Border crisis exposes Cambodia’s criminal connections 

A border war between Cambodia and Thailand last year appeared to be yet another flare-up of longstanding territorial disputes. But beneath the crossfire lies a more consequential story about the blurring of lines between states and criminal enterprises in Southeast Asia.

Back in April, an economic crisis loomed over Phnom Penh. US President Donald Trump’s announcement of 49% tariffs on Cambodian goods threatened to collapse the garment sector, employing 900,000 workers and representing 60% of exports. 

The Southeast Asian nation responded quickly, offering to eliminate tariffs on 100% of American products, as well as purchasing Boeing aircraft. But even reduced tariff rates in August threatened the labour-intensive garment sector.

Economic vulnerability extended beyond its formal export sector. Border provinces host a thriving legal casino industry that generates billions annually. Indepth reporting have linked it to business elites closely associated with former prime minister Hun Sen.

Political power

Investigations from 2024 estimate that Cambodia’s cybercrime industry also generates over US$12.5 billion annually, a quarter of the country’s official GDP. 

Run by Chinese criminal networks operating from fortified compounds often within or adjacent to casino complexes, these “scam centres” force an estimated 100,000 trafficked people to work sophisticated “pig butchering” schemes targeting victims globally. 

American citizens alone lost at least $5 billion to these operations in 2024.

This dual economy – legal casinos and illegal cybercrime – is linked to the Cambodian state and political power structures. 

Ly Yong Phat, frequently described in regional media as Hun Sen’s “elder brother” and personal adviser to Prime Minister Hun Manet, has been named in investigative reporting as a key figure linked to casino developments and scam operations from border provinces. 

Kok An, another Hun Sen adviser with multiple casino towers, faces Thai arrest warrants for transnational crime. Try Pheap, the former Hun Sen adviser dubbed the “King of Rosewood,” runs timber smuggling networks alongside scam compounds.

Again, investigative reporting and international assessments suggest these networks play a significant role in sustaining the patronage system that finances Cambodia’s ruling coalition. It is also aligned with China, as evidenced by the expansion of the Ream Naval Base.

By early 2025, Thailand was threatening both revenue streams after Bangkok announced plans to legalise casinos, threatening Cambodia’s border monopoly, while intensifying crackdowns on scam centres. 

Territorial tensions

Phnom Penh’s leadership, already facing Trump’s tariffs, confronted a convergence of economic shocks that intensified existing territorial tensions and narrowed de-escalation.

In mid-2025, the situation continued to deteriorate. Cambodia fortified Hill 745 near the disputed Preah Vihear temple, while Thailand built roads straddling the border. 

Thai General Boonsin Padklang also unilaterally closed crossings, defying then-prime minister Paetongtarn Shinawatra’s authority. On May 18, when Thai soldiers approached Cambodian troops digging fortifications, a 10-minute firefight killed a Cambodian officer. 

In response to rising border tensions, Hun Sen weaponised the country’s migrant workers residing in Thailand. In mid-June, citing risks of discrimination, he called on up to 1.2 million of them to return home.

That constituted roughly 10% of Thailand’s total labour force and between 70% to 80% in its border provinces. When 400,000 workers departed within five days, Thailand faced an acute labour deficit.

Bangkok retaliated swiftly. It banned its citizens from crossing into Cambodia to gamble, causing a 62% drop in casino traffic and raided 19 properties linked to Kok An. Assets totalling $33.8 million were seized.

Hun Sen’s response was cynical in its effectiveness. On June 15, he leaked a call with Paetongtarn where she admitted to wanting to reopen the border but that she could not control General Boonsin. 

Thailand’s coalition government collapsed, stock markets crashed to five-year lows and the proposed casino legalisation legislation was scrapped.

Nationalist sentiment

Military conflict erupted on July 24, with multi-day artillery exchanges and rocket strikes killing dozens and displacing approximately 400,000 people. 

The Cambodian leadership quickly stoked nationalist sentiment, demonstrated the price of threatening its elite networks to Thailand and created leverage with Washington. Trump, eager to finalise trade deals, personally called both leaders to demand a ceasefire. 

It came on July 29, and within days, he announced the final 19% tariff rate for both countries. 

The resolution process exposed regional diplomatic complexities. Proposed Chinese bilateral mediation plans were rebuffed with both countries insisting on an ASEAN-led processes with Malaysia as chair. Yet China positioned itself strategically throughout.

Foreign Minister Wang Yi framed the dispute as “a legacy of Western colonial powers” and Beijing hosted trilateral consultations and dispatched envoys for shuttle diplomacy. 

The fragility of the ceasefires produced by the ASEAN process served Chinese interests by demonstrating US ineffectiveness and deepening both nations’ dependence on Beijing. 

For Southeast Asia, the crisis illustrated the limits of the “ASEAN Way” – emphasising consensus and non-interference – in maintaining regional peace. Malaysia’s mediation helped broker temporary de-escalation in late July. 

But without robust monitoring or enforcement mechanisms, the fragile ceasefires repeatedly collapsed. 

China’s strategic positioning throughout the process demonstrated how external powers can exploit the gap between ASEAN’s diplomatic achievements and its institutional capacity to consolidate them.

Criminal networks

For Cambodia and Thailand, the 2025 conflict revealed a regional configuration where weak civilian governments, autonomous militaries and transnational criminal networks create conditions for instability. A pattern that regional institutions have struggle to prevent. 

With no indication that Cambodia’s Hun Sen or Thailand’s military will relinquish influence despite looming Thai elections, this year threatens more of the same – instability as strategy where reform would threaten the very networks sustaining political power.

Will Brehm is an Associate Professor in Education at the University of Canberra in Australia.

This edited article is republished from East Asia Forum under a Creative Commons license. Read the original article here, which was also part of an EAF special feature series on 2025 in review and the year ahead. 

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy of China Factor.