New Thai cabinet casts shadow over Cambodia’s economic ties

New Thai cabinet casts shadow over Cambodia’s economic ties

It also raises serious concerns among Cambodian and Thai business communities about the potential disruption in bilateral trade, economic cooperation, and overall relations.

The new cabinet of the Royal Thai Government (RTG) led by Prime Minister Anutin Charnvirakul, sworn in Wednesday, has triggered concerns over prolonged trade disruption, stalled investment, and strained bilateral relations with Cambodia.

As the new cabinet begins its tenure, Cambodian businesses and policymakers are confronting the dual challenges of gold export scrutiny and border uncertainty, both of which pose significant risks to overall economic confidence in the region.

Prior to Anutin’s official cabinet, he ordered an immediate investigation into $2.15 billion worth of gold exports to Cambodia on September 15, citing concerns that irregularities or illegal activities may have driven the surge.

The probe was assigned to the Thai Finance Minister Ekniti Nitithanprapas, following consultations with Kriengkrai Thiennukul, Chairman of the Federation of Thai Industries (FTI), signalling the intention to scrutinise cross-border trade with Cambodia more rigorously.

Five days later, Anutin announced that the Royal Thai Army (RTA) would decide on reopening the border with Cambodia, emphasising that the RTG under his leadership would not negotiate while Cambodian actions continue to provoke Thai troops.

It may be recalled that in early July, former Thai Prime Minister Paetongtarn Shinawat ordered the arrest of Cambodian Senator Kok An over alleged involvement in scam centres in Poipet city, Banteay Meanchey province.

Thai authorities also conducted coordinated raids on 19 properties in and around Bangkok linked to Kok An, marking a rare crackdown on individuals allegedly tied to the cyberscam industry amid the border dispute.

These incidents underscored escalating risks for cross-border investment, raising serious concerns among Cambodian and Thai businesses, while intensifying uncertainty, caution, and potential disruption in bilateral trade, economic cooperation, and overall relations.

Speaking to Khmer Times, Chea Chandara, President of the Logistics and Supply Chain Business Association in Cambodia (LOSCBA), noted that Anutin’s cabinet is expected to remain in office for approximately four months.

He explained that this arrangement stems from an agreement with the opposition People’s Party, which agreed to support Anutin’s premiership on the explicit condition that he dissolve the parliament within four months and call for a general election thereafter.

Chandara emphasised that as long as cross-border issues remain under the authority of RTA, the two neighbouring kingdoms are unlikely to reopen the border or restore bilateral trade relations anytime soon.

“Instead, the Thai military continues to create challenges, and the conflicts over border and trade matters may not be resolved quickly or without sustained diplomatic effort.”

For logistics operators and traders, Chandara recommended sourcing goods and supplies from alternative partner countries, citing two major reasons.

First, Cambodian consumers are increasingly boycotting Thai products despite competitive pricing, and second, the border dispute may take months or even years to resolve due to internal conflict in the Thai government.

Kevin Nauen, Dean of the Faculty of Social Sciences and International Relations of Paññāsāstra University of Cambodia (PUC), said that the swearing-in of Anutin’s cabinet represents a civilian face of governance, but the Royal Thai Armed Forces (RTARF) remains the institutional power broker.

“Since the 2014 coup, the military has entrenched itself in constitutional design, the judiciary, and security policy. Even though civilian politicians may push for economic pragmatism and normal relations with neighbours like Cambodia, they operate within boundaries set by military and royalist guardians.”

Nauen went on to add that the armed forces still frame Thailand’s territorial and security posture, especially in border disputes, maritime demarcations, and relations with the Cambodian government. “This tension is not new, as Thailand has often had to balance a ‘hawkish’ military posture with a ‘pragmatic’ economic calculus.”

“Historically, when economic losses are significant and prolonged, the business sector can indeed act as a moderating force. This takes concrete form in the persons of new members of the cabinet that seek to improve Thailand’s economy,” he noted.

He added that the Thai military’s dominance means civilian cabinets like Anutin’s cannot easily pre-empt nationalist impulses; instead, they are pressured to manage the fallout once economic realities make hardline policies untenable, he added.

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