FTI official says dispute poses long-term risks for Cambodian trade

VICHAYA PITSUWAN

The Preah Vihear dispute has so far only marginally reduced cross-border trade with Cambodia, but business is likely to deteriorate further in the long run, said Sommart Khunset, deputy secretary-general of the Federation of Thai Industries (FTI).

Until now, the appeal of Thai personal-care products in Cambodia meant bilateral trade worth 20 billion baht had not changed due to the dispute, he said.

"Some products such as electronic appliances may see fewer sales in Cambodia since the conflict erupted. Some operators thought it may cause a boycott of Thai products. But I think the level is very minimal and cannot be officially recognised as a boycott of our products," said Mr Sommart.

However, he added that fears of personal safety and difficulty in distributing products had disrupted Thai investment in Cambodia.

For example, Khon Kaen Sugar Industry Plc (KSL), Thailand's fourth-largest sugar producer, has had to postpone the launch of a sugar mill in Koh Kong. This has now been put back to next year due to safety concerns, said Mr Sommart.

He added that delays to investment projects had also put cost pressure on operators.

The FTI reports that most Thai business ventures in Cambodia are in garment manufacturing, shoe-making, tourism and agriculture. Most investors have been attracted by cheap land and abundant cheap labour suited to labour-intensive industries, said Mr Sommart.

FTI labour chief Thaveekij Japurajarernkul - who has been active in Cambodia for over 20 years - said his hotel in Siem Riep, 150 kilometres from the Aranyaprathet border post, had felt the impact from the conflict.

"My hotel occupancy rate has dropped 20-30% as tourists fear for the security of their lives," he said.

Mr Thaveekij said the impact is not yet at a worrying level. But he expressed a fear that unless the Thai government engages in effective negotiations, Thai ventures in Cambodia will be affected more than by previous conflicts.

"I said this because the current dispute is an international matter that looks to be deeper and to affect citizens of both countries psychologically," he said.

Also taking into account the global economic slowdown and domestic political conflict, both Mr Thaveekij and Mr Sommart said the private sector may have to struggle twice as hard to survive.