[Thai] Trade with Cambodia will decline at least 20%

Thu, November 26, 2009
By CHALIDA EKVITTHAYAVECHNUKUL
THE NATION

Trade between Thailand and Cambodia will fall at least 20-per-cent short of last year's US$2.13 billion (Bt70.64 billion), due to their roiling political conflict, a new study shows.

"Trade will decline 20 per cent, or roughly Bt14 billion, if the two countries respond to each other only by diplomatic means," Anusorn Tamajai, dean of Rangsit University's Faculty of Economics, said yesterday.

"But if the situation grows more intense until they end up closing the border, the trade loss will rise to 50 per cent. In the most serious scenario, in which the two countries go to war with each other, 90 per cent of the trade will disappear."

The study, "Economic and Investment Impact from the Thai-Cambodian Conflict and Some Solutions", focused on the opinions of Thai social leaders and businessmen.

Over the past two or three years, two-way trade has been growing 10-15 per cent annually, with many Thai companies expanding their investment there, particularly those in labour-intensive industries.

The loss of investment could range from Bt7 billion to Bt32.521 billion, depending on the severity of the situation.

However, it is difficult to evaluate the full loss from this conflict, especially in terms of poorer living standards and lost economic opportunities, he said.

Fifty-two per cent of survey respondents preferred the two governments to solve the conflict diplomatically and return the situation to normal as soon as possible.

Only 2 per cent thought Cambodia was wrong and that the Cambodian government should be responded to in a tit-for-tat manner.

Anusorn said both governments would do best to place their respective countries' welfare as their top priority and boost collaboration, in order to achieve the Asean Economic Community.

"Some of our respondents - and I, personally - thought PM Abhisit Vejjajiva should be brave enough to move Foreign Minister Kasit Piromya to another ministry. Or he should appoint other people to be responsible for Cambodian affairs, because Kasit has had a personal conflict with Cambodia for a long time now," he said.

The government should adopt measures like low-interest loans or tax deductions to support the companies that were affected by this conflict, Anusorn added.

Bilateral trade [between Thailand and Cambodia] could take big hit

October 17, 2008
By Petchanet Pratruangkrai
The Nation

Trade between Thailand and Cambodia could take a hit as a result of a protracted military conflict between the two countries, according to the Thai Chamber of Commerce (TCC).

Economic and business opportunity losses could amount to Bt10 billion, as bilateral trade is forecast to plunge from Bt60 billion to just Bt50 billion for this year.

Last year's two-way trade value was Bt48.4 billion, with the balance hugely in Thailand's favour.

Thai exports totalled Bt47 billion, while Cambodian exports to Thailand were only about Bt1.3 billion.

Niyom Waiyawatchapanich, chairman of the TCC's Neighbouring Countries Trade Promotion Committee, said the ongoing conflict had especially hurt Thai exporters.

"On average, we could lose Bt100 million per day in trade value if gateways for cross-border trade were shut down," said Niyom, adding that 70 per cent of the bilateral trade is currently generated by cross-border merchants.

Niyom said Thai businessmen hoped the conflict would end soon to avoid serious impact on trade and investment.

So far, bilateral cooperation has also been delayed by the conflict, with plans for a five-year joint tourism development programme and single visas for visitors to both Thai and Cambodian destinations put on hold.

Moreover, Thai investors, who have contract farming businesses in Cambodia, have lost Bt300 million-Bt400 million in revenue due to the military conflict as they cannot transport farm output to Thailand.

Thanavath Phonvichai, director of the University of Thai Chamber of Commerce's Economic and Business Forecasting Centre, is optimistic that the border situation should return to normal soon.

He said Cambodia relied on imports of several essential products from Thailand, including refined petroleum products, construction materials, food and beverages, sugar, and consumer goods.

The TCC, meanwhile, will also hold a meeting with representatives of the business community in five border provinces on Monday to assess economic and business impacts resulting from the military conflict.

Fears Thai-Cambodian Border Dispute To Hit Business Ties

Friday, October 17, 2008

PHNOM PENH (AFP)--A tense border spat that left two soldiers dead this week threatens burgeoning economic ties between Cambodia and Thailand, business leaders and government officials fear.

Shortly after gunfights broke out between troops from the two countries on Wednesday, businessmen were among the several hundred Thais who fled the Cambodian capital Phnom Penh for home, risking booming trade and investment.

"The conflict needs to be resolved urgently. If it continues or expands further, it will bring a huge (economic) loss to both sides," Niyom Wairatpanij, chairman of Thailand's Chamber of Commerce said.

"People from both countries are already afraid to conduct their business near the borders. Thai businessmen are concerned," Niyom said.

The chamber was lowering trade growth targets for this year between the two nations by THB8 billion ($233.5 million) to THB52 billion, he said, in the wake of the dispute which shows few signs of a quick resolution.

The standoff flared in July after Cambodia's ancient Preah Vihear temple was awarded World Heritage status by the United Nations cultural body UNESCO, angering some Thai nationalists who claim ownership of the site.

The situation quickly escalated into a military confrontation, with up to 1, 000 Cambodian and Thai troops facing off for six weeks, although both sides in August agreed to reduce troop numbers in the main disputed area.

Tensions boiled over after Monday's talks aimed at cooling the standoff failed.

In the first eight months of this year, Thailand exported THB47.04 billion worth of goods to its neighbor - mostly sugar, fuel, metals, auto parts, and other industrial goods - which was nearly equal to total trade between the two countries in 2007, the Thailand's Foreign Trade Department says.

Cambodian exports to Thailand which include fruits, vegetables, steel and clothing were worth over $61 million in the first eight months this year - already nearly $1.2 million more than exports for all of last year.

But the Cambodian government said the hostilities had already started to affect investment.

"Many Thai big investors fear that if anything wrong happened they would find it hard to withdraw their shares or collect payment," said Mao Thora, secretary of state at Cambodia's commerce ministry.

"Only small or medium-sized (Thai) enterprises are still continuing their business in Cambodia." Cambodia also stands to suffer a loss of tourism revenue as Thais shy away from visiting ancient temples and border casinos.

The Bangkok Post newspaper reported Friday that after this week's clash Thai gamblers are taking their business to casinos in Myanmar.

Although relations between Thailand and Cambodia have been amicable for decades, Thais have good reason to be nervous as the border dispute has heightened nationalism on both sides.

The Thai embassy and some dozen other Thai businesses in Phnom Penh were looted and burned in the 2003 anti-Thai riots after false reports that a Thai actress insulted Cambodia.

After this week's fighting, Cambodian police were posted in front of the Thai embassy and undercover agents were assigned to protect Thai interests in the country, said Cambodian interior spokesman Khieu Sopheak.