Thai rapprochement may boost business

via Khmer NZ

Thursday, 26 August 2010 15:01 May Kunmakara

TRADE officials welcomed the resumption of diplomatic ties between Cambodia and Thailand yesterday, saying it would potentially boost business and investment.

In the past two days, both countries’ ambassadors have returned to their posts after ousted Thai Prime Minister Thaksin Shinawatra resigned as Cambodia’s economic adviser on Tuesday. The diplomats were recalled in late 2009 after his appointment.

“This is a very good sign for our diplomatic relationship, which is not only [a] political issue but also affects economic development,” said Em Sophoan, undersecretary of state at the Ministry of Commerce, yesterday.

Although bilateral trade between the two countries increased this year, rising 76 percent to US$1.61 billion in the first seven months of 2010, Thai investment in Cambodia dramatically dropped.

Approved Thai investment was worth $178 million in the first six months of 2009, according to the Council for the Development of Cambodia, but fell to just $2 million in the first half of 2010.

“Local business people who cooperated with Thais were a bit scared of importing goods from Thailand – especially because of internal political turmoil in Bangkok – that’s why the investment from Thailand dropped,” Em Sophoan said.

Jiranan Wongmongkol, director of Thai Embassy’s foreign trade promotion office to Phnom Penh, agreed yesterday that the move would help business and predicted that bilateral trade between Cambodia and Thailand would increase between 20 to 30 percent this year.

“I believe that after we resume our diplomatic relationship, there will have more and more Thai’s investment and trade activities. The [return] of both ambassadors of each country will create even more cooperation and confidence to businesspeople,” he said.

And the business community also remains confident.

Khaou Phallaboth, president of Kampot Cement, which owns 10 percent of a joint venture with Thailand’s largest industrial conglomerate Siam Cement Group, said that although his business had not been impacted by the political spat, he hoped the development would improve trade.