Logo of Phnom Penh Post newspaper Phnom Penh Post - Strikes, bureaucracy crimp garment sector

Strikes, bureaucracy crimp garment sector

Strikes, bureaucracy crimp garment sector

090615_13.jpg
090615_13.jpg

Industry conference hears how Cambodia’s business climate is damaging the competitiveness of its biggest export industry

Photo by:

Tracey Shelton

Cambodia’s garment industry, which has suffered a huge drop in demand for its products since the global economic crisis, needs to address persisiting problems to compete, the CSDC said.

GOVERNMENT bureaucracy and industrial unrest are crippling Cambodia's garment sector and have already cost the country at least one major investor, the chairman of the Cambodia Skills Development Centre (CSDC) told a major industry conference Friday.

David Van cited a recent decision by a major Japanese manufacturer to make a $50 million investment in Bangladesh rather than Cambodia as a "wakeup call for Cambodia's garment industries" and urged the government, private sector and unions to work together to ensure the sector's survival.

"Garment industries in Cambodia are in danger," he said. "Collaborative efforts are needed immediately."

He said a major reason for the Japanese company's decision was the frequency of strikes in Cambodia and the excessive time taken to clear shipments in Cambodia. "Excuse my frank words, but there is no strike [in Bangladesh]," he said. "Instead, they have access and competitive costs."

Import-export clearance in

Cambodia is still

painfully slow.

It took between three and four days to clear one shipment through customs in Cambodia, he said, compared with between half a day to a dayin Vietnam.

"Compared to other countries in the region, import-export clearance in Cambodia is still painfully slow," he said.

According to the World Bank, it takes 4.3 days on average in Cambodia to clear a shipment for export, and 5.1 days to clear an imported container, while informal charges are also common.

Van did not name the Japanese company. Van Sou Ieng, the president of the Garment Manufacturers Association of Cambodia (GMAC), also referred to the Japanese manufacturer in an interview with the Post on Thursday and again declined to give the company's name.

The conference, which was organised by the CSDC in association with GMAC and USAID's Micro, Small and Medium Enterprise/Business Enabling Environment project, was held against a backdrop of a 26.41 percent year-on-year decline in garment exports in the first quarter to US$534.64 million, according to Ministry of Commerce figures. Export figures for April and May are not yet available.

The quarterly contraction came after garment exports grew just 3.33 percent to $2.93 billion in 2008 after growing 28 percent per annum since 1998.

Garment manufacturing accounted for 12 percent of 2007 GDP and 72 percent of total merchandise exports.

Foreign investment has been the major driver of growth, with more than 90 percent of garment manufacturers in Cambodia owned by foreign investors, according to GMAC figures.

MOST VIEWED

  • ‘Kingdom lacks up to 400MW in available electricity’

    Prime Minister Hun Sen has called on the general public, hoteliers and businesspeople with generators to use them as back-up as the Electricity Authority of Cambodia cannot generate enough electricity to meet needs due to low water levels in power station reservoirs. On Saturday evening

  • Sor Chandeth defends his criticism of Hun Sen

    Former senator Sor Chandeth has defended his choice of words when criticising Hun Sen, saying he was merely speaking metaphorically to attack the Prime Minister’s political life, not his actual person, as the latter seeks damages. [img] Chandeth spoke to The Post on Thursday,

  • South Korea’s Moon arrives in Kingdom for state visit

    South Korean president Moon Jae-in and his wife arrived in Phnom Penh on Thursday at the start of a three-day state visit to Cambodia to strengthen ties and further the friendship between the two countries. After arriving at the Phnom Penh International Airport in the

  • Youths band together to clean ‘filthy’ Boeung Trabek canal

    Inspired by their affection for the environment, a desire to have a clean and beautiful city, and wanting to send a message to people to stop littering, a group of some two dozen volunteer youths have taken to picking up trash day and night from