PHNOM PENH, July 13, 2008 (AFP) - Sath Vanny sits anxiously at the door to her tiny one-room hut in the factory district of Cambodia's capital.
She left her hometown in the southern province of Takeo seven years ago to work at a women's shirt factory, sending most of her earnings back to help the family farm.
But a slowdown in orders has the 25-year-old worried about her job.
Overtime work has fallen off as Cambodia's textile sector, the country's biggest industrial employer, struggles against stiffer global competition and slowing demand.
More than 10 Chinese-owned factories have moved to cheaper markets, leaving hundreds of thousands of garment workers -- mostly young women like Vanny who support their impoverished families -- facing destitution.
"I was told that we didn't have as many orders as we used to, but with the basic wage I don't have money to send to my parents," says Vanny, who now earns less than 60 dollars per month.
"I can't imagine living without a factory job. I am so worried about my family," she adds, wiping away tears.
The garment industry earns 80 percent of Cambodia's foreign exchange earnings and employs an estimated 350,000 people in more than 300 factories.
The industry thrived after a unique labour-friendly deal with the United States in the 1990s.
Under the deal, Cambodia passed new labour laws, encouraged labour unions and allowed the International Labour Organisation (ILO) to inspect factories and publish its findings.
In turn, the United States cut tariffs on Cambodian garment exports, buying 70 percent of all of the country's textiles.
Cambodia maintained its higher working conditions after the deal expired in 2005, and garment-making has made the economy one of the fastest growing in the region. But it does not look built to last.
The industry grew only 8.0 percent last year after suffering a dismal fourth quarter that saw orders plummet by nearly half, according to the World Bank. It previously enjoyed growth of up to 20 percent.
Apparel exports have declined since October, mainly due to the US economic slowdown, according to Cambodia's commerce ministry.
Exports to the United States slipped 1.44 percent in the first quarter, compared with the same period last year, to some 500 million dollars, it added.
Meanwhile factory owners are looking abroad for greater productivity and lower costs, says Cambodia's Free Trade Union (FTU).
Sok Vannak, who has been working at a factory for almost 10 years, says her Chinese bosses often threaten to move the factory to Vietnam, where costs are cheaper.
"They warn us all the time. I'm afraid that it could come true," says the 27-year-old.
"I have no land to farm. Without the factory we will have a hard time surviving," Vannak says.
Garments are a shifting industry, says Kaing Monika, manager at the Garment Manufacturers Association of Cambodia. Many manufacturers could move to Vietnam, Bangladesh or India, he adds.
"Production costs -- oil and power -- are high in Cambodia, and the demand for higher wages also put the country's garment industry in danger," he says.
Factory owners complain about a proliferation of labour unions and illegal strikes, but workers say they merely want proper wages.
About 27,000 garment workers have quit in the last year in search of higher pay, according the FTU.
Some have gone to look for work in rural areas where the cost of living is lower, while others have found work at karaoke parlours where they're in danger of falling into prostitution, says FTU president Chea Mony.
Next year will bring even more competition when US restrictions on Chinese textile exports are scheduled to end.
"China and Vietnam are still our direct competitors, and so far we have nothing special to offer buyers. That is why we're very concerned," says Oum Mean, of Cambodia's labour ministry.
"To counter this competition, we must increase productivity, quality and extend our reputation as having high labour standards," he says.
She left her hometown in the southern province of Takeo seven years ago to work at a women's shirt factory, sending most of her earnings back to help the family farm.
But a slowdown in orders has the 25-year-old worried about her job.
Overtime work has fallen off as Cambodia's textile sector, the country's biggest industrial employer, struggles against stiffer global competition and slowing demand.
More than 10 Chinese-owned factories have moved to cheaper markets, leaving hundreds of thousands of garment workers -- mostly young women like Vanny who support their impoverished families -- facing destitution.
"I was told that we didn't have as many orders as we used to, but with the basic wage I don't have money to send to my parents," says Vanny, who now earns less than 60 dollars per month.
"I can't imagine living without a factory job. I am so worried about my family," she adds, wiping away tears.
The garment industry earns 80 percent of Cambodia's foreign exchange earnings and employs an estimated 350,000 people in more than 300 factories.
The industry thrived after a unique labour-friendly deal with the United States in the 1990s.
Under the deal, Cambodia passed new labour laws, encouraged labour unions and allowed the International Labour Organisation (ILO) to inspect factories and publish its findings.
In turn, the United States cut tariffs on Cambodian garment exports, buying 70 percent of all of the country's textiles.
Cambodia maintained its higher working conditions after the deal expired in 2005, and garment-making has made the economy one of the fastest growing in the region. But it does not look built to last.
The industry grew only 8.0 percent last year after suffering a dismal fourth quarter that saw orders plummet by nearly half, according to the World Bank. It previously enjoyed growth of up to 20 percent.
Apparel exports have declined since October, mainly due to the US economic slowdown, according to Cambodia's commerce ministry.
Exports to the United States slipped 1.44 percent in the first quarter, compared with the same period last year, to some 500 million dollars, it added.
Meanwhile factory owners are looking abroad for greater productivity and lower costs, says Cambodia's Free Trade Union (FTU).
Sok Vannak, who has been working at a factory for almost 10 years, says her Chinese bosses often threaten to move the factory to Vietnam, where costs are cheaper.
"They warn us all the time. I'm afraid that it could come true," says the 27-year-old.
"I have no land to farm. Without the factory we will have a hard time surviving," Vannak says.
Garments are a shifting industry, says Kaing Monika, manager at the Garment Manufacturers Association of Cambodia. Many manufacturers could move to Vietnam, Bangladesh or India, he adds.
"Production costs -- oil and power -- are high in Cambodia, and the demand for higher wages also put the country's garment industry in danger," he says.
Factory owners complain about a proliferation of labour unions and illegal strikes, but workers say they merely want proper wages.
About 27,000 garment workers have quit in the last year in search of higher pay, according the FTU.
Some have gone to look for work in rural areas where the cost of living is lower, while others have found work at karaoke parlours where they're in danger of falling into prostitution, says FTU president Chea Mony.
Next year will bring even more competition when US restrictions on Chinese textile exports are scheduled to end.
"China and Vietnam are still our direct competitors, and so far we have nothing special to offer buyers. That is why we're very concerned," says Oum Mean, of Cambodia's labour ministry.
"To counter this competition, we must increase productivity, quality and extend our reputation as having high labour standards," he says.
7 comments:
It is so sad to see factory workers like Sath Vanny and Sok Vannak worry about their future for not having a job even the job they have right now couldn't even pull them out of poverty! Since most of the factories are foreign owned and they can pick up and leave anytime they want because they don't feel obligate or have the responsibility to make thing work for the local community becasue it is all about the bottom-line!
It is time that Cambodia must have indigineous factories especially owned and operated by the Cambodian who has the obligation and the responsibility to make thing work for the local community without having to threaten the local community just to meet their bottom line!
There is something wrong with the whole Cambodian economic sytem and it must be reshaped and remolded to fit the need of Cambodian people because after all this is Cambodia and the Cambodian people can be the producer and the consumer to balance everything out such as the cost of living!
The Cambodian government must step in to help out and to create opportunity for them to move on such as give them interest free loan to learn new career or something! Not all people can be successful and some people do need help!
The solution would be to get rid of the greedy dumb union leader. That will help to keep the businesses here instead of going to Laos, Vietnam, or Burma.
LOL it looks like you all need to learn more about globalization.
Well, business is business, if you can't make the expected profit, no globalization in this universe is going to help you.
he he he! Can Preah Vihear help you? Now your people is nearly die. Time bomb will explode after election! The 31% inflation rate, how can you resist economic downturn?
Stop dreaming of Cambodian businessman to run garment business. Realize the fact of your country! You are agricultural based economy and what is the award for industrialize the country rather than environmental pollution. Your infrastructures are not supporting industry as well.
Importantly, Khmere businessman can do nothing rather than gambling business, political related business and beer garden.
So, vote for CPP! The prostitute will flood around. You will see the gambling, CamboSix and SportLive in every corner of the road because that is the hope of the poor. Vietnamese will occupy the country.
Goodluck, Khmere Friend!
What is so hard about setting up a garment sweat-shop!
First build a big warehouse or rent a big warehouse! Second populate the whole place with sewing machine! Third begin the hiring of dirt poor desperate people who are willing to work for food!
It is a fucken stereotype that Cambodian can only do farming or gambling related business!
Most Cambodian people chose not to do certain business because they were misleding into believing that it very hard or take alot of money to start business! The fact is in the real business world it is all about making contact and have a good network of friends who can help with the capital to start the business! Fuck the bank!
The fucken problem is Cambodia lack of every kind of literature on how to start businesses and the fucken school is doing such a poor job in teaching Cambodian people about financial literacy and the business world! Other problems is the foreingers bring in their money with such a buying power that they can virtually buy the whole Cambodia to be their slave! To make everything worst, the corrupted Cambodian officials only chose to deal with the foreingers who have a lot of money to do business while suppressing those small Cambodian enreprenures who want to start small businesses!
A lot of time the stupid corrupted Cambodian officials forget that it is small business that will grow into big business! And in the meantime Cambodia is out of luck unless Cambodia has a new leadership with a new vision!
And what is so hard about setting up a Space Shuttle? Just do the same thing, and Cambodia will be the top 10 richest countries in the world in no time.
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