Search

Search form

Logo of Phnom Penh Post newspaper Phnom Penh Post - Garment sector economics

Garment sector economics

Content image - Phnom Penh Post
Hiroshi Suzuki, Chief Economist at the Business Research Institute for Cambodia, talks at his office yesterday. Vireak Mai

Garment sector economics

In this week’s interview, the Post’s Hor Kimsay sits down with Hiroshi Suzuki, chief economist at the Business Research Institute for Cambodia (BRIC). Suzuki discusses the debate about minimum wages in the garment sector, strikes and whether increases will hurt Cambodia’s competitiveness.

How much of an effect will the combination of garment strikes, violence and political tensions have on economic growth?
From my point of view regarding macroeconomic growth, the effect is not so big. The economy is driven forward by several kinds of engines, including the garment sector, tourism, agriculture, construction and real estate. The tourism industry is enjoying an increase in visitors. The agriculture and construction sectors are also performance well. Having a look at all these things, we can see that growth in these sectors will support the fundamentals of Cambodia’s economy.

What about the garment sector?
Of course, some of it is affected, because many factories were closed and they could not produce to meet deadlines. Some were damaged. It also could affect the volume of orders from the buyers. But, Cambodia is not alone. Bangladesh, a garment industry country, is facing a big fight because of its recent election. It is fortunate that the economy of the US and EU are recovering.

Better economic performance in Cambodia’s two major markets means the demand will increase. I know that this week, 80 per cent of workers are coming back to their jobs.

Cambodia has attracted investors because of cheap labour. Will the decision to increase the minimum wage to $100 make Cambodia lose its competitive advantage?
We should also consider facilities and the infrastructure of a factory. For instance, if a factory makes an investment on more modern technology and better machinery, the productivity of workers will improve.

Regarding the minimum wage, even if it is increased to $100, Cambodia won’t lose its low-cost advantage.

Workers are still demanding that the government raise their wage to at least $160 per month. Do you think it’s feasible?
It is a sensitive question. Based on total payment, China and Thailand have much higher wages than Cambodia.

So, even if Cambodia’s garment workers receive a wage increase to $160, it is still much less compared to them.

However, we need to consider our competitors, like Myanmar, Laos and Bangladesh. Maybe Cambodia could be affected.

This interview has been edited for length and clarity.

RECOMMENDED STORIES

  • Breaking: PM says prominent human rights NGO ‘must close’

    Prime Minister Hun Sen has instructed the Interior Ministry to investigate the Cambodian Center for Human Rights (CCHR) and potentially close it “because they follow foreigners”, appearing to link the rights group to the opposition Cambodia National Rescue Party's purported “revolution”. The CNRP - the

  • Government approves plan to relocate Phnom Penh’s airport

    The government has signed off on a proposal to build a new airport to serve Phnom Penh and has earmarked land in Kandal province for the $1.5 billion project. A new international airport to replace the existing Phnom Penh International Airport will be constructed on partially

  • American convicted of raping boy, 10, in Siem Reap

    A 79-year-old American man was sentenced to one year in prison for raping a 10-year-old boy by Siem Reap Provincial Court on Wednesday. John Paul Zollbrecht, of Washington state, was sentenced to one year in prison while a Cambodian man who helped facilitate the abuse, 23

  • PM derides talk of government affairs, hinting phone records could reveal all

    Prime Minister Hun Sen on Sunday night told Cambodia’s starlets to either name their high-profile government lovers or keep quiet, telling a room full of journalists he did not want to be tarred with the same brush. Addressing more than 3,400 people at the second