Preparing Cambodia’s Garment Sector for Continued Success
The value of Cambodia’s garment exports grew from $26 million in 1995 to $1.6 billion in 2004. The sector now produces 80 percent of the country’s exports, accounts for one-eighth of GDP, and employs 250,000 people directly. Another 2.5 million are employed in supporting industries or receive remittances from direct and indirect employees.
But with concentrated success comes vulnerability. To continue prospering despite heightened competition, Cambodia’s garment makers must continue to attract global buyers who sell in the U.S. and European consumer markets. Manufacturers already have a good reputation among U.S. buyers not only for quality but also for working conditions in factories. The greatest promise for boosting competitiveness—and providing Cambodians with a foundation for sorely needed industrial diversification—lies in boosting productivity at the factory level.
Over the next three years, Nathan will be establishing a Garment Industry Productivity Training Center in Phnom Penh. The firm’s earlier study concluded that productivity can be boosted by as much as 20 percent—by training factory directors, managers, supervisors, and team leaders and by introducing management information systems and production controls. The center will offer a curriculum for improving management and a program for furthering sound economic governance that complements manufacturers’ reputation for good working conditions.