Cambodia & Thailand: Review and strategic dialogue on border tensions, prospects for the private sector

On the morning of Monday, June 30, 2025, a meeting was held at the Wing Tower Bank building in Phnom Penh, focusing on the critical issue of tensions at the border between Cambodia and Thailand. The meeting was held under the auspices of the Government-Private Sector Forum (G-PSF) with the aim of assessing the short-, medium-, and long-term repercussions of the current border situation and developing concrete recommendations.

This meeting was chaired by H.E. Kith Meng, President of the Cambodian Chamber of Commerce and Chair of the Coordinating Committee of the Private Sector Working Group under the G-PSF

dia, all vice-chairs of the working groups, and numerous business leaders.

Objectives and scope

The main objective of the meeting was to thoroughly assess the challenges posed by the border tensions and to examine the proposals and requests of the private sector. The forum also aimed to identify strategic solutions that could mitigate the negative effects currently affecting trade, investment, and economic cooperation. The discussions therefore sought to develop pragmatic responses to the multiple repercussions of the border conflict.

Key issues raised and lessons learned

Throughout the meeting, participants raised several critical issues:

1. Disruption of trade and tourism: Border tensions have caused significant blockages, severely affecting cross-border trade flows, tourism activities, and labor mobility. These disruptions have led to an economic slowdown in border regions and beyond.

2. Risks to the microfinance sector: Microfinance institutions expressed concerns about systemic risks, particularly if Cambodian workers returning from Thailand have difficulty repaying their loans. This could destabilize the microfinance ecosystem and affect financial inclusion efforts.

3. Supply chain and production costs: Trade barriers have led to increased production costs near border areas, as manufacturers struggle to find alternative suppliers. This has put pressure on factory operations and competitiveness.

4. Decline in the tourism sector: Tourist arrivals to major destinations such as Siem Reap and Phnom Penh have fallen sharply. International interest in Cambodia as a tourist destination is declining, which has had an impact on revenues and employment in the hospitality sector.

5. Supply chain diversification: Companies producing foodstuffs in Cambodia are increasingly considering shifting production to markets such as Malaysia and Vietnam, with the aim of becoming reliable supply partners.

6. Vulnerabilities in the agricultural sector: Rapid changes in supply sources and challenges related to agricultural production pose potential threats to food security. Discussions also focused on broader sectoral implications, highlighting the need for adaptive strategies.

Outcomes and way forward

The meeting concluded at noon on the same day in a spirit of constructive dialogue and understanding. Participants agreed on the importance of continued cooperation and committed to working closely with government agencies to implement the recommendations made during the session.

The outcomes of the forum are expected to serve as a basis for policy adjustments and private sector initiatives aimed at stabilizing and revitalizing economic activities affected by border tensions.

Without a doubt, this meeting illustrates the proactive commitment of the Cambodian private sector to resolving complex geopolitical challenges, highlighting the essential role of public-private partnerships in preserving economic resilience and promoting sustainable development.