Fourth quarter Cambodian garment exports plummet 46 percent: officialPHNOM PENH (AFP) -- Cambodian garment exports plummeted 46 percent in the fourth quarter of last year, industry officials said Thursday, warning of factory closures and jobs cuts in one of the country's key sectors.
An economic downturn in the United States, which buys 70 percent of all Cambodian textiles, and continuing domestic labour disputes contributed to the plunge, said Van Sou Ieng, chairman of the Garment Manufacturers' Association of Cambodia (GMAC).
Until last year, the sector had enjoyed annual growth of up to 20 percent, he added.
Export growth for the entire year stood at only 2.4 percent, Van Sou Ieng told AFP, adding that the outlook for 2008 "surely was not good."
"Definitely some factories will close, some people will lose their jobs," he said.
Cambodia's garment industry is the impoverished country's largest source of income, providing 80 percent of its foreign exchange earnings and employing an estimated 350,000 people.
Despite heavy competition within the region, namely from China and Vietnam, Cambodia has won over buyers in the US and Europe with its labour-friendly image.
But the end of US restrictions against Chinese textile exports in 2009 and greater productivity in Vietnam are likely to erode Cambodia's position, industry officials warn.
Deteriorating labour relations are also weakening the sector, Van Sou Ieng said.
"The immediate solution is improving industrial relations," he said.
"If we can convince our colleagues from the unions to cooperate and be more serious and productive, we might be able to maintain some permanence," he added.
Industry officials said an estimated 1,100 separate unions are operating in Cambodia's 300 garment factories, with some manufacturers having to deal with as many as seven workers' groups at one time.
"It is impossible to manage," Van Sou Ieng said, adding that frequent illegal strikes have cut heavily into productivity and driven away foreign buyers.
"It is a serious black mark on the industry," he said.
Labour leaders have disputed factory owners' claims, saying they are greatly exaggerating the number of strikes and that workers are simply lobbying for fair wages.
Minimum wage for garment workers hovers around 50 dollars per month.
An economic downturn in the United States, which buys 70 percent of all Cambodian textiles, and continuing domestic labour disputes contributed to the plunge, said Van Sou Ieng, chairman of the Garment Manufacturers' Association of Cambodia (GMAC).
Until last year, the sector had enjoyed annual growth of up to 20 percent, he added.
Export growth for the entire year stood at only 2.4 percent, Van Sou Ieng told AFP, adding that the outlook for 2008 "surely was not good."
"Definitely some factories will close, some people will lose their jobs," he said.
Cambodia's garment industry is the impoverished country's largest source of income, providing 80 percent of its foreign exchange earnings and employing an estimated 350,000 people.
Despite heavy competition within the region, namely from China and Vietnam, Cambodia has won over buyers in the US and Europe with its labour-friendly image.
But the end of US restrictions against Chinese textile exports in 2009 and greater productivity in Vietnam are likely to erode Cambodia's position, industry officials warn.
Deteriorating labour relations are also weakening the sector, Van Sou Ieng said.
"The immediate solution is improving industrial relations," he said.
"If we can convince our colleagues from the unions to cooperate and be more serious and productive, we might be able to maintain some permanence," he added.
Industry officials said an estimated 1,100 separate unions are operating in Cambodia's 300 garment factories, with some manufacturers having to deal with as many as seven workers' groups at one time.
"It is impossible to manage," Van Sou Ieng said, adding that frequent illegal strikes have cut heavily into productivity and driven away foreign buyers.
"It is a serious black mark on the industry," he said.
Labour leaders have disputed factory owners' claims, saying they are greatly exaggerating the number of strikes and that workers are simply lobbying for fair wages.
Minimum wage for garment workers hovers around 50 dollars per month.
2 comments:
This is just the beginning of a slow-down. The U. S. economy is shattered by one financial disaster after another. Big banks and insurance companies are losing money in the billions. It will reach Cambodia soon. Land speculators beware.
Just do your job, and forget about going on illegal strikes, because you'll be out of work. Don't blame us... blame on your failure and ignorance.
Again, as long as you do your job, you'll be fine.
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