Thai-Cambodian border clashes may affect trade, investment: KRC


BANGKOK, May 2 – The ongoing Thai-Cambodian border clashes, if continued, will tend to lower the market share of Thai goods in Cambodia despite the continous growth of trade between the two countries, according to the Kasikorn Research Center (KRC).

The leading think tank said the situation may affect, at a certain level, the confidence of Thai exporters and investors having businesses in Cambodia. They may be pressured by investors from other countries in the Association of South East Asian Nations (ASEAN), especially Vietnam.

Trade and investment between Thailand and Cambodia has risen continuously risen from US$1.4 billion in 2007 to US$2.5 billion last year, with Thailand gaining the positive balance of trade. The two countries’ border trade counts about at least 70 per cent of overall trade.

In this year’s first quarter, trade between both countries increased to Bt16 billion, or counting for 14.3 per cent, year-on-year. However, the export volume in March grew only slightly.

Thailand held the biggest market share among Cambodia’s imported goods in 2008-2009 although the figure dropped from 34.9 per cent in 2008 to 29.9 per cent in 2009 following border clashes.

As a result, more merchandise from Vietnam entered the Cambodian market, rising from 19.5 per cent in 2008 to 23.7 in the following year, while Vietnam’s exports to Cambodia last year increased 35.3 per cent, counting about US$1.5 billion. The value of exports rose again 44.3 per cent in this year’s first quarter, compared to that of Thailand at 31.1 per cent.

Vietnam is also the biggest investor in Cambodia with its accumulated investment value about $49.5 million, followed by Thailand at US$47.2 million and Singapore with US$24.9 million respectively.

Thai investment in Cambodia decreased significantly from US$30.7 million in 2008 to only US$1 million last year.