International Business News – According to a report recently released by the Cambodian General Administration of Customs and Excise, in the first seven months of this year, Cambodia’s total exports reached US$13.78 billion, of which nearly 50% came from the garment industry. The report pointed out that with the increase of orders in the international market and the effective control of the new crown pneumonia epidemic in Cambodia, the Cambodian garment industry has developed a strong momentum. The Cambodian government expects that the garment industry will continue its good recovery momentum this year. On this basis, the export value of the garment industry is expected to increase by 8.1% next year.
The Cambodian garment industry emerged in 1996 and has been developing rapidly for 26 years. The garment industry is one of the pillar industries of Cambodia’s economy and the largest export industry in Cambodia, accounting for 40% of the GDP.
At present, there are about 1,100 garment factories in Cambodia, providing jobs for more than 800,000 Cambodians, which is equivalent to 1 in every 20 Cambodians working in garment factories. In July this year, the Cambodian Development Council announced 8 major national investment projects, 4 of which are garment factories, which are expected to create more than 10,000 jobs.
Jiang Monica, deputy secretary-general of the Cambodian Garment Manufacturers Association, said that the Cambodian government’s optimistic expectations for the garment industry come from solid data. “In the first half of this year, the growth of orders in the garment industry has been maintained at more than 20%, and more than 400 factories that were temporarily closed due to the epidemic have basically resumed work.”
The anti-epidemic effect brought about by the high vaccination rate is the basis for the strong recovery of the Cambodian garment industry. Cambodia has one of the highest rates of Covid-19 vaccination in Asia. According to statistics, Cambodia has now received 41.9 million doses of the new crown vaccine, and the number of people who have completed the whole process of vaccination has reached 14.4 million, accounting for 86.3% of the country’s total population. Hong Wanka, an economic researcher at the Royal Academy of Cambodia, believes that with the support of China and other countries, Cambodia has obtained enough vaccines in a timely manner, especially in the garment industry. All employees have been vaccinated throughout the entire process, which has greatly ensured the stable production of the garment industry. out.
The stable supply of raw materials and convenient land transportation have also provided an important impetus for the recovery of Cambodia’s garment industry. It is understood that 60% of the raw materials for Cambodia’s garment industry come from China. Kisiliwo, an economist at the Royal Academy of Cambodia, said that the stable supply of raw materials for garments in China and the opening and operation of the China-Laos Railway are conducive to the smooth resumption of work and production of garment factories in Cambodia.
In order to promote the long-term and healthy development of the garment industry, the Cambodian government has been committed to strengthening the welfare of garment workers in recent years. The Cambodian Ministry of Labor and Vocational Training recently announced that it will implement a private enterprise pension plan from October 1 this year, requiring enterprises and employees to pay 2% of their wages to the national pension fund account each month within the first 5 years of the labor contract. After 5 years, 2.75% of the salary is paid monthly, and the employee starts to receive the pension after the age of 60. Ai Tun, chairman of the Cambodian Garment Workers Democratic Alliance, said that garment factories are the main body of Cambodia’s private enterprises, and the pension plan will be the first to be promoted in the garment industry, which is a big step taken by Cambodia in strengthening the social security of garment workers.
The analysis believes that despite the good momentum of recovery, the Cambodian garment industry also faces some challenges, including increased competition from neighboring countries and uncertainty about preferential tariff treatment. In addition, the increase in water, electricity and labor costs has also brought a lot of pressure to the development of the garment industry.