The manufacturer’s group from Cambodia predicted a slowdown in the country’s garment export growth in the forthcoming year primarily due to uncertainty prevailing over the soon to come July elections and stiff competition from neighboring Asian rivals that operate at lower cost.
According to statistics furnished by the trade body, in the first nine months of the year 2017, Cambodia witnessed a high growth rate of 8% in the garment sector. However, the premium export body, Garment Manufacturers’ Association of Cambodia pegged the growth rate for the forthcoming year between 3 to 4%. The association covers 600 factories that employ around 700,000 people.
The manufacturers however, chose to play down the risk factor associated with the European Union (EU) exercising its option of cutting down trade preferences. The threat to carry out this drastic move came in wake of the Cambodian government’s decision to dissolve the main opposition party, a month ago.
The manufacturers expressed the view that on the global front and in Cambodia there were adequate grounds to justify concern over the slowdown but at this juncture they were not expecting economic sanctions to be executed by the EU. “The slowdown we anticipate will mainly be caused by the concerns of the buyers over the elections,” the body said.
On the worrying front, Cambodia is scheduled to conduct elections in July 2018. The current premier, Hun Sen is expecting to cruise comfortably to victory having succeeded in dissolving the opposition party, namely the Cambodia National Rescue Party (CNRP). Besides, their leader Kem Sokha has been placed under arrest. This instability is viewed with hostility by the Western powers.
Statistics so far, do not betray any letdown as the garment exports of Cambodia for the previous year stood at USD 6.3 billion and in the first seven months of the current year rallied to reach USD 4.9 billion.
The hostile view from the West would matter if Cambodia which exports 30% of its garments to the European Union were denied a duty free access to the EU markets under the Everything but Arms (EBA) scheme earmarked for poor countries.
The heartening news on this front so far is that the European Chamber of Commerce offices in Cambodia were not in favor of any trade sanctions on the country. “Such a move will serve no purpose and on the contrary jeopardize all the progress Cambodia has made in the past two decades,” they opined.
At present, Cambodia’s garment industry supply to global brands that include Gap Inc, H&M, Nike, Puma, and Adidas among others.