Thai business under threat

NAREERAT WIRIYAPONG & SOMRUEDI BANCHONGDUANG

Thai businesses operating in Cambodia have expressed concern that bilateral relations could be shaken by conflict over the Preah Vihear temple.

The opposition Democrat Party has blasted the government over the past week, alleging that it is ceding Thai territory to Cambodia for supporting the latter's bid to register Preah Vihear as a World Heritage site.

The World Court earlier ruled that Preah Vihear is Cambodian territory and that Thailand has no claim to the temples.

The Thai embassy in Phnom Penh recently met with Thai business executives operating in Cambodia to discuss the political and social tensions between the two countries.

Business leaders want to avoid a repeat of the anti-Thai riots of January 2003, when the Thai embassy and Thai businesses were sacked. The riots were sparked by allegedly inflammatory remarks made by a Thai actress and resulted in hundreds of millions of baht in damage.

''We do hope that the current arguments will not last long,'' said Chitrapongse Kwangsukstith, chief operations officer for upstream petroleum and gas business of PTT Plc.

''There are several possible peaceful solutions that will be of mutual benefit. But if the situation could not be ended quickly and get worse, it would possibly make the relationship sour and cause the parties to lose trust in each other. [Thai] businesses operating [in Cambodia] could be affected.''

PTT holds a licence to develop an offshore natural gas block off the east coast of Cambodia. It also has been in discussions about petroleum exploration rights in the overlapping area that is claimed by both countries.

Dr Chitrapongse said that the temple issue could complicate discussions over the overlapping claims.

Niyom Waiyaratchapanich, the chairman of the Thai Chamber of Commerce's committee on border trade development, called on the government and related parties to end the conflict quickly.

''If it is prolonged and intensified to provoke nationalistic actions, Thai businesses in Cambodia would be seriously affected,'' said Mr Niyom.

Thai investors rank third among foreign businesses investing in Cambodia after Korea and Japan. Most Thai investments are in hotels and construction.

Thailand enjoys a trade surplus of 35 billion baht in trade worth 40 billion baht annually, he added.

Thailand's Siam Cement Group has operated a cement plant in Cambodia and plans to expand its logistics and trading businesses. The Charoen Pokphand group has invested in an animal feed and integrated agricultural project there.

Thai Airways International files daily between Bangkok and Phnom Penh, while Bangkok Airway operates daily flights from Bangkok to Cambodia's capital and Siam Reap. Thai Air Asia has seven flights a week between Phnom Penh and Bangkok.

Figures from the Tourism Authority of Thailand (TAT) show that 35,796 Thai nationals visited Cambodia in 2007, up 14.5% over the previous year, mainly for tourism and business. Meanwhile, 108,776 Cambodians visited Thailand, down 13.2%, due mainly to a sharp rise in the Thai baht. Cambodia uses the US dollar as its main currency.

''Conflicts over Preah Vihear are highlighted once again, making the bilateral relationship not so smooth. This could cause Cambodian tourists to lose confidence in visiting Thailand,'' the TAT said in a recent report.

Siam Commercial Bank executives said they were closely monitoring events.

Paspun Suwanchinda, the bank's executive vice-president, said the bank's operations in Phnom Penh had not been affected by the Preah Vihear case.

''Business transactions remain at normal levels,'' she said.

SCB operates branches in Phnom Penh, Battambang, Siem Reap and Sihanoukville under the name Cambodian Commercial Bank.

But while the situation appears stable now, Ms Paspun said the bank had contingency plans to cope with ''unpredictable events''.

''We are receiving round-the-clock information updates from the Thai embassy, and we have also held briefings with our staff to be sensitive to the situation,'' she said.