Cambodian Garment Workers Face Poor Prospects

The global economic slowdown is hitting the Cambodian export-oriented garment industry very hard. Gap, Levi’s, Wal-Mart and Nike are among the biggest importers. As American and European buyers – which absorb 89% of the exports – have cut back their consumption in the last few months, the industry has been affected seriously. The garment sector employed about 360.000 people, mainly young women who support their families back home in the countryside. According to the Garment Manufacturers Association of Cambodia (GMAC) already more than 90 companies had closed or curtailed production by early February this year. They predict that 30 more would close by the end of March. The unions however suspect that some of them use the crisis as a pretext to relocate elsewhere, without compensation for workers.

Besides garments, the ILO assesses that construction and tourism are the most vulnerable sectors, due to a significant drop in foreign direct investments and in the number of tourists. To date 60,000 jobs are lost in garments and 25.000 in construction.

The Cambodian economy simply can’t absorb those now being laid off from the country’s two biggest industries, says economist Kang Chan Darriot. Early indications from UNDP show that many unemployed workers are returning to their villages, where livelihood opportunities outside subsistence agriculture are severely limited. To survive, more and more Cambodian women and children may find themselves in the informal economy.

Sources: NPR, Day-to-Day, 10 February 2009;            
UNDP, Newsroom, April 2009; Economic Crisis on Cambodia, A Rapid Assessment, ILO.