Thailand Reviews Cambodia Ties on Thaksin Appointment (Update2)

By Anuchit Nguyen and Daniel Ten Kate

(Posted by CAAI News Media)

Nov. 6 (Bloomberg) -- Thailand will review agreements and cooperation projects with Cambodia after the government in Phnom Penh named fugitive former Thai premier Thaksin Shinawatra an economic adviser, threatening to fan tensions that have triggered border clashes.

Thai Prime Minister Abhisit Vejjajiva recalled the nation’s ambassador from Cambodia yesterday, prompting counterpart Hun Sen to follow suit. The two leaders have no plan to meet today or tomorrow in Tokyo, where they are attending a regional summit with Japan’s Prime Minister Yukio Hatoyama, Abhisit said today.

Thaksin’s appointment is an “interference in Thailand’s domestic affairs and failure to respect Thailand’s judicial system,” the Foreign Ministry said in a statement. The move “hurts the feelings of most Thais,” Abhisit said yesterday.

Hun Sen sparked a diplomatic row last month by comparing Thaksin to Aung San Suu Kyi, Myanmar’s detained opposition leader. Hun Sen said he wouldn’t extradite Thaksin, ousted in a 2006 coup and living in exile after fleeing a two-year prison sentence for abuse of power.

Thaksin has engineered anti-government protests from abroad since he left the country, attacking Abhisit and preparing his allies for a fresh election. President Barack Obama, on his first trip to Asia, is scheduled to co-chair with Abhisit a Nov. 15 summit of Southeast Asian leaders that will include Hun Sen.

Thai-Cambodia Trade

Cambodia, Thailand’s 18th largest export market, imported more goods from its neighbor last year than any other country. Trade between the countries reached $2.13 billion in 2008, with Thai exports such as sugar, cement and oil accounting for 96 percent, according to Thailand’s Commerce Ministry. Two-way shipments this year have dropped 26 percent through September.

Siam Cement Pcl, Thailand’s biggest producer of the building material, imports raw materials for its cement plant in Cambodia. Khon Kaen Sugar Industry Pcl, Thailand’s biggest publicly traded miller, opened a plant in Cambodia this year.

Thai and Cambodian officials had set up committees to work on demarcating their 803-kilometer (499-mile) land and sea border. The two countries have yet to reconcile 10,422 square miles of disputed waters in the Gulf of Thailand that may contain oil and gas reserves.

‘Economic Skills’

Thaksin was appointed an adviser because of his “economic skills” and “close friendship” with Hun Sen, Cambodian Foreign Ministry spokesman Koy Kuong said by phone from Phnom Penh. Cambodia “fully complies” with the extradition treaty between the countries and won’t send Thaksin to Thailand because the charges are “political,” he said.

Hun Sen “does not want to provoke any adverse incident between the two countries,” Koy Kuong said. Cambodia would send its ambassador back to Bangkok provided Thailand reinstates its envoy first, he said.

A Twitter message posted on Thaksin’s Web site yesterday said the decision to recall the ambassador was “childish” and an “overreaction.” Thaksin lives in Dubai and travels frequently. His spokesman, Phongthep Thepkanjana, didn’t answer calls to his mobile phone.

Thailand last recalled its ambassador in 2003, when Cambodians burned down the embassy and attacked Thai businesses. Thaksin was Thailand’s prime minister at the time.

Deteriorating Relations

Relations between the two countries have deteriorated since July 2008, when a Thai court ordered a pro-Thaksin government to withdraw support for Cambodia’s bid to list the Preah Vihear temple as a United Nations World Heritage site. The temple is near an area of land the two countries dispute. Gun battles near the site since then have killed at least six soldiers. The situation at the border now is “normal,” Koy Kuong said.

If Thaksin “were actually there and coordinating his people from a base, that would cause problems,” said Robert Broadfoot, managing director of Hong Kong-based Political & Economic Risk Consultancy Ltd. “I don’t think either Hun Sen or the Thais will allow this to spin out of control. Cambodia is just taking the opportunity to get back at what was really a Thai mistake” in objecting to the temple listing.

Thaksin or his allies have won Thailand’s past four elections since 2001. Since the coup, courts have disbanded two parties linked to him, including the winner of the 2007 election, a decision that allowed Abhisit to form a coalition government. The Thaksin-linked Puea Thai party remains the largest in parliament.

Thaksin, a billionaire-turned-politician, has claimed the judicial system is biased against him. His opponents say he’s corrupt and wants to upend Thailand’s monarchy.

To contact the reporters on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net; Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net.