Infrastructure

Basic physical infrastructure – water, transport, energy and communications infrastructure – plays an analogous role in the economic organism, to the blood vessels, capillaries, lymphatic and nervous systems of the human body. Since it is precondition for every economic activity, infrastructure occupies a central place in physical economy.

Since the quality of each economic activity depends on the availability and quality of infrastructure, infrastructural improvements constitute the single most effective means to boost the real productivity of the economy. 

Remarks on the North-South and East-West rail corridors in Thailand

It is obvious that the lack of modern transport infrastructure in most of the country is a key problem -- maybe the Number One problem because lack of infrastructure prevents other problems from being solved.
 
A good example is the failure of attempts to promote "decentralization" of the industry -- to get more development outside the Bangkok area. How can you expect to have industrial development in the interior of the country if the infrastructure is lacking?
 
In infrastructure the key problem is the lack of an efficient railroad system. You can compare with Germany, where the creation of a dense network of railroads covering the whole territory of the country was decisive for the development and economic power of the economy. 

Kra Canal and improving logistics inside Thailand

Concerning how the Kra Canal can improve the logistics and decrease the logistics costs in Thailand, I would suggest the following points:
 
1. The biggest direct benefit of the Kra canal for the INTERNAL logistics of Thailand will be for the South of the country, where the transport infrastructure is completely inadequate.
 
2. Thailand has no domestic shipping network. The Kra canal and the construction of deep ports and industrial parks on both ends of the canal will change the situation completely. Shipping is the cheapest way to move bulk goods and containers between the South of Thailand and the other areas on the Gulf of Thailand.
 
3. Thailand is the largest exporter of rubber in the world, and most of the rubber comes from the South of Thailand. Today most of the rubber exports go to China. But the logistical cost for rubber exports is very high, because of lack of good infrastructure in the South.
 
4.The South does not have any large modern harbor -- Songkhla harbor has very low capacity -- so the rubber going to China is transported by truck all the way to the Laem Shabang port, and partly by train to ports in Malaysia and Singapore, which is a huge expense.