cambodia-Thailand

Cambodia-Thailand trade volume tops 1 bln USD

The trade volume between Cambodia and Thailand reached 1.279 billion U.S. dollars in 2006, 34.4 percent higher than 2005, local media quoted Cambodian Minister of Commerce Cham Prasidh as saying on Tuesday.

This is a remarkable and proud trade volume between the two countries, Cambodian language newspaper Kampuchea Thmey Daily quoted Cham Prasidh as saying.

The good trade relations between Cambodia and Thailand resulted from the border-crossing trade agreement which was approved between the two countries in February 2006, Cham Prasidh added.
Recently, Thailand has provided 340 kinds of products for selling in Cambodia without having to pay tax or paying very low tax, he said at a Thai Products Fair held in Phnom Penh from May 19 to 22.
High quality and luxurious products from Thailand are popular in Cambodian market, including construction materials, cosmetics, household goods, food, clothes, stationery, decoration materials and souvenir, the newspaper said.

Source: Xinhua

People's Daily Online --- http://english.people.com.cn/

Cambodia-Thailand trade turnover in 2007 reaches 1.4 billion USD
Phnom Penh, Mar 16, 2008 (Asia Pulse Data Source via COMTEX) --

Trade turnover between Cambodia and Thailand increased 10.56 percent in 2007 to 1.404 billion USD, said Cambodian Commerce Minister Cham Prasidh.
However, trade balance was in deficit for Cambodia which exported to Thailand only 50 million USD worth of goods, Minister Cham Prasidh said at Thailand?s Exhibition 2008 being held in Phnom Penh from March 14 to 18.
Cambodia to Import Electricity from Thailand with ADB's Help
MANILA, PHILIPPINES - The Asian Development Bank (ADB) today signed an agreement to provide a $7 million loan without government guarantee to build transmission lines to import electricity from Thailand into Cambodia, including to the tourism hub of Siem Reap, and the growing cities of Battambang and Banteay Meanchey where there have been power shortages.
The development will be a boost for the economy of northwest Cambodia, not just in tourism but also in agriculture, services and manufacturing. ADB financial assistance is being made to the (Cambodia) Power Transmission Lines Co. Ltd. (CPTL), a private Cambodian company.
ADB’s assistance will go toward the estimated $34 million total project cost. The balance of funding is being provided through equity and loans from the Export-Import Bank of Thailand, Foreign Trade Bank of Cambodia, and a wholly owned subsidiary of Gramercy Advisors/Arco Capital Management Family of Funds.
“This will give the region access to a constant supply of inexpensive and reliable electricity, which is essential for economic growth," said Jo Yamagata, a Director with ADB's Private Sector Operations Department. "We are pleased to have worked closely with the Export-Import Bank of Thailand, Arco Capital and Foreign Trade Bank in achieving this milestone."
"This is a momentous occasion as we attracted a top international and local lending syndicate to support what is the first private cross-border, high-voltage transmission line project in the Mekong Region built to world-class standards," said Ly Say Khieng, Chairman and CEO of CPTL. "The project will bring many benefits to Cambodia."
The 115-kilovolt power lines will connect with Thailand’s national grid at the border. They will then run about 221 kilometers into Cambodia, mainly alongside National Road 5 and National Road 6 to Siem Reap and Battambang. In addition to connecting the major towns, the new lines will provide opportunities to wire rural communities along the route.
The high-voltage grid lines will be the first to be privately owned in the Greater Mekong Subregion. It is the first ADB private sector infrastructure project in Cambodia.
Northwest Cambodia, like the rest of the country, suffers from insufficient and unreliable power. There is no national grid and electricity is generated almost exclusively by small diesel plants that generate relatively high emissions. This hinders Cambodia’s ability to attract investment and promote sustainable economic activities, which are critical to reducing poverty.
Electricity in Cambodia is among the most expensive in the region because of the disaggregated and isolated small-scale systems.
Siem Reap is home to the famed Angkor Wat temples and is an important and growing tourism center. Many hotels in the area rely on their own power generators. There are similar power shortages in neighboring Battambang, an important agricultural center, and Banteay Meanchey, which supports manufacturing and trading activities.
Thailand As A GMS Principle - Trading Center
As mentioned earlier, Thailand’s economy, as measured by the size of the GDP, is larger than any other GMS economy (Cambodia, Myanmar, Laos, Vietnam and Yunnan province of Southern PR China). With its largest export volumes in relation to others’ in the sub-region, Thailand is the principle-trading center of the GMS.
Degree of interdependence in trade between Thailand and the rest of the GMS country could be measured by the relative share of exports between Thailand, its largest member, and the rest of GMS.1
Applying the formula with the available data set, results of calculation verified that Thailand is the principle-trading center in this sub-region since indicator for degree of trade interdependence was greater than 1 (i.e., 1.12 or 112% in 1990) and had increased about 6 times in ten years later (i.e., 6.42 or 642% in year 2000). In other words, over the past decade, Thailand’s exports to the rest of the GMS country (in relation to exports to the world) was proportionately 6 times larger than the rest of the GMS country’s exports to Thailand (in relation to exports to the world). That is to say, the rest of the GMS country had increasingly been dependent on trading with Thailand. Indicators for other individual GMS country could be similarly obtained from the relevant data set.
Trade Diversion and Trade Creation
By definition, trade diversion generally means that a free trade area diverts trade away from a more efficient supplier outside the FTA toward a less efficient supplier within the FTA whereas trade creation means a free trade which creates trade that would not have existed otherwise. Nevertheless, trade diversion and creation can occur regardless of whether a preferential trade agreement, a free trade area or a customs union is formed. Theoretically, trade creation will always raise a country’s national welfare whereas trade diversion could be welfare-enhancing or welfare–reducing depending on magnitude of consumer price’s changes.
By definition, trade diversion generally means that a free trade area diverts trade away from a more efficient supplier outside the FTA toward a less efficient supplier within the FTA whereas trade creation means a free trade which creates trade that would not have existed otherwise. Nevertheless, trade diversion and creation can occur regardless of whether a preferential trade agreement, a free trade area or a customs union is formed. Theoretically, trade creation will always raise a country’s national welfare whereas trade diversion could be welfare-enhancing or welfare–reducing depending on magnitude of consumer price’s changes.
Data analysis found that there had been an occurrence of the so-called trade diversion/creation phenomena within the GMS sub-region during the past years, the results of which are summarized in Table 4. Changes in the percentage share of total imports from the GMS countries to total imports from the world of any individual GMS country are used to verify the existence of trade diversion / creation hypothesis. Overall, GMS intraregional import shares, although relatively small in magnitude, had increased from 2.40 percentage point to 4.54 percentage point or grew at a rate of 37.57% p.a. during 1990-2000 periods. Trade was certainly created within the GMS as well as diverted away from other relatively more efficient non-GMS to the GMS members, but either trade creation or trade diversion had a greater significant quantitative effect which cannot be verified from the data set. For individual country, Lao PDR, Cambodia and Myanmar were found to have larger shares of import from the GMS countries in the countries’ total imports, indicated a significant role of trade diversion/creation. On the other hand, shares of import from the GMS countries of Thailand and PR China, although trended upward, were quite low, i.e., only 6.5% and 2.4% of the total imports, respectively, in 2000, implying that the trade diversion/creation may have occurred at a less significant extend.

For the six member economies of the GMS, although there is no established formal sub-regional trade bloc among them, all are members in one or more of the existing multilateral, regional and bilateral forum such as ASEAN-AFTA, WTO and other individual bi-lateral FTA. Thailand, in particular, has extended special trade privileges of importation of agricultural products (e.g., maize, soybeans, peanut, mungbeans, and Eucalyptus logs) from the three GMS countries that share common borders with Thailand (i.e., Cambodia, Laos, Myanmar) under the ACMECS project as noted earlier. Such currently implemented domestic, regional and international trade measures would certainly have generated positive impacts on increased intraregional trade creation and diversion. A case in point could be cited for Thailand. Trade has been (and will continually be) created with an increasing import of lower production costs of agricultural commodities such as garlic, bulb onion and some cult-flowers after Thailand-PR China FTA agreement entered into force. On the contrary, trade diversion might have occurred with respect to Thailand’s imports of comparatively higher production costs of soybeans, maize and other upland crops’ grains from Cambodia, Laos, and Myanmar (under the ACMECS project) instead of importing from the relatively more efficient US and Argentina suppliers.

From the April 2003 issue of World Press Review (VOL. 50, No. 4)

Cambodia/Thailand: Reacting to Rumors
Rachel S. TaylorWorld Press Review associate editor

On Jan. 18, Rasmei Angkor, a small Cambodian newspaper, published a front-page article that sent shock waves through the region. Picking up on a rumor that 24-year-old Thai soap opera star Suvanant Kongying (nicknamed Phkay Proek) had claimed Cambodia’s national treasure, the breathtaking 900-year-old temple of Angkor Wat, was rightfully Thailand’s, the paper reported: “Phkay Proek said that if any Cambodian official or director invited her to perform in Cambodia, she would do so only if they first agreed to give Angkor Wat to Thailand....Phkay Proek said that she hated Cambodians like dogs.”
While recognizing that Kongying’s statement might have been misinterpreted, the article continued: “If this Thai actress said that she hates Cambodians like dogs, we would like to tell her that Cambodians throughout the country hate Thais like leeches that suck other nations’ blood....If it is true, Kongying must lower her head to the ground and salute by placing palm to palm in order to apologize to Cambodians, who are a gentle and polite race and have never encroached on other countries’ land. It is insulting enough for Cambodians to hear Thais wickedly saying to their children, ‘You must not be born a Khmer in your next life’ and so on.”
Kongying, reportedly shocked by the story, denied ever making such comments—a denial that now appears, by all accounts, to be true. But a Cambodian population long convinced that their richer and more powerful Thai neighbors looked down on them was not open to any such explanations.
Around 5 p.m. on Jan. 29, the situation reached a boiling point. At that time, a group of Cambodians demonstrating outside the Thai Embassy in Phnom Penh received news—again false—that 20 of their compatriots had been killed in the Thai capital. “Furious violence” ensued, according to Udom Katte Khmer (Jan. 30)—protesters broke through the embassy fence, entered the building, destroyed documents inside, and set fire to the structure and to nearby cars. The Thai ambassador was forced to flee; Reaksmei Kampuchea (Feb. 1) quoted him as saying, “I had to jump over the fence of the embassy in order to escape from the crowds of Cambodians and the really bad situation.” He later had to leave the area by boat.
Thais reacted with horror. As the situation spiraled out of control, Thailand’s prime minister, Thaksin Shinawatra, told Hun Sen, his Cambodian counterpart, that Thai commandos would be sent in if the situation were not brought under control within 90 minutes. Though Cambodian police ultimately arrived on the scene, making arrests and firing shots in the air to disperse the crowd, this official response came too late. Before the night was over, the angry Cambodian crowd had destroyed several Thai-owned businesses, including Cambodia Shinawatra, the telecommunications company of the Thai prime minister, and the well-known Royal Phnom Penh Hotel.
The next day, Thailand sent military planes into Cambodia to evacuate its embassy staff and several hundred Thai civilians. Thai Airways suspended flights to Cambodia. And, as Reaksmei Kampuchea (Feb. 5) explained, “Thai Prime Minister Thaksin decided to reduce diplomatic relations with Cambodia to the level of consul-general, return Cambodian workers from Thailand to Cambodia, prohibit Cambodian nationals from entering Thailand, close Cambodian-Thai border crossings, and stop economic cooperation. The decision affects more than 50,000 Cambodians who work in Thailand. Moreover, it affects Thai trade and people.” Thailand also reportedly put its border forces on alert and deployed naval vessels.
By mid-February, tensions had lessened considerably. Borders were reopened. The Cambodian government vowed to pay Thailand for the damage caused and to protect Thai nationals who returned. Thailand sent a chargé d’affaires to re-establish a diplomatic presence in Cambodia. But the causes and effects of the crisis were still being debated.
Many in the Thai media have tried to determine the underlying reasons for the violence. Khao Sod (Feb. 5) speculated: “The root cause was due to the long-held dislike of Thailand’s role in Cambodia’s history. In the past, U.S. planes took off from Thai air bases and bombed Cambodia to smithereens. That’s why the Cambodian people have never remembered that Thailand helped to build their roads and rehabilitate their war-torn economy in the past two decades.”
Kom Chad Leuk speculated (Feb. 5) that “the deep resentment of young Cambodians, who were born after the genocidal regime of the Khmer Rouge in 1978, was the main cause. They have not received any benefit from peace dividends in the past 10 years. While they are proud of their country’s newfound stability, they are very bitter with the lack of governance and corruption problems in their country. Any news, especially that related to neighboring countries, can trigger outrage. The burning of the Thai Embassy was the outcome of this madness.”
One Cambodian paper pointed to Thailand’s arrogance as a cause of the crisis. “According to Cambodian history, Cambodians, who are an older race in Southeast Asia, had a prosperous culture and civilization. But near-neighbor Thailand seems not to understand this,” said Kampuchea Thmey (Feb. 16).
But most Cambodian papers were less concerned with the cause of the violence than with its effects. Worried that Thai businesses would not reopen, Kampuchea Thmey noted (Feb. 4), “Most investors come from Thailand. The garment sector alone provided jobs for more than 200,000 workers. But now, Cambodian unemployment will increase more and more.” Koh Santepheap pointed out (Feb. 6), “If the Thai investors return, then hundreds of Cambodians who are currently unemployed because of Thai business closures will feel relieved. These Cambodians are worried that they may not be able to get their January salaries....Who will pay Cambodians if Thai investors leave the country?”
A more astute and forward-looking analysis was provided by Thailand’s Mathichon Daily (Feb. 4), which laid the blame squarely on both countries. “The biggest mistake of the Thai-Cambodian misunderstanding is the fanning of nationalism on both sides,” it charged. The paper then offered a suggestion: “Thailand should learn from this incident and urge both the government and private sectors to find ways to ameliorate the feelings of Cambodians.”