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Logo of Phnom Penh Post newspaper Phnom Penh Post - Report says global economic crisis led to factory closings

Report says global economic crisis led to factory closings

The Ministry of Labour report says laid-off employees will be able to find work; unions claim ex-workers are pushed into sex industry.

OUT WITH THE OLD...

The report presented Tuesday by the Ministry of Labour and Vocational Training also found that 236 new garment and footwear factories opened between 2004 and 2008, creating jobs for approximately 62,000 employees. 

MOST garment factories that shut down in 2008 did so because of the global economic crisis, which resulted in a rapid decrease in purchase orders from key markets, according to a report completed last week by the Ministry of Labour and Vocational Training.

The report, presented Tuesday at a seminar in Phnom Penh, states that 207 "garment and footwear enterprises" employing 75,000 workers closed down between 2004 and 2008.

Although the report does not specify how many closed in 2008, it points to a sharp drop in purchase orders from the United States and the European Union as a principal factor that pushed factories into bankruptcy.

Chea Mony, president of the Free Trade Union of the Workers of the Kingdom of Cambodia, told the Post Tuesday that 30 garment and footwear factories employing 27,000 workers closed in 2008.

Options for the unemployed

The report states that many of those who lost their jobs are "skilful employees" who have applied for new jobs at factories in Phnom Penh.

Others have opted to return to their home provinces, it states.

But Chea Mony said some unemployed workers were reluctant to leave the capital and had taken jobs in karaoke bars and beer halls.

Dr Vichet Lok, executive director of the NGO Cambodia Health Education Development, which works with garment factory workers in Phnom Penh, said a rising number of unemployed workers were considering indirect sex work, which would expose them to diseases including HIV/Aids.

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