A worldwide economic slowdown combined with turmoil in Cambodia’s garment sector have caused at least a dozen factories to close temporarily, top officials said Thursday.
Between 3,000 and 4,000 workers are without jobs as purchase orders from the US, Europe and other countries have continued to decline, Minister of Commerce Cham Prasidh said.
“We hope that the second half of this year there will be more purchase orders coming,” he said, adding that the 12 factories still have all of their equipment on line and have not left the country.
Cham Prasidh blamed a world-wide economic downturn, especially in the US, for the decline in orders from jittery companies. The garment sector is the largest single industry in the country and produces the bulk of Cambodia’s exports; 80 percent of those exports go to the US.
The amount of garments sent to the US and other countries dropped for the second quarter in a row, according to a report from the Cambodian Development Research Institute. Exports to the US decreased to $189 million, down from about $220 million in the last quarter of 1999, according to the report.
Roger Tan, secretary-general of the Garment Manufacturers Association of Cambodia, said he does not expect an upturn in orders for the next quarter either.
“It’s a combination of things,” Tan said, citing the economic downturn, continued strikes at Cambodian factories and garment manufacturers using factories in other countries to fill orders.
Of 225 factories registered with the Commerce Ministry since the beginning of 1999, 39 have temporarily or permanently closed, Cham Prasidh said.
Meanwhile, Cambodia’s garment industry, which employs around 150,000 workers, most of whom are women, continually experiences unrest from the workers.
Intense strikes a year ago brought a $5 pay raise to workers, bringing their minimum wage to $45 a month. Employees complained of long working hours and factories not complying with existing labor codes.
The sector has seen little calm since, with workers continuing to call for more compliance with labor codes, shortened working hours and better working conditions.
Cham Prasidh said the strikes were another likely reason orders for garments and textiles have fallen off in recent months.
“That happens too frequently,” he said. The strikes have scared away companies who apparently fear their orders may be interrupted by striking workers, he said.
The minister’s warnings come even as workers of one Phnom Penh garment factory entered a third week of strikes.
About 900 workers at Phnom Penh’s Concept Garment Cambodia Co Ltd have been on strike since the June 8 dismissals of nine union leaders. The strikes culminated June 20, when workers burned tires, disrupting traffic on Route 2 in Chak Angre Krom commune in Meanchey district near the factory.
Chea Vichea, president of the Free Trade Union of the Workers of the Kingdom of Cambodia, said Sunday the workers will continue to strike unless the union leaders are hired back.
Factory spokesman Allen Lo said the company will resume negotiations with the workers this week, but if no resolution is reached, the factory will close its gates indefinitely starting June 29.
The Concept strike is just the kind of unrest that factory owners say scares their buyers. And it is just the kind of action union workers say is necessary to ensure the rights of the worker.
Cham Prasidh said the implementation of newly formed International Labor Organization monitoring teams will help restore confidence for buyers and protect the rights of workers. The ILO is expected to report the teams’ findings in September. The report will be read by, among others, US representatives as they decide on whether to increase the amount of garments and textiles Cambodia can ship to the US.
(Additional reporting by Ana Nov)