Can Bangkok be the capital city of ASEAN? (2)
In the previous article, I have spoken about the opportunity of Bangkok to become the capital city of ASEAN, especially as a center of trade and logistics, investment and office settings, tourism industry, and healthcare and beauty services.
Even though Bangkok has the opportunity to become the capital city of the region because of the advantages it faces due to its geographical location and strengths in some economic aspects, there are some important threats which reduce the opportunity for Bangkok becoming the center of the region and reduces the benefits associated with it becoming the center of the region. These are?
1) The competition from neighboring countries
In the atmosphere of preparing for the AEC, neighboring countries all try to build up preparation and abilities to gain benefits from the community integration. Many countries can be the center of the region such as Singapore which can be the a financial hub, the center of air and water transportation, offices and business services, healthcare industry center, and a center of education services. So does Malaysia, which has the opportunity to become the center of education, electronic industry, tourism industry center etc. These two countries are counted to be the competitors for Thailand (along with Bangkok). While there are some opportunities specific to Thailand, both countries have more strengths in terms of management, technology, and quality of labors aspects.
At the same time, many countries in the ASEAN community have some strong points which are different from Thailand and are trying to develop themselves to gain benefits from the opening of AEC. For example, Indonesia has great potential of attracting foreign investors because Indonesia has a lot of population, lower labor costs, and rich resources. Also, Indonesia has transformed its politics and institution structures to include democracy with stability. The same goes for Myanmar, the country which transformed herself to a strong democratic style and development urban cities and infrastructure to support investment and build acceptance to a global stage. The Myanmar government has the objective of becoming the ?battery of Asia? by attracting investment for energy exploration and production. Myanmar has rich resources and very low labor cost and it is situated between China and India, two countries who both possess largest market size. Hence, it is also an interesting site for investors from all around the world.
2) Insufficient infrastructure
Bangkok has the tendency to cause traffic congestion due to its central location of transportation, logistics, and tourism in the region. More foreign businesses in the region will enter to establish in Thailand; more will also come to work and travel. However, infrastructure in Bangkok still has not improved to be able to support the expansion of the city and the abrupt increase in the number of population in the city, especially infrastructure for transportation which is still very slow in terms of progress. As a result, this will cause serious traffic congestion and thwart the potential for Bangkok to be the center of trade, investment, and the tourism industry.
Apart from this, infrastructure for railway transportation connected between Bangkok and other provinces nearby, which will be a connected route to other neighboring countries in the future, is still a single rail. This makes the railway transportation slow causing it to not follow its time schedule. At the same time, the problems of railway management system and transportation connection system in other forms are still inefficient. As a result, the railway system is not the main system in transportation of exports. Instead, it is the transportation on land which makes transportation and logistics cost of Thailand high thereby reducing the opportunity for Bangkok to become the center of transportation, trade, and investment and office settings in ASEAN.
3) The lack of direction and measure of preparation
Bangkok is still lacking a clear strategy and distinct measures of preparation for the coming change from the integration of the AEC. The direction of development, therefore, does not occur from prior planning and preparation. The awakening in having to be prepared has occurred only with large organizations or institutes that already make transactions aboard. However, SMEs and normal people do not know the information, opportunities, and the effects from a situation like this. Thus, the people and local companies in Bangkok will do not fully gain benefits from the AEC.
The threat in developing Bangkok city is the governor of Bangkok who has limited power to control and enforce direction and operation on political issues. This is because there are many organizations with power and responsibility in developing Bangkok. However, the work of these organizations are not united; each works separately on its own. Moreover, if there were to be any conflicts between the central government and the Bangkok governor, the result would be unstable and an inefficient Bangkok developmental policy. The unstable politics of the country makes the government?s Bangkok developmental policies likely to be discontinued having no clear direction.
It seems to be good news that the government and the Bangkok governor both talk in similar ways as to how they are going to work along seamlessly. I, therefore, hope that the development of Bangkok will have a clearer direction, with the cooperation of many organizations, efficient, and united in order to turn Bangkok into a city I have dreamed.
Senior Fellow at Harvard University?s Center of Business and Government.
Thursday, 3 March, 2016 - 15:42