Government bureaucracy and industrial unrest, which have already cost the country at least one major investor, are crippling Cambodia's garment sector, said the chairman of the Cambodia Skills Development Centre (CSDC), Mr. David Van.
While speaking at a major industry conference he said that the garment industries in Cambodia are in danger and need immediate collaborative efforts for survival.
A major Japanese manufacturer has recently decided to make a $50 million investment in Bangladesh rather than in Cambodia. Mr. Van cited this decision as a 'wake up call for Cambodia's garment industries'.
He also urged the government, private sector and unions to work together for the survival of the garment sector of the country.
Frequent strikes as well as excessive time taken to clear shipments in Cambodia are the major reasons for such kind of a decision of the Japanese company, said Mr. Van. Compared to other countries in the region, import-export clearance in Cambodia is still very slow that takes three to four days to clear one shipment, he added.
According to the World Bank, in Cambodia it takes 4.3 days on average to clear a shipment for export and 5.1 days to clear imports, while informal charges are also common. Garment exports of the country have experienced a 26.41 percent y-o-y decline in the first quarter to US$534.64 million.
The conference was held against this backdrop and was organized by the CSDC in association with GMAC and USAID's Micro, Small and Medium Enterprise/Business Enabling Environment project.
The quarterly contraction in 2009 came after garment exports grew just 3.33 percent to $2.93 billion in 2008 after achieving a consistent growth of over 25 percent per annum since 1998. Garment manufacturing, accounted for 12 percent of 2007 GDP and also 72 percent of total merchandise exports.
According to GMAC, foreign investment has been the major driver of growth, with more than 90 percent of garment manufacturing companies in Cambodia owned by foreign investors.
Fibre2fashion News Desk - India
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