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Monday, 09 November 2009
Written by Simon Roughneen
Asia Sentinel

The Cambodian prime minister's own lesson in economics

Cambodian Prime Minister Hun Sen's offer to employ the fugitive Thai ex-premier Thaksin Shinawatra as an "economics advisor" comes at a time when Thailand's political house is in disarray, and seemingly is a daring – or perhaps foolhardy – gamble to provide Thaksin with a possible springboard to return to power in Bangkok.

Both countries have recalled their respective ambassadors, with some navel-gazing in Thailand wondering whether this was an over-reaction. There is talk of closing the land border between the two – although it is doubtful whether vested business interests operating across the frontier would be happy. Thailand is also reviewing a maritime agreement with Cambodia, threatening to undermine a deal to collaborate on oil and gas exploration.

Thaksin was overthrown in a 2006 royalist coup and has since remained out of Thailand, evading corruption charges, while his allies won back power democratically only to have the military and the courts oust them again. Despite the political setbacks, the absent Thaksin probably remains the second-most popular figure after the ailing King Bhumibol Adulyadej. He has been content to stay outside the country but has raised considerable hell from abroad through inciting his Red Shirt followers to continue to march, demonstrate and object to the government of Prime Minister Abhisit Vejjajiva and his Democrat Party.

Relations between the two countries have been strained for months. Hun Sen first offered Thaksin a home in Cambodia in October, embarrassing Abhisit just before he played host to his counterparts in the Association of Southeast Asian Nations as well as the leaders of Australia, China, India, Japan, New Zealand and South Korea, at the resort town of Hua Hin, a couple hours south of Bangkok.

Thaksin has been stranded in Dubai for several months after the British government revoked his passport. If he moves to Cambodia, that gets him considerably closer to the scene of the action in Bangkok, where he remains committed to taking over. Thitinan Pongsudhirak, a political science professor at Chulalongkorn University in Bangkok, told the Associated Press that the move constitutes a new offensive by Thaksin to return to power.

The move comes at a particularly sensitive time, with Bhumibol, the 86-year-old monarc, having just emerged from hospital after more than a month of illness. The royal succession is in flux, with Crown Prince Vajiralongkorn the presumptive heir. With the Red Shirts harrying the government on one side, the royalist Yellow Shirts of media tycoon Sondhi Limthongkul are forming up on the other.

In particular Newin Chidchob, who defected from Thaksin's surrogate People Power Party in 2008 to join Abhisit's Democrats, is viewed with distrust as someone who could either could re-defect and force Abhisit to call new elections, or who possibly has lost control over his faction.

Thai media have taken potshots at Hun Sen, decrying the lack of media freedom in Cambodia. Reporters without Borders ranks Thailand a lowly 130 in its media freedom index. Cambodia, often decried for its authoritarian leanings, sits a few notches above, at 117.

Cambodia historically has been wary of its larger neighbor since the Siamese army conquered the Khmer capital in 1353. Thailand sees a poorer, smaller, somewhat paranoid client state, while Cambodia sees an aggressor responsible for cultural identity theft and continued commercial exploitation.

The Thai and Cambodian armies fought briefly over the disputed 10th Century Preah Vihear temple, which straddles the border between the two countries although maps show it to be inside Cambodia. Thailand's current foreign minister Kasit Piromya, called the Cambodian leader "a thug." Previously, in 2003 Cambodian security forces looked on as rioters torched the Thai embassy in Pnomh Penh following an alleged claim by a Thai actress that the famed Angkor Wat temple belonged to Thailand.

Abhisit called Hun Sen's action an "interference in Thailand's domestic affairs," which earned the Thai premier a strong bounce in popularity. He dared the fugitive telecoms billionaire to "review his role and consider what he is doing" and asked "does he give priority to the national interest and care about the good ties between Thailand and the neighboring country?"

Hun Sen, said one western observer in Bangkok, "must figure he doesn't have much to lose in upsetting Abhisit and Kasit, particularly since they led the nationalist charge on Preah Vihear last year. He also must be betting Thaksin's allies will be back in power soon enough."

If not, Cambodia could be in trouble because it needs Thailand a lot more than Thailand needs Cambodia. Thai businessmen virtually run the Cambodian economy. Cambodia ranks a minute 18th as Thailand's export partner, according to Bloomberg, with Thai exports to Cambodia such as sugar, cement and oil accounting for 96 percent of Cambodian imports. Thailand and Vietnam remain by far Cambodia's biggest fixed asset investors, amounting to US$178 million in the first half of 2009, with Vietnamese investment a distant second at US$114.2 million, primarily in sugar cane plantations and processing plants, rubber, telecommunications and transportation.

Both Hun Sen and Abhisit are to attend the Asia-Pacific Economic Cooperation summit which is taking place this week in Singapore and which will be attended by, among others, the leaders of Singapore, Malaysia, Australia, China, Chile, Indonesia, Mexico, Russia and the United States. Singapore's Foreign Ministry is getting jittery, not wanting the row to spoil their gala APEC and Asean week, with US President Barack Obama in town for meetings that will include the first-ever US-ASEAN summit.

"It is not good for Asean," the ministry said in a statement. "We hope that both our friends will keep that larger interest of Asean in mind and find a way to resolve their differences quickly in a spirit of good neighborliness," the ministry said.

Abhisit will co-chair the meeting with President Obama, another photo-op for him to boost his Thai poll ratings. So what odds something dramatic again from Phnom Penh, to try overshadow that?