The Cambodian strategy is to derail Thai economic recovery. Why? to lessen the power of Thailand, to keep it weak, and to undermine the legitimacy of the Apisit government which hinges on economic performance and recovery. The second aim suits Thaksin fine, so he is cooperating to force this difficult matter of extradition in Apisit's hands, calculating that Apisit will lose stature once the government cannot do anything about his extradition except grit its teeth. Apisit will then be portrayed as an ineffective leader, with a lot of hot air. If he makes some mistakes, it will be used as political capital by Thaksin and the Pua Thai who can claim that Apisit is not to fit to rule, that he’s immature, got to have elections to determine whether the people really support Apisit on Cambodian policy etc. etc.

The derailment if it happens will undermine the popularity of Apisit as well as put uncertainty in the minds of foreign businessmen and investors in Thai economic prospects. But I don’t buy the idea that foreign businesses will shift to Kampuchea instead. No one in his right mind would put big money into such an unstable political environment and bet on such an unreliable leader, who’s been in power for over 20 years and is angling for a new story to perpetuate his rule or that of his relatives. Also, derailment is not going to be allowed to happen as recovery is so crucial and the momentum is so strong.

So it all depends on how Apisit will retaliate once Thaksin is in Cambodia (if he really comes, which I think he will). If the retaliation is crafted in a way that wins the hearts and minds of the people, then Thaksin will have lost in this game. The response has got to have real teeth but not appear threatening to the Cambodians as a whole, as it might then result in a nationalist backlash which would playing right into Hun Sen's trap.

Economic measures are the best form of demonstration and leverage. One might also take some measures concerning the huge number of Cambodian migrant workers here. If relations truly deteriorate tighter, control of them or even mass expulsions might happen, not as a policy choice but as a security imperative, as other nations have done in crisis situations. The argument being since Hun Sen started this, let him take care of the returnees, and stew in his own juice.

A strong Thai military retaliation is not productive at all, but the Cambodians could engineer a provocation at the border to bring about this, as such retaliation is the goal of this exercise. Shelling, firefights do have an impact on perception of economics.  Apisit is facing a difficult choice and must thread carefully. So far most Thais are backing him but such support could evaporate if he makes a mistake. This is what Thaksin is hoping for. To respond tough is the right move psychologically but not to extremes.  A military conflagration will attract third parties with their own agenda, and that is not good.