Cambodia 20250811
Mekong Memo Cambodia Weekly: Business, politics, finance, trade & legal news.
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Headlines:
Ceasefire Locked In With Eyes In The Sky
… Or is it? Incursions, Detainees, New Conditions
Arms Buys and Airpower Raise The Temperature
Displacement Drives A Push for Relief
Closed Crossings Crush Bookings, Trade
Growth Holds, Risks Piling Up
US Tariff Waiver, PTT Boycott, ATIGA Review
Green Bonds And FDI For Deeper Capital Markets
Food Systems Overhaul
Tourism, Retail, And Textiles Face A Shaky H2
Japan’s Quiet Bridge-Building In A Crowded Field
Scam Gangs Face Heat As Money Trails Go Crypto
Ceasefire Locked In With Eyes In The Sky
Cambodia and Thailand have both said they’re good with a 13-point ceasefire and an interim ASEAN observer presence after the Kuala Lumpur GBC (General Border Committee) meeting. Malaysia facilitated the deal and says it’s ready to send a monitoring team if requested. The United States backed the process, promising support to set up an ASEAN Monitoring Team and provide space-based and aerial surveillance to track compliance. Cambodian officials reported calm along front lines during an ASEAN delegation visit, with both sides committing to international humanitarian law (IHL) standards for detainees, and another GBC session set to take place within a month.
Read more: China Daily Hong Kong (deal details), Hindustan Times (monitoring), CamboJA News (US support), Khmer Times (observer team), Khmer Times (front-line calm), Khmer Times (US welcome), China Daily Hong Kong (Malaysia role), The Straits Times (ASEAN critique), The Jakarta Post (monitoring), Crisis Group (conflict recap), The Militant (roots), EFE (status), China Daily Hong Kong (monitoring team)
… Or is it? Incursions, Detainees, New Conditions
Reports of Thai troops and heavy equipment entering the An Ses area to lay barbed wire brought howls of protest from Cambodia, which called it a breach of the truce and asked for international intervention. Cambodian officials also said the Thais are guilty of “slingshot attacks” and complained that 18 detained soldiers had yet to be released. Thailand prepared eight conditions for the GBC talks, including a freeze on troop movements and a forward-working group for incident management. Both sides traded complaints, with Thailand alleging new mines and Cambodia rejecting the charge. ASEAN observers visited the zone, but no conclusions are yet forthcoming. Rights groups and legal experts are investigating alleged war crimes after artillery, airstrikes, and (again, alleged) cluster munitions left at least 40 dead and hundreds of thousands displaced. The ICRC met with a dozen and a half Cambodian POWs in Thailand and says that it will keep pressure on both sides to stick to IHL.
Read more: CamboJA News (barbed wire), Khmer Times (slingshots), Khmer Times (incursion), Khmer Times(equipment video), The Cambodia Daily (Thai conditions), CamboJA News (war-crimes probe), ICRC (detainees), Khmer Times (legal threat), Prensa Latina (landmines)
Arms Buys and Airpower Raise The Temperature
Bangkok approved new naval spending after the clashes, greenlighting two frigates and moving ahead with three S26T submarines using a Chinese engine. The air force is adding four Gripen jets, and top brass rejected calls to ground F-16s along the border, describing them as essential for defense. They’ve also deployed drones for reconnaissance. Phnom Penh responded with a 15-day drone ban in nine provinces and condemned reported Thai plans to seize temples inside Cambodia. The military signaling on both sides is doing nothing to dampen the risk to a fragile truce that hinges on verifiable restraint.
Read more: Maritime Executive (navy spend), The Cambodia Daily (F-16 stance), Khmer Times (drone ban), Khmer Times (temple remarks)
Displacement Drives A Push for Relief
Aid agencies are racing to support displaced families, with World Vision and UNICEF looking for more than a million bucks that they say is needed for child-focused health, protection, and education. UNDP teams began a socio-economic assessment as diplomats and UN agencies toured camps in Oddar Meanchey and Siem Reap. Authorities reported hundreds of thousands returning from Thailand; the Labour Ministry denied claims they were driven by threats of citizenship loss. Officials say border checkpoints are staffed around the clock, with jobs and social services readied for returnees. The government also asked donors not to visit frontlines for safety and operational security reasons, but did encourage contributions through official channels.
Read more: UCA News (child needs), Khmer Times (field visit), Khmer Times (impact study), Khmer Times(repatriation), Khmer Times (migration claims), Khmer Times (new displacement), Khmer Times (donor guidance)
Closed Crossings Crush Bookings, Trade
Land borders are still shuttered despite the ceasefire protocol, crushing bookings in Thai border provinces and bringing cross-border tourism and casino traffic to a stop in Poipet. Thai media says that the cost is now more than 17 billion baht and warned the bill could top 100 billion baht if business doesn't soon return to normal. Hotels on the island of Koh Chang and other area hotspots have reported cancellation rates near 100%.
Read more: TravelMole (border closures), Khaosod English (economic cost), The Boston Globe (ceasefire recap)
Growth Holds, Risks Piling Up
Cambodia was able to muster almost 6% growth in H1 2025 on gains in manufacturing, tourism, and agriculture. Inflation is running at 3.5%, reserves stand near $25 billion. The riel appreciated 1.6% year-on-year, though banks are seeing rising NPLs, currently 8.3%. AMRO expects growth to slow a little in H2, to 5.2% and 4.7% in 2026 on tariff uncertainties, real estate stress, and a widening current account deficit. Policymakers are watching credit quality, capital buffers, and fiscal space and pushing diversification and digitalization to buffer against external shocks.
Read more: IntelliNews (H1 data), AMRO (outlook)
US Tariff Waiver, PTT Boycott, ATIGA Review
Phnom Penh has set a zero customs tariff on US-origin goods, excluding used items, as exports to the US hit $5.5 billion in H1, up 25.6%. Importers are now required to file strict origin declarations to make sure they can’t be accused of fraud. A Thai brand boycott is reshaping fuel retail: local franchisees said they would terminate their PTT contracts and rebrand as Khmer-owned stations after revenues fell. Regional trade rules are also evolving, with ASEAN working to update the ASEAN Trade in Goods Agreement (ATIGA) by October to manage fragmentation from new tariffs and supply chain changes.
Read more: Khmer Times (US tariff), CamboJA News (boycott), The Straits Times (ATIGA)
Green Bonds And FDI For Deeper Capital Markets
Regulators opened Phase III of the Cambodia Sustainable Bond Accelerator, adding the Credit Guarantee Corporation to help issuers figure out how to structure green and sustainability-linked bonds. The local bond market has doubled in size since 2023 to more than $400 million. More than $60 million in green deals have already been placed, and another $100 million is in the works. UNCTAD data show inward FDI stock topped $52 billion in 2024, with $5.8 billion brought in the door in H1 2025. Outward FDI reached $1.7 billion cumulatively, an interesting sign of an expanding regional footprint for Cambodian firms.
Read more: Khmer Times (bond push), Fibre2Fashion (FDI data)
Food Systems Overhaul
Officials laid out a plan to connect agriculture, nutrition, climate, and social protection at the UN Food Systems Summit stocktake. The roadmap is intended to support the development of durable value chains, healthier diets, and gender equity. The policy focus sits at the intersection of farm productivity, processing, and market access, where logistics, finance, and skills training need to catch up if the country has any hope of turning raw exports into higher-margin products. As an example of the need for change, cashew exports rose about 15% this year, but most nuts leave the country unprocessed, so the local value-add is limited by capacity shortcomings, and a lot of the profitability is captured elsewhere.
Read more: Khmer Times (policy plan), Cambodia Investment Review (cashew exports)
Tourism, Retail, And Textiles Face A Shaky H2
Tourism, retail, and textiles leaders aren't wild-eyed with enthusiasm on the outlook for the remainder of this year. Although international arrivals were up 13.6% from January to April on more air routes and events, border closures have hammered cross-border travel. Retail and FMCG trends are thankfully a little more upbeat as consumer spending recovers and global chains enter the market; e-commerce continues to grow handily. Textiles are expecting weaker US orders and fast-fashion pressure. Diversification and innovation remain the biggest challenges for the sector.
Read more: Cambodia Investment Review (sector views), TravelMole (border impact)
Japan’s Quiet Bridge-Building In A Crowded Field
Tokyo is working closely with Phnom Penh while walking a careful line with Beijing and Washington. Japan sent the first foreign navy vessel into the expanded Ream base with minesweepers, a show of support for freedom of navigation and a “Free and Open Indo-Pacific.” The two countries officially raised their relations to a “comprehensive strategic partnership” in 2023, and their close work together spans maritime security, investment, and development. With American focus shifting and Chinese influence rising, Japan is trying to set itself up as a steady and reliable partner that backs rules and capacity-building without forcing binary choices.
Read more: 9DashLine
Scam Gangs Face Heat As Money Trails Go Crypto
A new book maps how today’s scam compounds evolved from 1990s Taiwan phone fraud to sprawling sites across Southeast Asia that recruit by deceit and trap workers into forced labor. The industry runs on cross-border safe havens, weak enforcement, and fast adaptation. Thai police just launched Operation SKYFALL against a network that allegedly laundered more than a billion baht a month through fake investment platforms. Investigators have tracked funds into crypto, then into cash in Poipet, before smuggling to Myanmar. Dozens of suspects are in the dock facing fraud and money laundering charges.
Read more: The Diplomat (industry roots), Khaosod English (crackdown)
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