Incentives and opportunities in Cambodia

With border tensions with Cambodia rising, Thai companies that have operations in the neighbouring country are wondering whether nationalistic rhetoric could threaten the closer economic relations the two countries are trying to create.

Cambodia, which only 13 months ago was pitching incentives and opportunities to Thai investors, is now a place where investors may be fearful of participating. The Preah Vihear temple dispute, initially perceived as an election campaign rallying cry by the ruling Cambodian People's Party (CPP), has not died down. Now the dispute has spread to involve the Ta Moan Thom temple, located in Si Sa Ket near the border.

Tensions in Cambodia are not new. Everyone recalls the hostilities that resulted in major damage to Thai businesses and the Royal Thai Embassy in Phnom Penh in 2003 after Cambodian media erroneously quoted a Thai actress as saying Angkor Wat belonged to Thailand. Last year, the government of Cambodia assembled an audience of more than 200 investors and declared that nationalistic issues would not be a factor in the future.

"Let's put the past behind us and build the future. That was a political issue and we took responsibility (by paying compensation for the burning of the embassy)," was the response at the time of Kong Vibol, first secretary of state for the government of Cambodia.