Government says Cambodia’s largest export generated $909m up to the end of May this year while predicting that the industry will see a 5 percent fall overall for 2009, a projection that other sector analysts say is overly optimistic
THE government announced garment exports dropped 20 percent in the first five months to US$909 million compared with the same period last year.
Hang Chuon Naron, secretary general of the Ministry of Economy and Finance, said the decrease should not seriously damage the Kingdom's economy, as the decline will prove temporary and ought to end later this year.
"We expect garment exports will decline only 5 percent for the year overall," he said. "We hope garment exports will climb to $2.8 billion later this year as the United States' economy is showing a higher demand for garments."
Cambodia exported $3.1 billion worth of garments last year. Most went to the US and the European Union.
Hang Chuon Naron was talking at a forum on Tuesday on the effects of the global economic crisis and strategies to overcome the challenges. The forum was attended by 300 people from government, NGOs and the private sector.
Chan Sophal, president of the Cambodia Economic Association (CEA), said it is not clear that local garment manufacturers will benefit from the expected boost to the US economy since other garment-exporting nations have moved ahead.
Chan Sophal blamed the closure of garment factories locally on a lack of competitiveness as well as the economic crisis.
"The US ... can buy from other countries which are more competitive, such as Bangladesh," he said. "The prediction that Cambodia's garment exports will decline only 5 percent ... is too optimistic."
Kaing Monika, external affairs manager for the Garment Manufacturers Association of Cambodia, a trade association, said garment exports would likely end the year 10 percent down, citing competition from high-volume producers Vietnam and Bangladesh.
"GMAC would welcome it if exports decreased in line with the government's prediction, but I don't think that will be easily achieved," he said. "Today's export markets are still narrow."