Cambodia’s export-oriented garment industry has contributed greatly to poverty reduction in
the country through employment of the poor. This paper provides a statistical verification of this
contribution based on firm-level data from 164 sampled companies collected in 2003. Its main
conclusions confirm the substantial impact that employment in the garment industry has had on poverty
reduction in Cambodia. Firstly, entry-level workers receive wages far above the poverty line. Secondly,
females make up the predominant share of the main category jobs in the industry. Thirdly, barriers to
employment and to promotions up to certain job categories are not high in terms of education and
experience. Another important finding is that a typical sample firm exhibited high profitability, although
there was wide variation in profitability among firms. This average of high profitability could be a good
predictor of Cambodia’s viability in the intensified competition since the phase out of the Multi-Fiber
Arrangement (MFA) at the beginning of 2005. A point of note is that Cambodia’s pattern of industrial
development led by a labor-intensive industry is similar to that of neighboring countries in East Asia
which earlier went through the initial stage of industrial development, except that Cambodia has lacked a
strong government industrial promotion policy which characterized the earlier group.