‘Footloose’ garment sector continues to drive growth
Despite an onset of risks—the uncertainty of upcoming elections, a looming E.U.-Vietnam free-trade deal and a rising U.S. dollar—the immediate outlook for Cambodia’s economy remains bright, a World Bank report released on October 5 says. But the country will have to address looming challenges now in order to remain competitive in the future, said economists presenting the report. “The garment sector has been the strongest driver of growth,” said World Bank senior economist Sodeth Ly at the release of the organization’s latest biannual “East Asia and Pacific Economic Update.” “But garment is a ‘footloose’ industry—they can move quickly from one country to another,” Mr. Ly said of foreign manufacturers. “The exposure is significant.” China—and affiliates Taiwan, Hong Kong and Macau—made up more than 90 percent of investment in the garment industry, according to the report. Local investment, by comparison, made up just 1.4 percent of the total.
