The presence of Thaksin Shinawatra in Phnom Penh is pushing a political battle between Cambodia and Thailand to one of its worst points in years, analysts said this week.  

The visit of the ousted prime minister has caused the mutual withdrawal of ambassadors, the potential scuppering of an offshore oil agreement, and the threat of closed borders, and could lead to chronic disputes between the neighbors, analysts say.  

“We had bitter experiences in the past. When we are in a conflict [with a neighboring country], we seem to lose more than them despite the fact that we are only in a sideshow of other people’s conflict,” said Chea Vannath, an independent analyst and former director of Center for Social Development.

However, Robert Broadfoot, managing director of Hong Kong-based Political and Economic Risk Consultancy, does not believe that both countries would allow the situation to “spin out of control”. He said the tension would ease after Thaksin leaves Cambodia.

Thaksin addressed a gathering of Cambodian officials Thursday, taking on his first duty in a controversial role as economic adviser to the government. Cambodia has strong potential in agriculture, tourism and oil, Thaksin said.  

Speaking to more than 300 officials at the Ministry of Economy and Finance, Thaksin noted Cambodia’s rapid economic growth rate in recent years, before the financial crisis brought a shrinking of 2.5 percent this year. 

In order to counter the crisis, he said, Cambodia must act fast to improve its products and services. Cambodia could also consider working together to promote tourism with Burma, Laos and Thailand. 

Thaksin said he would be willing to sit down with a small group to discuss how to improve the tourism industry, including joint promotions with other countries, especially, he said, with Thailand.