Pattaya. With investment from government and from private enterprise, the direct and the indirect impact of the EEC can only be positive for the region as a whole.
Land and especially prime land in Pattaya is becoming increasingly scarce so market forces will ultimately see prices rise. Inevitably, this will result in Pattaya becoming a more upmarket destination. One of the key points of the introduction of the EEC is to allow greater options regarding foreign ownership of land as a further extension of the BOI’s measures to encourage overseas investment in certain sectors. Once again, this will lead to an increase in land prices due to its higher marketability.
