No Buffers, No Allies, No Easy Exits
Issue 45 — Key Developments Across Cambodia, Laos, Myanmar, and Thailand
Editor’s Note
by Mattia Peroni, Lead Editor - Mekong Belt Desk
When crises arrive from outside, what matters most is what you have built within to defend yourself. This week’s issue finds the Mekong countries caught between external shocks and internal fragilities, and the distance between the two is shorter than governments would like to admit.
Cambodia is absorbing three simultaneous blows: a border conflict that sent hundreds of thousands of workers home, a fuel crisis draining foreign exchange, and a scam economy still corroding investor confidence. Each shock alone would already be tough to manage. Together, they have pushed growth projections to their lowest in years. In Laos, the numbers are looking just as uncomfortable: inflation already above target, debt constraining every policy response, and a fuel shock that hit households before the government had any cushion to soften it.
Meanwhile, In Myanmar, the revolution's closest allies are being peeled away one by one. Not by the junta, but by China's calculated pressure on the very groups that once dealt it its greatest defeats. Finally, Thailand too has been suffering the shockwaves rippling from the Middle East, but its advanced digital infrastructure allows it to do what few others can: get relief to the right people without resorting to costly blanket subsidies.
Cambodia 🇰🇭
Cambodia’s Growth Outlook Falls as Three Crises Hit at Once
by Sokna Thea, in Phnom Penh
Cambodia’s economic outlook for 2026 has been revised down sharply by major institutions. The World Bank now projects 3.9% growth, the ADB 4.5%, while the government still holds to a 5.0% target. The downgrade comes as inflation reached 5.6% in March 2026, tourism weakened, and investment confidence came under further pressure.
The first shock is the Cambodia-Thailand border conflict. The ADB estimates that the border closure alone cut Cambodia’s GDP growth by about 1.4 percentage points. Around 900,000 to 950,000 Cambodian migrant workers in Thailand returned home, and remittances dropped 37%, from USD 2.95 billion to USD 1.86 billion in 2025. Trade was also hit hard. The Poipet-Aranyaprathet crossing, which handles more than 70% of bilateral land cargo, was closed, blocking about USD 460 million per month in trade flows. Tourism suffered as well, with Angkor Wat arrivals down 34% year on year by March 2026.
The second shock is the energy crisis. Cambodia imports virtually all of its refined fuel and has no domestic refining capacity, leaving it highly exposed to global price swings. Since late February 2026, diesel prices surged by as much as 87%, regular gasoline rose 30% to 35%, and LPG increased about 70%. More than 2,000 of Cambodia’s 6,300 petrol stations were initially paralyzed, while fuel imports reached $606 million in January and February 2026 alone. The shock is now pushing up production costs across garments, transport, and agriculture.
The third shock is the scam economy, which continues to damage both reputation and investment. Cambodia-based scam operations are estimated at USD 12.5 billion to USD 19 billion a year. The US Treasury sanctioned 146 targets linked to the Prince Group network, and the US Department of Justice seized about USD 15 billion worth of Bitcoin tied to Chen Zhi’s network. Foreign direct investment fell 37% year on year, according to the Council for the Development of Cambodia. The decline reflects a drop from a higher 2024 baseline, though Cambodia still attracted about USD 5.2 billion in 2025, with more than 70% coming from China. An AmCham survey also found that the share of firms expecting profit declines rose from 20% to 34%.
These shocks are interconnected. The border conflict disrupted fuel supply routes, while higher energy costs added pressure across export sectors. Meanwhile, scam-related reputational damage continues to slow tourism recovery and limit investor diversification. Compared with regional peers, Cambodia’s outlook is now clearly weaker. Vietnam is projected at 7.2%, while Indonesia stands at around 5.2%.
The key question is whether this represents only a temporary slowdown or something more structural. The ADB had earlier projected 6.2% growth for 2026 before recent downgrades. The current range, from 3.9% to 4.5%, suggests Cambodia may be moving into a lower growth path if the Middle East conflict remains unstable and border and scam-related risks continue to weigh on the economy.
Sokna has a background in International Affairs and Business & Commercial Law. He’s currently a Senior Project Coordinator at the Ministry of Economy and Finance of Cambodia, working on the Financial Management Information System (FMIS) Project. His professional focus is driven by entrepreneurship, business development, and financial technology, with a particular interest in how private-sector innovation drives Cambodia’s economic growth.
Lao PDR 🇱🇦
Lao New Year Relief as Rising Costs Strain Daily Life in Laos
by Thongsavanh Souvannasane, in Vientiane
Rising living costs continue to affect households nationwide, with the impact most pronounced in the capital Vientiane, where prices of food, transport, and basic services are rising steadily.
Over the past year, inflation has been driven mainly by higher fuel costs, currency pressure, and reliance on imports, steadily reducing purchasing power. For many residents, daily expenses now take up a larger share of income, leaving less room for savings or non-essential spending.
A typical urban daily budget reflects this pressure.
Meals that once cost around 15,000 to 20,000 kip (USD 0.68 to 0.90) now often exceed 35,000-60,000 kip (USD 1.5 to 2.7), while transport costs have risen alongside fuel prices. Higher fuel costs have also pushed up logistics expenses, feeding into broader increases in goods and services.
Recent projections by the Asian Development Bank show that economic growth in Laos is expected to slow to around 4.0% in 2026, down from 4.4% in 2025, before a slight recovery to 4.5% in 2027.
Inflation, after easing to 7.7% in 2025, is projected to rise again to around 9.8% in 2026. In the first quarter of 2026, it already stood at around 7%, remaining above the government’s target of keeping inflation below 6% over the next five-year term.
Fuel prices remain a key driver of rising costs.
Following escalation in the Middle East, diesel prices in Laos surged sharply from around 19,970 kip (USD 0.9) per liter in late February to over 50,000 kip (USD 2.26) by mid-April 2026, an increase of more than 150%. As Laos relies heavily on imported fuel, global price shocks quickly translate into domestic inflation.
At the same time, structural challenges persist.
Public and publicly guaranteed debt is estimated at around 82% of GDP, limiting fiscal space and constraining policy responses. External risks, limited foreign exchange buffers, and banking sector pressures continue to weigh on the economic outlook.
Despite gradual stabilization supported by exports, tourism recovery, and infrastructure development, these gains have yet to fully ease household-level pressures.
As a result, many people are adjusting their spending habits, eating at home more often, reducing non-essential purchases, and prioritizing basic needs.
Compared to neighboring Thailand, where higher wages and more diversified supply chains provide greater resilience, consumers in Laos remain more exposed to external shocks.
Despite these challenges, mid-April brings brief relief as Laos celebrates Lao New Year (Pi Mai Lao) from around 13 to 16 April. The traditional water festival is marked by water splashing, religious ceremonies, and family gatherings.
While it does not change economic realities, it offers a short pause from financial pressures and a moment of collective relief.
Thongsavanh is a journalist from Laos with a background in English-language media. He graduated from the Lao-American Institute with a Diploma of the Arts in English and contributes to independent news platforms. His reporting focuses on environmental issues, socio-economic development, and geopolitics.
Myanmar 🇲🇲
Myanmar’s Neighbors Prioritize Self-interests Over Morality
by Mozart
Amid international neglect of Myanmar’s political crisis, its neighbors are increasingly prioritizing their own interests by engaging with the junta and supporting its plans to suppress dissent, ignoring the will and suffering of the Myanmar people. In fact, the junta’s actions are largely dictated by the political calculations of neighboring states, particularly China.
On the third day of the Thingyan festival, April 15, 2026, the Ta’ang National Liberation Army (TNLA) issued a statement formally congratulating junta leader Min Aung Hlaing on becoming Myanmar’s president, indicating its hope to collaborate with his leadership on peace negotiations through political means. The statement frustrated many during the Thingyan break, as a group once considered an enemy of the junta appeared poised to become its partner under pressure from a neighboring country.
The TNLA is one of the three members, alongside the Arakan Army and the Myanmar National Democratic Alliance Army (MNDAA), of the Brotherhood Alliance, which launched the highly successful Operation 1027 in late 2023, severely weakening the junta by seizing towns, military bases, and key trade routes. However, China-brokered ceasefires had already strained the alliance by early 2026: the MNDAA began handing back control of Lashio to the junta in April 2025, and the TNLA agreed to return Mogok in October 2025. China holds significant influence over both groups, and its facilitated peace process leaves little room for dissent from either party. The episode reveals, with some irony, that durable peace in Myanmar may be impossible without Chinese involvement — and that such involvement comes on Beijing’s terms alone.
These groups had repeatedly pledged solidarity with the people of Myanmar. That position has now reversed — not due to internal conviction, but external pressure. The junta’s heavy reliance on China for surveillance infrastructure, combined with Beijing’s leverage over regional armed forces, illustrates a realist politics that places strategic interest firmly above political morality. China needs Myanmar stable enough to advance its economic agenda, including Belt and Road Initiative projects such as the Kyaukphyu Deep Sea Port and cross-border pipelines. Beyond Shan State, China is also pressing the Kachin Independence Army (KIA) to enter negotiations with the junta to stabilize the broader region.
China is not the only enabler of the regime’s survival — but it is arguably the most significant. Other neighbors have adopted similarly realist stances. Thailand’s dependence on Myanmar’s natural gas, and its desire to limit refugee and migration flows, have led Bangkok to continue engaging with the military leadership, often bypassing ASEAN’s Five-Point Consensus. India’s Act East policy and its competition with China have led New Delhi to maintain ties with the junta in order to protect infrastructure projects such as the Kaladan Multi-Modal Transit Transport Project and to manage instability along its border.
Together, these regional dynamics have created what might be called a buffer of indifference — one that shields the junta from full international isolation. While Western sanctions bite, Myanmar’s neighbors provide the economic lifelines and diplomatic cover the regime needs to endure. By facilitating a sham electoral process in late 2025 and early 2026, these states are not seeking a democratic solution, but a manageable one that protects their investments. The Myanmar people find themselves fighting not only a domestic military dictatorship, but a regional geopolitical order that treats their suffering as secondary to trade and security.
Mozart is a research assistant at Mosaic Myanmar and is currently pursuing a Bachelor of Arts in Liberal Arts and Sciences at Parami University. His academic and professional interests span community development, minority issues, and social impact research. He has held roles including service-learning intern, student mentor, and operations coordinator for local initiatives, supporting project management, monitoring and evaluation, and education programs in Myanmar.
Thailand 🇹🇭
Thailand's Digital Edge in an Analog Crisis
by Satid Sootipunya, in Bangkok
The status of the Strait of Hormuz remains uncertain. The Iranian government announced on Friday that it would be ‘completely opened’ during a 10-day ceasefire, signaling relief to countries across the world, including Thailand; however, the waterway was shut once again on Saturday.
The sense of uncertainty directly affects the movement of assets worldwide, including energy prices. Experts said that even though the war ends today, the impact of developments in the Middle East on global energy prices – especially Liquefied Natural Gas (LNG) – would still persist due to attacks on energy infrastructure in the region. For example, LNG infrastructure in Qatar’s Ras Laffan Industrial City, a major exporter to many nations including Thailand, has been severely affected.
As such, the world will face persistently elevated energy prices for an extended period since it potentially takes 3-5 years for those infrastructures to resume operation, according to an expert.
The International Monetary Fund (IMF), in its latest Economic Outlook in April 2026, suggested that governments should implement targeted subsidies on energy prices instead of broad-based measures, given limited fiscal space in many countries.
For example, Thailand is experiencing prolonged fiscal deficits of 3–4% of Gross Domestic Product (GDP), meaning that allocating public funds to untargeted energy subsidies would further strain its already-stretched public finances.
Krishna Srinivasan, Director of the Asia and Pacific Department (APD) at the IMF, said during the launch of the Asia Pacific Economic Outlook that the Thai economy is highly exposed to developments in the Middle East due to its heavy reliance on oil and LNG imports through the Strait of Hormuz, accounting for 8–10% of GDP. Given Thailand’s relatively high public debt of 65–66% of GDP, targeted subsidies are recommended.
“Thailand’s debt is on the higher side,” Krishna said, adding, “make sure that you use your fiscal resources wisely.”
Ekniti Nitithanprapas, Deputy Prime Minister of Thailand and Minister of Finance, said during the session “Governor Talks: Thailand – Navigating Macroeconomic Stability and Growth in a Turbulent World,” that although the Thai economy is relatively vulnerable in this oil price crisis, one area where Thailand can perform well is in implementing targeted subsidies for vulnerable individuals.
Ekniti said Thailand’s digital infrastructure is among the most advanced in the region, allowing individuals to transfer money instantly between banks without transaction fees through the government-backed PromptPay system, using only telephone or 13-digit identification numbers. Through the registration system in the digital platform, it enables the government to identify vulnerable groups and deliver relief measures directly.
“Currently, we are developing a [digital] oil and Liquefied Petroleum Gas (LPG) wallet to mitigate the impacts of the war on Thai people as well,” said Ekniti, adding that “we need to target only households severely affected by the war. We cannot implement broad-based measures because our fiscal space is limited.”
On 27 March 2026, the Thai administration announced several relief packages for 5 vulnerable groups directly affected by the spike of energy prices, including low-income households, public transportation drivers, farmers in the agricultural sector, fishermen, as well as SMEs and government contractors.
Satid is a multimedia economic journalist and news anchor who covers macroeconomic trends, Thailand’s fiscal policy, and key regional developments for Bangkok Biz. A Journalism graduate from Thammasat University, he has reported on major issues such as the US–China trade tensions, the Myanmar crisis, and global corporate stories, drawing on prior newsroom experience at The Momentum, the Bangkok Post, AFP, and Varasarn Press. His work blends economic analysis, foreign affairs, and digital storytelling, with a strong focus on making complex financial and political topics accessible to Thai audiences.
Editorial Deadline 18/04/2026 11:59 PM (UTC +8)
