Factory closures far outstripped openings last year, Ministry of Labour reports
AT Least 106 garment and shoe factories were closed last year, mostly because of a slump in Cambodia’s key export industry, forcing more than 45,000 workers out of employment, Ministry of Labour figures showed late Monday.
Oum Mean, secretary of state at the ministry, said that 66 additional factories had suspended operations over the same period, temporarily affecting an additional 38,124 workers.
“At the same time, we also saw 48 new established factories that employed 16,886 workers,” he said, adding that the government trained 40,000 unemployed garment workers in agriculture up to October.
It was unclear what percentage of closures were factories that had been hit by the global economic crisis – which prompted a 15.8 percent slide in Cambodian garment and apparel exports last year – and how many had closed and immediately reopened to benefit from tax breaks, reportedly a practice that happens frequently in the Kingdom.
The Ministry of Labour said at the end of September that 130 garment factories closed or suspended operations in Cambodia in the first three quarters, meaning an additional 42 factories had shut down from October to the end of December.
Just over 30,000 garment workers were made redundant last year up to the end of September.
Figures from the government showed a smaller closure rate than those by the Free Trade Union of Workers of the Kingdom of Cambodia, a body that represents workers’ rights across different sectors.
President Chea Mony said late Monday that according to union data 135 garment and shoe factories had closed since the start of the global economic crisis in Cambodia, around August 2008, causing 78,000 workers to lose their jobs. Most redundancies had been in the garment industry, he added.
“I am concerned that workers have increasingly been losing their jobs … it is the government’s duty to address this,” said Chea Mony.
Oum Mean said the government inspects every factory in the Kingdom to calculate its employment data.
“We have not finalised the figures [for closures and job losses in January and February] yet,” said Oum Mean.
“But we have hope for 2010 because ... we see that the garment sector is stable.”
Evidence so far has suggested that openings and closures were about the same, he added.
A representative of the Garment Manufacturers Association of Cambodia (GMAC) told the Post last week, however, that the sector is far from recovery.
Speaking after the release of Ministry of Commerce figures that showed an annualised 0.2 percent drop in garment and apparel exports in December, GMAC Secretary General Ken Loo pointed out that shipments were still down after dismal figures for the last quarter of 2008.
He added that anecdotal evidence for January and this month suggested the situation has yet to improve.
The Ministry of Labour’s report of extensive job losses in the garment sector comes as unions have threatened strikes and put pressure on GMAC to consider a rise in the industry minimum wage of US$50 per month, a move factory owners say is unfeasible given the continued slump.
GMAC said last week that it would look into the issue of wages, which unions said last year should be raised to more than $90 per month based on living costs in the capital.