It may not be easy to see on the surface, but Cambodian capital Phnom Penh is a boom town akin to those of America's old Wild West.
But the dirty, dilapidated city's most precious commodity is not gold. Rather it is garments, which provide hundreds of millions of dollars a year in exports to the United States.
The garment industry is nothing short of a phenomenon the likes of which strife-torn Cambodia has never seen before, but it has not been without costs. The rise of factories has been accompanied by labour problems and an unprecedented union movement, sociological effects, alleged corruption and exploitation by foreign companies, and ultimately, quota restrictions imposed by the US earlier this year.
Analysts concede the boom is beginning to slow as the government tries to extract more taxes from manufacturers, the quota system becomes a concern, and independent labour unions mature.
Nonetheless, the garment industry remains unchallenged in Cambodia, and observers say the country is taking a necessary evolutionary step previously taken by other war-torn nations such as Japan and South Korea.
'It's an industry that won't be here forever,' says David Carrad, an American investment adviser in Phnom Penh. 'It will go someplace cheaper. So I think we should take advantage of it while we can - get some training for people.' He says developing countries such as Malaysia used the garment industry as a springboard to more advanced industries like semiconductors.
The Cambodian government, which was granted Most Favoured Nation (MFN) trading status by the US in 1996 and had no quota restrictions, was more than eager to encourage the industry. Officials enticed foreign investors with an 'open-door' policy that included wide-ranging tax exemptions, duty-free imports of supplies and materials, cheap labour and few laws.
The result was far beyond the government's expectations. Since 1996, more than 120 foreign-owned garment factories have opened in or around Phnom Penh. Exports of items such as T-shirts, jeans and dresses went from US$2.5 million that year to a staggering US$400 million in 1998.
Even a bloody 1997 coup proved only a minor inconvenience in the surge of new factories, whose US clientele expanded from K-Mart to more up-scale retailers such as The Gap and The Limited.
'There was really a gold-rush mentality,' says one Western economic analyst. 'The [garment] industry is playing an unusually strong economic role in Cambodia's economy as far as exports are concerned.' More than 80% of Cambodia's exports are garments and the industry employs more than 90,000 young Cambodians, mainly women, who would otherwise be relegated to menial agricultural work. But the flood of garments into the US prompted trade officials there to slap quotas on 12 export items from Cambodia, including T-shirts and jeans, while promising some exemptions if labour conditions were addressed.
Secondly, the cash-strapped government, desperate to increase revenues, is no longer as generous to manufacturers. It is trying to enforce a 'turnover tax' - 1% of gross profits - but is meeting fierce resistance.
Singaporean Roger E Tan, secretary-general of the Cambodian Garment Manufacturers Association, says the tax will directly affect future investment in the industry. 'This turnover tax will definitely be a discouragement,' Tan says. 'The garment industry is the only thing that is attracting the attention of the international community. The turnover tax could cripple the industry.'
He says the US-imposed quotas will also discourage new investors and destroy newer manufacturers if they do not react. 'The new companies were caught with their pants down,' Tan says. 'The existing companies may have to branch off into non-quota items. There's still room for expansion.'
Such talk is encouraging to the seemingly endless supply of Cambodian workers, who line up to labour 72 hours a week at little more than US$1 a day. Nearly half of the country's population of 11 million is under 25, and competition for garment jobs is so fierce that people often bribe their way into work.
'It bothers me that [unions] say you're oppressing these people,' says investment adviser Carrad. 'Is that why they're lining up 40 deep to get a job? This is not Burma, because that really is slave labour at the point of a gun.'
Union activists paint a far different picture, alleging workers can be fired for joining unions. They also allege some workers are subjected to daily beatings by factory managers, are working in dangerous conditions and are denied overtime pay in violation of a 1997 labour law.
'We will become a colony of cheap labour,' warns prominent political dissident Sam Rainsy, opposition leader of Cambodia's parliament. Rainsy, a labour lawyer, led Cambodia's first-ever garment strike in 1996 after helping to establish the industry's only independent union. The labour movement has since been on a sometimes bloody roller coaster ride that included dozens of organised strikes, clashes with riot police wielding shock batons and water cannons, and collusion between the government and manufacturers to weaken the unions.
Industry officials blamed Rainsy for stirring labour unrest for political purposes, as well as slinging allegations that manufacturers are involved in drug smuggling and illegal transshipment of garments.
However, some analysts say the labour movement has taken on a life of its own. It was no small feat for the young, uneducated Cambodians, who are by nature non-confrontational and subservient.
'The bargaining position of the workers has improved,' Rainsy says. 'The seed of democracy has been placed in the workers. Now they have to conduct the fight themselves.' Their current fight is to raise their salaries to US$60 a month, but most factory owners are not listening.
Duch Kosal, a 28-year-old garment worker from rural north-east Cambodia, says she and her co-workers have unsuccessfully gone on strike twice for a pay-raise from the current US$40. 'The factory is not heaven and it certainly is not wonderful for me, despite what they say,' she says. 'I can't [live on] only US$40 a month. I have to send a little bit of money to my family. They are happy receiving only a dollar.'
One Western diplomat says manufacturers, many of whom are ethnic Chinese, are 'nickel-and-diming' the Cambodians because they see them as lazy and unproductive.
'Cambodians don't have the Chinese-style mentality as far as factory work [goes],' the diplomat says. 'They are not as physically strong, partly due to malnutrition at some point in their lives.'
US trade representatives, prodded by American labour unions, have taken a special interest in the rights of Cambodian garment workers. The trade deal between the US and Cambodian governments that imposed quotas, provided exemptions if steps were taken to improve conditions at factories.
'There's been much more attention to the working conditions since this deal,' one US official says. 'I don't want to say it's improved.' Indeed, labour problems have steadily continued, but management and workers are slowly learning the art of negotiation. What analysts and politicians disagree on is how long the industry will last, and what Cambodia will do once its 'golden goose' dies.
Rainsy says beliefs that garment factories are part of a developing nation's natural evolution are 'ridiculous', adding that the government should promote other industries such as fisheries and agriculture. 'Garment factories are ... one pillar, but I don't want it to be the only pillar,' he says. 'A house needs four pillars or it will collapse.'
The government is reviewing at least 15 applications for shoe factories, which analysts say is another small step in Cambodia's industrial development.
It had better evolve quickly, say some economic analysts. The World Trade Organisation is considering implementing by 2004 a system to restrict imports of textiles and apparel products to the US, Europe and other markets.
That, coupled with China's expected entry into the WTO in the next few years, could mark disaster for Phnom Penh's boom town of factories. 'China can clothe the world,' one diplomat says. 'It will be difficult for any countries like Cambodia to compete.'