The virtuous circle of Cambodian manufacturing

Manufacturing in Cambodia

A series of challenges affecting China, Thailand and Vietnam have attracted investments in factories in Cambodia, stimulating the economy, the rise of wages and development of skilled labor. This video from Bloomberg presents the interests and benefits of the developing manufacturing sector in Cambodia.

Key points and advantages of manufacturing in Cambodia

  • Rising wages in China is one of the major factor that makes firms relocate their production to Cambodia, but floods and political instability in Thailand and investment saturation in Vietnam are also pushing companies that want to mitigate their risks into Cambodia.
  • The garments and shoes industry is especially dynamic for the creation of new factories.
  • Wages in Cambodia have risen more than 65% in the last 5 years. Wages are however still under 130 USD per month, which compares to more than 500 USD for the same work in Shanghai.
  • Cambodians growing their skill set and productivity also help the manufacturing sector to move up the value chain, in garments, auto parts, electronics.

2 thoughts on “The virtuous circle of Cambodian manufacturing

  1. What about the not-so virtuous, or vicious circle, exemplified by the latest of many road accidents killing and injuring garment workers?

    http://indiatoday.intoday.in/story/5-dead-65-injured-in-cambodian-garment-worker-truck-crash/1/568323.html

    Virtuousness will be achieved only when the workers obtain fair wages and conditions that include safe transport, reasonable accommodation and proper diets. They should not have to sacrfice any of these to scrape together as much money as possible to send back to their poor families.

    1. Hi John,

      Agreed. The conditions in Cambodia are far from perfect and this tragedy reminds us yet again of the road that remains ahead.

      However, you have to start somewhere. It’s better to have the opportunity for people to work manufacturing than not having it.
      It is the very beginning of a virtuous circle of economic development which will, hopefully, lead to better conditions some day.

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