The idea of a canal across the Kra Isthmus in Southern Thailand has been the subject of debate and study for parts of five centuries. The appeal of a shorter route from Japan and China to the Middle East and Europe, that would eliminate transit through the Straits of Malacca, creating a maritime version of the Silk Road has obvious appeal to many countries in the region.

While the benefits are obvious, the drawbacks and hurdles to such a project are many:

  • From a Thai perspective, the idea of a canal in the Kra Isthmus would literally split the country in half, separating the predominately Muslim provinces to the south from the rest of Thailand, opening the possibility of a successful separatist movement in an already troubled part of the country.
  • Environmentally, there are huge issues that would need to be resolved. The surrounding landscape is much more rugged than the relatively flat plains of Panama. Large quantities of dirt would need a new home, with erosion and pollution an unwanted result of the excavation.
  • Cost – China is seen is the only country with the incentive and the financial capacity to manage the project. It is estimated that it would take at least 10 years to complete and dollar figures vary wildly, creating a financial model that is risky. Ownership and maintenance issues would be problematic.

While the drawbacks and concerns regarding the construction of the canal are many, some positive points can be made for Thailand specifically, and the region in general:

  • The Straits of Malacca is currently the maritime highway used to transport all ocean freight between Japan, Korea, and the eastern seaboard of China. The Straits are already crowded and will only become more so as commerce, population, and shipping become more prevalent in this region. At less than 2 miles width at its narrowest point, the Straits are a potential choke point if military or political events occur.
  • Properly administered, a canal would be a financial boon to Thailand, potentially stimulated its sluggish economy and providing an ongoing revenue stream into the future.  Secondary benefits would be enjoyed by Thailand’s neighbors (Myanmar, Vietnam & Cambodia) as a result of their proximity to this new trade route.
  • Costs of goods and commodities would in theory be reduced as a result of the 400 mile reduction in transit afforded by the canal when compared to transiting through Singapore and the Malacca Straits.
  • Singapore and to some extent, Malaysia would obviously be affected by a canal through the isthmus, but the long lead time for its construction, coupled with Singapore’s decreasing dependence on its port as a source of revenue, would be offset by the increase in commerce and investment in the region.

Currently, no firm plans are in  place, but ongoing discussions between the Thai and Chinese government may eventually lead to a solidified working agreement that would initiate at least some preliminary activities in the area. The current strong world-wide economic environment make this an ideal environment to stimulate the interest and investment needed to make the Kra Canal a reality.