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Trade fears over conflict [Border clashes may hit tourism, investment]

Businesspeople are worried the border clashes between Thailand and Cambodia in Si Sa Ket province will hurt trade and investment sentiment as well as dim the tourism recovery.
At a pass at Khlong Yai in Trat province, the number of traders from
both Thailand and Cambodia dropped by half yesterday. Notably, not a
single tourist applied to cross the border to Koh Kong. JAKKRIT
Kongkrit Hiranyakit, chairman of the Tourism Council of Thailand
(TCT), said the clashes between Thai and Cambodian troops are making a
number of tourists stay away from nearby areas. He expects they will
have a long-term impact on Thai tourism as the country may lose the
opportunity to be a tourism hub when the Asean Economic Community
integration takes place in 2015.
“The ongoing clashes can make other Asean member nations turn their
attention from Thailand to other countries. Our rivals like Malaysia
and Singapore may take this opportunity to promote themselves,” he said.
Border clashes could mean other neighbouring countries like Laos and
Burma may not trust Thailand, and Thai investors may be reluctant to
invest in these countries, he added.
As for short-term impact, the number of Thai visitors to Cambodia
will drop. Also foreign tourists who stop over in Thailand before
travelling to Angkor Wat will decrease, with Japanese and Koreans
likely stopping over in Vietnam instead. This is tens of thousands of
tourists annually, he noted.
Niyom Waiyaratchpanich, chairman of the Thai Chamber of Commerce
committee on neighbouring countries, urged the government to quickly
quash the conflict as a prolonged flare-up may lead to losses in
trading value of up to 1 billion baht.
Bilateral trade has gradually declined from 59 billion baht in 2008
to 50 billion baht in 2009 and 2010, with estimates this year of 45
billion baht.
Commerce Minister Porntiva Nakasai said the closure of four
checkpoints in the past four days has docked trading value by about 100
million baht.
Deputy Commerce Minister Alongkorn Ponlaboot said border trade
between Thailand and Cambodia accounted for 80% of bilateral trade for
the countries last year. More than half of the total exports to
Cambodia were shipped through checkpoints in Sa Kaew province.
Mr Alongkorn believed the trade decline would not exceed 5% of total border trade, but that assumes no prolonged fighting.
So far, the ministry has not received any complaints from Thai
investors working on construction and infrastructure projects in
Cambodia, but Thailand already suspended the export of bandages and
medical supplies to the neighbouring country.
The latest government assessment showed the economic impact was limited to border trade, sparing investment sentiment.
“But after a new round of fighting yesterday morning, the government
has to evaluate whether to go ahead with a planned Thai trade fair in
Phnom Penh from Feb 17-20 as private operators are concerned about
their safety,” he said.
The Department of Export Promotion said 90% of 61 entrepreneurs registered for the trade fair wanted to postpone the event.
The Board of Investment of Thailand reports since Cambodia allowed
foreign investment in 1994, there have been 1,628 project investments
by Thai businessmen through 2008, worth about US$8.1 billion of
investment capital. The latest figures released by the Cambodia
Investment Board reported that 101 investment projects from Thailand
were approved in 2008 involving $260 million.
The garment industry had 38 projects worth $48.7 million, followed
by tourism with 20 projects worth over $100 million. Agro-industry and
energy were also big sectors.
Payungsak Chartsutthipol, chairman of the Federation of Thai
Industries, said a committee should be set up to jointly solve the
problem without military force.
“We think [the two countries] will be able to sort out the problems without a prolonged fight,” he said.
Bangkok Post
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