Reports
Discussion Papers
No.062 The Garment Industry in Cambodia: Its Role in Poverty Reduction through Export-Oriented Development
by YAMAGATA Tatsufumi
June 2006
ABSTRACT
Cambodia’s
export-oriented
garment
industry
has
contributed
greatly
to
poverty
reduction
in
the
country
through
employment
of
the
poor.
This
paper
provides
a
statistical
verification
of
this
contribution
based
on
firm-level
data
from
164
sampled
companies
collected
in
2003.
Its
main
conclusions
confirm
the
substantial
impact
that
employment
in
the
garment
industry
has
had
on
poverty
reduction
in
Cambodia.
Firstly,
entry-level
workers
receive
wages
far
above
the
poverty
line.
Secondly,
females
make
up
the
predominant
share
of
the
main
category
jobs
in
the
industry.
Thirdly,
barriers
to
employment
and
to
promotions
up
to
certain
job
categories
are
not
high
in
terms
of
education
and
experience.
Another
important
finding
is
that
a
typical
sample
firm
exhibited
high
profitability,
although
there
was
wide
variation
in
profitability
among
firms.
This
average
of
high
profitability
could
be
a
good
predictor
of
Cambodia’s
viability
in
the
intensified
competition
since
the
phase
out
of
the
Multi-Fiber
Arrangement
(MFA)
at
the
beginning
of
2005.
A
point
of
note
is
that
Cambodia’s
pattern
of
industrial
development
led
by
a
labor-intensive
industry
is
similar
to
that
of
neighboring
countries
in
East
Asia
which
earlier
went
through
the
initial
stage
of
industrial
development,
except
that
Cambodia
has
lacked
a
strong
government
industrial
promotion
policy
which
characterized
the
earlier
group.
Keywords:
Cambodia;
export-oriented
industrialization;
garments;
poverty
reduction
JEL
classification:
J30,
J31,
L67,
O53
Please note that discussion papers are works in various stages of progress and most have not been edited and proofread and may contain errors of fact or judgment. Revised versions of these papers may subsequently appear in more formal publication series. The views expressed in this publication are those of the author(s). The IDE does not guarantee the accuracy of the data included and accepts no responsibility for any consequences arising from its use.