[PHNOM PENH POST]
AS Prime Minister Hun Sen heralds a “new era of cooperation” between
Cambodia and the newly elected Puea Thai government, Cambodians can hope
the Red Shirt’s electoral victory ushers in a new era of trade and
investment from their western neighbour.
Despite promises from
both sides that business would continue as usual, even as clashes raged
along the border, it was anything but. The most obvious hit was taken by
the Kingdom’s tourism industry, as the number of tourists entering from
Thailand inevitably took a hit during the fighting.
Although the
statistics generally note an increase in visitors over the first few
months of 2011, tourists entering through Poipet and other crossings
with Thailand doubtlessly would have grown further without the border
conflict.
Regardless of past Ministry of Tourism pronouncements,
the country’s tourism sector clearly requires Thai support. Although
linkages with other ports of entry are increasing, Bangkok is still the
main port of entry to Cambodia for hundreds of thousands of visitors
each year.
Authorities from both governments have repeated that
the bilateral trade relationship continued unhindered, pointing out
statistics showed increases in trade during the period. But at times the
conflict risked spilling more significantly into the sphere of
business.
Thailand, for instance, closed some of its border gates
located near the fighting, and Hun Sen responded by threatening to look
elsewhere for much-needed imports. Cambodia’s Commerce Ministry also
postponed a major Thai trade fair in Phnom Penh, claiming its safety
could not be guaranteed.
With the friendly-to-Cambodia Shinawatra
family back in power, one hopes this back-and-forth fades quickly.
While Thailand imports a significant amount of its agricultural produce
from Cambodia, an even larger quantity of consumer goods travels in the
other direction. More than that, though, Cambodia could well benefit
from Thai investment in the country, particularly in sectors such as
services and agriculture.
Proposals from Thailand accounted for
just 0.08 percent of all approved foreign investments in 2010, according
to the Cambodian Investment Board. And there were no Thai projects
among the 42 large-scale investments approved by the Council for the
Development of Cambodia during the first five months of this year.
Certainly,
it would behoove Thailand to build out the Kingdom’s meager milling
capacity in order to take advantage of cheaper labour here. Much of
Cambodia’s surplus paddy is currently bought by Thai middlemen, and then
milled and exported in Thailand. But a scenario where Thai rice mills
set up in Cambodia, taking advantage of lower domestic labour costs and
wider market access afforded to domestic exporters, is easy to envision.
This kind of investment would significantly assist the
Cambodian government in its goal of exporting 1 million tonnes of
high-quality rice by 2015. Vietnam and other foreign investors could
play a role here as well. However, Thailand is the world’s largest rice
exporter, and has the skills, experience, and capital required to take
the lead.
Of course, all of this depends on the Puea Thai
government retaining power. Given the history of coups in the Kingdom’s
western neighbour, there’s no guarantee that will happen. But even in a
scenario where the Yellow Shirts reclaim power, the Cambodian government
ought to find a way to work with them.
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