Rich in natural resources, southern Thailand is situated between two oceans – the Indian and the Pacific oceans. Maritime transport plays a very important role in the southern economy, and efforts have been made to link the two oceans together through the southern region of Thailand.
The southern region, comprising 14 provinces, is geographically divided into three major areas. The first area consists of the Andaman group of provinces, namely Krabi, Phang-nga, Phuket, Ranong, and Trang. The second area comprises the group of provinces in the Gulf of Thailand: Chumphon, Nakhon Si Thammarat, Phatthalung, and Surat Thani. The third area consists of the southern border provinces, namely Narathiwat, Pattani, Satun, Songkhla, and Yala.
Agriculture, tourism, and border trade are important economic sectors in southern Thailand. In 2010, the Andaman group of provinces earned more than 250 billion baht in income, 150 billion baht of which came from tourism, 94 billion baht from agriculture, especially natural rubber, oil palm, and fisheries, and the remaining earnings were from other economic sectors. A strategy has been worked out to develop Phuket Island in the Andaman group into a city of “meetings, incentives, conventions, and exhibitions,” or MICE, and a regional aviation hub. The MICE industry is expected to contribute to the success of the ASEAN Economic Community (AEC).
The group of provinces in the Gulf of Thailand focuses its strategy on developing natural rubber and palm oil, the major cash crops in this area, apart from eco-tourism. Samui Island in this group is well-known for its natural beauty and has become an internationally renowned marine tourism site. Since the Gulf of Thailand stretches out to a long coastal area, this group of provinces is also seeking to develop logistics services in order to cut transportation costs and facilitate business operations within the ASEAN region.
As for the group of southern border provinces, which share borders with Malaysia, emphasis is placed on border trade and exports of natural rubber in the forms of both rubber sheets and latex. This group is attaching greater importance to enhancing Thai-Malaysian cooperation in various areas. Thailand and Malaysia are also joining hands in setting up a “rubber city” in Songkhla province as a rubber-processing industrial estate for the development of the border zone of the two countries.
Cooperation in resolving the situation in the southern border provinces is an important aspect of Thai-Malaysian relations. In addition, the Thai government is developing Pattani as a halal industrial center. Muslims of Malay descent are concentrated in the southernmost provinces of Narathiwat, Pattani, Satun, Yala, and some districts of Songkhla. A land bridge project linking Songkhla and Satun is being planned to help reduce production costs from goods transportation.
The total population in the southern region is about 8.9 million, accounting for 14 percent of the country’s population. Most of the southern residents are Buddhists, while more than two million are Muslims. Around 70-80 percent of the people in Narathiwat, Pattani, Satun, and Yala are Muslims, so they have a distinctive culture different from the culture in other parts of Thailand.
The southern GDP accounts for 9.8 percent of the country’s GDP and the per capita income of the southern region is 104,738 baht, lower than the national per capital income of 150,118 baht, but higher than the per capital income of the northern region, which registers at 79,158 baht, and the per capita income of the northeastern region, which registers at 49,092 baht. Of all the 14 southern provinces, Phuket has the highest per capita income, while that in Pattani is the lowest.
The local economy depends chiefly on the agriculture sector. Rubber production in southern Thailand represents 86 percent of the country’s total output, while oil palm production represents 94 percent. Cross-border trade in the South brings in 500 billion baht annually, accounting for 70 percent of Thailand’s border trade value. More than 90 percent of border trade in the South is conducted through Sadao and Padang Besar border checkpoints in Songkhla.
Major exports in southern border trade include rubber and rubber products and computers and parts, and imports are mainly marine animals and processed wood. In overall, Malaysia is Thailand’s largest cross-border trading partner, followed by Myanmar, Lao PDR, and Cambodia.
The Thai government is pushing for the implementation of mega-projects, involving the construction of infrastructure linking southern Thailand with Malaysia and other international transportation routes. The objective is to export agricultural products to neighboring countries, with lower transportation costs. This would help improve the living conditions of local residents, especially farmers.
The southern region of Thailand is part of the Indonesia-Malaysia-Thailand Growth Triangle, known in short as IMT-GT. Among major projects being studied are the establishment of a special Thai-Malaysian economic zone, the construction of the Na Klua port in Trang province, the development of a logistics center in Thung Song district of Nakhon Si Thammarat, the construction of a motorway from Hat Yai to Sadao in Songkhla, and halal standard development.
Since the ASEAN Community will be in place in 2015, Thailand is preparing to link IMT-GT with other ASEAN partners, covering Brunei Darussalam, Cambodia, Lao PDR, Myanmar, the Philippines, Singapore, and Vietnam, as well. This will contribute to ASEAN connectivity and help promote more trade, investment, and tourism in the whole region.