Thailand-Cambodia Border Dispute Threatens Trade and Tourism
A simmering border dispute between Thailand and Cambodia is escalating, triggering economic repercussions for both nations. Cambodia has threatened to involve the International Court of Justice (ICJ) if Thailand doesn’t withdraw its military and address the contested area. This dispute has already led to tightened border controls, reduced working hours at checkpoints, and limitations on the duration of stay for Thai citizens in Cambodia, impacting trade, investment, and tourism. The Thai-Cambodian Joint Boundary Commission (JBC) is scheduled to meet on June 14 to address these issues, but the stakes are high for both economies.
Economic impact of the border Dispute
The trade relationship between Thailand and Cambodia is ample. In 2024, the total trade value reached 366.73 billion baht, with Thailand exporting 323.63 billion baht worth of goods and importing 43.099 billion baht. Border trade alone accounted for 181.32 billion baht.However, the recent tensions are already taking a toll. During the first four months of 2025, trade amounted to 126.283 billion baht, with border trade contributing 67.071 billion baht.
Did You Know? The total trade between Thailand and Cambodia in 2024 was approximately $10.5 billion USD.
Key Thai exports to Cambodia include gems and jewelry (34.26 billion baht), refined oil (16.197 billion baht), sugar (6.419 billion baht), and vehicles and components (2.811 billion baht). Major imports from Cambodia consist of vegetables, fruits, and processed garnishes (6.257 billion baht) and minerals and metal ores (3.930 billion baht).
The current border situation has led to a significant slowdown in trade activities. According to the Thai Ministry of Commerce, exports to Cambodia have decreased by approximately 15% in the last month alone.
Voices from the Ground: Business Perspectives
Local businesses are feeling the pinch. Prakob Chaisongkram, from yong Sanguan Group Company Limited in Ubon Ratchathani Province, noted that border trade has effectively halted due to the uncertainty surrounding checkpoint operations. Thai entrepreneurs are delaying deliveries, and Cambodian merchants are hesitant to purchase Thai goods, fearing they won’t be able to transport them across the border.
“The border trade with Cambodia should be quiet, not less than 10-20%. But also affecting the Cambodian people And definitely affects Thai people.”
Mongkol Chulan, Senior President of the Ubon Ratchathani Chamber of commerce, added that trade from Ubon Ratchathani province to Buriram has decreased by about 20% sence the tensions began. Larger operators are most affected, while villagers who don’t heavily rely on border trade experience minimal impact.
SME Concerns and Border Trade Dynamics
Saengchai Theerakulpanit, President of the Thai SMEs Confederation Strategy, emphasized the importance of addressing the conflict due to its potential impact on the economy, notably for Thai businesses dependent on border trade. In 2024, Thai-Cambodian border trade was valued at 175.53 billion baht, with a trade surplus of 109.163 billion baht. As of April 2025, approximately 403,949 Cambodian workers were employed in Thailand, highlighting the interconnectedness of the two economies.
If the conflict remains unresolved,it could significantly disrupt trade and economic activities. According to the World Bank, Cambodia’s economic growth is heavily reliant on trade with neighboring countries, making it particularly vulnerable to border disruptions.
Tourism Impact: A Disparate Effect
Chai Arunanonchai, President of the Tourism Industry Council of Thailand (TAT), believes that the border conflict has not significantly affected Thai tourism overall. The issue is primarily localized to the border regions, impacting traders who require cross-border travel for business. However, adjustments to border checkpoint operations could disrupt product transportation and possibly halt business activities.
Thailand’s tourism sector is less reliant on Cambodian tourists. Conversely, Cambodia’s tourism industry heavily depends on Thai visitors, especially those frequenting casinos along the border. Cambodia boasts over 40 casinos near the Thai border, with a substantial portion of their revenue derived from Thai patrons. Thai tourists account for approximately 32% of all foreign tourists visiting Cambodia. In the first three months of this year, over 500,000 Thai individuals traveled to Cambodia.
In 2024, Cambodian tourists in Thailand generated 1.4 billion baht in revenue, representing a small fraction of Thailand’s overall tourism income. In the first five months of this year, approximately 200,000 Cambodian tourists visited Thailand. Thus, the border conflict is expected to disproportionately affect Cambodia’s tourism sector.
Economic Risks and Investment Outlook
Associate Professor Dr. Athat Phisanwanich, an expert in international economics and ASEAN, warns that prolonged disputes could hinder the expansion of Thai-Cambodian trade. Time restrictions at border checkpoints could disrupt trade and logistics, affecting travel and gambling activities in Cambodia. Escalating tensions and potential violence could also deter foreign investment in both countries.
According to the ASEAN Secretariat, regional stability is crucial for attracting foreign direct investment, and any disruption could have long-term economic consequences.
Despite the ongoing tensions, the Office of the Investment Promotion Committee (BOI) reported in June 2025 that there are currently 65 Thai entrepreneurs investing approximately $287 million USD (9.471 billion baht) in Cambodia. Companies like Global House, Bangkok Garment, Thai Nakhon Phatthana, Thai President Foods, and Dhipaya Insurance continue to operate in Cambodia.
Narut Terd Sathasak,Secretary-General of BOI,stated that the disputes have not yet significantly impacted foreign investment in Thailand or Thai investments in Cambodia,as the situation is perceived as manageable and localized. Krisada Chanchamratsaeng, Vice President of the Thai Construction Industry association, echoed this sentiment, noting that while the closure of border checkpoints could disrupt the transportation of construction materials, the overall impact on Thai investments in cambodia’s construction and real estate sectors remains limited.
Pro Tip: Diversifying trade routes and strengthening domestic industries can help mitigate the impact of border disputes on the economy.
JBC Meeting: A Path Forward?
The upcoming JBC meeting on June 14 presents an prospect for Thailand and Cambodia to address their border issues and prevent further economic disruption. A prosperous resolution could restore confidence in the region and pave the way for continued trade and investment. Though, failure to reach an agreement could exacerbate tensions and lead to more severe economic consequences for both nations.
What long-term solutions can ensure stability along the Thailand-Cambodia border? How can businesses adapt to mitigate the economic impact of these disputes?
Ancient Context and Future implications
Border disputes between Thailand and Cambodia are not new, with a history of disagreements over specific areas dating back decades. these disputes frequently enough flare up due to differing interpretations of historical maps and treaties.The current situation underscores the importance of clear and mutually agreed-upon border demarcations to prevent future conflicts.
The economic implications of these disputes extend beyond immediate trade disruptions. Prolonged instability can deter foreign investment, hinder regional integration, and undermine economic growth. Addressing the root causes of the conflict and fostering cooperation between the two countries is essential for long-term stability and prosperity.
Frequently Asked Questions
- What is the main cause of the Thailand-Cambodia border dispute?
- the primary cause is disagreements over the demarcation of the border, leading to military presence and restrictions on movement.
- How is the Thailand-Cambodia border trade affected by the dispute?
- The border trade is significantly impacted due to delays, reduced working hours at checkpoints, and hesitancy from businesses on both sides, leading to decreased trade volumes.
- What are the primary Thai exports to Cambodia?
- The top Thai exports to Cambodia include gems and jewelry, refined oil, sugar, and vehicles and vehicle parts.
- What impact does the Thailand-Cambodia conflict have on tourism?
- Cambodia’s tourism sector is more affected, as it relies heavily on Thai tourists, especially those visiting casinos. Thailand’s tourism is less impacted, as it receives fewer tourists from Cambodia.
- What is the role of the Joint Boundary Commission (JBC) in resolving the Thailand-Cambodia border issue?
- The JBC is responsible for negotiating and resolving border issues between Thailand and Cambodia, including conducting official boundary surveys to prevent future conflicts.
- How might the Thailand-Cambodia dispute affect foreign investment?
- Prolonged tensions and potential violence could deter foreign investment in both Thailand and Cambodia due to a lack of confidence in the region’s stability.
- What measures are being taken to mitigate the economic impact of the Thailand-Cambodia border situation?
- Both countries are engaging in negotiations through the JBC to find a resolution. Additionally, businesses are adapting by delaying deliveries and adjusting trade strategies to minimize losses.
Disclaimer: This article provides general information and should not be considered as financial or legal advice. Consult with a professional for specific guidance.
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