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Cambodia's Garment Industry on the Wane

14/12/09December 14, 2009

Garment factories make up the most important industry in Cambodia but factories are losing orders because of the global financial crisis. According to the Cambodian ministry of commerce, garment exports generated only 70 million US dollars in January 2009, compared with 250 million dollars in January 2008. In the first half of this year, garment exports to the EU fell by nearly 10 percent, while exports to the US dropped around 33 percent.

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Most of Cambodia's garment workers are women -- many have been laid off because of the crisis
Most of Cambodia's garment workers are women -- many have been laid off because of the crisisImage: AP

At least 90 garment factories have shut down in the past year in Phnom Penh and about 50 other factories have suspended their workers. This means that some 30,000 jobs have been lost and thousands of workers have been temporarily laid off.

Most of the garment workers in Phnom Penh are women from rural Cambodia. They not only make a living for themselves, but also support their families back home.

Those who have lost their jobs are struggling: some have gone home, while others are trying to make a living in the entertainment sector or are even turning to crime.

A garment workers' union leader, Ath Thorn, explained that generally villagers migrated to the cities in the hope of earning more money and having a better life but everything had changed because of the crisis.

Reality is different from dreams

People were finding out, Ath Thorn said, that reality is different from dreams and it is hard to escape the vicious circle of poverty. “When they lose their jobs, their first problems are that they don’t have money to pay the rent or food, or for transportation and their children.”

“Sometimes they borrow money from companies or other people that charge high interest. Some find jobs in darker entertainment such as nightclubs, restaurants, karaoke bars, beer promotions where they can work as hostesses."

According to a United Nations report, textile factories in Cambodia accounted for 12 percent of GDP in 2007, and contributed over 70 percent of overall exports. Garment workers could make up to 100 US dollars a month with overtime and bonuses. The money they sent home supported millions of their family members.

“No money to set up shop, no land to grow rice”

Sophorn is an unemployed textile worker. The 30-year-old came from Prey Veng Province to the capital to build a better life for herself. She worked for a company called "Hi Text" for eight years before losing her job.

She says she will not go back to her village because she has no money to open her own business and not enough land to grow rice. However, due to her poor education she is finding it difficult to find another job in the city. She is struggling to cover the rent and her transport costs.

She is also worried about her relatives: “My family's living conditions are very difficult now because they depend on me and the money I've been sending home. Before the factories closed, I tried hard to save and could put aside between $20 and $30 per month for my family. Seven people are dependent on me. Life in Phnom Penh is very difficult. Sometimes, I have no money for food and my rent. I don’t know what to do in the future."

The Garment Manufacturers’ Association of Cambodia predicts that if the current slump continues unabated in the next two years, at least another 100,000 jobs could disappear -- with devastating consequences for the rural poor.

Author: Chhengleap Yib
Editor: Thomas Bärthlein