Cambodia’s vital garment and footwear exports have continued to show strong growth despite ongoing labor unrest, according to the government’s latest mid-year figures. But while overall exports are up, those to the massive U.S.’s market have dipped slightly.
Garment and footwear exports, which make up 80 percent of everything Cambodia ships abroad and brought in more than $5 billion last year, rose 16 percent during the first six months year-on-year and totaled $2.92 billion, a Ministry of Commerce official said Monday.
The official, who spoke on the condition of anonymity, as he is not permitted to share figures with the press, said exports to Europe led the way at $1.14 billion, up 32 percent compared to the same period last year. But exports to the U.S. dipped slightly by 2 percent, he added, to just under $1 billion. The figures were also reported by Chinese state news agency Xinhua.
The overall six-month figures were more than twice as strong as the 7.4 percent year-on-year growth in garment and footwear exports in the first three months.
The growth comes despite ongoing protests and strikes over working conditions and unpaid wages at some factories and a persistent call from a number of unions for the government to hike the garment sector’s monthly minimum wage, currently set at $100, to $160 by early next year.
After security forces put down several days of increasingly violent garment sector protests in early January, killing at least five workers, factories have been warning of drastic cutbacks in orders from risk-averse brands and imminent factory shutdowns. But despite confirmed cutbacks from a few U.S. brands, namely GAP and Levi’s, those predictions have yet to prove true.
Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia, said he had not seen the government’s latest six-month figures for himself and declined to comment on them.
He said he was surprised to hear of a 16-percent rise, however, after seeing five-month figures showing only a 5-percent year-on-year rise.
Mr. Loo said that the five-month figures were more in line with his reports that global brands had started to cut back on orders and predicted growth would continue to slow below 5 percent in the coming months.
“I expect this to go down…a lot more,” Mr. Loo said. “For sure next quarter.”
However, Kang Chandararot, who heads the Cambodia Institute of Development Study and has researched the country’s garment sector, said the government’s mid-year figures were proof that the factories were exaggerating the fallout from the strikes and protests to gain leverage in ongoing talks on how far to raise the $100 minimum wage.
He expected the industry to weather the latest bout of labor unrest unscathed, just as it has following past industrial disputes.
“The garment industry has been manipulated by many parties [talking] about uncertainty and risk and labor unrest…which can damage the industry,” he said. “It is just to get their own benefit in the negotiations.”
Some brands have offered to pay more for their orders to accommodate a rise in the local minimum wage but have not specified how much. The government, factories and unions are currently in negations over how much to raise the minimum wage by and are scheduled to announce their decision in October.
