Thailand on Thursday ordered a review of soft loans intended for Cambodia and suspended a grant in aid for it in the wake of Phnom Penh's refusal to extradite fugitive former Thai Prime Minister Thaksin Shinawatra, while the two countries expelled each other's diplomats in an escalation of the dispute.
Thai Prime Minister Abhisit Vejjajiva in the morning called an urgent meeting of the National Security Council to consider further steps to take in reaction to Cambodia's appointment of Thaksin as an economic adviser and its refusal to extradite him to Thailand.
Abhisit later told reporters that while Thailand would not mobilize troops at the border with Cambodia, it will review its cooperation with its neighbor.
Thai Deputy Prime Minister Suthep Thuagsuban later said implementation of a 1.4 billion baht (US$41 million) loan for road construction in Cambodia, which was already approved by the Cabinet several months ago, "will not be smooth," while the Cabinet will not even consider a 31 million baht grant-in-aid that Cambodia more recently sought from Thailand.
Thai Deputy Finance Minister Pruttichai Damrongrat said his ministry has been assigned to review another 1 billion baht loan that was to be used for road building in Cambodia.
Cambodia punched back by declaring Kamrob Palawatwichai, the first secretary at the Thai Embassy in Phnom Penh, persona non grata and ordering him to leave within 48 hours, without giving any explanation.
On Thursday evening, the Thai Foreign Ministry followed suit by declaring the first secretary of theCambodian Embassy in Bangkok persona non grata, also without explanation.
Earlier this week, Thailand withdrew its ambassador from Phnom Penh and axed bilateral negotiations on overlapping maritime claims, while Abhisit said Wednesday that Thailand would restrict the flow of people crossing the border to gamble in casinos in Cambodia.
But he said the border will not be closed.
The tit-for-tat comes on the same day that Thaksin, who arrived in Cambodia on Tuesday, irking the Thai government, lectured to some 300 Cambodian economists as well as government and parliament figures.
Thaksin spoke of his successes as prime minister, such as in helping Thailand's rural poor in health, education and financial support. He also touched on the global economic crisis, the future of the global economy, tourism, agriculture, and micro-finance.
But he only treaded lightly on Thai politics, saying his political opponents were engaged in "false patriotism" rooted in "domestic political compulsions" and that without reconciliation, Thailand will be "off the radar screen of many investors."
At the event, Cambodian Deputy Prime Minister and Minister of Economy and Finance Keat Chonlauded Thaksin's "astonishing" achievements in reducing rural poverty and introducing universal healthcare, as well as his economic policies that helped accelerate Thailand's economic recovery from the 1997 Asian financial crisis.
Thaksin served as Thailand's prime minister from 2001 until he was toppled by a military coup in 2006 and fled into exile. He was sentenced in absentia to two years imprisonment for breaking a conflict of interest law while he was in power.
He was appointed as a personal adviser to Hun Sen and an economic adviser to the Cambodian government on Oct. 27, a move that Abhisit's government calls an insult to the Thai judicial system.
Hun Sen has responded by saying Thailand in the past harbored Khmer Rouge leaders so "there is nothing in the Thai judicial system that is worth respecting," according to a transcript of an interview with him carried Thursday in The Nation, a Thai newspaper.
Hun Sen's government has refused to extradite Thaksin on grounds that an extradition treaty in effect between the two countries since 1998 does not apply to cases on which the alleged offense is of a political nature.
"I have told Abhisit that Thaksin is my friend. Friends don't betray friends," he told interviewers.
"If you want to close the border, close it. Cambodia will take up action in response," he said, noting that Thailand's exports to Cambodia last year were worth some $2 billion but Cambodia's exports to Thailand were valued at only $90 million.
"Cambodia will close the border, as well as shut out economic activities as well. Even one mouse will not be permitted to cross the border," he said.
Thaksin arrived Thursday in Cambodia's northern province of Siem Reap where he was greeted by around 50 hardcore supporters who crossed the border from Thailand the previous day to see him.
His supporters in Thailand have been rallying against the government, demanding that Abhisit step down, that the House of Representatives be dissolved, and that Thaksin be pardoned for his conviction.
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