Cambodia : Garment sector competes & thrives

Wearing a dark-blue uniform, with red trim, and standing next to a huge ironing machine in a garment factory in Phnom Penh, 20-years-old, Son Sean, smiles and responds: “My family has better living conditions now,” she pauses and continues while pushing a collar into the machine, “From my earnings, my mother has been able to build a 5 by 7 meter brick house with a tiled roof, and my 15 year-old sister has been able to continue her schooling.”

Son Sean is one of many garment workers who come from the poor Cambodian province of Svay Rieng, located about 120 km east of Phnom Penh. She earns on average about US$70 per month, depending on how much overtime she gets, and each month, Sean sends US$50 to US$90 cash home to support her 50-year old widowed mother and her younger sister, who studies in the fifth grade.

Sean’s co-worker, Vong Pak, 39, smiles proudly when asked whether she supports members of her family with her earnings. “From my salary I support my 68-year-old mother, my four children and I pay for my children’s schooling,” she says while sewing a shirt. Pak is the breadwinner of the family. Three of her four children, who are 14, 12, 7, and 3 years old, are in school now.

Both Sean and Pak work at the New Island Clothing garment factory (NIC), along with more than 800 other workers. NIC is one of 290 garment factories in Cambodia which exports goods to the United States and Europe. NIC operates in six countries: Cambodia, Indonesia, Sri Lanka, Vietnam, Lithuania and Mauritius.

The company produces men's and ladies’ formal and casual shirts, supplying these to Marks & Spencers, as well as to premium overseas customers. New Island is a winner of Cambodia’s First Corporate Citizenship Awards which were sponsored by the World Bank Group’s private sector financing arm, the International Finance Corporation (IFC) in 2005.

Cambodia’s garment industry is the country’s main industry and its leading export revenue earner. In 2006, exports totaled US$2.5 billion and the sector employed 330,000 mostly poorer rural women, who in turn support extended families. In total, an estimated 1.7 million people depend on the garment industry directly or indirectly.

According to the report Export Diversification and Value Addition for Human Development which was published by the Economic Institute of Cambodia in June 2007, garment industry workers earn an average of US$73 per month, 29 percent of which comes from overtime work.

Representing almost 80 percent of Cambodia’s total exports, the sector is crucial to Cambodia’s economy. However, increasing global competition makes the industry vulnerable, and so a variety of approaches are needed to help the industry sustain itself.