Cambodia’s apparel, footwear and travel goods industries rebounded in 2021, with exports rising 15.2 percent to $11.38 billion, according to data released by the Cambodian General Administration of Customs on February 12.
The industry is Cambodia’s largest source of foreign exchange earnings. According to the Ministry of Labor, the industry consists of about 1,100 factories and branches employing about 750,000 workers, most of whom are women.
The increase in exports was mainly due to a recovery in international demand, as Covid-19 restrictions were gradually eased in Cambodia’s key export markets, including the EU, UK and US, and a successful nationwide vaccination campaign allowed the country to fully recover its presence in all countries. socioeconomic activities in the field.
better-than-expected growth
“Cambodia’s economy is expected to grow at a better-than-expected 3 percent in 2021 from a contraction of 3.1 percent in 2020, due to a rapid rebound in the apparel and non-apparel sectors, as well as agriculture,” said Economy and Finance Minister Aun Pornmoniroth.
“The economy is expected to grow at a higher rate of around 5.6% in 2022, driven by rising global demand expectations and foreign investor confidence,” he added.
Going forward, however, analysts in Cambodia see not only short-term opportunities, but also long-term challenges, as well as potential supply chain disruptions and serious exposure to external forces.
Too much dependence on the clothing industry
Many analysts point to Cambodia’s garment industry, which accounts for more than a third of the country’s gross domestic product, as an overly powerful reliance. One of the problems is that the industry is built on low-skilled, low-cost labor, a model they say will eventually catch up with the state.
In addition, Cambodia also faces the vulnerability of being completely dependent on imported fabrics, more than 60% of which come from China. As a result, Cambodia is vulnerable to price shocks and potential supply chain disruptions.
This will ultimately make it necessary for Cambodia to implement a diversification strategy for its economy that will mandate improvements to its education system to create a higher-skilled workforce to increase its competitiveness in the region.
Garment workers at a factory in Phnom Penh (Image: World Bank) Cambodia’s apparel, footwear and travel goods industries rebounded in 2021, with exports rising 15.2 percent to $11.38 billion, according to data released by the Cambodian General Administration of Customs on February 12. The industry is the largest foreign exchange industry earner in Cambodia. According to the Ministry of Labor, the industry consists of about 1,100 factories and branches employing about 750,000 workers, most of whom are women. The increase in exports was mainly due to a recovery in international demand…
Cambodia’s apparel, footwear and travel goods industries rebounded in 2021, with exports rising 15.2 percent to $11.38 billion, according to data released by the Cambodian General Administration of Customs on February 12.
The industry is Cambodia’s largest source of foreign exchange earnings. According to the Ministry of Labor, the industry consists of about 1,100 factories and branches employing about 750,000 workers, most of whom are women.
The increase in exports was mainly due to a recovery in international demand, as Covid-19 restrictions were gradually eased in Cambodia’s key export markets, including the EU, UK and US, and a successful nationwide vaccination campaign allowed the country to fully recover its presence in all countries. socioeconomic activities in the field.
better-than-expected growth
“Cambodia’s economy is expected to grow at a better-than-expected 3 percent in 2021 from a contraction of 3.1 percent in 2020, due to a rapid rebound in the apparel and non-apparel sectors, as well as agriculture,” said Economy and Finance Minister Aun Pornmoniroth.
“The economy is expected to grow at a higher rate of around 5.6% in 2022, driven by rising global demand expectations and foreign investor confidence,” he added.
Going forward, however, analysts in Cambodia see not only short-term opportunities, but also long-term challenges, as well as potential supply chain disruptions and serious exposure to external forces.
Too much dependence on the clothing industry
Many analysts point to Cambodia’s garment industry, which accounts for more than a third of the country’s gross domestic product, as an overly powerful reliance. One of the problems is that the industry is built on low-skilled, low-cost labor, a model they say will eventually catch up with the state.
In addition, Cambodia also faces the vulnerability of being completely dependent on imported fabrics, more than 60% of which come from China. As a result, Cambodia is vulnerable to price shocks and potential supply chain disruptions.
This will ultimately make it necessary for Cambodia to implement a diversification strategy for its economy that will mandate improvements to its education system to create a higher-skilled workforce to increase its competitiveness in the region.
