Cambodia's garment industry saw 69 new factories open in the first nine months of this year. But 32 others closed during the period, said a Ministry of Industry and Handicraft report.
Ministry spokesman Oum Sotha who voiced no concern over the possible removal of Cambodia from the EU’s Everything But Arms (EBA) preferential trade scheme, said factory openings and closings were normal in business.
However, he was quick to add that the growing trend of factory openings reflected the Kingdom’s investment potential.
“The number of factories keeps growing, that means our country’s economy is lucrative for investors. We can maintain this as long as we have good political stability and attractive policies for foreign direct investment,” he said.
The report showed that a total of 129 new factories were opened in the first nine months, among which 69 were garment factories.
It also said a total of 40 factories were shut down, among which 32 were garment factories. This left a total of 18,645 workers unemployed.
“The shutdown of factories is part of the economic fluctuation. Some are opened and others are closed or reopened, depending on contracts or their owner’s financial flows. They don’t pose a problem for the Cambodian economy,” he said.
Echoing Sotha’s remark, Cambodia Chamber of Commerce (CCC) vice-president Lim Heng said the possible EBA suspension will not affect fluctuations in the garment industry.
“EBA is not a concern for the industry’s growth since we still have [the market] and make profits. Investors still [work] with us,” he said.
As the EU reviews its EBA agreement with Cambodia, concerns had mounted over the possible impact that its possible suspension could pose to the Kingdom’s economic growth.
President of Cambodian Labour Confederation president Ath Thorn had expressed his concerns, saying: “Despite the government saying the [possible] EBA withdrawal is not a concern, it is for us [the workers], unless the government can ensure job security and wages for all workers,” he said.
Thorn claimed that the increasing number of new factories did not reflect a real growth in the industry.
‘Temporary suspension’
In a letter addressed to European Trade Commissioner Cecilia Malmstrom last week, the Garment Manufacturers Association in Cambodia asked the body not to make any decision that would harm the Kingdom’s economy.
“A temporary suspension of the EBA or any short-term unilateral sanctions may have a long-term negative impact on the lives of our workers and their families,” its letter read.
It added: “All the progress that Cambodia had achieved over the past two decades through the efforts of all stakeholders, including development partners like the EU could be destroyed very quickly.”
According to a report released by the ministry, the Kingdom’s garment industry generated $5.32 billion in the first eight months this year, indicating a 12 per cent increase over the same period last year.
The EU is the biggest customer for Cambodia’s garment and footwear industries. The Kingdom’s garment industry alone employs around 700,000 workers or about 7.5 per cent of the total labour force.
