Thailand and Cambodia are now experiencing their worst military confrontation in more than a decade. Fighting erupted on 24 July along their disputed frontier and rapidly expanded across several locations, with artillery, rockets and ground forces being used and Thailand deploying F-16 fighter aircraft against Cambodian military targets. By this weekend, casualties have risen on both sides and well over 100,000 civilians have been displaced from Thai border provinces alone, while large numbers of Cambodians have also fled their homes. Both governments accuse the other of beginning the fighting. The immediate triggers include months of deteriorating relations, a Cambodian soldier killed during a May border confrontation and incidents involving landmines that injured Thai troops. But the dispute itself is much older, rooted partly in maps produced when Cambodia was under French colonial rule and in competing claims around ancient Khmer temples along an incompletely demarcated frontier. What makes this conflict interesting is precisely how economically irrational it initially appears. Thailand and Cambodia gain very little material value from fighting over relatively small pieces of territory, while war destroys trade, tourism, infrastructure and lives. Yet that apparent irrationality disappears once territory is understood not merely as land but as sovereignty, historical memory and evidence of whether governments are capable of defending the nation itself.
The historical dispute demonstrates why borders are among the most unusual institutions in international politics. Thailand and Cambodia share a frontier of more than 800 kilometres, much of it deriving from arrangements between Siam and French colonial authorities in the early twentieth century. The most famous dispute concerns the eleventh-century Hindu temple of Preah Vihear. In 1962, the International Court of Justice ruled that the temple belonged to Cambodia; after renewed fighting decades later, the court clarified in 2013 that Cambodia also possessed sovereignty over the promontory immediately surrounding it. Yet several other areas remain disputed, and Thailand and Cambodia rely partly on different interpretations of colonial-era maps and watershed boundaries. The material value of an ancient temple or a few square kilometres of mountainous territory is relatively small compared with the economies of either state. The political value can be enormous because conceding the territory is interpreted not as selling an unproductive asset but as accepting that another government possesses a superior claim to part of the national homeland. Territory therefore has identity value that market prices cannot capture, which is why standard economic reasoning often underestimates how much states will spend defending it.
This is not unique to Southeast Asia. India and Pakistan accept enormous military costs over Kashmir. China and India maintain forces along remote Himalayan territory whose immediate economic value is limited. Japan and China dispute uninhabited islands in the East China Sea. Argentina continues to claim the Falkland Islands despite the enormous military defeat suffered attempting to seize them in 1982. These disputes persist because sovereignty is a non-fungible political good. A government cannot easily compensate citizens for losing territory by saying it received something economically equivalent elsewhere. If Thailand surrendered a disputed temple in exchange for several billion dollars, many Thai citizens would not interpret that as a profitable transaction; they would interpret it as selling the country. This is one reason international conflicts cannot be modelled simply by assigning monetary values to assets. Political utility contains history, identity and status alongside income.
Nationalism amplifies this effect because leaders rarely negotiate territory in an empty political environment. The current confrontation has become intertwined with an extraordinary domestic political crisis in Thailand. Prime Minister Paetongtarn Shinawatra spoke privately with former Cambodian prime minister Hun Sen in June while trying to reduce border tensions. Hun Sen subsequently released a recording of the conversation, in which Paetongtarn addressed him deferentially as “uncle” and appeared critical of a Thai military commander. The leak triggered enormous outrage in Thailand and contributed to the Constitutional Court suspending her from office while it considers an ethics case. A border dispute therefore became entangled with Thailand’s long-running struggle between the Shinawatra political movement, conservative institutions and the military. This matters strategically because leaders negotiating under nationalist suspicion have less room to compromise. Any concession that might appear sensible privately can become politically fatal publicly.
This is the audience-cost problem in international relations. Governments negotiate with foreign states while simultaneously negotiating with their own populations. A Thai leader may believe privately that compromising over one small disputed area would reduce the probability of war. If domestic opponents can describe that compromise as surrendering sacred national territory, the political cost may exceed the security benefit. Cambodian leaders face the same mechanism. Once citizens are told that soldiers died defending Cambodian sovereignty, accepting a settlement perceived as conceding the disputed territory becomes harder. Violence therefore changes the bargaining range because deaths create sunk costs psychologically even though economic theory says sunk costs should not affect future decisions. Governments ask: if we concede now, what were the soldiers killed for? That question can prolong conflicts long after the original territorial stakes would justify them materially.
The current crisis demonstrates how easily such political constraints interact with a security dilemma. Both governments claim they are defending their territory. Thailand says Cambodian forces initiated attacks and fired rockets into civilian areas; Cambodia says Thai troops violated Cambodian territory and that its forces acted in self-defence. From outside, establishing every tactical sequence immediately is difficult. Strategically, the problem is that both claims can become internally self-reinforcing. Thailand moves troops towards the frontier because it fears Cambodian action. Cambodia observes the troop movement and reinforces its own positions. Thailand interprets the Cambodian reinforcement as evidence that its original concern was justified. Neither government needs to desire a major war for military preparations to produce one. Capabilities are observable; intentions are not. States therefore respond to what an adversary can do rather than trusting what it says it intends to do.
The landmine incidents illustrate this uncertainty particularly well. Thai soldiers were injured by mines in disputed border areas during July, and Bangkok accused Cambodia of laying new mines. Cambodia rejected that allegation and argued that the mines may be remnants from decades of conflict. Cambodia remains one of the world’s most heavily mined countries because of its twentieth-century wars, meaning old unexploded ordnance genuinely remains widespread. Determining whether a mine was newly deployed or decades old therefore changes the political meaning of exactly the same explosion. One interpretation is deliberate contemporary aggression. The other is a legacy of historical conflict. The physical event is identical; attribution determines escalation. This is why military crises become especially dangerous when governments need to make decisions before forensic certainty exists.
Once fighting began, technology increased the scale rapidly. Thailand possesses substantially stronger conventional air capabilities and used F-16 aircraft against Cambodian military targets, while Cambodian forces possess rocket artillery capable of reaching across the frontier. This creates an asymmetric military relationship but not one in which the stronger side can act without cost. Cambodia does not need an air force equal to Thailand’s to impose damage. It needs enough rockets, artillery and ground forces to make escalation expensive. The situation therefore resembles a smaller version of the deterrence relationships examined repeatedly this year: military inferiority does not eliminate bargaining power if the weaker actor retains enough survivable capability to impose politically meaningful losses.
Civilian displacement demonstrates how quickly the cost extends beyond militaries. Thai authorities reported almost 157,000 evacuees from seven provinces by 28 July, alongside civilian and military deaths and injuries, while ASEAN warned of growing casualties, property destruction and large-scale displacement on both sides. Border communities suffer first because farms close, schools suspend operations, hospitals face disruption and households abandon homes. Even property never physically struck can lose economic value temporarily because nobody knows whether fighting will expand. This is expectational destruction again: war damages economic activity before destroying physical capital simply by increasing uncertainty.
The tourism cost could become particularly significant because both countries depend heavily on international visitors. Thailand possesses one of the world’s largest tourism economies, while Cambodia’s tourism sector depends substantially on cultural destinations such as Angkor and regional travel. Images of artillery exchanges do not need to occur beside Bangkok or Angkor Wat to influence traveller behaviour. Foreign tourists frequently respond to country-level risk perceptions rather than precise maps. A conflict concentrated along one border therefore can create cancellations elsewhere. This is the same economic multiplier terrorism creates: the perceived probability of violence travels farther than the violence itself.
Cross-border commerce faces similar disruption. Thailand’s economy is far larger than Cambodia’s, giving Bangkok greater ability to absorb a prolonged confrontation, but economic asymmetry does not make coercion free. Cambodian workers, border traders and businesses depend substantially on connections with Thailand, while Thai firms sell goods and operate commercially in Cambodia. During the escalation before the fighting, both governments already used economic restrictions against each other. Cambodia banned some Thai imports and entertainment content and cut internet bandwidth links, while Thailand restricted border crossings. These measures demonstrate how modern interstate conflict often begins below the military threshold through weaponised interdependence. Trade, telecommunications and labour mobility become pressure instruments before artillery appears.
The problem is that economic coercion can strengthen nationalism rather than producing concessions. If Thailand restricts Cambodian access, Phnom Penh can present economic hardship as evidence of Thai bullying. If Cambodia bans Thai products, Bangkok can frame the measure as hostility requiring retaliation. Consumers then begin treating ordinary commercial choices as patriotic acts. The market becomes another battlefield. This is why interdependence does not automatically produce peace. Trade increases the cost of conflict, but it also creates more channels through which governments can impose costs on one another. Interdependence is simultaneously a restraint and a weapon.
The conflict is especially important for ASEAN, because the organisation’s central claim is that Southeast Asian states can manage disputes through consultation, non-interference and regional diplomacy rather than allowing great-power competition or historical disputes to destabilise the region. ASEAN foreign ministers have called for an immediate ceasefire, maximum restraint and a return to negotiations, while Malaysia, as the current ASEAN chair, is facilitating talks. The organisation therefore faces a credibility test. Two ASEAN members are exchanging artillery and air strikes over a territorial dispute while the regional institution has limited coercive power to stop them.
This reveals both the strength and weakness of the ASEAN model. ASEAN succeeded historically partly because it does not resemble the European Union. Member states surrender little sovereignty, decisions rely heavily on consensus and the organisation avoids intrusive enforcement. That makes membership politically comfortable for governments with very different political systems. It also means ASEAN possesses relatively weak mechanisms for forcing two members to stop fighting. The organisation can convene, mediate and create face-saving diplomatic space. It cannot deploy a supranational authority capable of imposing a settlement. Institutional breadth was purchased partly by institutional shallowness.
That does not make ASEAN irrelevant. Mediation can be extremely valuable precisely because Thailand and Cambodia need an actor allowing both to de-escalate without appearing to capitulate to the other. Malaysia can host negotiations in which a ceasefire becomes a regional decision rather than a unilateral retreat. ASEAN therefore provides face-saving infrastructure. In nationalist conflicts, this can be as important as formal enforcement because leaders need a domestic explanation for why they stopped.
The United States has also become involved, with Trump speaking to the leaders of both countries and reportedly using prospective trade negotiations and tariff pressure to encourage an end to hostilities. Malaysia has acknowledged US engagement alongside Chinese diplomatic contact. This is an interesting extension of Trump’s economic-coercion strategy. The same American market access used against trading partners during the tariff disputes can become leverage for conflict management. If Thailand and Cambodia value favourable US trade terms, Washington can effectively say that continued fighting carries an additional economic cost unrelated to the battlefield.
This is cross-issue coercion: leverage in one domain is used to influence behaviour in another. It can be extremely effective for a country controlling access to a huge market. It also demonstrates why Trump’s tariff policy cannot be analysed purely as economics. Once tariff rates become discretionary bargaining instruments, they become part of American foreign-policy power. The potential benefit is obvious if trade pressure helps stop a war. The longer-term credibility cost remains the same: governments learn that commercial access can become conditional on political behaviour, increasing incentives to diversify away from dependence on the United States.
China has incentives to participate diplomatically too. Cambodia has exceptionally close economic and political relations with Beijing, while China also maintains substantial trade with Thailand. An extended conflict would disrupt regional supply chains and could push Thailand closer towards American security cooperation. Beijing therefore gains little from uncontrolled escalation. This produces a potentially useful alignment: America and China can compete strategically while both prefer stability between Thailand and Cambodia. Great-power rivalry does not mean interests oppose each other on every issue.
The deeper solution, however, cannot come from Washington or Beijing because the territorial disagreement itself requires a legitimate boundary mechanism. Cambodia has favoured taking several disputed areas to the International Court of Justice, while Thailand has rejected compulsory ICJ jurisdiction and prefers bilateral mechanisms such as the Joint Boundary Commission. This disagreement over how to resolve the disagreement is itself part of the problem. Cambodia prefers an external legal institution partly because previous ICJ rulings around Preah Vihear favoured its claims. Thailand prefers bilateral negotiation where its greater economic and political weight may provide more influence and where sovereignty is not delegated to outside judges.
This is a classic problem in international law: states support neutral adjudication most strongly when they expect neutral adjudication to favour them. International courts possess no world police force capable of imposing every judgement. Their authority ultimately depends on states deciding that predictable legal rules are more valuable than preserving complete discretion. Smaller states often favour international adjudication because law partially compensates for material weakness. Larger states may prefer negotiation because bargaining power matters more there.
The dispute therefore needs a mechanism both governments regard as legitimate before the substantive border question can be settled permanently. One possibility is a strengthened bilateral demarcation process with third-party technical observation rather than binding foreign adjudication. Modern satellite mapping, joint surveys and transparent publication of evidence could reduce factual disagreement even where legal interpretation remains contested. The goal should be converting territorial ambiguity into administrative precision.
Ambiguity is dangerous because soldiers patrol according to different maps. A patrol can therefore believe it remains inside national territory while the opposing army believes it has crossed the border. That makes accidental confrontation structurally likely. Clear demarcation is not glamorous diplomacy. It removes opportunities for tactical incidents to become nationalist crises.
This is the broader institutional lesson. Borders create peace partly because everyone knows where coercive authority changes. An ambiguous border is not simply an unfinished cartographic project. It is an information failure backed by armed forces. Every unclear kilometre creates a zone where two states can believe simultaneously that they are defending sovereign territory.
The current fighting also shows why historical artefacts can become politically dangerous when connected to national identity. Temples such as Preah Vihear and Ta Muen Thom are culturally valuable because they represent centuries of Khmer civilisation. But modern Thailand and Cambodia are nation-states whose present borders emerged long after many of these structures were built. Attempting to assign ancient cultural heritage neatly to modern national identity therefore creates historical simplification. A Khmer temple can possess enormous Cambodian cultural significance while sitting within territory administered by Thailand. Cultural ownership and territorial sovereignty do not need to be identical.
Governments could potentially reduce conflict by de-nationalising heritage management: joint archaeological projects, shared tourism arrangements, guaranteed access and cross-border cultural zones. If both populations receive some value from the site regardless of which side the legal boundary falls on, the zero-sum character of sovereignty becomes less economically and symbolically severe. This does not eliminate the need for a recognised border. It reduces what losing a particular legal claim means in practice.
The European experience contains examples of this logic. Borders that once produced wars became less politically important partly because citizens could cross them easily and economic activity integrated across them. France and Germany did not resolve centuries of nationalism by proving one side’s historical narrative correct. They changed the payoff structure around the border. Territorial sovereignty remained. Its daily economic importance fell.
ASEAN is nowhere near the EU’s level of integration and probably should not attempt to copy it mechanically. But the underlying principle travels: a disputed border becomes less explosive when communities on both sides gain more from keeping it open than governments gain politically from contesting it.
The current crisis has produced the opposite. Crossings close. Trade falls. Soldiers mobilise. Nationalist narratives strengthen. Each step increases the value of sovereignty while reducing the value of cooperation. That is how low-level disputes become self-reinforcing.
This is why a ceasefire, while urgently necessary, will not be enough. The two governments need military communication, withdrawal arrangements around sensitive sites, mechanisms for investigating landmine incidents and a credible process for demarcation. ASEAN or Malaysia can help monitor compliance if both sides accept the role. Without these mechanisms, the conflict simply returns to the same equilibrium with more casualties and stronger nationalist memories.
The first objective is therefore negative peace: stop artillery and air strikes. The second is institutional: make another accidental confrontation less likely. The third is political: reduce the domestic benefit leaders and opposition movements receive from turning border disputes into tests of patriotism. That final objective is the hardest because nationalism can be electorally valuable even when economically destructive.
Thailand’s domestic crisis demonstrates this clearly. Paetongtarn’s leaked conversation became damaging partly because opponents could frame diplomatic deference as national humiliation. Hun Sen benefited from releasing it because weakening Thailand’s government improved Cambodia’s bargaining environment and strengthened his own nationalist position. Personal political incentives therefore became intertwined with interstate security. This is elite competition externalising costs onto the state. Leaders can receive political benefits from confrontation while border communities receive the artillery.
Citizens should therefore be sceptical whenever governments describe territorial compromise automatically as betrayal. A strong state is not one that refuses every concession. It is one capable of distinguishing territory genuinely important to security from territory whose symbolic value has been inflated by political competition. Equally, governments should not dismiss symbolic concerns as irrational because national identity itself affects political legitimacy. The challenge is designing arrangements where sovereignty can be clarified without requiring one population to interpret the outcome as humiliation.
Thailand and Cambodia possess overwhelming reasons not to fight. They are members of the same regional organisation. Their economies benefit from trade and tourism. Neither
