Thailand harnesses the power of private capital
The country’s leaders and its bankers hope a renewed surge of infrastructure investment will deepen equity capital markets and drive regional integration.
The roads in Bangkok are heaving and Euromoney is struggling to get to a meeting on time. The taxi driver suggests we pay what is owed and jump out of the taxi onto the nearest SkyTrain, the elevated rapid transit system that runs through the city.
The SkyTrain’s air-conditioned carriages are a momentary relief from the heat. But at the end of the line it turns out that another taxi ride is the only feasible way to reach the final destination. So much for beating the traffic.
Although it is modern, the SkyTrain’s coverage remains limited. At the moment it consists of just two lines covering 23 kilometres. Combined with the MRT, the underground rail network in Bangkok, only 6% of city dwellers travel on 79.5 kilometres of public transport each day.
The lack of efficient transport networks is costly: in Thailand logistics cost around 16% of GDP when that figure should be closer to 13%, but it is unlikely to fall when infrastructure spending has been so low for so long.
"Public investment spending in 2011 as a proportion of GDP was only 5.5% – close to 40-year lows," says Ian Gisbourne, head of equity research at Phatra Securities.