Two Waves of Shock: A Major Humanitarian Crisis and Household Collapse in Cambodia

While armed clashes between Cambodia and Thailand have triggered the mass return of nearly 900,000 migrants and the displacement of hundreds of thousands of people, growth is resuming. Yet household incomes have collapsed, plunging a large share of the working population into unprecedented vulnerability.

@AKP

A shock in two waves, a major humanitarian crisis

The border conflict between Cambodia and Thailand saw two successive escalations in 2025. The first, triggered on July 24, displaced more than 172,000 people in the provinces of Preah Vihear, Siem Reap, and Oddar Meanchey. After a ceasefire on August 8, more than 85% of the displaced had returned by early September. But on December 7, new hostilities caused a far larger wave of displacement, peaking at 644,589 displaced people between December 25 and 27, including 347,346 hosted in temporary sites and 297,243 in host families.

As of January 15, 2026, there were still 141,850 displaced people, spread across 102 sites or with relatives. This crisis was accompanied by the return of nearly 900,000 Cambodian migrant workers from Thailand, brutally drying up an essential source of income for hundreds of thousands of rural households.

Key figures: 644,589 displaced at the crisis peak, 900,000 migrants returned, 883 schools closed, more than 50 health centers suspended.

Households on the ground: incomes in freefall and jobs disappearing

Data from the survey of 674 displaced households and 1,055 households of returnees from Thailand (October-November 2025) show a collapse in living conditions.

Among internally displaced persons (IDPs), the average monthly income fell from $429 to $281, a loss of $148 (−34%). For returnee migrants, the drop was even more brutal: from $840 to $427, an average loss of $413 (−49%). At the same time, the share of households reporting “no work” rose from 23% to 38% among IDPs, and from 22% to 51% among returnees.

The composition of income has radically changed: wages and remittances have declined, while subsistence agriculture and humanitarian aid have become primary sources. Displaced households reduced their monthly spending from $250.9 to $190.7, cutting back on education, housing, and social activities. Returnee migrants maintained their spending level ($255.8 to $257.7) but refocused on food and health, at the expense of education and housing.

Agriculture, livestock, education: a triple degradation

Agriculture, a pillar of survival, has been severely affected. Crop losses reached 42.7% among IDPs ($436.5) and 36.8% among returnees ($339). Producer prices have fallen (60% of households), inputs are unaffordable, and market access is disrupted. Livestock, essential as a precautionary asset, suffered severe losses: a displaced household that lost cattle lost an average of $617; among returnees, the loss reached $829.

Education has been heavily disrupted: 23.9% of displaced households with school-aged children saw their school close, and 231 children (including 114 girls) stopped or reduced schooling, mainly for security reasons. At its peak, the conflict led to the closure of 883 schools, depriving more than 200,000 students of classes.

Health and protection: massive psychosocial needs

While the majority of households report access to a functioning health center (95.7% of IDPs, 98.9% of returnees), the psychological consequences are heavy: 85.8% of IDPs and 47.3% of returnees say their mental well-being has been “severely” affected. Needs for counseling and community support groups are a priority.

Protection risks affect 27.3% of IDPs and 17.3% of returnees, with cases of financial stress (74.3% and 88.2%), food insecurity (42% and 38%), and fears for physical safety (54.6% among IDPs). Access to aid remains unequal: 83% of IDPs received assistance, but 52% of returnees report receiving none, mainly due to lack of information.

Trade, tourism, agriculture: the three interconnected vessels of the economy

The macroeconomic impact is noticeable but mixed. In 2024, Cambodian exports to Thailand reached $845 million (3.7% of total exports), while imports from Thailand totaled $3.4 billion, making Thailand Cambodia's third-largest supplier.

In 2025, exports to Thailand fell 13.5%, to about $731 million. Imports from Thailand dropped 12.7%, to about $3.0 billion. Agricultural products (cassava, corn, fresh fruits) were the most affected, with estimated losses of $156 million over the year. In response, operators turned to Vietnam, China, and maritime routes, allowing total imports to rise 17.1% in the first ten months of 2025.

Tourism suffered a sharp break. After a post-Covid rebound to 6.7 million arrivals in 2024, international arrivals fell 11.6% in the first ten months of 2025, to 4.75 million. Arrivals from Thailand plunged 42.3% and those from Laos 55%. 2025 tourism revenues are revised downward: $3.21 billion instead of the expected $4.07 billion without conflict, a loss of $855 million.

Migrant remittances: a lifeline that evaporates

Before their return, 85.8% of surveyed households received money transfers from Thailand, averaging $2,194 annually. After return, this fell to $110 per year. At the macroeconomic level, remittances are estimated at $2.60 billion in 2025 versus $2.88 billion in a normal situation, a loss of $277 million. In 2026, the loss could reach $665 million if tensions persist.

Reintegration of migrants: skills available, jobs absent

Before departure, 56.2% of migrants were unemployed. In Thailand, 94.3% worked, often without contracts (49.5% in informal fixed-term jobs). Upon return, 37.9% are unemployed, 46.5% in salaried jobs, and 15.6% self-employed. Individual incomes went from $182 per month pre-migration to $409 in Thailand, then back to $200 post-return.

Yet skills exist: mechanics, sewing, agriculture, services.

But barriers are numerous: lack of recognition of prior learning, insufficient capital for microenterprises, and above all, a strong preference for short-term training (under three months) delivered at the commune level, the only way to overcome mobility and security constraints.

Three recovery scenarios, a persistent gap between macro and micro

The report authors model three trajectories:

Fragmented Recovery: growth at 4.4% in 2025, 3.7% in 2026, high unemployment, social tensions.

Managed Reintegration: growth at 4.6% then 4.2%, with targeted policies (support, temporary works, SME backing).

Transformative Recovery: growth at 4.8% in 2025-2026 then 6.4% in 2029, thanks to lasting peace, skills investment, and sector diversification.

Even in the most favorable scenario, household incomes remain below pre-crisis levels. The gap between aggregate recovery and the reality lived by families is the red thread of this report.

Recommendations: stabilize first, train locally, protect the most vulnerable

The authors advocate an integrated approach articulated around several axes:

• Stabilize consumption via temporary monetary supports (cash-for-work,

• training-linked allowances)

• Value existing skills through recognition of prior learning (RPL) and short trainings linked to local opportunities

• Anchor programs at the commune level to lift distance, security, and childcare barriers

• Combine financial protection and revival (debt moratoriums, micro-insurance, flexible savings)

• Support productive self-employment with starter kits and cooperative models.

• Integrate child care and psychosocial support into all programs

• Coordinate reintegration in territorial frameworks associating displaced persons, returnees, and host communities

Report conclusion:

“Macroeconomic recovery does not guarantee household restoration. Policies must bridge the gap between aggregate growth and real living conditions, or vulnerability will persist and departures risk resuming.”

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Sources: UNDP Cambodia, Ministry of Labor and Vocational Training of Cambodia, National Committee for Disaster Management (NCDM), household surveys October-November 2025, customs data and National Bank of Cambodia.