Cambodian PM's daughter to take over CATS

BANGKOK, Nov 21 (TNA) -- Cambodian Prime Minister Hun Sen’s daughter plans to hold shares in Thai-owned Cambodia Traffic Air Services (CATS) after the Cambodian government has temporarily taken over management of the firm, according to Dr Panitan Wattanayakorn, deputy secretary-general to the Thai prime minister.

Dr Panitan, also acting government spokesman, confirmed the news report that Cambodian leader's daughter is planning to hold shares in CATS.

The plan followed confirmation by the Cambodian government of its temporarily assuming control of the management of the country's air traffic control company following the arrest of CATS employee Siwarak Chutipong on charges of espionage.

Tekreth Samrach, a deputy minister of Cambodia’s Council of Ministers, said in Phnom Penh Friday that his government acted against CATS for the sake of national security and for flight safety. Nine other Thai employees of the company were also banned from the workplace.

Meanwhile, Chawanon Intarakomalsut, the Thai Foreign Minister’s secretary, said in Bangkok that CATS is registered in Hong Kong and it was not possible to determine the identity of its shareholders.

He said, however, it would be difficult for any individual to take over the company, but his ministry would try to assist CATS. So far the company has not requested help.

He said the Thai foreign ministry is studying whether CATS is included in the Thai Cambodian Investment Protection Act as it is registered in Hong Kong.

Dr Panithan said that he did not know whether the company could be protected as other companies registered in Cambodia.

It is up to the company to file a request for the Cambodian government to consider, said Mr Panithan, adding that the firm’s lawyer and Mr Siwarak’s lawyer are different persons.

Referring to the bail request for detained Siwarak, Mr Chawanon said he expected that the process could be completed next week.

Mr Siwarak’s mother could also probably visit her son next week, Mr Chawanon added.

Relations between the two neighbouring countries have been strained after Phnom Penh rejected a formal request from Thailand to extradite Mr Thaksin during his five-day stay in Cambodia, beginning November 10.

The situation deteriorated when ambassadors of the two countries were recalled. Mr Siwarak was apprehended in Phnom Penh on spying charges on November 12 when he was seen releasing flight information on the fugitive former Thai prime minister, Thaksin Shinawatra’s, to a Thai embassy official.

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Thai businesses fear closure of border

As the Thai-Cambodian media skirmish continues, Thai executives are starting to fear their operations will suffer.

Gamblers are staying away from casinos in Koh Kong and Poipet, while tourist numbers are on the slide. Kasikorn Research Center said the escalating tensions could affect businesses and populations on both sides of the border.

The conflict between the Thai and Cambodian governments recently reached a new and alarming level when both countries withdrew their ambassadors after Cambodia named fugitive former prime minister Thaksin Shinawatra as an economic adviser and refused to extradite him when he visited the country.

But the Thai-Cambodian border remains open so the border trade, which accounts for as much as 80% of bilateral trade, continues as usual.

If the conflict is quickly resolved without either side resorting to force, trade will not be disrupted, said K-Research.

Even a temporary border closure, similar to that caused by the earlier Preah Vihear temple dispute, would only have a limited impact, the researchers said. But a prolonged closure would inevitably damage trade, causing Thai exporters to lose their share in Cambodia's market.

Thai exports to Cambodia last year were worth 67 billion baht, while imports from Cambodia were only 3 billion baht.

Thailand's trade surplus reflects Cambodia's inability to supply its market's demand, while Cambodian consumers are accustomed to imported Thai products such as sugar, beverages, cosmetics, soaps and related products. The Cambodian business sector also relies on imported processed oil and cement.

Thailand is currently the largest exporter to Cambodia, supplying 23% of its imports, followed by Vietnam with 17% and China with 15%.

Like Thailand, Vietnam benefits from close proximity with Cambodia, with significant border trade. Vietnam's exports to Cambodia have soared from US$178 million in 2002 to $1.43 billion last year. The country is now competing directly with Thailand in oil, sugar and cement.

Chinese goods, currently in third place, also have good opportunities for growth due to the strength of the Chinese economy and the development of the logistics system linking China and Asean.

But Cambodia would also face losses from this scenario. Materials and intermediate goods from other countries for its production sector would likely have higher prices due to the logistics costs. Similarly, Cambodian consumers would likely have higher living costs.

Bangkok Post

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