The clothing industry in Cambodia has expanded rapidly since the mid-1990s—following the dark days of the Khmer Rouge regime under the leadership of Pol Pot and subsequent Vietnamese occupation and civil strife—to become the largest manufacturing sector in the country. Exports have risen sharply in recent years, and by 2012 combined exports of textiles and clothing reached US$4.22 bn—which represented about 60% of Cambodia's total exports. In the same year, the clothing industry provided direct employment for around 350,000 people, and it has been estimated that a further 650,000 people depend on it for their livelihoods. Almost all of the impetus behind the sector's expansion has come from foreign investment, in which the government has played a strong supporting role by implementing a market oriented economy and pursuing business friendly policies which have been especially welcoming towards foreign investors. As a result, an estimated 90% of clothing factories are under the ownership and control of non-domestic interests, including investors based in China, Hong Kong, Malaysia, Singapore, South Korea, Taiwan and the USA. On the downside, this has led to the establishment of an industry which is limited mainly to low added value cut, make and trim (CMT) operations and which lacks design and marketing skills. Also, the industry is heavily dependent on imports for its raw materials as the textile industry in Cambodia is small and underdeveloped through a lack of investment. Another weakness is growing labour unrest as workers protest over the clothing industry's low wage rates. However, clothing production is set to remain the country's principal manufacturing activity and there are hopes that new initiatives—such as the establishment of the Cambodia Garment Training Institute, announced in December 2012—will foster the development of a more highly skilled workforce as well as local manufacturing businesses with their own Cambodian identity.
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