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ILO doubts bleak garment outlook

A salesperson arranges Nike basketball shoes on display at a Foot Locker retail store at the Beverly Center
A salesperson arranges Nike basketball shoes on display at a Foot Locker retail store at the Beverly Center in Los Angeles in August last year. BLOOMBERG

ILO doubts bleak garment outlook

The International Labour Organization (ILO) yesterday cast doubt on the Garment Manufacturers Association in Cambodia’s (GMAC) bleak outlook for the rest of 2014, after the association claimed that deadly violence sparked by wage disputes would result in clothing brands reducing future orders.

Speaking from Bangkok, Maurizio Bussi with the ILO’s office for Thailand, Cambodia and Laos, said that the industry will grow at a sustained pace, and that any financial impact will only be short term, despite GMAC’s numbers.

Cautioning that comparisons between countries are difficult to make, Bussi cited the world’s second-largest garment producing nation, Bangladesh, as a place that had continued to prosper despite major tensions.

“If you look at the data that was released at the end of the year for Bangladesh, in a year that was quite severe in terms of the general political environment in Bangladesh and in particular the issues within the garment industry, they haven’t done very badly.

“I think they have done OK,” he said, adding that the industry continued to grow by over 30 per cent.

Bangladesh’s garment industry was thrown into the global spotlight in November 2012, when a factory fire killed more than 100 people. Months later, in April, international criticism reached new levels of outrage following the collapse of the Rana Plaza factory, where nearly 1,300 workers perished.

“We haven’t observed a clear contraction in orders as a result of even a very serious situation where 1,300 people lost their lives,” Bussi said.

Van Sou Ieng, president of GMAC, said on Monday that a strike in the sector over wages and an ensuing clash with government security forces on Friday would cause orders to go down by 20 to 30 per cent in 2014. He cited developments in Bangladesh as backup for the claims.

GMAC’s statements came at a meeting three days after military police fired on protesting garment workers, killing at least four. Workers are demanding a $160 minimum wage, $60 more than the current proposed rate. The strike, which started late last year, appears to be petering out, as workers short on money return to their jobs. Many of the hundreds of factories are resuming normal production today.

Bussi said that if things remain at a “reasonable level of stability”, Cambodia’s garment sector could grow at a growth rate of 20 per cent over the next five years.

Contacted again yesterday, Ieng said he hoped the ILO was correct, but cautioned that the UN-backed body was not producing goods. “They are not managing a factory,” he said.

Major brands including H&M, Gap, Levi’s and Adidas yesterday sent an open letter to the government, manufacturers and trade unions, calling for a peaceful resolution to the wage fight.

Also in the open letter, the brands expressed their concern over “widespread civil unrest and the government’s deadly use of force.”

“The undersigned brands are committed to staying in Cambodia,” the joint statement read.

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