Businesses wary of border closure

Protecting people and assets the concern

Published: 7/11/2009

(Posted by CAAI News Media)

Amid the rising tension after fugitive former prime minister Thaksin Shinawatra's appointment as an economic adviser to Cambodia, Thai businesses are highly concerned about the safety of their people and assets, but they say closing the borders should be a last resort.

Thais andCambodian tourists travel freely across the border at a checkpoint linking Trat province with Cambodia’s Koh Kong. Thai officials yesterday threatened to close the borders as a diplomatic row between the two countries continues to escalate. JAKKRIT WAEWKLAIHONG

Thailand's national energy flagship PTT has valuable assets in Cambodia and is monitoring developments closely. Should violence occur, it said its assets in the country would be protected by the Royal Thai Navy.

"So far we are in alarm mode since we have facilities worth billions of baht in Cambodia, even though they are located in areas far from conflict," said Kampong Kittitornkul, vice-president for international marketing.

PTT has a 50% market share from six service stations and three oil tank farms in Phnom Penh and Siem Reap. The rest of the market is held by France-based Total.

PTT's oil products stored in tanks include jet fuel, petrol, diesel, lubricant and fuel oil used in power plants. The oil tanks are located in Navy areas.

"The Thai business community has not seen any impact yet, but we have to be cautious," he said. "Our major concern is if the situation comes to the point of a border closure, whether our business can run as usual or not. We also need to prepare for immediate evacuation if riots break out.

"We hope the situation will not lead to violence as happened in 2003. So far, high-ranking officials in Cambodia are still attempting to calm down the local business community."

Logistics operators are wary a border closure will hurt not only trade with Cambodia but also within the Greater Mekong Subregion (GMS).

Sealing border trade with Cambodia affects co-operation to integrate GMS logistics networks. Last month, a trial run trucking goods from the Thai border to Ho Chi Minh City via Cambodia took place successfully, said Yoo Chienuenyongpong, a counsellor to Thai Logistics Alliance Co.

Chemical product shipments to factories in southern Vietnam would be affected, said Mr Yoo, also the president of the Land Transport Federation of Thailand.

"We should not let politics cause problems for people who are not involved in the dispute," he said.

"Vietnam is more important to us than Cambodia in terms of business opportunity. Our counterparts in China are concerned about growing disputes between Thailand and Cambodia because it might further delay our regional economic integration."

Land transport takes two nights and three days to reach Ho Chi Minh City from the Thai border, compared with 10 days by sea from Laem Chabang Port to Sihanoukville in Cambodia.

Thanet Sorat, vice-president of logistics service provider V-Serve Group, said tens of local logistics companies operating at the border and with Vietnam would be affected.

"These logistics companies are the second group of casualties after local residents if the disputes intensify and lead to border closure," Mr Thanet said.

"I think the issue should not be blown up to become a national agenda item to minimise the damage for the sake of the people and the business sector."

The Commerce Ministry is calling on people and business operators of both nations not to panic, as Thai trade officials and commercial counsellors in Cambodia have not been recalled yet even though the two countries' ambassadors have left their posts.

Border trade represents up to 80% of trade between the countries worth at least 50 billion baht a year.

Traditionally, commercial ministers are not recalled as the recall of Thailand's ambassador to Cambodia is strong enough to show the kingdom's disapproval with Hun Sen's embrace of Mr Thaksin.

Commerce permanent secretary Yanyong Phuangrach said that during emergencies, all Thai trade officials are told to be ready to help Thais doing business in Cambodia.