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Cambodia’s low rate of unemployment doesn’t tell whole story, report finds

Workers stitch clothes at a garment factory in a special economic zone near Sihanoukville last June.
Workers stitch clothes at a garment factory in a special economic zone near Sihanoukville last June. Sahiba Chawdhary

Cambodia’s low rate of unemployment doesn’t tell whole story, report finds

Cambodia continues to boast a remarkably low unemployment rate of 0.2 percent, according to a new global employment report from the International Labour Organization (ILO) – but analysts warn the number doesn’t tell the entire story.

According to the report, released yesterday, Southeast Asian countries are continuing to create jobs – but they often remain of poor quality. That means many in Cambodia and other countries, while technically employed, are still struggling to make ends meet, said Sara Elder, head economist at the ILO’s Asia and Pacific office.

“A lot of people in Cambodia are doing a few hours of work during the week, such as selling something on the street, but in the meantime they’re looking for another job, another source of income,” Elder said. “So in a sense they’re employed and unemployed at the same time.”

How economists calculate unemployment has long plagued researchers in developing countries, where many say the figure is all but meaningless.

According to the report, Cambodia’s unemployment rate is below the 3.4 percent for Southeast Asia as a whole.

However, 51 percent of jobs in Cambodia are “vulnerable” jobs, slightly higher than the Southeast Asian average of 46 percent. People in vulnerable jobs are not salaried – instead, they may work as farmers or for their family. Many are what economists are now calling “underemployed”.

Miguel Chanco, lead analyst at the Economist Intelligence Unit, said he typically does not rely on unemployment rates in Cambodia.

“A significant proportion of the labour force continues to rely heavily in agriculture, which remains at the mercy of the weather,” Chanco said, adding that workers are also subject to “the narrowness of . . . [the] manufacturing sector”.

William Conklin, of the labour advocacy group Solidarity Center, said wages are also an important indicator of economic health.

“Many people here have more than one job because the wages are too low,” Conklin said, adding that it is common to see women working as store vendors during the day and at hostess bars or KTVs at night.

As the garment industry has stagnated, Elder said it is worrisome to see growth in high-paying jobs plateauing since the early 2000s.

“[Garment factory jobs] weren’t perfect jobs, but they were jobs,” Elder said. “As that levels off, we need to think about diversification and whether or not the economy is going to create enough jobs in the service sector. That’s where the real struggle comes in.”

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