April 14, 2026
PHNOM PENH – A UN report released last week warned that the 2025 border conflict between Thailand and Cambodia has triggered a “double shock” of mass displacement and economic collapse which threatens to undo years of developmental gains.
The assessment showed that the hostilities, which peaked in late December, forced over 644,000 people to flee their homes while simultaneously driving nearly 900,000 Cambodian migrant workers back across the border.
Internally displaced families have fared little better, seeing a 34 per cent decline in average earnings. This financial freefall is exacerbated by the near-total evaporation of remittances, which were projected to drop by a combined $942 million through 2026.
Beyond the immediate loss of cash, the conflict has obstructed essential services. At the height of the crisis, 883 schools were shuttered, disrupting the education of 200,000 children, while more than 50 health facilities were forced to suspend operations.
Agricultural production, the region’s lifeline, has been gutted by falling farmgate prices and a 42 per cent crop loss for displaced farmers.
“This conflict did not just move people across a map; it dismantled the economic scaffolding of the border provinces, replacing steady wages with a debilitating cycle of debt and trauma that requires an immediate, localized response to repair,” said warned lead UN official involved in the assessment.
The UN is calling for a “Transformative Recovery” plan that moves away from traditional aid. The report’s primary recommendation is the immediate stabilisation of household consumption through time-bound income support and cash-for-work programmes. These initiatives would hire displaced workers to rehabilitate the very infrastructure — irrigation canals, roads and schools — damaged during the hostilities.
The macro-economic damage has been equally severe, with the report identifying a “structural break” in Cambodia’s trade and tourism sectors. Total exports to Thailand contracted by 13.5 per cent, while tourism receipts for 2025 were slashed by $855 million as international arrivals plummeted.
Although many traders attempted to diversify routes through Vietnam and China, the disruption of Thai imports — particularly fertilisers and mineral fuels — caused a ripple effect that spiked production costs for domestic industries and farmers alike, according to the report.
In the agricultural sector specifically, the UN projects a $156 million decline in food and agriculture exports compared to the previous year. Major cash crops such as cassava, maize and fresh fruits suffered most, hit by a combination of border frictions, price collapses and quality restrictions.
“Prior to return, 85.8 per cent of surveyed households received remittances from Thailand, averaging $2,194 per year. Following large-scale return, average remittances declined sharply to approximately $110. At the macro level, total remittances are projected at $2.60 billion in 2025, compared to a baseline of $2.88 billion, and $2.27 billion in 2026, compared to a baseline of $2.94 billion, implying estimated losses of $277 million in 2025 and US$665 million in 2026,” said the report.
Without this influx of money, which traditionally served as the primary means for servicing microfinance debt, the UN warns of a looming crisis of landlessness as impoverished families are forced into distress sales of their property to satisfy creditors.
The report emphasised that recovery must be taken at the commune level to be effective. The UN recommended establishing local training hubs in pagodas and community centres to provide short-cycle vocational training. This approach is designed to overcome the transport and safety barriers that currently prevent women and caregivers from accessing help.
It also urges the government and financial institutions to implement urgent debt restructuring. With many families facing landlessness due to an inability to service microfinance loans, the report suggests a shift toward cash-flow-based lending and temporary grace periods.
By pairing these financial protections with the formal recognition of skills returnees acquired in Thailand, the UN argues that Cambodia can transform a crisis of displacement into an opportunity for rural revitalization.