Proposal to help garment sector

Proposal to help garment sector

By Chea Sophal
March 11, 2009

Phnom Penh (Cambodia), Vietnam Garment Sector experienced a remarkable growth over the past years. According to the Vietnam National Textile Garment Group (VINATEX) Vietnam Textile and Apparel Association (VITAS), Vietnam earned $9.1 billion USD from the garment and textile exports. This shows 17 per cent increase compared to 2007.

With difficulties faced in the context of global financial crisis, Vietnam’s Ministry of Industry and Trade made a three point proposal to help its garment and textile sector to survive. The three-point proposal includes a Ministry’s request for Government to grant one percent of the sector’s total export revenue as subsidy to local garment and textile exporters to maintain their production.

Secondly, the Ministry suggested the Government earmark 1.1 to 1.4 million USD for the country’s garment and textile association to organize trade promotion activities in foreign markets such as Africa, Japan, East Europe and South America.

The final point is that the Ministry also asked the Government to delay collection of value added tax levied on imported equipment used in the garment production.

Vietnam is one of the Cambodian’s direct competitors in the garment and textile industry since it was integrated in the World Trade Organization and the end of MFA.

Cambodian earned $3.15 billion USD from the garment and textile export in 2008 which is 7 percent increase compared to the same period in 2007, reported Phnom Penh Post. Cambodia will need to overcome the low productivity to compete with the neighboring countries.

Government of Cambodia in collaboration with GMAC and GIP/C decided to create a National Institute to help train Cambodian worker.

"We hope that in three years' time, this national institute will produce at least 8,000 highly skilled workers to replace foreign workers," said, Pich Sophorn, a secretary of state at the Ministry of Labour and Vocational Training

"We are trying to produce qualified and productive workers to boost economic growth and reduce poverty," he said.

Some 500,000 Cambodians have been affected by the global economic downturn, English-language daily newspaper the Phnom Penh Post on Friday quoted the International Labor Organization (ILO) as saying.