Cambodia’s garment exports rose some 4 percent year-on-year in 2014 to $5.75 billion, far less than the 20 percent jump in garment exports the previous year, but defying the most pessimistic predictions that exports might actually shrink.
The slowdown in one of the country’s main economic drivers may have a significant impact on overall growth. The industry employs some 600,000 workers, accounts for 80 percent of Cambodia’s total exports and contributes a third of gross domestic product.
The new figures, from the Commerce Ministry’s import-export inspection department, did not break down the exports by destination. However, most of the garments Cambodia ships abroad are bound for the U.S. and Europe.
Quarterly export figures started out strong last year but gradually slowed as the impact of falling orders from international brands began to hit the factories. Many buyers started reducing their orders in 2014 following a record number of garment worker strikes over wages, benefits and alleged labor abuses the previous year. The unrest came to a head in December 2013 when the Labor Ministry rejected unions’ minimum wage demands and reached a bloody end the next month after military police shot into a crowd of protesting workers, killing at least five.
Commerce Minister Sun Chanthol declined to comment on the new figures because he had not yet seen them. He referred questions to ministry spokesman Ken Rotha, who could not be reached.
The Garment Manufacturers Association in Cambodia (GMAC) had predicted total exports would shrink in 2014.
GMAC Secretary-General Ken Loo declined to comment on the latest figures from the import-export department, preferring to wait for year-end numbers from another department at the Commerce Ministry, which he expected in the coming days.
However, Mr. Loo did say that he expected even worse figures this year.
“I think in 2015 we’re going to see negative growth…. The question is how much,” he said.
While many factories have already reacted to the falling orders by cutting down on overtime shifts, Mr. Loo said a wave of factory closures and staff layoffs was likely to hit the sector by May.
And while the number of strikes fell by more than a quarter in 2014 by GMAC’s own calculations, Mr. Loo said buyers were not likely to take much comfort from the decrease as it was only a climb-down from a record year. A 28-percent hike in the sector’s monthly minimum wage also took effect in January.
“We still see wildcat strikes, we still see violent demonstrations, we still need to see more enforcement of the law,” Mr. Loo said.
Unions say that many of the strikes the factories deem illegal do comply with the Labor Law. They accuse many employers in turn of firing their representatives for legitimate union activity and of colluding with the government to block their applications for local branches.
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