Thailand’s cabinet recommended on Tuesday that parliament scrap a proposal to jointly develop hydrocarbon resources along a disputed maritime border with Cambodia in an escalation of a spat between the countries.
Cambodia and Thailand have been locked in dispute since last week when Hun Sen, the Cambodian prime minister, asked Thaksin Shinawatra, Thailand’s self-exiled former prime minister, to become an economic adviser.
Mr Thaksin, also de facto opposition leader who was sentenced to two years in jail last year for abuse of office, arrived in Phnom Penh, the Cambodian capital, on Tuesday.
Bangkok reacted angrily to the original offer by accusing Phnom Penh of interfering in its affairs.
Panitan Wattanayagorn, spokesman for Abhisit Vejjajiva, the Thai prime minister, said: “When you have someone with a conflict of interest in the other camp, you have to review treaties like this. There is nothing emotional about this, nothing personal.”
Thailand and Cambodia signed a memorandum of understanding in 2001 that covers a 27,000 sq kmzone known as the Overlapping Claims Area. The move was a step towards opening up what some in the oil and gas industry believe could be one of the most productive unexplored areas in south-east Asia.
The dispute comes at an awkward time for the two members of the Association of South East Asian Nations. Leaders of the 10-nation grouping will meet Barack Obama, US president, this weekend in Singapore following the Asia-Pacific Economic Co-operation forum meeting.
The conflict will also lend weight to the view that the differences between Asean members are more significant than the similarities.
The tough stance being taken by Mr Abhisit has given him a boost in opinion polls.
While the Thai parliament is unlikely to oppose the cancellation of the agreement, politicians appear to have backed away from threats to close the border between the two countries, a move that would hurt Thailand more.
Thailand exported goods worth more than $1bn to Cambodia in the first eight months of this year, compared with Cambodian exports of just $39m to Thailand.
Bangkok wants Phnom Penh to extradite Mr Thaksin, the telecommunications billionaire who has been living mostly in the Gulf since his British visa was revoked last year.
Although the two countries have an extradition treaty, there is an exclusion clause for victims of political persecution. Hun Sen, a long-standing friend of Mr Thaksin, has made speeches contending that the case against the former Thai premier is politically motivated.
Mr Thaksin went into self-imposed exile after being removed from office in a military coup in 2006. In spite of a conviction for breaching conflict of interest laws and being sentenced in his absence to prison, Mr Thaksin retains substantial support among the Thai electorate, especially among the rural poor in the north-east.
Political analysts say Mr Thaksin or his appointees would have a good chance of winning if the government were to call a general election.