OPINION: Turning Crisis into Opportunity – Charting a Path Beyond the Border Dispute

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OPINION: Turning Crisis into Opportunity – Charting a Path Beyond the Border Dispute
OPINION: Turning Crisis into Opportunity – Charting a Path Beyond the Border Dispute./Image credit: Banteay Meanchey Provincial Governor, Oum Reatrey.

Views and opinions expressed in guest writer opinion pieces are those of the author(s) and do not necessarily reflect the official position(s) of B2B Cambodia.

By EuroCham Cambodia

The ceasefire between Cambodia and Thailand continues to hold, offering a welcome pause in tensions after weeks of uncertainty. But while armed conflict has subsided for the time being, its economic impacts remain acute. For many Cambodian businesses and EuroCham members, especially in tourism, logistics, agriculture, manufacturing, and consumer goods, the fallout has been swift and severe.

According to independent analysis in Mekong Strategic Capital's recent report, ‘Economic Impact of Cambodia-Thai Border Conflict’, the Thai–Cambodia border dispute could shave more than 3 per cent from Cambodia’s GDP in the next 12 months. Tourism, which accounts for nearly 10 per cent of GDP, has seen visitor numbers tumble: ticket sales to Angkor are down 20 per cent in recent months. The Royal Government of Cambodia estimates 750,000 workers have returned from Thailand, cutting remittances by an estimated USD 375 million (1.5 per cent of GDP), according to the impact report.

“In 2024, Thailand was Cambodia’s top source market. Border closures, loss of traveller confidence, mounting cancellations, and official travel advisories have hit micro, small, and medium-sized enterprises the hardest. These businesses are the backbone of our sector,” said Catherine Germier-Hamel, Chairperson of EuroCham's Tourism & Hospitality Committee.

The upcoming ‘Business Pulse H1 2025’, the chamber's biannual member survey across key sectors conducted over the past two and a half weeks, provides a frontline view of this disruption.

Among respondents, drawn from members of the chamber's Tourism & Hospitality Commitee, 77 per cent reported cancellations or reduced bookings from international travellers, 63 per cent saw revenue drop, and 55 per cent experienced a decrease in tourist arrivals from Thailand. Others cited delays in cross-border trade, higher logistics costs, and reduced visitor spending.

“This human tragedy calls for a response that is compassionate and decisive. Our committee will draw on the UN Tourism Toolbox for Crisis Communications in Tourism, the ASEAN Tourism Crisis Communication Manual, and European Union frameworks,” Germier-Hamel continued. “We will provide members with practical crisis tools, market diversification strategies, and measures to strengthen operational resilience.”

Insights from the Transport & Logistics Committee reaffirm the broader impacts on business. According to committee members, the conflict has caused significant disruptions to cross-border trade, with shipments being diverted to air, sea, and alternative land routes via Laos. The latter option is hampered by limited facilities and the former represent costly alternatives that reduce profits and increase complexity for service providers.

Additionally, the committee cited an overall reduction in demand by around 50 per cent for Thai products in Cambodia due to the soured public sentiment caused by the conflict.

Opportunity in Disruption: A Strategic Approach

While the short-term costs are undeniable, the crisis has underscored the need, and opportunity, for Cambodia to strengthen its economic foundations. The potential for recessions in both countries in the next 12 months has increased, however, Mekong Strategic Capital notes in its report that diversification of supply chains, targeted fiscal stimulus, and reform can not only cushion the impact but position Cambodia for faster growth from 2027 onwards.

Far from a reaction to the recent crisis, EuroCham has long been acting on several fronts to reduce costs associated with logistics, manufacturing, and compliance, as well as supporting the development of Cambodia's value-added agricultural sector.

This advocacy work, conducted through 12 sectoral committees, has already made tangible progress in addressing the vulnerabilities highlighted by the border crisis.

“Any disruption at a key border crossing can create significant delays, increase costs, and impact the competitiveness of Cambodian exporters and importers,” said Bunthan Suy, Chairperson of the Transport & Logistics Committee. “This underscores the need to diversify and enhance our trade routes, improve the efficiency of our logistics processes, streamline cross-border procedures, and expand the capacity of strategic gateways such as the Sihanoukville Autonomous Port (PAS) and international airports to ensure goods can move swiftly and predictably, regardless of external challenges.”

Through the ‘From Paper to Pixels’ forum and high-level dialogues with the General Department of Customs and Excise (GDCE), the chamber has driven forward the digitalisation of customs procedures, advancing the integration of ASYCUDA and CVDS systems to enable streamlined single submission of declarations, valuations, and origin certifications. This effort has already led to the removal of multiple supporting document requirements, marking a clear step toward faster, more transparent, and more efficient trade flows.

In parallel, the Transport & Logistics Committee has worked closely with PAS to identify and resolve bottlenecks, modernise handling systems, and increase container throughput. These improvements are critical to strengthening Cambodia’s maritime trade capacity, providing a reliable alternative to land-based logistics when cross-border routes are disrupted, and reducing costs for operators.

Recognising that energy resilience is also a key part of competitiveness, EuroCham has been actively advocating for an updated rooftop solar policy for factories. The chamber’s proposals include a simplified, predictable tariff structure designed to incentivise investment in solar arrays, particularly for manufacturers with high energy demands.

“By accelerating the development of a robust rooftop solar framework, Cambodia can help manufacturers mitigate risks from supply interruptions while lowering operational costs and emissions,” said Emerald Am, Chairperson of the Garment & Manufacturing Committee. “For our sector, this is not only a safeguard in times of uncertainty, but also an opportunity to enhance competitiveness, attract sustainable investment and position Cambodia as a forward looking manufacturing hub in the region.”

While challenges remain, such reforms are essential to making renewable energy a viable, cost-effective option for industrial operators.

At the same time, EuroCham has continued to champion the development of Cambodia’s agri-food processing industry.

“Sustaining the shift in local demand for Cambodian agri-foods from imported products–Thai products–requires focusing on three key areas in the processing sector: food safety and quality, developing economies of scale, and increasing market competitiveness,” said Chan SereiRatha, Vice-Chairperson of the Agribusiness Committee. “Development in these areas will ensure high standards that build consumer trust, increase production efficiency to lower costs, and establish competitive pricing and investing in long-term branding to gain consumer confidence.”

In 2025, the committee advanced Cambodia’s agri-food processing sector through targeted events on competitiveness and market access, branding and packaging for global markets, and strategies to attract investment. Building on this momentum, its two-year strategic plan will expand advocacy, events, and matchmaking to address these priority areas and unlock further industry growth.

Across sectors, these initiatives aren’t abstract policy goals. They are practical pathways to greater economic independence, competitiveness, and resilience for chamber members and the broader business community in Cambodia.

Resilience Through Partnership

The border conflict is a reminder that Cambodia’s economic success depends on more than favourable trade terms or stable neighbours. It requires building the capacity to adapt, withstand, and grow through uncertainty. EuroCham is committed to working with the Royal Government, international partners, and the member network to turn lessons learned from this crisis into a roadmap for long-term stability.

By embracing innovation, investing in infrastructure, and accelerating reforms, Cambodia can emerge from this moment not just recovered, but stronger. The ceasefire may have paused the conflict, but now is the time to ensure the economy is ready for whatever comes next.

“The ceasefire is more than a pause in tensions; it is a chance to chart a stronger course for Cambodia’s future. The border conflict exposed vulnerabilities, but it also revealed exactly where Cambodia can strengthen its economic foundations,” said Gabriele Faja, EuroCham Chairperson. “By accelerating reforms, expanding market access, and investing in domestic capabilities, we can transform these lessons into lasting advantages. EuroCham will continue to be a driving force, ensuring our members and the wider business community are equipped to thrive in a more unpredictable world.”
 

About EuroCham Cambodia: The European Chamber of Commerce in Cambodia (EuroCham Cambodia) was created in 2011 by French, German and British business associations in Cambodia to act as the official chamber of the European business community in the Kingdom. Since then, it has grown to over 400 members and seven national chapters, comprising 23 European countries. EuroCham Cambodia's core activities are to promote, support and represent its members and European business interests in dialogue with the Royal Government of Cambodia, with the aim of developing a more efficient and fertile business and investment environment for all.