Thailand: Controversial Bilateral Agreement Worsens Risk of Unrest and Diplomatic Tensions

Multiple opposition groups, such as the Thai Pakdee Party and Palang Pracharath Party, have criticized MOU 44 terms for allegedly weakening Thailand's position in JTC negotiations. The former leader of the People's Alliance for Democracy, Sondhi Limthongkul, also stated that the agreement risks Thai sovereignty over Koh Kood Island, which Cambodia also claims. Sondhi has threatened to reignite protests on the same scale during the anti-government demonstrations between 2005-2009. These threats are unlikely to materialize as Thai authorities have typically quelled unrest quickly through mass surveillance, censorship, and arrests since large-scale anti-government protests occurred in 2021. Although significantly violent or prolonged demonstrations are unlikely, an elevated risk of targeted attacks against Cambodians, fueled by nationalist rhetoric, cannot be ruled out, particularly in border regions. 

The party has experienced past instability with the removal of the previous Prime Minister, Srettha Thavisin, on August 14, 2024, over the appointment of a corrupt cabinet minister. The administration has made efforts to allay the concerns of nationalist groups by improving transparency. For example, the Ministry of Public Relations has denied disputes over Koh Kood Island and clarified that any decision made by the JTC would require compliance with international law and consent from both countries' public and legislative bodies.  

While such clarifications have helped ease public anger to some extent, they have hindered progress in setting up and using the JTC, delaying a solution for rising energy insecurity within Thailand and Cambodia that could provide additional motivation for protest activity. Both states heavily rely on fossil fuel consumption and imports for their electrical production. At the same time, the disputed maritime area holds up to USD 140 billion worth of natural oil and gas reserves. Prolonged delays may be exploited by protest groups to mobilize against the government, potentially hampering other areas of bilateral cooperation.  

Even though military escalation between both states is unlikely, brinkmanship and the loss of face could increase tensions and result in further diplomatic complications. Thai Additional Defense Minister Phumtham Wechayachai has frequently visited Koh Kood amid opposition pressure to hold naval exercises near the island beside the contested waters. These naval exercises can create diplomatic spats as Phnom Penh perceives Bangkok as attempting to secure further Exclusive Economic Zone (EEZ) rights around Koh Kood and the disputed waters. Previous maritime disputes between Vietnam and Cambodia over the (EEZ) around Phu Quoc Island have left Phnom Penh wary of losing further naval waters in the Gulf of Thailand as it tries to develop the state's blue economy program of sustainable fishing while securing a strategic hold on the Gulf of Thailand's maritime trade routes. Hence, increased naval patrols and mutual retaliation policies affecting rules for economic projects and manpower movement are possible.  

The risk of unrest over MOU 44 will likely continue over the coming months as the government attempts to avoid domestic opposition and diplomatic strains that may dent investor confidence in Thailand. Sporadic violence and potential setbacks to joint government-sponsored projects pose the most significant operational risks, especially for firms with Cambodian links. 

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