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Tearing at the seams

Tearing at the seams

Government and NGOs are scrambling to stitch a safety net as the struggling garment industry sheds thousands of jobs.

As the economic downturn tightens its stranglehold on Cambodian exports, the statistics suggest there is more pain to come: The number of labour strikes between January and June has almost doubled since the same period last year. Of the 23 cases, 17 were related to the garment industry, according to the Phnom Penh Municipal Police.

This is just one of many grim indicators for the sector. The Ministry of Commerce predicts garment exports will fall by "at least" 30 percent this year. The Cambodian Development Resource Institute says wages fell by 18 percent between May 2008 and May 2009. Since January, according to the Free Trade Union of Workers of the Kingdom of Cambodia, 78 Cambodian garment factories have closed and 30 more have suspended production.

While US imports from Cambodia have declined sharply, exports to the US from regional competitors such as Bangladesh, Vietnam and China have increased. "There's concern not just over the economic downturn, but about competitors in the industry," said Chan Sophal, president of the Cambodian Economic Association. Other garment-producing nations in the region are passing Cambodia by, Chan Sophal said, because of lower labour costs or more efficient production.

"We bring more efficient machines; we try to encourage workers to be more efficient; we try to negotiate for cheaper raw materials ... [but] everything is hitting rock bottom already," Roger Phan, secretary general of the Garment Manufacturers Association of Cambodia, told the Post.
A recent report by the UN Inter-Agency Project on Human Trafficking (UNIAP) estimated that 60,000 Cambodian garment workers have lost their jobs since the economic downturn began, and said more layoffs are sure to come.

Further job losses will be felt across the Cambodian economy. UNIAP estimates that of a population of 14 million, about 2 million Cambodians depend on the garment industry - 400,000 through direct employment and another 1.6 million through remittances.

Everything is hitting rock bottom already.

Searching for new jobs
NGOs and the government are trying to address the issue through vocational training, but identifying industries to absorb former garment workers - the majority of whom are unskilled and have limited education - is proving a challenge.
Helen Sworn is the director of Chab Dai Coalition, a partnership between NGOs and private companies to retrain women from the garment sector.
She said that although vocational training programmes abound in Cambodia, many of them are designed with insufficient attention to the demands of the labour market. "It's great to have another sewing programme," she said, "but where are those girls going to go?"

Many former garment workers turn to the entertainment sector, Sworn said, including jobs in beer gardens, massage parlours and sex work. "That's been a lure for them ... because it's low-skill and they earn a similar amount to what they get in the garment factories." Such jobs often put women at risk of sex trafficking, she warned, adding that there are also "huge issues of debt bondage".

Heng Suor, director general of the Ministry of Labour and Vocational Training, said roughly 40,000 former garment workers, from an applicant pool of around 70,000, had participated in government-sponsored retraining programmes ranging in length from one to four months. The government has yet to consider the issue of job placement, he said.

Buot Channy, 30, has been working at Phnom Penh's Tack Fat garment factory since 2004. Six months pregnant, she worries about losing her job, although she is critical of the irregular pay and reduced hours. "It seems irregular; sometimes we have work to do, sometimes we don't, and the paycheck is always difficult to get," she said.

Sok Kim, 46, is another Tack Fat employee. She, too, is worried about losing her job and has already prepared for that scenario. "I have bought a sewing machine for my house," she said. "If I lose my job, I will go back to my home in Takhmao." Like Buot Channy and other workers interviewed, she was unaware of the Ministry of Labour's retraining programme.

Going back home
Leaving the capital and heading home may be the best option for many laid-off garment workers, according to Chan Sophal. He cited agriculture as one of the most promising sectors, as did Michael Smiddy, a senior consultant at Emerging Markets Consulting. Of the 40,000 spots in the Labour Ministry's programme, over 30,000 are reserved for agriculture. The sector is as low-skill and labour-intensive as factory work, with excellent potential for growth, Smiddy said. Crop yields are improving, and profits will increase further if processing facilities are improved, he added.

For some, however, the loss of a factory job means not a new career but early retirement. Ouk Sokha, a worker at Phnom Penh's GoldTex Garment Manufacturing Ltd, said she often worries about unemployment but has no contingency plan. "Maybe I would go back to my hometown in Prey Veng," she said. "I am too old to find a new job."


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