This is a part of Macroeconomic Study.
Course# Econ 830
Professor Rachain Chintayarangsan
Spring Semester 2006
Student ID 4910341023
Submitted on: November 30th, 2006
1. Background of The Kra Canal ProjectP. 3
2. Purpose of This PaperP. 6
3. Brief of The Project DetailsP. 8
4. Cost and Benefit of The Grand CanalP. 9
5. Risk of The ProjectP. 9
6. Macroeconomic Analysis for Kra Canal in The Present Open EconomyP. 10
7. ConclusionP. 11
8. ReferenceP. 12
1. Background of The Kra Canal Project
Kra Canal Project in Thailand was studied by many of Thai and international organizations for such a long time, but it had never occurred that the study was undertaken at the level of the national project because of many problems both internal and external.
The project has been considered by several Thai governments for a long time. Many fields of study have been conducted e.g. Administration, Military, Navy, Civil Engineering, Financial, Economics, Social and Environmental impact. We had collected a lot of information and research, but we never take this project seriously enough to put it in the Government Development Plan.
The Scientific and Technological Assistance of Thailand & The Royal Thai Navy suggested that the canal will need many deep sea ports, many industrial zones and there are many towns and cities in the area. Therefore, the canal will be a Mega project. There were many different studies, and the latest study suggested that the best location to excavate the canal is not the Kra district in Ranong anymore, so many people call The Kra Canal Project “The Grand Canal Project”.
The main idea of the canal is “The route where container ships can pass rapidly.”, then we consider other aspects regarding who, what, when, why and how we pursue the project.
If one day we will build up the Kra Canal, we should also consider building up some other facilities to support the canal such as;
1. Deep Sea Ports at both sides of the Canal
2. Industrial Zone to Support the new world maritime route 3. More local railroads to support domestic demand for transportation 4. An International Airport to support the full function of world transportation
To study this project, we have to study its history. We can not go anywhere or do anything if we don’t know who we were and where we came from in the past. The following is a brief of Kra Canal Project.
History of The Kra Canal Project
Thailand is located in the Western part of the Indo Chinese Peninsula, bordered by Myanmar in the West, Laos and China in the North and Northeast, Cambodia in the East and Malaysia and Singapore in the South. For this reason, Thailand is a suitable location for the principal international trade distribution hub between Asia and Europe + Middle East. If we look at the world map, Thailand is between Europe, Middle East, South Asia (India, Pakistan, Bangladesh) and East Asia (China, Korea, Japan, Hong Kong, Taiwan and all Asean countries. This means all goods traded between Europe, Middle East, South Asia and East Asia are to be transported through our region, but the maritime transportation has to transport all goods through the Strait of Malacca because it is the shortest route available at the moment. There is the narrowest point in Thailand called "Kor Kod Kra", since 1942, Thai Governments have been officially studying this area for a possibility to build up a human made canal. It is in Ranong and Chumporn provinces, and it is between Andaman Sea and South China Sea. The isthmus is 50 km wide, if the Kra Canal is built it will save the trunk route around 800-3,000 km of the world maritime route.
There were a lot of histories of Kra canal in Thailand. The first one who raised this project up was in King...