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Logo of Phnom Penh Post newspaper Phnom Penh Post - Border crisis fails to dampen trade, investment relations

Border crisis fails to dampen trade, investment relations


The protracted dispute over territory near Preah Vihear temple is a tiny bump in the road for growing Thailand-Cambodia commercial ties

Vandy Rattana

Police guard the Thai embassy in Phnom Penh last month in an effort to prevent a repeat of its 2003 looting.

AFIRE engine and armed police may be stationed outside their embassy in Phnom Penh, but Thai officials and businesses are putting a brave face on the state of commercial ties between the two countries, which they say will weather the Preah Vihear temple feud.

The monthlong dispute had initially ignited fears of a repeat of the 2003 anti-Thai riots, when the Thai embassy and Thai businesses were looted and torched.

But Poonsak Khunudom, economic attache at the Thai embassy, said he had heard of no Thai business pulling out during the recent tensions.

"Our relations are good... We have to support each other," said Khunudom, confirming that "a lot of Thai investors are still interested in Cambodia."

Yong Yut, spokesman for Siam Cement Group in Cambodia (SCG), said the Preah Vihear dispute has had no effect on the company's operations.

"[July] orders fell, but that was because of the elections - not the temple dispute," he said.

SCG is Thailand's largest conglomerate and a major global construction materials producer. The company was hard hit by the 2003 riots when its Phnom Penh offices were destroyed by rioters.

SCG currently has operations in Phnom Penh, Kampot and Siem Reap and has reported about US$50 million in annual local sales and production of about one million tonnes of cement for the local market.

The company expects 15-20 percent local sales growth this year, according to Yong Yut.

But the temple dispute appears to have put the brakes on a recent Thai fruit exhibition in Sihanoukville.

The exhibit offered no explanation for the cancellation, but Cambodian officials speculated that security could have been an issue.

"Maybe they are afraid of disturbances during the exhibition because both countries have a strong stance towards their nations," said Nguon Meng Tech, director general of the Cambodian Chamber of Commerce, earlier this month.

thai investors are still interested in Cambodia.... our relations are good.

But cancellation of the fruit exhibition would have no impact on trade relations between the two countries, said Thon Virak, deputy director of foreign trade at the Ministry of Commerce.
Thailand is the region's third largest investor in Cambodia and has about 100 small- and medium-sized enterprises (SMEs) in the kingdom, according to the Thai embassy.

Even with border tensions running high, trade between Thailand and Cambodia has continued to skyrocket this year.

Thai exports rose more than 70 percent this year to $1.05 billion - the highest rate in five years, according to Thailand's commerce ministry.

Bilateral trade for 2007 was $1.47 billion.

The Thai government also continues to promote trade and investment and has loaned 2.13 million baht to Thai businesses investing in Cambodia. The Thai embassy has issued travel security warnings to citizens traveling to Cambodia but said that more than 1,000 Thais remain in the country.



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