EIJS Working Paper Series,
Stockholm School of Economics, The European Institute of Japanese Studies

Abstract: The Cambodian garment industry in Phnom Penh; employing as many as a quarter of a million people could be seen as a success story. Workers are in domestic terms paid at decent rates and their employments have had an important impact on their but also their rural families’ standards of living. Against the background of the phasing out of the MFA, income linkages from the garment industry have recently received much attention. One of the most important of the studies undertaken is a major survey carried out under the auspices of the Asian Development Bank (ADB), which considers the income and expenditure patterns of garment workers as well as the effect on rural livelihoods of remittances. This working paper has been carried out with a view to adding to the extensive study initiated by the ADB by the help of a much smaller survey intended to shed light on some of the underlying mechanisms only indirectly addressed by the larger survey. The most important insights from this study include that any research into migration and spending patterns must recognize the fact that migration requires some kind of financial resources. It has been shown that the migrant sending households have access to resources and credit markets and consequently are not among the poorest ones. The study has also shown that although the garment workers’ salaries at first glance may appear relatively high their living expenses and remittance obligations do not leave them with much more than a subsistence living. Additionally the study has pointed out that one must be cautious in trusting one-sided data as mirroring data showed that there are large discrepancies in between both quantitative and qualitative answers from garment workers and the remittance-receiving households. Finally the study has indicated that the motivation for migration and the use of remittance money is likely to be very different depending on work activities and natural conditions of the migrant-sending destination.

Keywords: Cambodia; Garments; Linkages; Migration

JEL-codes: O12; O15; O18

35 pages, December 19, 2005

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