Enhancing Competitiveness of Cambodian Garment Industry in the Global Market February, 2012 Program in International Development Policy Graduate School of International Studies Seoul National University Sokhen

Abstract

Cambodia reformed its economy from a planned economy into an open market in mid-1994. Since then, the Cambodian textile and garment industry has been a prospective engine for economic growth, job creation and poverty alleviation. This industry is a potential source to transform the economy from a labor intensive one into a skill intensive one. It is also the tool to upgrade the productive capacity of the country. Cambodia‟s garment industry has faced increasingly tough competition in the globalization era, especially as Vietnam became a WTO member in 2007 and as the U.S. and the E.U. lifted safeguard measures on China at the end of 2008. Due to the declining competitiveness on the global market, this research has found that lack of domestic investment, low productivity and value-added, demand constraints, poor state of the related supporting industry, corruption, and lack of ability to grab the opportunity are some of Cambodia‟s weaknesses. In order to enhance competitiveness of Cambodia‟s garment industry in the global market, this paper introduces some national strategies which were successfully adopted or implemented in garment export-oriented countries. These policies would be recommended to the Cambodian government and firms.