June 24, 2013

Thailand’s new frontier?

Plans for F1 in Bangkok have been blocked but could the northeast of Thailand hold the answer? © Getty Images

Thailand is southeast Asia’s second-largest economy, although – like much of the world – growth has been slowing in recent years, thanks in part to the Great Financial Crisis™. But northeastern Thailand is a region still experiencing a boom, particularly the province of Isaan.

Reuters recently ran a fascinating piece about the whys and wherefores of Isaan’s economic growth, which stems in part from the region’s support of former prime minister Thaksin Shinawatra – whose influence can still be felt in Thai politics – and in part from their previous abject poverty.

The current Thai government has mandated minimum wage increases that have been most sharply felt in Isaan. In January 2013, the government introduced a nationwide minimum wage equivalent to $10 a day, but because wages in Isaan had previously been so low, the increase was equivalent to a 35%, one of the sharpest jumps in the country.

So what relevance does any of this have to Formula One?

Isaan is “the next entry point for investors and consumers – if they link it up to China, it becomes the entry point to Thailand, not Bangkok,” Barclays Capital economist Rahul Bajoria is quoted as saying by Reuters.

And if Formula One can’t race in Bangkok, why not explore this new frontier?

With endless on-going construction work and infrastructure improvements, the addition of the F1 circus could not be said to have a detrimental effect on the locality, the (entirely sensible and legitimate) reason the proposed Bangkok palace route was dropped. If the area is booming, and infrastructure booming with it, then F1 could be accommodated into new developments in the early stages, creating the sort of city circuit that Mokpo was supposed to be.

Economic growth in Isaan is nearly double that of the rest of Thailand. Since 2007, monthly household income has increased at a greater rate than anywhere else in the country. Private and public investment are both thriving. Some of Thailand’s biggest companies are moving northeast, both to save money and to protect their businesses from losses caused by regular flooding in the southern regions.

But the business migration means that logistics and facilities in Isaan are improving, and could be made F1-ready. Transport links are improving every day.

If F1 really wants Thailand, why not take a punt on Isaan? The Mokpo model has to make sense somewhere…

Comments

Posted by CJ on 25/06/2013

I found it pretty interesting John, but feel free to let me know where the article falls down rather than slating it with no evidence... (Genuine request, I'd be equally interested in the other side of the story).

And Trucker, it just says Shinawatra was the former Prime Minister which Isaan supported. You're right that Isaan is an area, but I think Kate's saying the region will have numerous good potential locations.

Posted by Trucker on 25/06/2013

I am confused by the artical, my limited understanding is that Isaan is an area. Also I thought Thaksin Shinawatra came from Chang Mai.

Posted by John Hanon on 24/06/2013

Pity that you have no idea about the reality of Thailand! Clichés, clichés, clichés...

Were you paid by Robert Amsterdam, the lawyer of Toxin to write such a piece? One has to wonder?

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WRITER BIO
Kate Walker is the editor of GP Week magazine and a freelance contributor to ESPN. A member of the F1 travelling circus since 2010, her unique approach to Formula One coverage has been described as 'a collection of culinary reviews and food pictures from exotic locales that just happen to be playing host to a grand prix'. Kate Walker
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