Afraid to come into the riotous streets of Phnom Penh, Thai Commerce Minister Adisai Bodharamik flew back to Thailand Wednesday night instead of meeting for a trade pact. A lot of work went with him.
Adisai’s flight was the first economic complication in a long list of complications incurred by Thais and Cambodians alike.
“The glass is already broken, and it’s not easy to repair what people have done these few days,” Minister of Commerce Cham Prasidh said Friday. “So many years of work and in one night, everything is gone.”
The two economic ministers were scheduled to sign off on a first set of trade agreements that had been long-negotiated by a Thai-Cambodian joint committee for trade cooperation.
“Now,” Cham Prasidh said, “everything is stalled. It will take five years to come back to normalcy with Thailand.”
The trade ministers missed out signing at least five measures to strengthen trade between the two already co-dependent countries.
“I was almost on the road to approve the [agreements]…but the minister left and we lost a lot of opportunity to cooperate,” Cham Prasidh said. “The January 30 meeting with the Minister of Commerce is postponed and may be canceled forever: Border aid, the transit of goods, joint cooperation to establish an export zone on the border…. For a lot of things we were discussing there is no way to talk now.”
Thailand has made an initial estimate of the total damage at more than $23.5 million.
An economic analyst at a Western embassy in Bangkok warned that desperately needed foreign investment was likely to be affected, given the fact security forces failed to contain the violence.
“Investors have already been reluctant to come here because of the lack of the rule of law and the fact that you can’t depend on the courts for a fair deal,” he said. “So the fact that the police are incompetent has got to just be one more concern for potential investors.”
Meanwhile, Thai businesses on Friday were tallying the damage from the riots in Phnom Penh, pondering future investment after Cambodian authorities failed to protect them.
Among the Thai-owned businesses destroyed or damaged were three hotels, several warehouses, the offices of three major telecoms companies and Bangkok Airways.
The owners of the luxury Royal Phnom Penh Hotel, whose two pharmaceutical companies were also damaged in the fire, reportedly put the total damage to their interests at $7 million.
Telecoms operator Shin Satellite, controlled by Thai Prime Minister Thaksin Shinawatra’s family, said the damage to its Cambodia unit Cambodia Shinawatra Co was around $500,000.
“The company will not make any decision regarding investment in Cambodia until the situation returns to normal. We are also waiting for policy moves from both countries,” Shin executive chairman Dumromg Kasemset said.
Another telecoms operator Samart Corp said it would review its business plan for its unit Cambodia Samart Communication Co after its offices were destroyed, and it put the cost at “many millions” of Thai baht.
Its business plans would depend in part on future relations between Thailand and Cambodia, managing director Somchai Lertwisettheerakulhe said.
Thailand’s largest industrial conglomerate Siam Cement, which operates several subsidiaries in Phnom Penh, said it could not assess the damage it sustained because its Thai staff had to be evacuated to Thailand.
Observers said the violence meant the outlook for new investment by Thailand was now poor. Thailand ranks eighth or ninth in foreign investment, Cham Prasidh said Friday.
“Thai investors who have already invested in Cambodia will stay there, but new investors will think twice because of the political uncertainty in Cambodia,” said Udom Tantiprasongchai, president of charter airline Orient-Thai.
“It will take eight months to one year to restore tourists and investor confidence,” predicted Udom, who ran Cambodia’s first international airline in the early 1990s.
A Bangkok-based Western diplomat echoed Udom’s view.
“Now Thai investors will think twice before investing in Cambodia. The country has to restore its image,” he said, noting that the volume and visibility of Thai investment in Cambodia has created resentment.
The Thai Farmers Research Center said that the riots had put Cambodian-Thai trade, investment and tourism at risk.
“The unexpected and shocking incident has destroyed the trading climate between Thailand and Cambodia, which sees two-way trade of [$1 billion],” the center said.
Traders on the two countries’ border are likely to be particularly hurt, after Thai authorities barred all Cambodian nationals from entering Thailand, the research center said.
The riots not only hurt the trade negotiations of top ministers, and not only damaged millions of dollars in corporate investment, but small investors also felt the sting.
One Thai business owner who opted not to flee with hundreds of other Thais called Cambodia her home, saying she was shocked but had decided to stay.
“I didn’t expect this thing to happen,” she said. “It’s very bad for business on both sides.”
(Reporting by Seth Meixner, Agence France-Presse and Brian Calvert)
