Paper Promises Burn Fast
Issue 29 — Key Developments Across Cambodia, Laos, Myanmar, and Thailand
Editor’s Note
by Mattia Peroni, Lead Editor - Mekong Belt Desk
The collapse of the Thailand–Cambodia Joint Peace Declaration sets the tone for this issue of the Mekong Belt. Almost two weeks since tensions resumed, our Thai correspondent analyzes how what was framed as a breakthrough in October quickly gave way to renewed fighting, revealing a peace process built to stabilize optics and markets rather than resolve the structural disputes that have long defined the border. Meanwhile, in Cambodia, the focus has shifted to containing the fallout. As hostilities remain confined to specific border areas, officials are pushing back against inaccurate reporting that risks spreading fear far beyond the front lines, illustrating how imperative it is for a tourism-dependent country that perception does not travel faster than conflict itself. In Myanmar, while the military speaks of elections and reconciliation, airstrikes on a hospital in Mrauk-U expose the widening gap between official narratives and life under junta rule, where civilians and medical facilities remain targets. Laos, meanwhile, is attempting repair through reform. The launch of a new Rural Development Bank signals an effort to correct long-standing weaknesses in rural finance and governance — an acknowledgment that without stronger institutions, development gains remain fragile.
Thailand 🇹🇭
The Fragile Peace
by Paranut Juntree, in Bangkok
The fighting between Thailand and Cambodia on December 8 marked the definitive collapse of the Kuala Lumpur Joint Declaration. Just two months after its high-profile signing, the two countries have returned to open hostility. While the immediate triggers remain disputed—ranging from alleged landmines to small-arms skirmishes—the rapid return to large-scale conflict, which has displaced more than half a million people on both sides, points to a deeper failure of a peace process that prioritized economic optics over structural resolution.
The re-escalation followed a landmine incident in November, which served as a catalyst for renewed diplomatic tension. Thailand formally alleged a violation of the Ottawa Convention, prompting the deployment of an ASEAN Observer Team to monitor the frontier. As instability grew, Bangkok opted to suspend the Joint Declaration entirely—a decision that coincided with mounting economic pressure from the United States linked to bilateral trade frameworks.
The October Joint Declaration could be interpreted as a form of “forced peace.” Brokered by the United States and Malaysia amid threats of trade disruptions, the accord functioned largely as a stopgap measure to stabilize markets rather than a genuine settlement of sovereignty disputes. By focusing narrowly on immediate de-escalation, mediators bypassed unresolved structural issues, including the legacy of the 1907 boundary dispute and the absence of a neutral verification mechanism for border incidents. When tensions resurfaced, avenues for de-escalation quickly disappeared.
The crisis also exposes the limits of ASEAN’s conflict management mechanisms. Although Thailand and Cambodia have agreed to the deployment of an ASEAN Observer Team ahead of the December 22 special meeting of ASEAN foreign ministers, the mission risks being constrained by the “ASEAN Way.” Bound by the Treaty of Amity and Cooperation and the principle of non-interference, both the observer team and broader ASEAN initiatives may remain sidelined.
For the December 22 meeting to produce more than another fragile ceasefire, ASEAN would need to move beyond neutral observation toward a framework of active adjudication. This could include establishing a permanent, impartial border verification commission tasked with conducting forensic investigations of incidents as part of a mutually agreed technical mandate. More broadly, the principle of non-interference may require pragmatic reinterpretation. In the Thai–Cambodian case, it must be complemented by a formal dispute-resolution mechanism that integrates the boundary dispute into a binding legal roadmap, rather than treating it as a peripheral grievance.
Without a shift from externally imposed, trade-driven ceasefires to a structural peace grounded in institutional oversight, any new agreement risks becoming a placeholder until the next skirmish triggers renewed mobilization.
Ultimately, the collapse of the Kuala Lumpur Joint Declaration underscores a broader challenge for ASEAN. If the December 22 meeting results only in symbolic gestures, the bloc risks reinforcing its image as a passive observer in its own region. To remain relevant, ASEAN may need to evolve from strict non-interference toward a model of pragmatic, principled engagement—one capable of addressing conflicts before they spiral into repeated cycles of instability.
Paranut has a background in advocacy, with experience in policy research, communications, and civic engagement across both the NGO and government sectors. As Thailand’s Youth Delegate to the United Nations, he represented Thai youth in global dialogues on migration, education, and human rights, championing inclusive policymaking. He holds a degree in political science with a specialization in international relations.
Cambodia 🇰🇭
Cambodia Shields Tourism Sector Amid Border Tensions
by Malai Yatt, in Phnom Penh
As hostilities between Thailand and Cambodia flared up again, reports emerged claiming the deployment of Thai F-16 fighter jets in Siem Reap province and even that fighting had reached the Angkor Wat temple complex. However, as fighting remains limited to border areas, claims suggesting that inner provinces are unsafe risk harming the country’s tourism industry, particularly in Siem Reap.
The recent conflict has drawn concern from tourism operators and other stakeholders, who have sought clarification on the actual impact on travel and tourism. According to Cambodia’s Ministry of National Defense, fighting has been limited to border areas between Cambodia and Thailand in specific provinces, including Preah Vihear, Oddar Meanchey, Banteay Meanchey, Pursat, Battambang, and parts of Koh Kong.
Authorities emphasized that even within these provinces, only areas close to the border are affected. Locations at least 70 kilometers away from the border zones remain safe, contrary to claims that entire provinces are at risk.
Maly Socheata, spokesperson for the Ministry of National Defense, said tensions rose following multiple airstrikes by Thai F-16 aircraft targeting civilian infrastructure near Siem Reap. On the morning of December 15, the Ou Chik Bridge area in Srei Snam District was hit by two bombs just minutes apart.
The situation escalated again on December 19, 2025, when Cambodia’s Ministry of National Defense reported that a Thai F-16 conducted three successive strikes on the same bridge at 10:55 p.m., 11:00 p.m., and 11:10 p.m. The bridge is a key link between Srei Snam District in Siem Reap Province and Chong Kal District in Oddar Meanchey Province, she added.
Following these incidents, concerns have emerged over potential impacts on tourism in Siem Reap, one of Cambodia’s main tourism hubs. To protect the sector, some foreign tourists and local residents have urged travelers not to cancel their plans, stressing that conditions in the province remain normal.
Cambodian authorities have also sought to reassure visitors. Siem Reap provincial spokesperson Ly Vannak said, “We can ensure the safety of tourists, although we understand that it is normal for some foreign travelers to cancel their bookings due to tensions in the country.”
According to the Ministry of Tourism, Cambodia welcomed nearly 5.2 million international tourists in the first 11 months of 2025. Visitors from China accounted for more than 1.1 million arrivals, marking an increase of nearly 44% compared to the same period in 2024.
Tourism Minister Huot Hak called on tourism operators and related businesses to continue operating as usual, urging them to maintain service quality, warm hospitality, and affordable prices. “We also call upon everyone to continue supporting tourism players during this period of solidarity,” he said.
In conclusion, Cambodian authorities maintain that recent border clashes are localized and do not pose a threat to tourism activities nationwide, reaffirming their commitment to ensuring the safety of all travelers.
Malai is a reporter at Kiripost, where she has worked for over two years, driven by a strong commitment to amplifying the voices of underserved communities. Her reporting focuses on economic and foreign affairs.
Myanmar 🇲🇲
Humanitarian Crisis Deepens in Myanmar as Military Bombs Hospital in Rakhine
by Pann Ei Thwel, in Mandalay
As the world marked Human Rights Day on December 10, civilians in Myanmar saw their most basic right—the right to life—violated again under military rule. Mrauk-U Hospital, the main healthcare facility in the area, provides emergency treatment, maternal care, and surgical services, and regularly receives patients requiring major surgery from surrounding hospitals. On December 10, the hospital was bombed by the Myanmar military, killing at least 33 people and injuring more than 70 others, including patients, caregivers, and medical staff. Tedros Adhanom Ghebreyesus, Head of the World Health Organization (WHO), warned that the attack would severely restrict access to healthcare for entire communities in Rakhine State.
Local news agency Myanmar Now reported that on the night of the bombing, a civilian, Thein Thein Soe, had transferred her father from Myay Pone Hospital to Mrauk-U Hospital for intestinal surgery, unaware that the military was planning an airstrike. About an hour after her father was admitted, the attack began. A loud explosion shook the hospital building, plunging the area into darkness. Her mother, sister, and brother-in-law were killed. While she survived, her father was seriously injured, losing one of his hands. Many other families reported similar experiences that night.
Following the attack, the military claimed the hospital had been used as a base by revolutionary forces and alleged that those killed were not civilians but members of armed groups. The United Nations rejected this claim, stating that the strike was part of a broader pattern of attacks on civilians. A day after the incident, ASEAN Parliamentarians for Human Rights issued a statement condemning the military’s actions and urging the international community to work toward protecting civilians and ensuring humanitarian access. The WHO also reiterated that attacks on healthcare facilities constitute attacks on humanity. Families of the victims have called for international action against the military for targeting civilians.
The airstrike on Mrauk-U Hospital underscores the deepening humanitarian crisis in Myanmar, where civilians and critical medical infrastructure continue to suffer amid ongoing conflict. As fighting intensifies in Rakhine State, calls are growing for accountability and stronger protection of civilians under international humanitarian law.
Pann Ei is an undergraduate student at Parami University, majoring in Philosophy, Politics, and Economics. Following an internship with the CSIS Southeast Asia Program, she developed a strong interest in policy research, with a particular focus on politics and education. She currently works as a research assistant at the Center for Research, Policy and Innovation (CRPI), where she focuses on political institutions and regime types across Southeast Asia.
Lao PDR 🇱🇦
Laos Bets Big on Rural Finance
by Chammie Lo, in Vientiane
The Lao government officially launched the state-owned Rural Development Bank on Wednesday, taking over the mandate of the former Nayoby Bank, a policy bank that for 18 years served as a key institution for poverty reduction in rural areas.
Rather than a simple name change, the new bank—fully financed by the government—is intended to be an upgraded version of Nayoby Bank. It is designed to build a more independent and self-sustaining financial system that can foster long-term commercial growth in rural areas by supporting the operations of micro, small, and medium-sized enterprises (MSMEs).
Rural finance in Laos has long been constrained by low commercial returns and limited financial penetration outside urban areas. Many rural MSMEs operate informally, with weak business records, while banks continue to rely heavily on land titles as collateral, excluding a large share of rural borrowers.
Established in 2006, Nayoby Bank was modeled on Vietnam’s Bank for Social Policies (VBSP) and operated as a policy bank providing loans to the poorest districts. Among the country’s 148 districts, it reached 143, including 74 officially classified as poor. To ensure inclusive access to credit, the bank offered highly concessional terms. Group loans required no hard collateral, relying instead on mutual guarantees among borrowers.
However, persistent governance and financial challenges undermined the model. Operating with concessional interest rates and limited collateral requirements, the bank struggled with elevated non-performing loans, turning it into a contingent liability for the Ministry of Finance. The central bank reported 21 corruption cases across the banking system last year, eight of which involved Nayoby Bank. Systemic weaknesses in oversight and internal controls were further reflected in disciplinary action taken against 167 individuals across state-linked institutions.
State-owned banks, including Nayoby Bank and the Agricultural Promotion Bank, have historically been the primary sources of credit for farmers, alongside village funds and informal lending. Yet ongoing reforms at both institutions have coincided with a contraction in their credit portfolios.
With the launch of the Rural Development Bank, the government aims to shift policy lending toward a more sustainable development banking model. The new institution plans to expand inclusive financial services by providing promotional loans for production, trade, and services, while integrating credit with technical training in areas such as crop cultivation and livestock breeding.
Chammie is a development professional working on sustainable finance and inclusive livelihoods in Laos. She holds a degree in Politics and Law from the University of Hong Kong and has contributed research insights to academic and community spaces on heat governance, climate migration, and emission transparency.
Editorial Deadline 19/12/2025 11:59 PM (UTC +8)
