BGA Cambodia Deputy Managing Director Sophea Ros wrote an updated to clients on the Cambodia-Thailand border dispute.

Context

  • Tensions along the Cambodian-Thailand border have intensified following a deadly skirmish May 28, despite both governments agreeing to revert military positions back to those prior to the incident. Troops and heavy weaponry have been deployed along the border, and responsive military measures are in effect. The potential for military clashes remains unpredictable, particularly in the lead-up to or following the scheduled meeting of the Joint Boundary Commission (JBC) June 14.
  • The escalation of tensions can be traced to Cambodia’s decision to refer the resolution of four disputed border areas to the International Court of Justice (ICJ), a move that Thailand strongly opposes. Thailand insists that these issues should be bilaterally addressed through the JBC, which was established under the memorandum of understanding agreed in 2000. The country has taken unilateral actions, including tightening border checkpoints, to pressure Cambodia into including these areas in the JBC’s agenda. Meanwhile, Cambodia has adopted reciprocal and proactive measures that have garnered significant public support.

Significance

  • The Cambodian Ministry of Foreign Affairs sent a letter to its Thai counterpart June 6, emphasizing that ICJ arbitration is necessary to resolve the long-standing border disputes. Given the complexity, historical significance and sensitivity of these issues, it has become clear that bilateral dialogue alone may not be sufficient to achieve a comprehensive and lasting resolution. While the JBC can help alleviate tensions, it cannot guarantee a peaceful resolution of the border issue.
  • The Thai government strongly opposes ICJ arbitration, insisting that the dispute should be resolved through bilateral discussions and the JBC. This position has been influenced by Thai nationalists who are pressuring Prime Minister Paetongtarn Shinawatra’s fragile coalition government.
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Implications

  • In an effort to pressure Cambodia into focusing solely on the JBC meeting, Thailand has, tightened border checkpoints for trade and passenger movement and threatened to cut off electricity and internet. In response, Cambodia has imposed stricter border controls and closed certain checkpoints. Cambodia has instructed internet providers to stop purchasing bandwidth from Thailand and is prepared to withdraw from its electricity supply agreement. The ministries of Information and Culture have also ordered TV stations and cinemas to cease airing Thai films.
  • Companies operating in Cambodia are strongly advised to activate their contingency plans, including reevaluating supply sources within Cambodia and exploring alternatives from other countries. Businesses should also review the potential impact of tariffs or increased costs on their profit margins and develop appropriate pricing strategies. It is essential for companies to engage with government officials and local stakeholders while staying informed about government announcements and guidance to ensure the safety of their operations and employees.

We will continue to keep you updated on developments in Cambodia as they occur. If you have any comments or questions, please contact BGA Cambodia Deputy Managing Director Sophea Ros at sros@bowergroupasia.com.

Best regards,

BGA Cambodia Team

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Deputy Managing Director

Sophea helps BGA clients parse Cambodia’s business environment and identify opportunities to build a sustainable foundation in the country. He has two decades of senior management experience in sectors such as telecommunications, fast-moving consumer goods and hospitality plus experience with international courts and nongovernmental organizations and as a university lecturer. Sophea has a deep knowledge of the investment environment in Cambodia that provides him a nuanced understanding necessary to help companies succeed.   Before joining BGA, Sophea led the government and external affairs strategies for a major telecommunications company in Cambodia. Prior to that, he worked for a leading beverages company, ... Read More