Should Cambodia work toward diversifying its industrial sector which has positioned itself as a low-cost labor destination for the garment manufacturers? Yes, expert feels so. Faisal Ahmed, IMF resident representative in Cambodia, said the country’s stellar growth has been driven by a strong flow of foreign direct investment in recent years – about double the rate of other countries in the region. While much of this capital is directed to the Cambodia’s booming construction sector and large-scale agro projects, a sizeable portion has gone into setting up apparel and footwear factories, which contribute about 80 per cent of total exports. A growing dependence on apparel for GDP growth has made Cambodia vulnerable to economic downturns, such as the 2008/2009 global financial crisis, which exposed the weakness of the country’s narrow economic base.
Rami Sharaf, CEO of Worldbridge International says, “Cambodia needs to diversify its industries. We need to upgrade to higher value and higher skill-level industry.” Worldbridge and partner Hong Kong-listed Kerry Logistics Network recently broke ground on a project to build a SEZ. It will not target apparel firms, instead it aims to draw assembly and light manufacturing companies that can move up the value chain from low-value garments.
