(Reuters) - Thailand and Cambodia are embroiled in a diplomatic stand-off over the appointment of former Thai premier Thaksin Shinawatra, on the run from a graft conviction, as an adviser to the Cambodian government.
Rivalry between the two neighbors dates back centuries and tensions are never far from the surface. But ties have sunk to their lowest in almost seven years, with both sides recalling their ambassadors and freezing agreements.
Their defense ministers met on Friday, saying military ties were strong and there was no risk of conflict [ID:nBKK529850]. But tensions remain high on the heavily armed border.
WHAT CAUSED THE LATEST FLARE-UP?
The Thai government sees Thaksin's new job as a slap in the face, but what seems to have irked Bangkok so much is Cambodia's refusal to extradite him, should a request be made, using the argument that his graft conviction was politically motivated.
That is seen as an attack on Thailand's judicial system.
There are other reasons, however. Thai Prime Minister Abhisit Vejjajiva has had enough trouble from the self-exiled Thaksin as it is, and the prospect of him wielding his sizable influence from across the border could hamper his efforts to bring stability to his deeply polarized country.
WHAT IS THE HISTORY OF TENSIONS?
There is no love lost between the two countries. Cambodia's Khmer Empire, dating back to the ninth century, was once the dominant power in the region and ruled over much of modern Thailand from its Angkor Wat complex, prompting many rebellions.
A big source of tension is Preah Vihear, an 11th century temple straddling their disputed border. Although an international court awarded it to Cambodia in 1962, it is still the source of nationalist squabbles that have led to deadly border skirmishes.
As recently as September, Cambodia accused Thai soldiers of burning a boy alive after shooting at villagers in the area.
Diplomatic ties were severed in 2003 for almost three months after Cambodians went on the rampage in Phnom Penh, torching the Thai embassy and vandalizing Thai businesses over an unsubstantiated rumor that a famous Thai actress had claimed Angkor Wat belonged to Thailand.
ARE TENSIONS GETTING WORSE?
Following Thaksin's departure from Cambodia on November 14, officials on both sides of the border have been more measured in their comments.
Thailand held back on plans to freeze low-interest loans to Cambodia and welcomed access to a Thai national detained in Cambodia charged with spying. The scheduled meeting between Thai and Cambodia defense ministers in Pattaya this week was not postponed as earlier expected.Defense ministers are discussing broad security and joint development-related issues. They did not make any commitment to withdraw troops from disputed land surrounding Preah Vihear temple, a move that would require parliamentary approval in Thailand.
SHOULD INVESTORS IN CAMBODIA BE ALARMED?
Not yet. Cambodia's economy depends heavily on China, Japan and South Korea, and very little on Thailand, which in turn relies on its neighbor for just 0.05 percent of total imports.
Despite endemic corruption and various internal problems, investors are still drawn to Cambodia and it is unlikely the latest tit-for-tat row with Thailand will change anything.
Providing the border remains open and peace prevails, it will not make much difference. However, the thousands of Thais that flock to Cambodia's border casinos each week might think twice about a flutter while tensions remain high.