Can Garment Exports from Cambodia, Laos and Burma be Sustained?

This paper examines institutional and firm-level technological capabilities to assess the capacity of Cambodia, Laos and Burma to sustain garment exports over the long term. Although the preferential access enjoyed by products from these countries in the developed markets has helped attract strong foreign direct investment inflows that have supported rapid growth in employment and exports, the empirical evidence shows that institutional support needs to be upgraded if garment exports from the three countries are to be sustained. Burma and Laos show the least potential to benefit among the three countries from this opportunity, with the former experiencing severe political instability and trade sanctions by the USA and the latter landlocked and endowed with a small labour force. The paper argues that unless the institutional and firm-level technological capabilities are developed further, all three countries will find it difficult to retain a significant presence of garment firms once the trade privileges are withdrawn.