Cambodia launches new strategy to develop GFT sector

Cambodia launches new strategy to develop GFT sector

The government yesterday launched a strategy designated to transform low value-added manufacturing to high value-added ones and sustainable production chains to reply to the significant trends and developments on environmental protection or environmental sustainability.

Named ‘Cambodia Garment, Footwear and Travel Goods (GFT) Sector Development Strategy 2022-2027’, it is expected to solve structural issues and enable Cambodia to seize opportunities to promote the development of the garment sector and sustainable economic growth and development.

The ministry stated the garment, footwear and travel goods sector has grown significantly and become a significant economic growth pillar.

Although there has been continuous development within the sector, its structure has remained unchanged over the past three decades. The ministry said that it is still a low value-added manufacturing hub with limited integration to supporting industries within the supply and value chains. Some significant trends and developments require additional attention at both policy and operational levels, specifically on environmental protection or environmental sustainability.

The ministry noted that responsibility in environmental protection or environmental sustainability, such as renewable energy in the production process, is receiving significant attention from buyers and Cambodia’s export markets. The Covid-19 crisis and its disruption on the regional and global production and value chains have posed further challenges and pressures to this sector.

The strategy is made to define a common vision, objectives, goals and strategic measures that will continue to strengthen and manage the development of this sector. It has challenges and opportunities and responds to the rapid changes in regional and global architecture.

“Through the implementation of this strategy, the RGC will upgrade the garment, footwear and travel goods sector in Cambodia into an industry that is environmentally sustainable, resilient, high value-added, focused on high-ended and unique products, highly competitive and supportive of economic diversification before the end of 2027,” the ministry’s statement read.

“This strategy will also contribute to enhancing competitiveness and promoting economic diversification, in response to the people’s expectations and needs, and building necessary foundations to achieve the 2030 Milestone and the Cambodian Vision 2050,” it added.

In the online launching ceremony, Aun Pornmoniroth, Deputy Prime Minister, Minister of Economy and Finance, and Chairman of the Committee on Economic and Financial Policy, said more opportunities in the sector would be created.

“The strategy is a package solution to deal with facing challenges in the sectors. It will also grab new opportunities in the sector that contribute to economic development,” Pornmoniroth said.

Cambodian Footwear Association president Ly Khun Thai said at the event that he believes the strategy provides high hopes to investors and workers. However, the world faces uncertain economic growth due to the Russia-Ukraine war and Covid-19.

From the late 1990s to 2008, this sector accounted for more than 95 percent of Cambodia’s total exports. It has remained high with an average of more than 70 percent since the global financial crisis in 2008, as other exports such as bicycles, vehicle parts, and electronic components have increased, implying Cambodia’s gradual diversification.

The export amount of the garment, footwear and travel goods amounted to $11.38 billion last year, 15.2 percent increase compared to a year before. Khmer Times