PHNOM PENH, Oct 5 (Reuters) - Cambodia agreed on Thursday to raise the minimum monthly wage of workers in its crucial textiles and footwear industry by 11 percent to $170 from next year.
The sector generates $7 billion annually for the economy, and garment workers are in the spotlight ahead of a general election in 2018.
Prime Minister Hun Sen Hun Sen, who has ruled the country for more than three decades, has met with garment workers almost every day in recent weeks, taking selfies with them and having lunch.
Garment workers have clashed with police in recent years and some unions representing disgruntled employees have joined opposition supporters protesting Hun Sen’s government.
Wages for garment workers have increased over 150 percent over the past five years from $61 per month in 2012 to the current $153.
The country has had to tackle the challenge of competitiveness, with some arguing that the wage increases have made Cambodia less appealing for some firms.
The garment industry employs an estimated 700,000 workers in Cambodia, helping to sustain rural livelihoods in one of the world’s poorest countries.
Government representatives, factories and unions backed the latest increase.
Hun Sen “always pays attention to the welfare and livelihood of the workers,” a statement from the Ministry of Labor and Vocational Training on Thursday said.
The ministry said that new wage will come into effect on Jan. 1, 2018.
It also said that the government will continue to delay taxing profits in the textiles sector and eliminate export management fees.
Pav Sina, president of the Collective Union Movement of Workers, said unions were happy with the hike.
“The prime minister always adds it every year, this is appropriate to what we tried to achieve,” Pav Sina said, while adding that higher wages would not make Cambodia less competitive.
But Kaing Monika, deputy secretary general for the Garment Manufacturers Association in Cambodia, said the new minimum wage was “beyond the affordability of some of our members and the competitive level of the country”.
Reporting by Prak Chan Thul; Editing by Amy Sawitta Lefevre and Kim Coghill