Cambodia’s textile competitiveness in danger: examine

Rising labour, transportation, logistics and electrical energy prices might doubtlessly undermine the aggressive benefit of Cambodia’s textile-linked industries, based on analysis performed by a distinguished native economist.

In “Cambodia’s present minimal wage and competitiveness”, Royal Academy of Cambodia economics researcher Ky Sereyvath explores the long run sustainability of the aggressive alternatives within the home garment sector in addition to its current and potential aggressive benefits over close by international locations together with the weaknesses that might impede them.

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Talking to The Submit, Sereyvath famous that the examine highlights how Vietnam’s decrease labour prices and Cambodia’s sole deep-sea port’s restricted capacity to deal with massive container ships have dulled the Kingdom’s aggressive edge over neighbouring international locations.

He defined that substantial volumes of cargo sure for Cambodia should first undergo Vietnam and Thailand, driving up prices.

He propounded that further deep-sea ports in Preah Sihanouk, Koh Kong and Kampot provinces would enable Cambodia to export items at decrease costs and be aggressive with superior economies in ASEAN.

Sereyvath additionally underscored that customs procedures stay comparatively difficult and that electrical energy charges pose an particularly powerful problem for the garment sector.

“The examine discovered that some factories and industries nonetheless don’t adhere to the right rules or keep good working circumstances, which is a problem. These factories have to be reorganised to maintain them from taking undue benefit of staff,” he stated.

The Ministry of Labour and Vocational Coaching is about to carry six further tripartite conferences to debate the 2023 minimal wage for textile-related sectors – on August 24 and 31, and September 7, 14, 22 and 23. This yr’s minimal wage is $194.

The Nationwide Council on Minimal Wage (NCMW) stated that on the first assembly, on August 15, it offered up to date figures of formal information and respected tutorial analysis on social standards – reminiscent of family standing, inflation charges and the price of residing – and financial standards together with productiveness, competitiveness of the nation, the labour market scenario and sectoral profitability to barter the 2023 minimal wage.

“We listened to the positions of every consultant and occasion by way of change in social and financial standards,” the NCMW stated in a press release.

The NCMW contains officers from the labour ministry, manufacturing unit proprietor representatives, business stakeholders and staff’ representatives from civil society organisations and commerce unions.

Talking to The Submit early this month, Kaing Monika, deputy secretary-general of Garment Producers Affiliation in Cambodia, the apex commerce physique for the business, acknowledged the tough scenario going through the Kingdom’s staff and the fragile steadiness between supporting their residing circumstances and enhancing the business’s competitiveness.

Monika commented that whereas the sector skilled strong export efficiency within the first half of the yr, the unstable international surroundings and financial downturn in Western international locations that represent among the largest patrons of Cambodian clothes translate to “severe concern over the export scenario for the second half”.

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