Timid Thailand may miss the boat

It was not clear why Prime Minister Prayut Chan-o-cha was not invited to the One Belt, One Road summit hosted by Chinese President Xi Jinping from May 14-16. The Chinese leader may simply have forgotten to extend an invite to the Thai premier or it could reflect the level of importance that China has attached to Thailand for this massive infrastructure development.

Bangkok was represented by Foreign Minister Don Pramudwinai, even though the forum would have provided an opportunity for Gen Prayut to rub shoulders with dozens of world leaders at an event designed to discuss the formation of the Silk Road Economic Belt stretching from China’s coastal area through Central Asia, the Middle East and on to Europe.

The Maritime Silk Road will run through the country’s southern part to Southeast Asia, South Asia and North Africa.

Of course, the Thai prime minister was not the only Asean leader who was snubbed by the Chinese government. Singapore PM Lee Hsien Loong and Brunei PM Hassanal Bolkiahdid also not make it to the guest list.

Singapore’s non-invitation is understandable given the recent diplomatic turbulence between Beijing and the city state, including Singapore’s military exercise in Taiwan, which Beijing considers a renegade province.

However, the Prayut administration’s diplomatic stance towards China is accommodating. The government has recently turned to China for political and military support amid US criticism over the political situation in Thailand.

For instance, the government recently agreed to purchase Chinese submarines in spite of possible tensions with the US, not to mention the public’s staunch opposition to the deal.

Bangkok has made known its wish to be included in the Silk Road project. Deputy Prime Minister Somkid Jatusripitak recently said the Thai government wished to link the prospective Eastern Economic Corridor (EEC) with the One Belt, One Road initiative, hoping to get a slice of the rewards that come with the project.

China said the programme would foster economic growth in the region by sharing Chinese development experience and development assistance. China has dedicated US$40 billion to the Silk Road Fund and the idea was the driving force behind the establishment of the $50 billion China-backed Asian Infrastructure Investment Bank.

It is unclear how Thailand or the EEC would fit with the Chinese-led initiative. On paper, the infrastructure development would better connect people in different parts of the world. However, the devil is always in the detail when it comes to investment requirements, as evidenced by previous negotiations such as the railway project between Thailand and China over the specification of materials used in the construction.

The Silk Road summit comes at a strategic time for China to assert its role on the world stage. After the Trump administration pulled out of the Trans-Pacific Partnership (TPP), the Silk Road project could be an option for international cooperation.

According to the Peterson Institute for International Economics, the TPP excluding China, though less a concern now, would have a negative impact on China’s economy.

For instance, when the TPP’s impact nears its peak in 2025, it is estimated to reduce China’s GDP by 0.3 percentage points and exports by 1.2 percentage points. However, such a negative impact could be more than offset by an FTA expansion. For example, the pursuit of the Asean+3 (China, Japan and South Korea) trade deal is estimated to add 1.4 percentage points to China’s GDP.

Thailand, however, has not yet taken any initiative of its own to increase its trade and investment, leading to Bangkok’s eagerness to take part in the Chinese-led Silk Road project.

In recent years, Thailand has taken a passive diplomatic approach by following the regional bandwagon instead of coming up with its own initiatives, as evidenced by Thailand’s role in regional trade talks.

Due to its geographical location, Thailand should have taken an active role in initiating infrastructure projects in Cambodia, Laos, Myanmar and Vietnam to boost the free flow of goods and people. It would be best for countries with similar political and economic circumstances to discuss their interests on a level playing field instead of being dominated by a superpower.

This is not to say that the One Road, One Belt scheme would necessarily be bad for Thailand. The benefits that a country would gain from any agreement are based on whether it has strategised its tactics before entering into any agreement. And it would be impossible to gain a good deal without addressing the needs of local people. The danger is that Thailand will continue to be drawn into any international agreements as a nation desperately fearful of missing the bandwagon and so often gets the bad deal.