Viability of Cambodia’s garment manufacturing sector in doubt after protests
- POSTED: 06 Jan 2014 20:36
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Questions have been raised about the viability of Cambodia's critical garment manufacturing sector, as the industry continues to struggle in the wake of deadly worker protests.
PHNOM PENH: Questions have been raised about the viability of Cambodia's critical garment manufacturing sector, as the industry continues to struggle in the wake of deadly worker protests.
While many factories have their doors open for business and there is hope normality will soon return, a huge number of workers have left the capital, badly affecting production lines.
While physical evidence of those deadly protests is hard to find, a strong police presence remains.
What is noticeable is the lack of workers coming in and out of the many factories there, which supply clothing brands such as Gap, H&M and Nike.
There have been first-hand reports of most workers returning to their home provinces, leaving the city out of fear of further violence or police crackdowns.
Cambodia’s economy relies heavily on garment manufacturing. It is the country’s biggest source of export -- mainly to Europe and the United States -- and a major employment sector, with around 600,000 workers.
It is clear there is uncertainty about the future viability of the country’s multi-billion dollar garment manufacturing industry.
Ken Loo, secretary general of the Garment Manufacturers Association in Cambodia, said: "I think (in the) short-term for sure, the industry has been impacted. Whether we will be able to recover and going forward, whether the industry can continue to grow, will depend very much on the government.
“If the government demonstrates that it has the will to maintain law and order, then I think investor confidence will be regained and, going forward, (it) might be a turning point for the industry.
“However, if the government allows the situation to go back to what it was before, then I think many investors are ready to leave."
Union leaders have said they are not afraid to continue the strikes unless better worker salaries are negotiated.
But strikes are not uncommon mainly due to discontent about working conditions and enforcement of labor law, and together with anti-government sentiment concurrently flowing through the country, they have created a climate for more dramatic stop work plans and the resulting violence in the last few days.
With such a climate, negotiating between the government and unions is extremely difficult.
The minimum wage for workers in Cambodia is just US$80 a month, and the government has offered a rise to around US$95.
Yet, division has been sparked by the opposition offering a doubling of the wage to US$160.
Opinion is divided as to whether that is economically sound, but it has given political ammunition to the opposition.
This is as the opposition maintains its stance not to negotiate with the government, as long as what it calls an “atmosphere of intimidation” remains.
Exactly when the industry can return to full operation is going to rely on those negotiations, which now seem like a distant prospect.