The minimum wage for Cambodia's garment workers is to rise by $5 a month from January 2012, following negotiations between the government and employers, Prime Minister Hun Sen told a public and private sector forum yesterday (23 November).

The rise will lift the monthly wage from $61 to $66, and according to the government will help workers to meet basic needs like health care as well as reduce the likelihood of strikes.

To offset the rise, the government has agreed to delay the introduction of a 1% tax on their profits from 2013 to 2015.

Mr Van Sou Ieng, chairman of the Garment Manufacturers Association of Cambodia (GMAC), said employers would face a loss of income due to the higher monthly wage but conceded that the move would help prevent strikes.

The garment industry in Cambodia employs around 400,000 workers and is the backbone of its economy. Exports reached $1.858bn in the first half 2011, up 32% over the same period last year.