Persistent Strikes May Harm Garment Sector, Experts Say

As tens of thousands of garment workers yesterday failed to show at their jobs for a second day in order to demand higher wages, garment sector representatives and experts warned that garment orders and investment in the industry could suffer if strikes were prolonged and spread.

Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia, said the impact of the strikes was already being felt.

“It has already affected deliveries and the reputation of the industry,” he said.

Mr Loo said he had been in contact with international buyers to inform them of the ongoing strike.

“Buyers are still trying to assess the situation: How many are genuinely on strike, does it really represent the voice of the workers?” he said.

Mr Loo argued that buyer confidence in the garment sector would be further affected if the protesters turned to intimidating non-protesting workers or to damaging factory property.

The Cambodian Labor Confederation organized the five-day strikes this week to demand salary supplements to bring the basic monthly wage up as high as $93.

CLC said 140,000 workers had not gone to work yesterday to protest. Estimates on the scale of the strike varied however, with CLC claiming on Monday around 70,000 joined the strike, while GMAC estimated about 20,000 workers had participated.

One garment factory manager, who preferred not to be named, said many factories had taken pre-emptive measures after they heard of the planned strike.

“All buyers have been notified,” he said. “We have either got approval to delay some of the shipments or buyers know there might be delays.”

He warned however, that “If things go according to the [five-day strike] plan of the unions that’s definitely going to impact the sector.”

Tuomo Poutiainen, chief technical adviser for the International Labor Organization’s Better Factories program, said the economic impact of the strike on the garment sector would depend on the duration and spread of the strikes.

“It really depends on the length of it,” he said, “If there were strikes for one week, the question is what after?”

Mr Poutiainen said workers’ demands for higher wages would in itself not deter foreign investment in the sector, as there had also been strikes for higher wages in Vietnam, Bangladesh and China recently, while wage levels in Cambodia were still low compared to most other countries.

Peter Brimble, country economist at the Asian Development Bank, also said the strikes’ duration would determine the impact on the industry, but added that labor relations within the garment sector had improved in recent years, while working conditions were good–two factors that are attractive to buyers and investors.

“Exporters will look at the wider picture than just this strike,” he said. “A few years ago Cambodia had much more strikes and that was much more of a concern to investors.”

He said however, that increasing wage demands could weaken international competitiveness of the sector in the long term.

 

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