SOURCE:
https://takshashila.org.in/wp-content/uploads/2019/04/TDS-The-Kra-Canal-MK-AK-KK-2019-02-1.pdf
THE KRA CANAL
: WHAT DOES IT MEAN FOR INDIA?
Why is China attempting to build a canal through the Isthmus of Kra?
How does this impact regional dynamics?
What are India’s interests in the project?
BY
Manoj Kewalramani , Anirudh Kanisetti & Kunaal Kini
March 2019
Executive Summary
A canal along the Isthmus of Kra could alter the strategic calculus for states across Southeast Asia, with China expected to benefit the most. In light of recent discussions around building the canal with the help of Chinese investors, this study examines the potential impact and pitfalls of this project from an Indian interests perspective. The following are the key conclusions of this assessment:
1. The Kra Canal is not going to materialise immediately and has several challenges.
Thailand has many misgivings about the project, with divided elite and public opinions. It is a diplomatically, politically and economically risky undertaking. In addition, China is working on less controversial alternatives to address the Malacca Dilemma.
2. The Kra Canal is not necessarily “aimed” at India, and can serve Indian interests.
The Kra Canal is not an economic risk to India and will likely boost trade with East Asia. The potential security threats it poses can be managed through contingency planning.
3. For India to benefit from the canal, it needs to take action immediately.
India must avoid direct involvement in the project. But if it materialises, India should deepen bilateral ties with key ASEAN members, pursue a “sea denial” strategy to address security concerns and invest in port and transshipment capacity.
What is the Kra Canal?
The Kra Canal is a proposed project that could route shipping from the Andaman Sea directly to the Gulf of Thailand. It’s in the news thanks to reports of a 2015 MoU between two private entities and the Thai leadership commissioning a feasibility study
The Kra Canal is a proposed project that aims to directly connect the Gulf of Thailand to the Andaman Sea through the Isthmus of Kra in Thailand, providing an alternative route for shipping that is now concentrated on the Straits of Malacca. If built, the canal would cut travel time from South Asia to East Asia by at least 3 days and 1200 kilometres.
In 2015, a Chinese company reportedly signed an MoU to construct the canal. Since then, there have been concerns about the canal’s impact on India. This Slidedoc discusses Thai and Chinese interests in pursuing the canal, the project’s feasibility and prospects, and proposes actions for India to maximise its interests.
How far along has the project come?
The Kra Canal is a project often discussed at times of geopolitical competition. Despite the support of Chinese academics and elements within the Thai military, it has not yet secured a green light. A feasibility study has recently been commissioned, but it is not the first and may not be the last.
The idea of a canal through the Isthmus of Kra is more than 300 years old, and has been periodically revived in times of geopolitical competition. The late 19th century, for example, saw competition between France and Britain, the former in support while the latter opposed. The late 20th and early 21st centuries have seen more systematic and technology-backed proposals, with multiple feasibility studies being carried out.
In 2015, an MoU was inked between the China-Thailand Kra Infrastructure Investment and Development company and Asia Union Group, to build the canal. Both the Chinese and Thai governments have since officially distanced themselves from the deal. But many Chinese academics and influential Thai businessmen - who also happen to be retired military officers - have spoken in favour of it.
Most recently, Thailand’s National Economic and Social Development Board and the National Security Council have been tasked to conduct a feasibility study (Pakkawan 2018). So far, neither the ruling military junta nor the democratic opposition have taken a clear, decisive stance supporting the canal, or outlining how it would be constructed.
What does Thailand stand to gain or lose?
There are compelling arguments for and against the Canal. It is potentially a very lucrative project, but comes with immense risks for Thailand
Economics
Gains
The canal could aid Thailand’s rise as a shipping and financial hub, create employment, incentivise business and boost growth.
Losses
To benefit from the canal, transhipment facilities and an SEZ must be built, bringing the total cost anywhere between $30-$80bn. The debt incurred may be difficult to repay – especially given that Singapore would remain a competitor and the canal could adversely impact the environment, hurting tourism.
National Security
Gains
Economic development and employment generation may well lead to increased social and political stability.
Losses
The Canal would physically divide the South of Thailand from the North. This impinges on Thailand’s territorial integrity. It could also fuel the existing insurgency by Malays in the south. Unsustainable debt burden owing to the canal could also comprise Thai sovereignty. All of this could lead to greater political and social instability.
Geopolitics
Gains
The Kra Canal would significantly buttress Thailand’s position as a swing power in Southeast Asia
Losses
A shift in trade away from the Straits of Malacca could lead to frictions among ASEAN states. Debt owed to China could increase Thailand’s dependence on it and risk embroiling it in the growing Sino-US competition (Bloomberg 2018).
Environment
Gains
Cutting the maritime travel time by 2-3 days and 1200 km would result in less energy consumption and reduced emissions (Murdoch 2017).
Losses
There are fears that increased shipping would adversely impact marine ecology and potentially pose an existential risk to tourist sites such as Phuket.
What does China stand to gain or lose?
China has much more to gain from the construction of the Kra Canal and is also less exposed to risk. However, some concerns remain.
Economics
Security
Geopolitics
https://takshashila.org.in/wp-content/uploads/2019/04/TDS-The-Kra-Canal-MK-AK-KK-2019-02-1.pdf
THE KRA CANAL
: WHAT DOES IT MEAN FOR INDIA?
Why is China attempting to build a canal through the Isthmus of Kra?
How does this impact regional dynamics?
What are India’s interests in the project?
BY
Manoj Kewalramani , Anirudh Kanisetti & Kunaal Kini
March 2019
Executive Summary
A canal along the Isthmus of Kra could alter the strategic calculus for states across Southeast Asia, with China expected to benefit the most. In light of recent discussions around building the canal with the help of Chinese investors, this study examines the potential impact and pitfalls of this project from an Indian interests perspective. The following are the key conclusions of this assessment:
1. The Kra Canal is not going to materialise immediately and has several challenges.
Thailand has many misgivings about the project, with divided elite and public opinions. It is a diplomatically, politically and economically risky undertaking. In addition, China is working on less controversial alternatives to address the Malacca Dilemma.
2. The Kra Canal is not necessarily “aimed” at India, and can serve Indian interests.
The Kra Canal is not an economic risk to India and will likely boost trade with East Asia. The potential security threats it poses can be managed through contingency planning.
3. For India to benefit from the canal, it needs to take action immediately.
India must avoid direct involvement in the project. But if it materialises, India should deepen bilateral ties with key ASEAN members, pursue a “sea denial” strategy to address security concerns and invest in port and transshipment capacity.
What is the Kra Canal?
The Kra Canal is a proposed project that could route shipping from the Andaman Sea directly to the Gulf of Thailand. It’s in the news thanks to reports of a 2015 MoU between two private entities and the Thai leadership commissioning a feasibility study
The Kra Canal is a proposed project that aims to directly connect the Gulf of Thailand to the Andaman Sea through the Isthmus of Kra in Thailand, providing an alternative route for shipping that is now concentrated on the Straits of Malacca. If built, the canal would cut travel time from South Asia to East Asia by at least 3 days and 1200 kilometres.
In 2015, a Chinese company reportedly signed an MoU to construct the canal. Since then, there have been concerns about the canal’s impact on India. This Slidedoc discusses Thai and Chinese interests in pursuing the canal, the project’s feasibility and prospects, and proposes actions for India to maximise its interests.
How far along has the project come?
The Kra Canal is a project often discussed at times of geopolitical competition. Despite the support of Chinese academics and elements within the Thai military, it has not yet secured a green light. A feasibility study has recently been commissioned, but it is not the first and may not be the last.
The idea of a canal through the Isthmus of Kra is more than 300 years old, and has been periodically revived in times of geopolitical competition. The late 19th century, for example, saw competition between France and Britain, the former in support while the latter opposed. The late 20th and early 21st centuries have seen more systematic and technology-backed proposals, with multiple feasibility studies being carried out.
In 2015, an MoU was inked between the China-Thailand Kra Infrastructure Investment and Development company and Asia Union Group, to build the canal. Both the Chinese and Thai governments have since officially distanced themselves from the deal. But many Chinese academics and influential Thai businessmen - who also happen to be retired military officers - have spoken in favour of it.
Most recently, Thailand’s National Economic and Social Development Board and the National Security Council have been tasked to conduct a feasibility study (Pakkawan 2018). So far, neither the ruling military junta nor the democratic opposition have taken a clear, decisive stance supporting the canal, or outlining how it would be constructed.
What does Thailand stand to gain or lose?
There are compelling arguments for and against the Canal. It is potentially a very lucrative project, but comes with immense risks for Thailand
Economics
Gains
The canal could aid Thailand’s rise as a shipping and financial hub, create employment, incentivise business and boost growth.
Losses
To benefit from the canal, transhipment facilities and an SEZ must be built, bringing the total cost anywhere between $30-$80bn. The debt incurred may be difficult to repay – especially given that Singapore would remain a competitor and the canal could adversely impact the environment, hurting tourism.
National Security
Gains
Economic development and employment generation may well lead to increased social and political stability.
Losses
The Canal would physically divide the South of Thailand from the North. This impinges on Thailand’s territorial integrity. It could also fuel the existing insurgency by Malays in the south. Unsustainable debt burden owing to the canal could also comprise Thai sovereignty. All of this could lead to greater political and social instability.
Geopolitics
Gains
The Kra Canal would significantly buttress Thailand’s position as a swing power in Southeast Asia
Losses
A shift in trade away from the Straits of Malacca could lead to frictions among ASEAN states. Debt owed to China could increase Thailand’s dependence on it and risk embroiling it in the growing Sino-US competition (Bloomberg 2018).
Environment
Gains
Cutting the maritime travel time by 2-3 days and 1200 km would result in less energy consumption and reduced emissions (Murdoch 2017).
Losses
There are fears that increased shipping would adversely impact marine ecology and potentially pose an existential risk to tourist sites such as Phuket.
What does China stand to gain or lose?
China has much more to gain from the construction of the Kra Canal and is also less exposed to risk. However, some concerns remain.
Economics
Security
Geopolitics
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