The Kra canal: A dream one step closer to reality?

Ben Moles

Almost a month ago the Nicaraguan Congress, with little fanfare, announced that they had approved a proposal for the construction of a US$40 billion canal that would link the Atlantic and Pacific Oceans, a rival sea route to the existing Panama canal that if it comes to fruition, will mean the eventual realisation of a nearly 200 year old dream.

Kra

Little fuss seems to have been made of this potential ‘game changing’ news either in the press or by analysts which surprises me, considering both the potential game changing nature of it and perhaps to a greater extent the fact that the company chosen to carry out the construction of the project (and whom have been granted a 50 year concession to build the waterway with an option of extending the concession for another 50 years once the canal is operational) is the Chinese Hong Kong based ‘Hong Kong Nicaragua Canal Development Co’- an enterprise owned entirely by Beijing businessman Wang Jing.

Big news in itself, what really interests me in relation to this story is what this could mean for another centuries old canal project dream closer to home, one also linked to a Chinese push to construct it, and the serious game changing implications this would have strategically in the Southeast Asia region.

The Kra canal is a centuries old vision to connect the Pacific and Indian Oceans through and across a narrow stretch of southern Thailand. To some degree mirroring current geopolitics, the last great push for the project came during the 1930’s from the regions’ then rising power Japan. But influence and pressure on Thailand, or Siam as it was at the time, from the dominant regional colonial power Britain- fearing what this would mean for Singapore- and the onset of World War Two and de-colonisation that followed, ensured that the project would remain but a dream.

Concerns regarding the Kra canal have never entirely dissipated and have bubbled away beneath the surface ever since, with fears most prominently and recently highlighted under the George W. Bush administration. In 2005 a paper prepared by Booz Allen Hamilton (the same company contractor and ‘whistleblower’ Edward Snowden was employed by) for US secretary of Defence Donald Rumsfeld was leaked to the Washington Times, it stated:

China is considering funding construction of a $20 billion canal across the Kra Isthmus that would allow ships to bypass the Strait of Malacca. The canal project would give China port facilities, warehouses and other infrastructure in Thailand aimed at enhancing Chinese influence in the region.”

This paper formed the foundation for the ‘String of Pearls’ theory, the US proposition that China was seeking to strategically strangle India by encircling it with leased naval bases- the theory these days having largely been debunked as a myth, though some like James Holmes maintain the realist position that despite not being a threat now, don’t discount it not being the case in the future- an always impossible position to refute and pertinent to the point that follows.

There are no clear signs at present concerning plans to start constructing the Kra canal, or any new indication that China is pushing ahead or pressuring Thailand into negotiating approval for such a project. But the announcement of the approval for construction of the Nicaragua canal should make us stop and think about what the strategic implications for the region would be if the Kra canal ever was to get the go ahead- because, as the Nicaraguan canal announcement proves, what once seemed but a distant dream can fast become a reality, and potential game changing nightmare for some.

To name only a few of the potential implications stemming from the Kra canal getting the ‘green light’: Mainland Southeast Asia and maritime Southeast Asia would be physically divided by the canal symbolically splitting ASEAN members; Thailand’s troubled separatist south would also be divided and may further fuel domestic Thai ethno-religious security issues with potential spill-over effects a worrying concern for neighbouring Malaysia; the shift in maritime traffic from the straits of Malacca would mean certain economic ruin for Singapore and have a massive economic impact on Malaysia and Indonesia, again impacting and straining ASEAN relations; and finally Chinese perceived control or influence over such a pivotal sea lane and transport route (and massive potential choke point) would concern and trouble many in the region- in particular the US.

William J. Ronan, reflecting on the idea of a Kra canal wrote“…the whole project of the Kra canal is one which is capable of suddenly developing from rumour and speculation into a serious attempt to alter the present strategic and economic balance of the Far East.”

And so very well it would. That these concerns by William J. Ronan were voiced in 1936 and the realisation of a Kra canal hasn’t happened yet shouldn’t foster or allow for complacency that it won’t. Real consideration should be given to the fact that although it hasn’t happened yet it still could, and would be a serious regional game changer with wide reaching ramifications if it did.

Ben Moles holds a Masters in International Security from the University of Sydney and has interned for the International Security Program at the Lowy Institute. He can be contacted at bwmoles@gmail.com or follow him on Twitter @bwmoles