Cambodia’s Garment Industry: A Case Study in Governance

Cambodia has struggled to diversify its economy in the past decade despite nearly double-digit growth per annum. Chinese interest and investment during this time comes at a critical juncture. This investment is driven from Taiwan, Hong Kong, South Korea, and China and has spilled into multiple industries, but most notably the garment industry which represents 14 per cent of Cambodia’s GDP and is by far its largest foreign exchange earner. The specific investment in garments demonstrates hand-in-hand governance where governments and firms work together to create an environment generating growth, and thus far has produced positive results. Surprisingly, Cambodia has been able to achieve significant growth with foreign investment despite the minimal enforcement of policies. The garment industry is an exception to the rule and may have enjoyed good enough governance to succeed.