Border row a double blow for businesses

Thai entrepreneurs in Cambodia face tough decisions, while local businesses deal with a sharp decline in Cambodian workers

- LAMONPHET APISITNIRAN

The Thai-Cambodian territorial conflict has curtailed border trade and raised worries over the future of Thai businesses in the neighbouring country, as well as Cambodian workers in Thailand.

In July when severe clashes between the two countries erupted, border trade shrank, with exports plummeting by 97.5% year-on-year to 370 million baht, while imports plunged by 99.8% to 6 million baht, according to the Department of Foreign Trade.

Thai entrepreneurs in Cambodia are gripped by concerns, making them reluctant to draw up business plans, while employers in Thailand face a sharp decline in Cambodian workers.

The Explainer looks into their concerns and what they are doing to deal with the impact of the months-long dispute, which is far from settled.

WILL THAI BUSINESSES WITHDRAW FROM CAMBODIA?

It is not easy for many Thai companies, especially those in the manufacturing sector, to leave Cambodia as they spent millions of baht building production facilities there.

"Some manufacturers are in labour-intensive industries such as garments and textiles and shoes. They are expected to continue working there," said Tanit Sorat, vice-chairman of the Employers' Confederation of Thai Trade and Industry (EconThai).

These manufacturers benefit from cheap labour, enabling them to better control production costs and enhance productivity.

However, Mr Tanit said Thai companies in the service and financial sectors can more easily decide to suspend or shut down their businesses.