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Bangkok Post
28-07-2025
- Politics
- Bangkok Post
Time for this unnecessary war to end
It was a war everyone saw coming. After weeks of provocations and inflammatory rhetoric across the Thai–Cambodian border since May 28, the failure to de-escalate tensions finally erupted into deadly border skirmishes. Despite diplomatic efforts, no fruitful progress was made. As diplomacy faltered, ultra-nationalism made inroads, and rhetoric gave way to border clashes beginning last Thursday. The militaries on both sides now face mounting public pressure to defend their respective motherlands. In such a climate, a tit-for-tat escalation was almost inevitable. Talk of a ceasefire has yet to be translated into meaningful action. Thailand has agreed in principle, while Cambodia wants an immediate ceasefire, but no cessation of hostilities has occurred on the ground. Beyond the battlefields, domestic challenges in both countries have further fueled the conflict. In Thailand, the Pheu Thai-led coalition is struggling to maintain stability. Prime Minister Paetongtarn Shinawatra's political future now hangs in the balance after the Constitutional Court suspended her from office following a leaked, deeply damaging phone conversation with Cambodian Senate President Hun Sen. Once seen as a diplomatic asset -- thanks to her father Thaksin's long-standing ties with Hun Sen -- that connection has turned into a liability for the Shinawatra family. Their private feuds have become a public liability that severs diplomatic channels. In Cambodia, Hun Sen, though no longer prime minister, remains the country's power centre as he backs his son, Prime Minister Hun Manet, much to the chagrin of the ruling Cambodia People's Party's old and young apparatus. But the economic headwinds are more intense. Cambodia faces a potential 36% tariff hike from the United States, reduced from an earlier proposal of 49%. If Phnom Penh fails to secure a deal with the Trump administration by Friday, Hun Sen's legacy and Cambodia's growth prospects will be thrown into jeopardy. Against this backdrop, President Donald Trump has phoned both Thai and Cambodian leaders, urging them to hold ceasefire talks; otherwise, ongoing trade negotiations with the US will be halted. Once again, Mr Trump is weaponising tariffs as diplomatic leverage, with his team hoping the ultimatum will bring an end to the fighting. Since Cambodia's independence in 1953, Thailand has always regarded it as a close neighbour and an integral part of the Asean family. Thailand also played an important role in the peace process, nation-building and development through the 1991 Paris Peace Agreements and Cambodia's membership in Asean in 1999. At the special private meeting of the United Nations Security Council (UNSC) last week, the two countries brought their cases for all to see. For many council members, the speed and ferocity of the conflict -- given the relatively stable ties that followed the 2011 border clashes -- came as a big surprise. That period, particularly during the Prayut Chan-o-cha government, had been marked by cordial relations and personal rapport between leaders. However, relations gradually turned sour after Pheu Thai returned to power in 2023. Initially, optimism prevailed. When Ms Paetongtarn assumed office in September 2024, it signalled a fresh chapter with Cambodia's new premier, Hun Manet. Both leaders, bolstered by the backing of domineering influential fathers, promised deeper ties. That hope vanished after their fallout over the leaked private phone call between Hun Sen and Ms Paetongtarn. Tensions rose further after Thaksin proposed cuts to the defence budget, arguing the military had consumed too much public funding. Then came Thursday. According to Thai officials, Cambodian artillery shells struck civilian areas in Thailand's Surin province early that morning, hitting community areas and a hospital. The attacks killed more than a dozen villagers. The Thai military quickly retaliated with precision airstrikes on military targets by deploying F-16s to target military installations across the border. Thailand's response was formally outlined by Ambassador Cherdchai Chaivaivid, its Permanent Representative to the UN, during the UNSC briefing. He emphasised that Thailand was the victim of Cambodia's "indiscriminate attacks" on civilians, and that its retaliation was defensive, proportionate, and limited to military targets. In a related move, Thailand submitted letters to the United Nations Children's Fund and the UN High Commissioner for Human Rights, urging them to condemn Cambodia's strikes that endangered civilian lives, especially children. As Thai armed forces mobilise further, nationalist sentiment is intensifying. With over 130,000 civilians evacuated and artillery still falling on Surin and nearby provinces, a real ceasefire appears remote. Given the current public sentiment, the Thai military is unlikely to agree to any truce unless Cambodia halts all attacks on civilians and commits to negotiations in good faith. At the global level, Cambodia utilised its diplomatic adroit skills to internationalise the conflict further. Phnom Penh made a pre-emptive request for a UN Security Council meeting within hours after launching its dawn assault. It was a calculated attempt to shift the blame to Thailand. Finally, the UNSC meeting was held and concluded without a resolution. Overall, the council members expressed concerns, but some of them deemed the armed clashes as not yet a threat to international peace and security. As such, the issue was neither placed on the UNSC agenda nor referred to the International Court of Justice for further action, as Cambodia had demanded. While Thailand has consistently said it prefers bilateral resolution, it has not completely rejected third-party facilitation. Asean Chair Malaysia, under Prime Minister Anwar Ibrahim, has offered a potential path forward. Mr Anwar, seen as a neutral and principled actor, is well-positioned to serve as an honest broker who can create an environment in which Asean members can begin to mend ties. As of this writing, Thai and Cambodian delegations were set to meet in Kuala Lumpur on Monday to negotiate a ceasefire under the Asean chair, as host and observer. It is hoped that the two sides will agree to return to the conditions that existed before May 2025. The ceasefire must also cover the protection of civilians, cultural heritage and humanitarian access. Most importantly, they have to adhere to international humanitarian law. Another critical element is preventing and stopping information warfare against one another. The information operation, both offline and online, has already sown the seeds of mutual hostile feelings for generations to come. In the longer term, the revival of existing bilateral mechanisms will be essential. These frameworks, which have been used in the past to ease tensions and foster cooperation, can help restore trust. But with blood already spilt, reconciliation will not be quick. Ending this unnecessary war must now be at the top of the agenda. Both sides must ensure that such unwarranted armed conflict does not recur for the sake of the well-being of Thais and Cambodians.
The Diplomat
10-07-2025
- Business
- The Diplomat
South Korean Banks, the EU, and the Failure of Microfinance in Cambodia
Many of the serious problems with the country's microfinance sector were present at its inception in the 1990s. The realities of microfinance lending in small developing countries which lack strong financial regulators has been once again illustrated by new research on the role of South Korean banks in Cambodia. 'Preying on Poverty' was published in June by Korean Transnational Corporations Watch. The research is based on interviews with 14 Cambodian families who borrowed from the South Korean-owned KB Prasac and Woori banks, carried out in August 2024. The interviewees said that their families had to cut back on food to try to meet repayments, and most of the children had dropped out of school in order to work. The banks were routinely seeking land and property as collateral, and engaging in high-pressure tactics including public humiliation to get repayments. Staff at the banks were highly incentivized with small basic salaries and commission payments for selling loans. Non-performing loans had to be avoided at all costs, with KB Prasac staff losing all their commission if the ratio of such loans in their portfolio rose above 3 percent. The Diplomat has contacted KB Prasac and Woori to seek responses. The report's sample is small, but the evidence does not exist in isolation. The U.N. Special Rapporteur on human rights in Cambodia in July 2023 said that 167,000 families had been forced to sell their land over the previous five years due to excessive microfinance debt. KB Prasac is already under investigation by the World Bank's International Finance Corporation (IFC) following a series of complaints in June 2024. The IFC is investigating the cases because it made an investment in KB Prasac via its holding in the Microfinance Enhancement Facility. In March 2025, the IFC published an assessment report based on its investigation into one of four cases. A separate IFC compliance investigation started in 2023 regarding the practices of six financial institutions in Cambodia, including Prasac. Flawed From the Start Prasac was established in 1995 as a European Union development project intended to try and help Cambodia to rebuild after the 1991 Paris Peace Agreements. The belief at the time was that such NGOs could help Cambodia to recover from the effects of the Khmer Rouge regime of 1975 and 1979, and the decade of war which followed Vietnam's 1979 invasion. The idea was that NGOs such as Prasac, which stands for Programme de Réhabilitation et Appui au Secteur Agricole du Cambodge, could help to remedy the shortfalls in government services due to the lack of capacity of local institutions. It originally focused on roles often played by government, such as irrigation schemes and water supply, as well as lending and small business development. Research from the International NGO Training and Research Center (INTRAC) published in 1996 found that Prasac displayed 'serious weaknesses in design in planning, primarily because the developmental sectors in which it works are not amenable to a 'rapid impact' approach.' INTRAC's report said that Prasac's 'institution building objectives are not made explicit and have led to confusion about outcomes, particularly in the credit sector.' Even in 1996, INTRAC found, people borrowing $50 from Prasac were being required to provide written evidence of land holdings. The pitfalls of trying to graft microfinance onto a complex and fragile local political reality were ignored. This is not hindsight. It was clear in 1996 to INTRAC, which found that large numbers of government staff were getting additions to their salaries from the Prasac budget. These payments were usually many times greater than the official government salaries. INTRAC cautioned that 'working in direct support of government departments may often not be the most productive type of intervention for NGOs in Cambodian circumstances.' Cambodia at the time was ruled by a coalition between the royalist Funcinpec party, the winner of the 1993 elections organized by the U.N. and Hun Sen's Cambodian People's Party. INTRAC in 1996 pointed out that Prasac's planning largely disregarded the possibility of political change in Cambodia. In the following year, 1997, Hun Sen ousted Funcinpec in a violent coup. The close relationship between the government and Prasac continued under Hun Sen. Prasac was licensed by the National Bank of Cambodia as a microfinance lender in 2003 and became one of the largest such lenders in the country. In 2017, Hun Sen had to order Prasac to change its logo because of public confusion as to whether the lender represented the government. South Korea's Kookmin Bank bought 70 per cent of Prasac in 2020, with the lender being rebranded as KB Prasac Bank in February 2024. Today it is clear that the early optimism of the EU was misplaced. Prasac stands accused of playing a leading part in turning microfinance lending in Cambodia into an exercise in sharp commercial banking which seeks to extract maximum profits from one of the world's poorest populations.
