How a Thai Canal Could Transform Southeast Asia
Kra Isthmus
Image Credit: Wikimedia Commons

How a Thai Canal Could Transform Southeast Asia


Southeast Asia’s salience as a major strategic nexus for maritime trade is well appreciated. The Strait of Malacca is the doorway from the Indian Ocean to the broader Asia-Pacific region and enables the transport of water-borne crude delivery and other strategic resources to East Asia’s many ports, from Manila to Tokyo. It’s not surprising then, that the idea of a canal through the Kra Isthmus in Thailand has been a topic of interest for seafarers, traders, and geostrategists since roughly the late-17th century.

A glance at Southeast Asian geography, and the merits of such an idea are immediately apparent — doubly so to seafarers. The Kra Isthmus, a mere 44 kilometers at its thinnest point, would render the current necessity for navigating south and around the entire Malaysian peninsula in East-West transit obsolete, connecting the Andaman Sea in the Indian Ocean to the South China Sea. The fuel and time savings wouldn’t be as great as they were in the case of the Panama or Suez canals, but a Thai Canal (also known as the Kra Canal) could assuage some of the overcrowding currently experienced in and near the Strait of Malacca.

So, if the canal is such a great idea, why hasn’t it been built?

Enjoying this article? Click here to subscribe for full access. Just $5 a month.

The answer to that lies partly in history, and partly in contemporary politics. In short, not everyone thinks it’s such a great idea. Historically, one of the first serious attempts to study the feasibility of such a canal was conducted by the French Engineer De Lamar in the late-17th century, at the request of King Narai of Siam. The idea was tabled due to its technological unfeasibility at the time. It resurfaced a century later under King Rama I, again to no avail. During this time, the Thai Monarchy recognized the strategic importance of a canal in facilitating its own troop movements.

Subsequently, the British East India Company tried to conduct a survey but abandoned the project when it became apparent that the mountainous geography inland would make the development of a sea-level canal prohibitively expensive. In the late-19th century, the British Empire – in the interests of protecting the dominance of Singapore as a major regional hub – agreed that it would not build a canal through the Kra Isthmus. This policy later crystallized as Article 7 of the 1946 Anglo-Thai Treaty which states that “The Siamese Government undertake[s] that no canal linking the Indian Ocean and Gulf of Siam shall be cut across Siamese territory without the prior concurrence of the Government of the United Kingdom.” The Thai government, conceding to the treaty at the end of World War II and Japanese occupation, did not resist these limits on its development.

In the 20th century, following European decolonization and Thailand’s emergence as a constitutional monarchy, the Thai Canal project received little attention, at least until the 1980s. In October 1983, EIR and the Fusion Energy Foundation – both founded by the controversial American politician Lyndon H. LaRouche Jr – briefed Thailand’s Ministry of Transportation on the construction of the canal. Their main pitch focused on the dynamism it would bring to the Thai economy. These discussions in the 1980s also incorporated several Japanese firms, including the Mitsubishi Research Institute. Discussions on how to build the canal became particularly creative in the 1980s when certain Japanese engineering firms suggested the use of Peaceful Nuclear Explosives (PNE) to bore a path for the waterway through the mountainous terrain.

After a lull, the Asian Financial Crisis in the late 1990s reinvigorated interest in the canal. Japan’s Global Infrastructure Fund (GIF) conducted a feasibility study, which estimated a cost of $20 billion for a 50 kilometer canal across the Kra Isthmus. During Thaksin Shinawatra’s tenure from 2001 to his ouster in 2006, the project was once again placed on the backburner amid other, more-pressing issues. Yingluck Shinawatra’s ascent to power has brought the canal back to the limelight. According to one expert  “Her party has voiced its commitment to reviewing and reinstating various development projects, including the Thai Canal, which aimed to develop and mend the country’s economy.”

Geopolitical Complications

The creation of a canal isn’t a geopolitical fait accompli by any means. Given the disruptive effect on the trade status quo emerging from such a canal, Thailand’s partners in ASEAN and elsewhere in Asia have a variety of views on the project.

For Malaysia and Singapore, debates on the canal are somewhat zero-sum, since diverting traffic and activity away from the tip of the Malaysian peninsula is detrimental to both their interests. The U.S. Energy Information Administration notes that Malacca’s importance to global energy trade isn’t shrinking anytime soon; it writes that Malacca “is the key chokepoint in Asia with an estimated 15.2 million bbl/d flow in 2011, compared to 13.8 million bbl/d in 2007.” It remains the shortest route between Persian Gulf suppliers and East Asian oil consumers — something the Thai Canal threatens very directly. Were the Thai Canal to be built, Malaysia and Singapore would suffer somewhat, but Malacca will always remain strategically salient for trade between the Persian Gulf and Indonesia or Australia.

Sign up for our weekly newsletter
The Diplomat Brief