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Economy

Thailand and Cambodia reopen rail and sea links as ties blossom

Leaving a love-hate relationship behind, both hope trade hits $15 billion by 2020

Railroad maintenance workers fix rail tracks outside Phnom Penh on April 22.   © AP

BANGKOK -- Thailand and Cambodia have ramped up efforts to bolster diplomatic and economic ties with the aim of doubling bilateral trade by 2020.

The neighbors revived a crossborder train link on April 22 after it laid unused for 45 years. Thai Prime Minister Prayuth Chan-ocha and Cambodian Prime Minister Hun Sen took a ceremonial ride across the border from Aranyaprathet in eastern Thailand to the Cambodian city of Poipet on a train donated by Bangkok.

The link was opened for daily services in 1941 and closed down in 1974. The project was originally meant to link up the two capitals, Bangkok and Phnom Penh. But the track on the Cambodian side was heavily damaged by its prolonged civil war.

Hun Sen took ordered the railway tracks to be repaired, and Cambodia reopened the final stretch of the 370km railway from Phnom Penh to the Thai border city of Aranyaprathet in 2018.

In 2015, Prayuth and Hun Sen signed an agreement for $15 billion worth of bilateral trade by 2020, through expanding road and rail links. According to the Bank of Thailand, the neighbors traded goods worth 245 billion baht ($7.7 billion) in 2018, a 35% increase compared to the previous year.

If bilateral trade grows at a similar pace this year and next, the $15 billion target will be within reach. Although the launch of full rail services connecting the two capitals may take a while as the governments have not yet reached an agreement, the link will help border trade in the future as it will provide a new means of transportation. For now, trade is conducted mostly by trucks.

The train link for Thailand and Cambodia means more than just bilateral trade. It is also a symbol of improved ties between the two that have had a love-hate relationship since the 1200s. Their most recent clash broke out in 2008, when troops exchanged fire at a World Heritage temple located at the border, over which both countries claimed sovereignty.

Thailand's Prime Minister Prayuth Chan-ocha, left, shakes hand with Cambodian's Prime Minister Hun Sen at the Thai-Cambodian border town of Aranyaprathet, Thailand on April 22. (Government Spokesman's Office via AP)

The territorial dispute was brought to the International Court of Justice in the Hague. The court awarded the temple to Cambodia and ordered the withdrawal of Thai troops in 2013.

Since the current junta took power in May 2014, peace between the two has been restored. At a bilateral border meeting in March 2018, Thai Deputy Prime Minister Prawit Wongsuwon and Cambodian Defense Minister Tea Banh agreed diplomatic ties were better than ever before. 

In October 2018, the two countries also signed an agreement to link ports to strengthen cooperation over tourism. They intend to connect Thailand's Koh Samui, a resort island in the Gulf of Thailand, with a port that Cambodia plans to begin building near the southern city of Kampot late this year or early 2020.

Such moves are in line with Thailand's efforts to tap into higher growth in the region that includes Cambodia, Laos, Myanmar and Vietnam. These four neighbors are all enjoying higher economic growth compared with Thailand which is facing an aging population. In return, Thailand can offer a more developed market and higher technology.

The moves also represent Thailand's strategy to access the Chinese market. Cambodia, as well as Laos, has strong connections with China from whom they both receive massive financial aid. Through their relationships in Cambodia and Laos, Thai companies may be able to clinch more business.

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