The Geopolitics of Canals: Far from the ‘Suez of the East’?

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Marcus is an incoming final year student reading International Relations and the East Asia Regional Editor for KCL International Relations Today. Marcus currently serves as the President & Senior Editor at King’s College London Geopolitical Risk Society.

Summary: This piece looks at the geopolitical implications of the potential construction of the Kra Isthmus canals in terms of ASEAN dynamics and Chinese encroachment onto regional stability through its ‘string of pearls’ strategy that is emboldened by the Belt Road Initiative. Although presently deterred by narrow cost-effectiveness and lukewarm Thai enthusiasm, the hypothetical success of this megaproject will transform the geopolitical landscape of Southeast Asia and beyond.

The Kra Canal

China has recently taken an interest in the construction of the ancient canal that cuts through the Malay Peninsula, conveniently linking the Gulf of Thailand and the Andaman Sea in conjunction with China’s grand strategy in the region. It will provide a shorter alternative between the Indian Ocean and the Pacific Ocean (which is now satisfied by the Straits of Malacca) by 1,200 km. Presently, 15-20% of global trade and 30% of global crude oil shipments travel through the Straits of Malacca annually. [1] Given the growth of Asian economies, the World Bank predicts that the Straits of Malacca will reach its peak capacity in the next couple of years. [2]

The geography of the Straits makes aspirations for the Kra Canal especially appealing. Characterised by straits which at their narrowest point are only 2.8 km wide, irregular tides and shifting bottom topography, [3] these ‘chokepoints’ are prone to navigational congestion, piracy or even naval blockades. Given that 80% of China’s crude oil imports pass through this area, policymakers in Beijing remain wary of such prospects. [4]

An undeserving allusion

Given the strategic utility of the Kra Canal, analysts have often tried to draw allusions of it being “an Asian equivalent of the Suez or Panama Canals” [5] which is misleadingly inaccurate. Unlike the proposed Thai waterway, the Suez Canal (11,600 km) enjoys a monopoly of maritime convenience that undercuts a 19,800 km journey that takes shipping around the African continent reducing distance by 43% and saving up to nearly two weeks worth of travel.

In contrast, the Kra Canal’s utility is undercut by its geographic ability only to shorten maritime transit by two to three days while having other alternative paths present such as the Sunda and Lombok Straits to overcome congestion. Even so, Indonesia’s decision to welcome Indian investment and infrastructural development in Sabang, Northern Sumatera (which sits 90 nautical miles away from the Andaman and Nicobar Islands) does not sit easy with Chinese’ ambitions. The prospect of entertaining Kra Canal becomes more incentivising as the two alternative shipping routes are moving away from Chinese sway.

It is estimated that 20-30% of the Malacca traffic will be redistributed to the Kra Canal, it would not displace but rather complement the rearranging of maritime traffic. [6] Finally, by merely avoiding a three-day transit around Peninsular Malaysia, the economics of building a $28 billion canal becomes highly questionable as to whether shipowners would pay a hefty toll fee when the status-quo remains largely unchanged. [7] Politically, the Kra Canal would, to some extent, offer a strategic utility to China as to how the Suez Canal offered Britain and France (and Egypt), particularly, a huge geopolitical trump card for Chinese naval ambitions in the Gulf of Thailand.

Aware of its limitations in comparison to its ASEAN counterpart, Thai officials are dubious about their ability to match up to Singapore’s standards in maritime logistics and financial hubs. And, whether the economics of vamping up its maritime facilities would guarantee a return of investment that is attractive enough to satisfy the masses. In addition, Thai policymakers are increasingly wary of relinquishing control over such a vital asset when considering the implications for Thai sovereignty under Chinese financial assistance given the witnessing of Sri Lanka’s experience with Hambantota.

Unfortunately, the technicalities of the construction make the project highly implausible even with modern-day technology: for example, the Suez and Panama Canal required a total of 430-460 million cubic yards of earth to be removed, the proposed Kra Canal would require three times the amount of unearthing. [8] Dumping the debris would prove to be a formidable task, whether financially, environmentally or politically should it decide to create offshore islands. In addition, as vessels are getting larger, the current plans for a 25-metre deep canal will not be sufficient to accommodate Chinese and Danish supercontainers. How feasible would it be for Thailand to financially expand its current blueprint for a canal that is wider than 20 km on the peninsula [9] while pushing the envelope to compete with Singapore?

Figure 1 – The Kra Canal and shortened maritime routes (Source: https://ipdefenseforum.com/canal-conundrum/)

Regional dynamics

The hypothetical construction of the Kra Canal will provoke a multitude of geopolitical concerns that stretch from Southeast Asia and beyond. Domestically, the canal will physically divide Thailand from its five southernmost provinces which has an ongoing Islamic insurgency among ethnic Malays in the Pattani region. [10] While scholars note the lack of clarity given to how a 1,200-foot wide canal would exacerbate the insurgency, there are practical and financial concerns of protecting the smooth and safe operation of the canal against insurgents and terrorists. [11] Some analysts even predict that the physical barrier has a potential of allowing the Malay insurgency spillover from Thai borders [12] , positing transboundary geopolitical risks to the northern states of Malaysia. Given the lack of a physical, clearly demarcated border boundary between Thailand and Malaysia (mainly unpatrolled forest and river terrains), armed wings of the insurgency such as the Runda Kumpulan Kecil are known for fleeing into Malaysia after carrying out violent attacks in the southern provinces.

Strategically, the Kra Canal would significantly buttress Thailand’s position as a swing power in ASEAN politics [13] as it becomes one of the few ‘gatekeepers’ of the region’s trade routes. The Kra Canal would inevitably have far-reaching geopolitical implications: providing a new and strategic channel of trade that would undercut Singapore’s current status as the maritime hub; potentially, driving up competition (providing it is able to build its facilities fast enough) and strife within the ASEAN collective. It is suggested that Singapore could lose between 30-50% of its shipping traffic [14] if the Kra Canal is built. However, this largely neglects Thai enthusiasm towards ASEAN regionalism and harmonious relations with its ASEAN counterparts. [15]

Nonetheless, given the logistical conveniences and the temporally unchallenged strategic geography of Singapore, which makes seaborne traffic the easiest to defend and interdict, Singapore’s maritime position remains unshaken. Nevertheless, while ASEAN states remain unconvinced to whether the Kra Canal will ever materialise, states such as Malaysia and Indonesia have already started planning to improve internal connectivity or build new port facilities to deal with the effects of the Kra Canal. [16]

China’s bid

The largest geopolitical concern arises from Beijing’s blueprint for threading a ‘string of pearls’ through the ASEAN heartland. It is noteworthy to consider that under the mirage of ‘promoting mutual economic development and connectivity’, Chinese interest in financing the Kra Canal comes from a geoeconomic angle rather than pure generosity. The Kra Canal will pose both benefits and risks to India: ships bound for Asia and the Pacific will have to pass through India’s Andaman and Nicobar Island channels which would enhance India’s ability to project naval power in the region and augment its strategic geography. On the other hand, it will too offer Beijing the ability to deploy naval assets quickly into the Indian Ocean, allowing Chinese naval power to permeate into the Andaman Sea and the eastern Indian Ocean far easier than it does at present. [17] A key element to this phenomena would be China’s current control over the Hambantota port which sits astride the sea lanes of the northern Indian Ocean opposite the Kra Canal [18] thus, allowing China naval presence to dominate the region.

Most importantly, the construction of an alternative shipping route will undermine the US navy’s ability to project power and fend off Chinese assertions which have become increasingly assertive in recent years. The Malacca Dilemma, which presents genuine worries for Beijing that the Straits may be closed off to China by regional powers should a conflict arise in the Indo Pacific [19] is the strategic counterweight that halts Chinese belligerence in the region. Current US anti-piracy patrols and freedom of navigation operations in the region are largely a stabilising force in the region. Should the Chinese financed-and-controlled canal come to light, Beijing would have a freer hand to do whatever it pleases when the US counterbalance diminishes.

While Beijing certainly possesses the maritime ability and willpower to resist threats of such blockades, it is instinctively keen on avoiding such inconveniences in the first instance through financial means. Subjected to a considerable amount of influence from Beijing, the Kra Canal might potentially create a situation where “China might have an advantage over the US in shifting naval forces between the Indian Ocean and the South China Sea” [20], a scenario that would inevitably arouse anxieties in regional players.

Conclusion

The growing volume of trade into Asia through the increasingly congested Straits of Malacca incentivises the Kra Canal solution to be heard and envisioned. While it takes two to tango for the Kra Canal ever to materialise, the lack of Thai vivacity mirrors a subtle understanding that the geopolitical concerns that stem from the canal outweigh a mere three-day journey around Peninsular Malaysia. While the materialisation of the Kra Canal could be uncertain, its geopolitical implications should not be underplayed.

The opening of an alternative shipping route will unleash a plethora of geopolitical changes in the political landscapes of Southeast Asia and beyond. Domestically, physical separation between the Peninsula could upheave an aggravation of ongoing insurgency in the Southern provinces of Thailand. Regionally, ASEAN dynamics could potentially be disrupted as maritime industries become dispersed and competitive while effectiveness of US counterbalances to Chinese assertiveness in the South China Sea. Nonetheless, as the title suggests, one should be wary of overemphasising the Kra Canal to possess a similar calibre as the Suez whether geopolitically or economically.

[1] “Geoeconomics of the Thai Canal,” YouTube video, posted by “CaspianReport,” Apr 30, 2018, https://www.youtube.com/watch?v=j1t6mmlYZ4o 

[2] Ibid.

[3] http://documents.worldbank.org/curated/en/962241468244545477/pdf/PID0P068133.pdf

[4] Pongsudhirak in Michael Cox et. al. “China’s Belt and Road Initiative and Southeast Asia”, CIMB ASEAN Research Institute, October 2018, pp. 40.

[5] https://www.huahintoday.com/thailand-news/kra-isthmus-canal-maritime-silk-road-rival-suez-panama/

[6]“Geoeconomics of the Thai Canal,”

[7] Lam Peng Er (2018) Thailand’s Kra Canal Proposal and China’s Maritime Silk Road: Between Fantasy and Reality?, Asian Affairs: An American Review, 45:1, 1-17, DOI: 10.1080/00927678.2017.1410403

[8] https://www.military.com/daily-news/2017/10/04/geopolitic-kra-canal.html

[9] https://theaseanpost.com/article/thai-ambassador-kra-canal-no-go

[10] Ibid.

[11] Lam Peng Er (2018) Thailand’s Kra Canal Proposal and China’s Maritime Silk Road: Between Fantasy and Reality?, Asian Affairs: An American Review, 45:1, 1-17, DOI: 10.1080/00927678.2017.1410403

[12] https://takshashila.org.in/the-kra-canal-what-does-it-mean-for-india/

[13] Ibid.

[14] https://www.military.com/daily-news/2017/10/04/geopolitic-kra-canal.html

[15] Chulanee Thianthai & Eric C. Thompson (2007) Thai Perceptions of the ASEAN Region: Southeast Asia as Prathet Phuean Ban, Asian Studies Review, 31:1, 41-60, DOI: 10.1080/10357820701196684

[16] https://takshashila.org.in/the-kra-canal-what-does-it-mean-for-india/

[17] Ibid.

[18] Ibid.

[19] https://ipdefenseforum.com/canal-conundrum/

[20] https://www.military.com/daily-news/2017/10/04/geopolitic-kra-canal.html

Bibliography

https://theaseanpost.com/article/thai-ambassador-kra-canal-no-go

https://www.military.com/daily-news/2017/10/04/geopolitic-kra-canal.html

“Geoeconomics of the Thai Canal,” YouTube video, posted by “CaspianReport,” Apr 30, 2018, https://www.youtube.com/watch?v=j1t6mmlYZ4o

ttps://ipdefenseforum.com/canal-conundrum/

Lam Peng Er (2018) Thailand’s Kra Canal Proposal and China’s Maritime Silk Road: Between Fantasy and Reality?, Asian Affairs: An American Review, 45:1, 1-17, DOI: 10.1080/00927678.2017.1410403

Michael Cox et. al. “China’s Belt and Road Initiative and Southeast Asia”, CIMB ASEAN Research Institute, October 2018.

Featured Image Source- https://www.ship-technology.com/features/featurekra-canal-rail-to-the-rescue-4669058/

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