Thailand–Cambodia relations face a heightened risk of deterioration in the near term as Prime Minister Anutin Charnvirakul, emboldened by his Bhumjaithai Party’s electoral victory, entrenches a confrontational stance toward Phnom Penh.
Bhumjaithai defied all predictions with a commanding victory in the February 8 election. Unofficial results show the party winning 193 seats in the 500-member House of Representatives, placing it in pole position to form the next government.
The progressive People’s Party, which had proposed a moderate policy toward Cambodia, won 118 seats, and Pheu Thai, which was blamed by Anutin for triggering last year’s armed conflict, won only 74 seats.
What’s behind the Bhumjaithai surge?
When asked whether the party’s electoral victory could be attributed to the prevailing nationalist sentiment or the border situation, Anutin stated that the victory was due to the Thai people’s confidence in the Bhumjaithai Party’s approach and working style.
Embracing the nationalist narrative, Anutin had vowed during the election campaign to maintain the border closure and seek termination of the 2001 Memorandum of Understanding (MOU) to settle maritime disputes, despite the risk of further damage to economic opportunities.
Anutin emphasized that the closure of the Thai–Cambodian border crossings is not merely a party policy, but a national consensus reflecting the will of the Thai people to keep the border strictly closed as long as the sovereignty situation remains unsettled.
Bhumjaithai is the only party that Cambodia does not want to see form the government because of its hardline stance on territory and national interests, he claimed.
If another party were in power, there might be negotiations, compromises, or even the return of territory, he said.
Anutin assured that there would be no negotiations under him and the Bhumjaithai Party, and guaranteed that Thai people would be safe and no longer bullied along the border.
Political gains, economic losses
Thailand closed its border with Cambodia due to rising tensions since June last year. Subsequent border skirmishes in July and December caused the deaths of 43 Thai soldiers and 18 civilians, 44 additional deaths due to collateral effects, and displaced more than 350,000 people.
The border flare-up not only yielded dividends for his politics, but Anutin also claimed that since the border closures were imposed, prices of agricultural products—such as rice, cassava, shallots and mangoes—have increased noticeably.
Statistics, however, point to a different reality. Thailand incurred monthly economic losses of around 24.06 billion baht (US$740.31 million), equivalent to around 1.5–2 per cent of monthly GDP, according to a recent report by the Institute for Strategic Policy, a Bangkok-based think tank.
These losses reflect the combined effects of disrupted trade, reduced tourism activity, labour shortages and supply-chain dislocation, it said.
Of the total, direct economic impacts account for roughly 16.26 billion baht per month, arising from collapsed cross-border trade, reduced output due to labour repatriation, unplanned government expenditures on security and relief and declining tourism revenues, according to the report entitled “Economic and Social Externalities of Interstate Conflict”.
Indirect and induced impacts added another 7.8 billion baht in losses per month, driven by supply-chain interruptions, contraction in local business activity and reduced household consumption, the report said.
Arada Fuangtong, director-general at the Ministry of Commerce’s Foreign Trade Department, said border trade with Cambodia last year amounted to 92 billion baht, contracting 47.3 per cent year on year.
Thai-Cambodian border trade remains fragile, amid concerns that further clashes could occur, and border crossings are not expected to reopen in the near term, she says.
Woratat Tantimongkolsuk, chairman of the Thai–Cambodian Business Council, revealed that trade losses on the Cambodian side were estimated at around 500 million baht per day, averaging more than 15 billion baht per month.
As for Thai businesses investing in Cambodia, he estimated direct equity investment in Cambodian companies at around 150 billion baht, not including other forms of investment.
At present, Thai investors are reassessing their options—whether to continue, pause, relocate their operations, or remain in Cambodia, according to Waratat.
The 2001 MOU may be scrapped
Anutin declared during his final campaign before polling day that his government would terminate the 2001 MOU signed with Cambodia 25 years ago to settle maritime disputes and jointly develop hydrocarbon resources in the Gulf of Thailand.
The continental shelves in the gulf claimed by both Thailand and Cambodia since the 1970s span approximately 26,000 square kilometers.
Studies suggest that this area holds significant energy resources, including an estimated 11 trillion cubic feet of natural gas and 300–500 million barrels of crude oil, with a combined economic value of around US$300 billion.
Under the MOU, both sides agreed to delimit an area 10,000 square kilometres above latitude 11 degrees North and establish a joint development scheme to extract and utilize the abundant resources as well as share the interest and benefit from them in the area 16,000 square kilometres below latitude 11 degrees North.
“There will be no concept of a 50/50 interest sharing arrangement. As a result, the maritime benefits agreed upon by the previous government would no longer apply,” Anutin asserted.
Right-wing nationalist groups have repeatedly called on successive administrations to scrap the maritime deal due to fears of territorial loss, notably of Koh Kut Island in Trat province, as well as sharing too much of the resources with Cambodia.
Anutin said he had already consulted with legal experts to make sure that the termination of the agreement would not pose any legal troubles to the government.
The prime minister also instructed the Ministry of Foreign Affairs and the Ministry of Defence to study possible approaches to revoking the MOU, with the paramount priority being the national interest.
Foreign Minister Sihasak Phuangketkeow said recently that Thailand was unlikely to lose anything from the termination of the MOU, as there had been no significant progress over the past two decades.
The defense ministry, in fact, had already completed its study about the MOU months ago, according to a source familiar with the matter.
The previous House of Representatives and the current Senate had set up two separate ad hoc committees to study the MOU for the government to use them to back up its decision.
The House committee failed to complete its work before the dissolution of the House in December, while the Senate committee made recommendations to scrap the document in mid-December last year.
“After thoroughly, carefully and comprehensively reviewing the information in all dimensions, the ad hoc committee has reached a clear conclusion regarding the 2001 MOU. The meeting of the ad hoc committee unanimously resolved that the 2001 MOU should be revoked,” said Senator Noppadol Inna.
Political and social contextual factors as well as a lack of good faith on the Cambodian side have generated negative impacts, and are not conducive to a constructive negotiating environment, he said.
“Cambodia has demonstrated an intention to assert continental shelf claims in a manner that creates an overlapping claim area far larger than warranted,” Noppadol said.
Such claims lack a sound legal basis, particularly the delineation of the continental shelf lines that fails to respect Thailand’s sovereignty and sovereign rights over the maritime areas surrounding Koh Kut, he said.
The Senate suggested that the government deploy naval power as a coercive measure, such as imposing a blockade and controlling vessels and goods entering and leaving Cambodian ports, to put pressure on Cambodia to make a new deal for continental shelf delimitation after the termination of the 2001 MOU.
Anutin’s move would be the second attempt to scrap the 2001 MOU.
Abhisit Vejjajiva had made the first attempt in 2009 following a conflict over the Hindu temple of Preah Vihear, but his cabinet did not follow the proper procedure and protocol to revoke the international agreement.
