Transport Infrastructure and Enlarging Production Network in

GMS

Contents

• Introduction

• Current Situation in GMS • Production• Market

• Effect of Transport Infrastructure in GMS• Third Thai-Lao Friendship Bridge• National Road 9 in Lao PDR• Japanese Friendship Bridge in Cambodia

• Conclusion

Introduction

Transition of Japanese Offshoring Place

ThailandChina ?CLMV

Why CLMV?○ Adequate△ Partially Adequate× Inadequate

What‘s Kind of Infrastructure?

ElectricityWater Service

TransportationIT

Education

Medical

Cambodia

Lao PDRMyanmar

Thailand

Vietnam Australia

Brazil

China

Japan

GermanySingapore

United States

1.5

2

2.5

3

3.5

4

4.5

0 10000 20000 30000 40000 50000 60000 70000

LPI Score

GDP Per Capita (US $)

Logistics Performance Index 2014 ( LPI )

Source: The World Bank

n=143

Current Situation in GMSProduction Side

0

50

100

150

200

250

300

350

400

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

US$/Monthly

Source: National Statistical Office of Thailand

Average Monthly Wage in Thailand

1baht=0.028US$

Comparison of Population Pyramid in Thailand 2015 and 2030

3000 2000 1000 0 1000 2000 3000

0～4

5～9

10～14

15～19

20～24

25～29

30～34

35～39

40～44

45～49

50～54

55～59

60～64

65～69

70～74

75～79

80+

Thousand

AgePopulation Pyramid in Thailand 2015

Male

Female

3000 2000 1000 0 1000 2000 3000

0～4

5～9

10～14

15～19

20～24

25～29

30～34

35～39

40～44

45～49

50～54

55～59

60～64

65～69

70～74

75～79

80+

Thousand

AgePopulation Pyramid in Thailand 2030

Male

Female

Source: The World Bank

Comparison of Population Pyramid in Cambodia 2015 and 2030

3000 2000 1000 0 1000 2000 3000

0～4

5～9

10～14

15～19

20～24

25～29

30～34

35～39

40～44

45～49

50～54

55～59

60～64

65～69

70～74

75～79

80+

Thousand

Age Population Pyramid in Cambodia 2015

Male

Female

3000 2000 1000 0 1000 2000 3000

0～4

5～9

10～14

15～19

20～24

25～29

30～34

35～39

40～44

45～49

50～54

55～59

60～64

65～69

70～74

75～79

80+

Thousand

AgePopulation Pyramid in Cambodia 2030

Male

Female

Source: The World Bank

Comparison of Population Pyramid in Lao PDR 2015 and 2030

3000 2000 1000 0 1000 2000 3000

0～4

5～9

10～14

15～19

20～24

25～29

30～34

35～39

40～44

45～49

50～54

55～59

60～64

65～69

70～74

75～79

80+

Thousand

AgePopulation Pyramid in Lao PDR 2015

Male

Female

3000 2000 1000 0 1000 2000 3000

0～4

5～9

10～14

15～19

20～24

25～29

30～34

35～39

40～44

45～49

50～54

55～59

60～64

65～69

70～74

75～79

80+

Thousand

AgePopulation Pyramid in Lao PDR 2030

Male

Female

Source: The World Bank

Comparison of Population Pyramid in Myanmar 2015 and 2030

3000 2000 1000 0 1000 2000 3000

0～4

5～9

10～14

15～19

20～24

25～29

30～34

35～39

40～44

45～49

50～54

55～59

60～64

65～69

70～74

75～79

80+

Thousand

AgePopulation Pyramid in Myanmar 2015

Male

Female

3000 2000 1000 0 1000 2000 3000

0～4

5～9

10～14

15～19

20～24

25～29

30～34

35～39

40～44

45～49

50～54

55～59

60～64

65～69

70～74

75～79

80+

Thousand

AgePopulation Pyramid in Myanmar 2030

Male

Female

Source: The World Bank

Current Situation in GMSMarket Side

0

1000

2000

3000

4000

5000

6000

2010 2015 2020 2025 2030 2035 2040 2045 2050

Million

Source: UNCTAD Stat

Population in Asia

Other Asia China India GMS

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

200020012002200320042005200620072008200920102011201220132014201520162017201820192020

%US$

Billions

Source: Euromonitor International (2010)

Changes in Income Stratified Populationin Emerging Asian Countries

$35,000 or more $5,000～$35,000

Less than $5,000 $ 5,000 or more of the ratio (right scale)

・advantages cost・R & D・employment・production efficiency and innovation

・pushing up the country's economy・market expansion

Production

Market

・Anxiety

・Expectation

Infrastructure development

e.g. Electricity, GasTransportation

Common Issues

Effect of Transport Infrastructure in GMS

Three Economic Corridors

1. The trade volume with neighboring

countries is large.

2. Through the development of cross-border

infrastructure and cross-border systems, the

trade volume increase.

Effect Analysis about Infrastructure

Third Thai-Lao Friendship Bridge

(Lao PDR)

National Road Route 9

(Lao PDR)

Japanese Friendship Bridge

(Cambodia)

Third Thai-Lao Friendship Bridge

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Export Import Source: Bank of Thailand (2015)

Thousand Bahts

Thai – Laos Trade Cleared at Custom Housein Nakhon Phanom

National Road 9 in Lao PDR

254

565 598662

972

1262

0

200

400

600

800

1000

1200

1400

1600

1800

2001 2002 2003 2004 2005 2006

Unit/Day

Source: Ministry of Public Works and Transport, Lao PDR (2007)

Domestic Traffic Moved on Route 9, Lao PDR

Mass Transport Traffic Passenger Traffic Total

0

50

100

150

200

250

300

350

400

450

2000 2001 2002 2003 2004 2005 2006

US$ Millions

Investment in Savannakhet

Source: Savannakhet Province Potential and Investment Opportunities (2007)

Japanese Friendship Bridge in Cambodia

Tonle Bet

Both Ways Traffic Volumes in Japanese Friendship Bridge in Cambodia

Source: Ministry of Public Works and Transport, Cambodia (2005)The data was calculated for 12 hour (6:00～18:00)

Conclusion

Conclusion

•Problem•System of transport infrastructure•Fundraising

•Our Suggestion

System of transport infrastructure

•Cross Border Transportation Agreement

• Single Stop

• Single Window

Not all countries ratify these agreements

0

100

200

300

400

500

600

700

800

Amount of Investment per Year Infrasturucture Needs per Year

US $Billions

The Supply-Demand Gap of Infrastructure Fund in Asia

AIIB: 15Billion

ADB: 23Billion

Source: ADB, Reuters 1,Dec,2015

700 US Billion

Our Suggestion

Construction of production network completed in GMS

• Thailand’s meritAvoid “Middle Income Trap”

•Neighboring countries’ meritImprove industry levels

• Foreign companies’ meritCut down production cost