Key Players in Garment Sector Discuss State of Their Industry

With the new minimum wage for garment workers set to take effect next month, key players in the industry met on Tuesday in Phnom Penh to discuss the state of the sector.

“As a group of stakeholders, we don’t sit down enough,” said Ian Ramage, director of Angkor Research, who moderated the discussion among representatives of the government, factories, unions, global brands, NGOs and foreign development agencies.

Since nationwide strikes rocked the garment sector in late 2013, the industry has shown steady growth and improved industrial relations amid significant minimum wage raises—from $100 to $128 in 2014, and up to $140 following the government’s latest decision.

However, Van Sou Ieng, president of the Garment Manufacturers Association in Cambodia (GMAC), said that the 8 percent year-on-year growth of the industry in the last two years may start to slow as the sector was “reaching a maturity phase.”

“Garment prices never go up, always go down, while production moves from more developed countries to less developed,” he said, explaining that as Asian countries develop, garment brands would shift their sourcing to Africa.

To mitigate the effects of such moves, Mr. Sou Ieng called on the industry to focus on higher-end clients. “Do not stay with buyers, with Wal-Mart for example, they move for $0.02,” he said.

There are about 1 million workers employed in the garment sector, with more than 300,000 workers at subcontracting and unregistered factories, said Mak Ousphea, deputy director general of trade support services at the Ministry of Commerce.

And while factory owners have said jobs could easily be shifted to other countries if Cambodia does not remain economically competitive, GMAC secretary-general Ken Loo said nobody knew what the future held.

“If anyone claims they know what will happen in just three years, it’s bullshit,” Mr. Loo said.

“It could continue to go well, or go down, no one really knows,” he added.

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