The number of garment and footwear factories in Cambodia has increased by 21 per cent in the past 16 months. Exports are up more than 10 per cent. Clothing and footwear make a significant contribution to Cambodia’s economic output.

The minimum wage has more than doubled since 2012. Cambodia’s monthly minimum wage level is lower than China, Philippines and Thailand but above that of Sri Lanka, Bangladesh and Pakistan. Garment manufacturing sector in Cambodia now employs 600,000 workers although this figure relates to the export sector only and does not include factories working as sub-contractors.

The burgeoning state of the industry has belied claims that increased minimum wages for workers would lead to a decline of the sector and the exit of inward investors. The buoyant state of the textile industry in Cambodia also offers a pointer for Myanmar where Korean investors are threatening to leave if new minimum wage legislation is implemented.

Cambodia enjoys duty-free export access to several important markets, including Canada, the European Union, Japan, Korea, New Zealand, and the US, a crucial advantage, but its low wage edge has eroded. Labour accounts for about a fifth of the country’s apparel manufacturing costs.