Logo of Phnom Penh Post newspaper Phnom Penh Post - Nation wakes up to slowdown




Nation wakes up to slowdown

Nation wakes up to slowdown

WORK-WEEK13.jpg
WORK-WEEK13.jpg

Officials are quickly realising Cambodia is not immune to the global economic upheavel and are brainstorming ways to save jobs in the key garment, construction and tourism industries

AFP

A motorcycle repairman sleeps through the afternoon as he waits for customers in Phnom Penh in this file photo. Joblessness is going to become an increasing problem for Cambodia as the effects of the global financial crisis start to bite, affecting mainly low-income workers, especially in the garment and construction sectors.

THE effects on employment of the global economic slowdown in the garment, tourism and construction sectors are a big concern for Cambodia, but it is not time to sound the alarm bell yet, analysts say.      

"It is not only a huge concern for unemployed workers, but even workers who still have jobs," Kang Chandararot, director for the Cambodia Institute of Development Study, told the Post Wednesday.

"There is no system to help the jobless, so in the meantime, whoever loses their jobs, they will have to find jobs by themselves," Kang Chandararot said.

Cambodian unemployment has been affected indirectly by the world financial crisis, which has led to a slowing of the macroeconomy that will be felt in 2009 and 2010.

"It makes enough sense that Cambodia's GDP would go down to around seven percent this year and even lower in 2009," Kang Chandararot said.

This situation could brew a general feeling of uncertainty and fear in workers.”

According to a CIDS study, data shows that the percentage of total employment absorbed by the garment industry has declined since 2006. The Ministry of Commerce figures show 62,000 garment workers have experienced unemployment since July 2008, including workers in factories that have permanently closed or temporarily suspended operations.

"This situation could brew a general feeling of uncertainty and fear in workers about their future," said Kang Chandararot.

But, he added, labour market programs are a tool to help improve industrial relations and enhance stability in the sector during this restructuring period.

"Labour market programs can remove workers' fears of income insecurity and make them feel like their employers care about their interests and protection," a CIDS release said.

Long-term impact

Cheath Khemara, a senior labour officer for the Garment Manufacturers Association of Cambodia, said the financial crisis will seriously affect the garment and textile sectors in coming years.

"Once Korean investors are affected by the financial crisis, so will be Cambodian garment factories, which are mostly operated by Korean business people," he said. "It is difficult for us in terms of protecting jobs and creating jobs for people."

Cambodia's garment sector employs a total of 350,000 people, mostly young women from the countryside. Cambodia exports 70 percent of its garment products to the United States, where the financial crisis first erupted before spreading to Europe and Asia.

Officials blame strikes as a major factor in the slowdown of purchasing by buyers.

Union disputes

The number of strikes have increased 37.5 percent in the first seven months of 2008 to 66 strikes, resulting in 169,439 working days lost, in which workers sought to gain income and job security through demands for higher wages, entitlement payments, non-discrimination against union members and rehiring of retrenched workers.

"Those strikes have been largely unsuccessful for workers, and consequently, more anxiety, adversely affecting industrial relations and undermining the capacity of factories and the stability of the sector," the CIDS release said.

Other sectors such as construction have also been severely affected by the crisis, in which 30 percent of a total 50,000 workers were laid off this year.

But the director of the Construction Department under the Ministry of Land Management and Construction, Lao Tip Seiha, told the Post recently that there was growth in the construction sector because of political stability and consistent economic growth.

"There are more jobs for Cambodian people working in the construction sector every year," he said.

He confirmed that there are 45,000 to 50,000 people currently working in the construction sector.

Tourism relatively safe

Ho Vandy, president of the Cambodian Association of Travel Agents, said that the financial crisis would definitely affect the tourism industry but was not likely to lead to any layoffs.

"We are worried about it, but we will come up with a strategy to keep tourism growing as usual by reducing the prices of services," he said.

"I have already had a discussion with the private sector to reduce the price of package tours and also urged airline companies to reduce the price of tickets, and will request the government to reduce the price of petrol," he said.

Representatives from the private sector and the tourism industry are scheduled to negotiate with the government on November 21 to come up with a strategy aimed at preventing unemployment in the tourism sector.

Additional reporting by Soeun Say

MOST VIEWED

  • Would you like fries with that? US burger chain makes Phnom Penh debut

    California-based The Habit Burger Grill restaurant chain is all set to serve up a delicious array of charbroiled burgers and sides at its newest international location in the centre of Phnom Penh. The Habit is “renowned for its award-winning Charburgers grilled over an open flame,

  • Phnom Penh underpass opens to ease traffic

    Prime Minister Hun Sen has announced a temporary opening of the 488m underpass at the Chaom Chao roundabout in Phnom Penh’s Por Sen Chey district, which was recently completed to connect traffic from National Road 4 to Russian Federation Blvd. The move is to reduce

  • Banteay Meanchey flood victims receive aid

    Prime Minister Hun Sen on Wednesday provided aid to more than 10,000 families affected by flooding in Banteay Meanchey province’s Mongkol Borei district and offered his condolences to the 18 victims who drowned in the province over the past week. He said flooding had occured in

  • PM urges caution as Polish man tests positive for Covid

    The Ministry of Health on Wednesday reported that a 47-year-old Polish man tested positive for Covid-19 after arriving in Cambodia on Monday. There are a total of six Covid-19 patients currently in the country, all of whom are being treated at the Khmer-Soviet Friendship Hospital

  • Banteay Meanchey floods kill one more as death toll reaches 15

    As floodwaters start to recede in Pursat, Battambang and Pailin provinces and Phnom Penh, Banteay Meanchey continues to bear the brunt as one more person was killed on Monday, bringing the total number of flood-related deaths to 15 in the province this month. Banteay Meanchey provincial

  • Serving coffee with a side of robots

    The eye-catching glass building surrounded by greenery at the intersection of Streets 371 and 2002 in Phnom Penh’s Sen Sok district is more than just another coffee shop where you can while away a few hours. UrHobby House cafe is filled with robots and characters from