Editorial: Cambodia's Garment Exports Continue To Advance Despite Headwinds

Editorial: Cambodia's Garment Exports Continue To Advance Despite Headwinds
Cambodia's garment exports have been doing well in recent years, despite partially losing duty-free access to EU markets because of the country's human rights record. The value of Cambodian clothing exports in 2022 was 12.7% higher in terms of US dollars than it had been in 2021, and 28.5% higher than it had been five years earlier. Furthermore, EU clothing imports from Cambodia in terms of euros shot up by 55.0% in 2022 alone--which was faster than the 54.7% increase in EU clothing imports from Vietnam and second only to the 89.0% increase in EU clothing imports from Myanmar. Cambodia will never reach the heights attained by Bangladesh, let alone challenge the supremacy of China as the world's largest garment exporter. Nonetheless, the industry provided employment to 633,000 workers directly in 2022 and to well above 1 mn workers when indirect employment in supporting activities is included. The clothing industry in Cambodia fulfils a crucial role in alleviating poverty throughout the country--partly because the industry's expansion has created employment opportunities and partly because workers are able to remit earnings to their families who have remained in rural communities. Such communities are, for the most part, extremely poor and lacking in infrastructure. The prospects for further expansion of the Cambodian garment industry are positive, especially given the support which the Cambodian government provides in the form of incentives to attract foreign investment. But the potential loss of favourable market access casts a dark shadow on the industry's future. At present, Cambodian exports qualify for duty-free access to a number of Western economies as the country is classed as a least developed country (LDC). But in 2021--for the first time--Cambodia met the criteria which would enable it to graduate from LDC status. If it meets the criteria again in 2024, it could be recommended for graduation from LDC status as early as 2027.