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Thailand: Southern corridor under consideration
The government is mulling the establishment of a Southern Border Economic Corridor (SBEC), spanning the southern border provinces of Pattani, Yala, Narathiwat, along with four districts of Songkhla province — Chana, Na Thawi, Saba Yoi and Thepha — to ensure greater efficacy in terms of development plans for the region.
Bordin Rassameethes, acting deputy secretary-general of the Southern Border Provinces Administration Centre (SBPAC), said the SBEC was recently pitched as a way to upgrade the government’s development plans for the region, an idea similar in form to the existing flagship Eastern Economic Corridor (EEC).
“SBEC needs to have its own laws enacted in the same way as the EEC to control development, covering city planning, investment privileges and public and environmental management,” said Mr Bordin. “I believe SBEC development can upgrade the quality of life, create jobs and generate income for people in these areas.”
Most people living within the SBEC area are poor. A 2018 report by the state planning unit, the National Economic and Social Development Council (NESDC), showed the gross provincial product (GPP) per capita of residents of Narathiwat was 62,066 baht, ranking 74th among 77 provinces. Pattani’s GPP per capita stood at 75,997 baht, Yala at 91,815 baht and Songkhla at 151,918 baht, respectively. The country’s average GPP per capita tallied 236,815 baht.
SBPAC has been tasked by the government with taking charge of the economic development plans for these four southern provinces, with the lofty target of improving the income of villagers in those areas.
The government announced an investment promotion policy in 2016 for industrial development in the southern border provinces to boost investment. The goal was to develop the local economy, which could support efforts to enhance security in the restive area.
The government also designated Nong Chik district in Pattani as a model agricultural development industry city, Betong district in Yala as a model sustainable development city and Sungai Kolok district in Narathiwat as a model international border city.
In January 2020, the cabinet approved the addition of Chana district in Songkhla province to the investment promotion zone, as a model bio-economy industry city project in the region.
Under the two-year extension (2021-22) for the measure to promote investment in five southernmost provinces (Narathiwat, Pattani, Satun, Songkhla and Yala), investors are eligible for three, five and eight years of corporate income tax exemption depending on the category.
Investors in 14 targeted industries are entitled to a maximum of eight years’ corporate income tax exemption and a 50% corporate tax reduction for five years. The 14 targeted industries include agro-industry, fisheries, textile, garment, leather, furniture, jewellery and ornaments, medical equipment, plastics and tourism.
The minimum investment requirement is 500,000 baht, excluding the cost of land and working capital.
Currently, infrastructure development in Nong Chik, Betong and Sungai Kolok has been completed, while infrastructure development in the Chana project is being handled by the private sector.
SBPAC anticipates more active investment in the southern border provinces after the pandemic and the Board of Investment’s approval of a two-year extension (2021-22) to the incentives available in the five provinces.
During 2017-19, these areas saw relatively low levels of investment, with only 24 investment projects worth 15.6 billion baht applying for privileges.
A significant project belongs to Palm Pattana Southern Border Co, a palm-crushing firm and biogas and biomass power producer, which produces electricity from byproducts of the crushing process. The firm plans to invest 500 million baht between 2022-25, and another 600 million during 2026-29.
SBPAC expects Betong airport, once operational, to help generate more tourism income to the areas.
Construction of the airport, valued at 1.9 billion baht, was completed earlier this year. Commercial operation was originally set for this month, but was subject to delay when the second wave of the pandemic broke out. SBPAC expects the operation of the new airport to be viable by this year’s fourth quarter.
Two airline operators — Bangkok Airways and Nok Air — have already agreed to operate flights at Betong airport. Bangkok Airways will operate flights from Bangkok to Betong and Betong to Phuket and Hat Yai, while Nok Air will operate flights from Bangkok’s Don Mueang airport to Betong.
Source: https://www.bangkokpost.com/business/2096235/southern-corridor-under-consideration