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Minimum wages surge across Southeast Asia

Favoring protectionism over productivity risks discouraging foreign investment

Cambodia's minimum wage, which determines the pay of many garment workers, has risen sharply in recent years.   © Reuters

TOKYO/YANGON/HANOI -- Minimum wages in Southeast Asia are rising sharply as governments strive to please their publics, but the trend could slow foreign investment as the region loses its edge as a low-cost production hub.

In Cambodia, where the textile industry accounts for 60% of exports, Japanese wig maker Artnature sold a factory last year to a Hong Kong business, just three years after setting it up. Rising labor costs were a factor in the decision.

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