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Financial shortfalls affecting Cambodian garment producers
10
Nov '11
Garment producers in Cambodia have called attention to the much-required financing for the country's budding garment manufacturing industry at a time when the World Trade Organization (WTO) hailed the economic achievements realized by Cambodia since it became a member in 2004.

Speaking at a presentation of the WTO's first trade policy review of Cambodia, Minister of Commerce Cham Prasidh said the Kingdom still falls short in providing financial backing to the garment manufacturing and agriculture sector's exports, which could help the industries in the country to grow.

The Minister said the trade sector in Cambodia still suffers dearth of liquidity from commercial banks and other financial institutions. He said the Kingdom has great potential on trade front but lacks adequate finance to fund these activities.

Garment Manufacturers Association of Cambodia President Van Sou Ieng said garment manufacturing industry is also no exception and is equally affected by the financial shortfalls.

He informed that the industry's export comes to around three billion USD per annum, which is almost equal to the Kingdom's commercial loan capacity, which leads to a shortage of funds for local trade financing and insurance.

He said while the domestic financial means have proved inadequate, the Export-Import Bank of the United States and the World Bank have also not extended any help to the industry in spite of their constant efforts and demands.

Mr. Van said that the two institutions are only required to assess the credit rating of the buyers for whom the goods are being manufactured before giving the loans.

The process should become easier when there are buyers like Gap and Levi's, still no steps are being taken in this regard and no financial support is being extended by these two institutions, he added.

According to the recently released WTO trade policy report on Cambodia, the inaccessibility of finance in the Kingdom may be linked to considerable rise in land and labour strife and also to unimplemented or lack of regulations.

In view of the continuing land conflicts at the Boeung Kak lake in Phnom Penh, the World Bank shelved new country loans to Cambodia in beginning of August this year.

Fibre2fashion News Desk - India

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