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1. Could you provide an assessment about the Ou Neang Special Economic Zone
plan in Cambodia? It had been suspended for almost a year due to the border
disputes between both countries. How will it stimulate the economic relations
between the two countries and help their respective economic development?
ANSWER: ANSWER: Ou Neang Special Economic Zone, when it is established, will be
Cambodia’s first special economic zone. It was first approved in 2005 and discussions
took place with potential Thai investors for several years. These were interrupted in
2009 when the border dispute over land surrounding the Preah Vihear temple broke
out.
The purpose of the Ou Neang Special Economic Zone is to attract Thai investment in
textile and shoe making industries in order to take advantage of Cambodia’s
preferential access to the U.S. market. The U.S. market is Cambodia’s major export
destination. The development of this special zone would bring employment to rural
Cambodians who presently cross the border illegally and seek work in Thailand. Thai
investors can be expected to profit from their investment. These funds could then be
reinvested in Cambodia or in businesses back in Thailand.
If the Ou Neang Special Economic Zone proceeds it will reassure Thai businessmen of
a stable investment climate in Cambodia. It would also represent a confidence
building measure between Bangkok and Phnom Penh.
2. Despite of political friction between Thailand and Cambodia, commercial ties
between both countries apparently remain strong. What is the situation?
ANSWER: The Thai‐Cambodian dispute over Preah Vihear is located in a remote area
in Cambodia’s north. Major trade between Thailand and Cambodia takes place in the
west, particularly through the road connecting Banteay Meanchey province, where
the Ou Neang Special Economic Zone is located, and Thailand. Cross‐border trade
has not been disrupted by the border dispute.
Garments and textiles make up 70% of Cambodia’s exports and the United States
remains the major destination for these goods. Cambodia’s economy has recovered
from the downturn in 2009 caused by the global financial crisis. It is expected to
increase by 3.3% this year and possibly rise to 5.1% in 2011. Economic growth in
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Cambodia will mean that it will be able to purchase more goods from Thailand as
well as other countries.
3. Over the last two months Thai‐Cambodian relations have warmed‐up. Former
Thai premier Thaksin Shinawatra has resigned as Cambodia's economic advisor. The
diplomatic ties between both countries have returned to normality. The two
countries have resumed talks on disputed territory. And now, they want to develop
their economic ties. In your analysis, what are the most important motivations for
the two countries to improve their relations now?
ANSWER: The border dispute between Thailand and Cambodia was more a symbolic
display of nationalism than it was about real material interests. In other words both
sides engaged in high profile posturing to defend national sovereignty. At issue was
less than five square kilometers of territory.
The border dispute arose in Thailand because yellow shirt protesters put pressure on
the central government to act to defend Thai interests. These pressures have eased.
ASEAN’s prestige has been dented by this dispute which has involved shooting
incidents. Both Thailand and Cambodia have come under external pressure to settle
this matter peacefully.
Both Thailand and Cambodia are motivated to find a face saving solution to a no‐win
situation.
4. What is your assessment on the future of the border dispute?
ANSWER: The series of events you mentioned – Thaksin’s resignation as economic
adviser to the Cambodian government, Thailand’s response in sending its
ambassador back to Phnom Penh, Cambodia’s reciprocation – plus Thailand’s
announcement that it would resume economic assistance ‐ all indicate that
diplomacy will take priority over confrontation.
Both sides have reaffirmed their commitment to the Memorandum of
Understanding reached in 2000 to resolve their dispute.
5. Besides the border dispute, what are the obstacles for the two countries develop
their relations?
ANSWER: Any optimism about the future of Thai‐Cambodian relations must be
tempered by the reality of their domestic politics. The Thai government must get
parliamentary approval for any agreement reached on the border issue with
Cambodia, including agreements reached in 2009 by the Joint Border Commission.
On August 18th the Thai parliament postponed a vote to approve this agreement. In
other words, domestic instability in Thailand will pose a risk to the development of
Thai‐Cambodia relations.
Cambodia’s government led by Hun Sen does not face domestic instability of the
magnitude faced by Thailand. But the political opposition in Cambodia attempts to
undermine Prime Minister Hun Sen’s government by criticizing the border
agreement with Vietnam. The opposition tries to portray itself as the true defender
of Cambodia’s sovereignty and Hun Sen as subservient to Vietnam.
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Hun Sen has responded by portraying himself as the true defender of Cambodian
nationalism and sovereignty by stoking Cambodian anti‐Thai nationalist sentiments
and by diplomatic grandstanding, that is, by attempting to internationalize the
border dispute by urging the intervention of the United Nations and ASEAN.