The country’s $7 billion apparel industry is fuelled by more than 740,000 garment workers, who strongman Hun Sen attempted to woo before July’s widely-criticised elections.
The poll was derided internationally after the only credible opposition party was disbanded before the vote, handing the premier’s ruling party all 125 seats.
Union representatives stopped short of welcoming the wage increase, which they say is not enough to address rising inflation and living expenses.
“It does not satisfy us yet. We were demanding an increase of at least $15 a month,” Ath Thorn of the Coalition of Cambodia Apparel Workers Democratic Union told AFP.
But Kaing Monika from GMAC — an association representing the owners of exporting factories — said the increase would test Cambodia’s competitiveness against neighbouring Vietnam.
“Our electricity and water bill is still higher than Vietnam,” Kaing Monika said. “So next year will be a test for Cambodia on whether we are able to compete.”
Parliamentarians have floated the possibility of temporarily revoking Cambodia’s entry into a trade scheme that allows tariff-free exports of goods to EU countries.
If enacted, it would be major blow to the industry, which currently exports about $5.7 billion worth of products to the EU.