Summary:
 The diplomatic spat between Cambodia and Thailand took center stage 
during the Ambassador's meeting with Prime Minister Hun Sen November 8. 
Hun Sen confirmed that former Thai Prime Minister Thaksin Shinawatra 
would arrive in Cambodia on November 10 and would deliver a speech to 
Cambodian officials at the Ministry of Economy and Finance on November 
12. He also confirmed that, aside from the diplomatic friction, tensions
 were low and military commanders remained cooperative at the border, 
and that he would continue to monitor Thailand's reaction and would 
respond in kind to each diplomatic downgrade that the Abhisit government
 initiated. We expect Hun Sen will now shift largely from an offensive 
to a defensive position. He is of course hopeful that the Thai will 
refrain from taking precipitous actions, but he is prepared to match any
 Thai action with a Cambodian reaction. In that context, Hun Sen will 
likely be both confident and relaxed during the upcoming Singapore 
meetings, amenable to suggestions that a de-escalation of rhetoric and a
 re-engagement between Cambodia and Thailand is in the best interests of
 the region as well as the parties. End summary.
¶2. (C) 
In raising this issue during a meeting previously scheduled to discuss a
 broad range of other issues (septel), the Ambassador reaffirmed that 
both Cambodia and Thailand should work to reduce political tensions and 
to refrain from acts that could be considered provocative. Hun Sen 
replied that military cooperation was proceeding very well at the border
 ) "there is no chaos," he explained, and "things remain very quiet." He
 also said there is no need "to keep so much force there" and confirmed 
press reports that he had ordered the 911 Brigade paratrooper unit be 
recalled to Phnom Penh and that he would do his best to ensure that Thai
 and Cambodian commanders continued to cooperate and avoid any military 
confrontation. If the situation remained calm, Hun Sen added he would 
also recall Division 1, which would reduce the Cambodian military 
presence at the border to normal, pre-July 2008, levels. Hun Sen 
reiterated that he wanted to "build up mutual trust between the armies,"
 and that he hoped that Thai military commanders would continue to 
cooperate and work to "reduce tensions.
¶3. (C) Hun Sen 
underscored that Thaksin would travel to Cambodia from "another ASEAN 
country," but that "the Thai don't care" about the purported double 
standard that has led the Thai government to criticize Hun Sen so 
publicly while ignoring Thaksin's presence elsewhere in the region. 
(Note: Hun Sen did not cite the name of the country where Thaksin was 
reportedly currently residing. End Note.). "Whether Thaksin comes or 
not," Hun Sen explained, it remains the "business of Cambodia" to engage
 him as an economic adviser during the current economic downturn. Hun 
Sen confirmed what he has said publicly: that the RGC would not "accept"
 any extradition request from Thailand as this case was "purely 
political" and the Thai-Cambodian extradition agreement was based on 
customary international law that clearly allowed extraditions to be 
rejected based on political context. And although he said he expected 
the Thai government to deliver a "letter of extradition," he said that 
the RGC had already prepared a reply rejecting the request.
¶4.
 (C) Because military relations at the border remained cooperative, Hun 
Sen said that the principal conflict with Thailand was diplomatic and 
that the public pronouncements from various Thai officials to downgrade 
diplomatic relations between Thailand and Cambodia reflected "internal 
confusion" within the Thai government. After Thaksin's arrival, Hun Sen 
said he would simply monitor the Thai reaction day by day. "There are 
many in the Thai government who are not acting under orders of the Thai 
Prime Minister," Hun Sen stated, pointing to the example of the Thai 
army, which "had to obstruct the yellow shirt protesters" sent from 
Bangkok from reaching Preah Vihear on September 19. In fact, Hun Sen 
averred that the Thai business interests in Sisaket Province were 
"already complaining" and would suffer most if Thailand prolonged and 
exacerbated the diplomatic dispute by closing the border with Cambodia 
in a "frenzied reaction" to Thaksin's visit. He added that the RGC had 
already sent a message to Bangkok that it was indeed the right of 
Thailand to close the border but, unlike in 2003 when the Thais PHNOM 
PENH 00000832 002 OF 003 allowed goods to continue to cross, he would 
respond by directing that Thai goods would also be barred from crossing 
into Cambodia if Thailand did so.
¶5. (C) Again referring 
to perceived dissension among key leaders of the current Thai 
government, Hun Sen claimed that "not everyone is on good terms" and 
that Deputy Prime Minister Suthep Thaugsuban and Minister of National 
Defense General Prawit Wongsuwan did not agree with Prime Minister 
Abhisit and Foreign Minister Kasit on this issue. "I met with them 
here," Hun Sen noted, and "spent three hours with them in Hua Hin" on 
October 23, where their lack of support for the direction of the current
 Thai government was clear. Moreover, Hun Sen said that he had been 
contacted by unspecified Thai Senators and other members of the 
government to begin the work of diplomatic "remediation."
¶6.
 (C) As previewed by the Prime Minister, Thaksin's private commercial 
charter arrived at the military side of Phnom Penh's airport at about 
9:30 a.m. on November 10, originating from Mumbai. Although local and 
international press viewed the arrival from a distance, Ministry 
spokespersons were guarded in their comments about the visit. Thaksin's 
car entered a motorcade secured by Hun Sen's bodyguard unit and departed
 for a lunch at Hun Sen's residence in Takhmao, south of the capital. At
 the end of the day, MFA spokesman Koy Kuong told reporters that no Thai
 request for extradition had yet been officially received, although 
others report that an extradition request from the Thai government has 
been already transmitted. Thaksin is reported to be staying in a villa 
close to the Cambodian Peoples Party headquarters not far from the Royal
 Thai embassy. Unconfirmed reports indicated that Thaksin is scheduled 
to depart Cambodia on November 13. Separately, in response to the 
Ambassador's inquiry during a meeting November 10, Commerce Minister 
Cham Prasidh commented that he was very familiar with the popularity 
polls recently conducted in Thailand and did not think they were the 
least bit credible. He added that he thought nothing Thaksin did or said
 in Cambodia would have much effect on the domestic situation in 
Thailand.
¶7. (C) Comment: Hun Sen remained thoughtful and
 calm throughout his discussion with the Ambassador, and there was no 
hint of the provocative rhetoric that he sometimes displays in public or
 private. In the weeks since Hun Sen's October 23 announcement that he 
would appoint Thaksin as an adviser, he has been most concerned about 
increases in border military activity; he now seemed pleased with the 
extent of military cooperation and believes that his decision to reduce 
the number of troops will contribute to continued cooperation. With that
 in place, Hun Sen has now turned his attention to the diplomatic front 
and seemed focused predominantly on how much and how quickly the Thai 
would erode diplomatic relations in what he believes is an effort to 
attract public support for a regime that can command long term support 
of neither the military nor a majority of the people. While it remains 
to be seen whether he has miscalculated in that assessment, it is 
apparent that he has received indications from some Thai officials that 
he has not. But, more importantly, none of that seems to matter much to 
the Prime Minister. Hun Sen has clearly calculated that whatever 
diplomatic downgrades are initiated by the Abhisit government do not 
outweigh the benefits that Hun Sen's friendship and support to Thaksin 
could provide to Cambodia both now and in the future. He seemed 
similarly uninterested in ASEAN or international reaction to the spat 
and did not directly respond to the Ambassador's inquiry about the 
message he intended to send to ASEAN or the international community 
about his actions.
¶8. (C) As much of the press and other 
reporting has suggested, Hun Sen's motivations are best described as 
personal political moves designed to attract perceived benefits to 
himself and Cambodia and to disarm his foes in the current Thai 
government. As this continues to play out, we expect Hun Sen will shift 
largely from an offensive to a defensive position. He is of course 
hopeful that the Thai will refrain from taking precipitous actions, but 
he is prepared to match any Thai action with a Cambodian reaction every 
step of the way, as he has done with the reciprocal recall of 
Ambassadors. In the meantime, we expect the U.S. and others will find a 
confident and relaxed Hun Sen during PHNOM PENH 00000832 003 OF 003 the 
upcoming Singapore meetings amenable to suggestions that a de-escalation
 of rhetoric and a re-engagement between Cambodia and Thailand is in the
 best interests of the region as well as the parties themselves. End 
Comment.
ทักษิณ - ฮุนเซน กับ อเมริกา..ว่าไงกันเรื่องน้ำมัน
Summary.
 In the latest of a series of trade and investment related visits to 
Cambodia, a delegation from the U.S.-ASEAN Business Council met May 9 
with senior Cambodian government (RGC) officials, including the 
Ministers of Commerce, Finance and Health. ConocoPhillips 
representatives urged the RGC to resolve the dispute with Thailand on 
the Overlapping Claims Area in the Gulf of Thailand. RGC officials 
believed resolution would have to await elections and a new Thai 
government. The Ambassador and the head of the Council's delegation, 
Frances Zwenig, urged Cambodia to sign the bilateral debt agreement. The
 U.S.-ASEAN Business Council's visit was another step toward greater 
American commercial involvement in Cambodia and another indication of 
the growing interest of U.S. business firms in establishing a presence 
here.
¶2. (U) Building on the success of the first 
U.S.-Cambodia meeting under the Trade and Investment Framework Agreement
 and the April visit of a business mission of American firms based in 
the region (Refs), the U.S.-ASEAN Business Council met with senior 
Cambodian government (RGC) officials on May 9 to explore opportunities 
for trade and investment. Led by Frances Zwenig, Counselor of the 
U.S.-ASEAN Business Council, the delegation consisted of representatives
 of ConocoPhillips Petroleum, Oracle, General Electric (GE), FedEx and 
ITT Defense. They met with former Ambassador to the U.S. Roland Eng and 
Minister of Transport and Public Works Sun Chanthol, the Ambassador, and
 had office calls on Minister of Post and Telecommunications So Khun, 
Minister of Commerce Cham Prasidh, Finance Minister Keat Chhon, Health 
Minister Nuth Sokhom and MFA Secretary of State Kao Kim Hourn.
¶3.
 (SBU) In each of the meetings, the ConocoPhillips representatives urged
 the RGC to resolve the dispute with Thailand over the Overlapping 
Claims Area in the Gulf of Thailand. Noting that their firm has held a 
contract for exploitation of the area for nearly ten years, they asked 
that enthusiasm for Chevron's petroleum discovery not be allowed to 
lessen the urgency of resolving the dispute. Kao Kim Hourn told them 
that the two governments had come very close to settling the dispute 
just prior to the fall of the Thaksin government in Thailand. He said 
they had agreed on a formula for dividing the revenue: 80% for Thailand 
and 20% for Cambodia in the tier nearest Thailand, 50%-50% in the middle
 and 20% for Thailand and 80% for Cambodia in the area closest to 
Cambodia. He thought that an additional six months of negotiations would
 have settled the matter. However, in Thailand's current disarray, he 
said, there could be no resolution until after Thailand's elections and 
the formation of a new government. Other interlocutors, including Cham 
Prasidh and Keat Chhon, agreed that nothing could be accomplished until a
 new government was formed in Thailand.
¶4. (U) GE 
announced to the Health Minister that it would open an office in Phnom 
Penh in the coming months. The office would focus on the sales and 
repair of diagnostic equipment in the health field. The GE 
representatives briefed the Minister on GE's program to sell refurbished
 equipment in developing countries and asked that Cambodia consider 
participating. They noted that GE's office could be used as a launching 
point for GE in other sectors in which GE is involved, such as energy.
¶5.
 (U) FedEx expressed appreciation to the Minister of Post and 
Telecommunications for his flexibility in compromising on regulations 
governing the courier service industry. The revisions accepted by the 
Ministry had allowed the courier service industry to remain operational 
in Cambodia. The firms in the industry have all registered, they said, 
and were functioning without problems. The FedEx representatives also 
thanked Commerce Minister Cham Prasidh for his role in convincing 
Minister So Khun to compromise.
¶6. (U) Showing signs that
 he was still recovering from a heart procedure that he underwent in 
Paris in April, Prasidh provided the delegation with an overview of the 
trade and investment climate in Cambodia. Reviewing the establishment of
 the garment industry, Prasidh stressed the need for Cambodia to 
outperform its neighbors in order to remain competitive. He explained 
the private sector forum that PHNOM PENH 00000668 002.2 OF 002 brought 
the private sector together with government in order to resolve policies
 and problems that inhibited business. In response to a suggestion that 
Cambodia could use the latest technology to computerize its "One Stop" 
investment service, Prasidh said that other ASEANs were more technically
 advanced than Cambodia. At best, Cambodia could become a model for the 
second tier of developing countries in ASEAN like Laos and Burma.
¶7.
 (SBU) Frances Zwenig asked Finance Minister Keat Chhon for an update on
 the status of negotiations on the bilateral debt. The Ambassador urged 
Keat Chhon to move forward and accept the agreement as it now stood. 
Further discussions were unlikely to get Cambodia a better deal. Keat 
Chhon responded that the RGC had been considering sending a team to 
Washington or inviting the USG to have a team visit from Washington.
¶8.
 (U) Comment: Coming on the heels of the successful first TIFA meeting 
in February and the American Business Mission in April, the visit of the
 U.S.-ASEAN Business Council was another step forward toward greater 
U.S. commercial involvement in Cambodia. It was also another indication 
of the growing U.S. business interest in Cambodia. Increasing numbers of
 American firms are beginning to sense that Cambodia has real potential.
 เส้น
เขตแดนทางทะเลของเขมร(สีนำ้เงิน)ของไทย(สีแดง) ขอจงเข้าใจง่ายๆว่า 
เส้นสีแดง=รั้วของประเทศเรา 
พื้นที่ด้านซ้ายหลังรั้วมาจนถึงประเทศเราก็คือสนามหน้าบ้านเรา 
ดินแดนเราก็คือบ้านของเรา ดังนั้นทรัพยากรทั้งหมดที่อยู่ตั้งแต่บริเวณรั้ว 
สนามหน้าบ้าน และในบ้านเรา คือ ของเราทั้งสิ้น เส้นของเขมรจอมปลอมขึ้นมาเอง
 ตัดผ่าเกาะกูดของไทยไปตั้งครึ่งค่อนเกาะได้เช่นไร?
เส้น
เขตแดนทางทะเลของเขมร(สีนำ้เงิน)ของไทย(สีแดง) ขอจงเข้าใจง่ายๆว่า 
เส้นสีแดง=รั้วของประเทศเรา 
พื้นที่ด้านซ้ายหลังรั้วมาจนถึงประเทศเราก็คือสนามหน้าบ้านเรา 
ดินแดนเราก็คือบ้านของเรา ดังนั้นทรัพยากรทั้งหมดที่อยู่ตั้งแต่บริเวณรั้ว 
สนามหน้าบ้าน และในบ้านเรา คือ ของเราทั้งสิ้น เส้นของเขมรจอมปลอมขึ้นมาเอง
 ตัดผ่าเกาะกูดของไทยไปตั้งครึ่งค่อนเกาะได้เช่นไร?
 
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