Robust traffic at the Poipet border crossing (shown in above file photo) has dropped 30 percent in recent weeks.
As soldiers dig in for what appears likely to be a prolonged standoff at Preah Vihear temple, business leaders remain confident that the crisis will not put the brakes on foreign investment in Cambodia.
Few see the staredown between Thai and Cambodian troops over territory adjoining the 11th-century Hindu temple as likely to destabilise the economy.
“It hasn’t affected our investments in Cambodia,” said Chinese Chamber of Commerce president Jimmy Gao. “And it certainly doesn’t affect our desire to invest our money here in the future.”
Gao offered no opinion on the issue of sovereignty over the temple and its surrounding land, adding that the government of China, a leading source of direct foreign investment in Cambodia, had not yet offered any advice to investors about the continuing military confrontation in the north. Spokesmen for the Thai, Singaporean and South Korean embassies have also declined to comment on the situation.
Douglas Clayton, CEO and founder of Leopard Capital, a private equity group that launched its Cambodian operations in April, said that the Preah Vihear crisis was not a serious concern, adding that only an actual outbreak of fighting would undermine investor confidence in Cambodia.
“I think it’s an unwelcome distraction right now, but most investors expect it to pass fairly quickly,” said Clayton. “Several investors have written to me to ask whether this is a serious issue … but we are confident that after the election there will be a compromise and the crisis will be resolved.”
Similar sentiments were echoed by many Cambodian officials, who see Preah Vihear as a mere bump on the longer road to robust economic growth and rising foreign investment.
Cambodian Chamber of Commerce general secretary Nuon Meng Tech said that as ASEANmembers, Cambodia and Thailand were unlikely to resort to violence and predicted business confidence would remain high as a result.
“The ASEAN countries have agreements; they have MoUs that there will be no fighting. People who know how ASEAN works will not be scared of anything happening,” Nuon Meng Tech said. “It may have a little bit of an impact ... it should resolve itself within one or two weeks.”
But despite reports that some Thai tourists were canceling trips to Angkor Wat out of fears for their security, Nuon Meng Tech was confident that it would not endanger large-scale financial commitments to the country.
“Big investors study, they do a lot of research, and I don’t think they’ll have a problem staying.”