The global financial crisis is taking its toll not only on factory owners, but also those who depend of the workers having jobs
Photo by: HENG CHIVOAN
Workers prepare cloth in a garment factory in Phnom Penh. Increasing numbers of factory employees are losing their jobs and returning to their homes outside the capital.
ABOUT 730 garment workers lost their jobs after the ACE garment factory closed in Phnom Penh Thmey commune, Russey Keo district, at the weekend, Chea Mony, president of the Free Trade Union of the Workers of the Kingdom of Cambodia, told the Post on Monday. The owners of the factory have not paid compensation to any of the unemployed workers, the union added. “About 730 garment workers lost their jobs. Now some are staying to demand their payment while some have gone back home, and some are looking for new jobs as garment workers [in Phnom Penh],” said Chea Mony. He said that the workers did not receive the salaries they were still owed when the ACE garment factory closed. He estimated that about one dozen garment factories have closed in the Kingdom since the beginning of last month.
IN a sign that the global crisis is cutting deeper into the Cambodian economy, workers' landlords say they are feeling the pressure of increasing garment factory closures as the export market to the United States and European Union shrinks.
With more workers returning home and factory floors lying dormant, owners estimate they are experiencing a loss of around 60 percent to 70 percent in rental income.
"Presently, I am losing US$600 per month because garment factories have shut down and workers have left," said Sinn Vanny, a landlord who owns 25 factory housing units in Dangkor district, Phnom Penh.
"Nowadays, I have only five rooms occupied - three rooms for garment workers and two for construction workers," she added.
"I make only $150 a month compared to the $750 I was earning just last year," she said.
Factory economies affected
Chea Mony, president of the Free Trade Union of the Workers of the Kingdom of Cambodia, agreed that due to the deepening financial crisis, not only garment workers are affected by the recent spate of factory closures.
Shop sellers and taxi drivers who depend on the factory workers to make a living are also losing money, too, he added.
Factory landlords are also facing big losses as they struggle to fill empty housing units that were mostly full about one year ago, they say.
Now it is so quiet because the garment workers have all gone back home.”
Chea Mony told the Post last week that 37 garment factories closed in 2008, leaving 27,000 workers unemployed.
Between January and this month, 10 garment factories employing 21,000 workers have closed, and more are "getting ready" to shut up shop, he said.
Chum Srey Pov, who rents out 25 factory housing units in Phnom Penh's Meanchey district, said that only one has been occupied since workers left after losing their jobs two months ago.
"I lost $1,000 over two months already because [factory workers] have no job to go to and they have left. Now I only have one room occupied, which gives me $40 per month in rent," he said.
Pring Samnang, who rents out 15 rooms in the capital, said that she lost occupants from 10 rooms two months ago when the garment factory she was leasing to closed.
"Now I have only five rooms occupied, which gives me $35 per month," she said.
"Before the garment workers left, I earned $525 every month ... but now it is so quiet because the garment workers have all gone back home."
The latest gloomy news from one of Cambodia's leading earners of foreign exchange is yet a further sign of the Kingdom's integration into the world economy and its suffering as a result of the downturn.
The International Monetary Fund reported last week that the global economic contraction and financial crisis were increasingly affecting Cambodia's export-driven economy.
"Garment exports are under pressure due to sharply lower retail demand in the United States and European Union," the IMF said.
The organisation predicted that prospects for growth in Cambodia's main sectors in 2010 - such as the garment industry - depend on the revival of regional and global economies.
While the IMF recommended increased spending in the Kingdom, as a percentage of gross domestic product, it did not offer advice for reviving the fortunes of the garment factories.