Production costs -- oil and power -- are high in Cambodia, and the demand for higher wages also put the country's garment industry in danger

Cambodian garment workers worry about future prospects
by Ros Sothea
Sun Jul 13, 3:10 AM ET



PHNOM PENH (AFP) - Sath Vanny sits anxiously at the door to her tiny
one-room hut in the factory district of Cambodia's capital.


She left her hometown in the southern province of Takeo seven years
ago to work at a women's shirt factory, sending most of her earnings
back to help the family farm.

But a slowdown in orders has the 25-year-old worried about her job.
Overtime work has fallen off as Cambodia's textile sector, the
country's biggest industrial employer, struggles against stiffer
global competition and slowing demand.

More than 10 Chinese-owned factories have moved to cheaper markets,
leaving hundreds of thousands of garment workers -- mostly young women
like Vanny who support their impoverished families -- facing
destitution.

"I was told that we didn't have as many orders as we used to, but with
the basic wage I don't have money to send to my parents," says Vanny,
who now earns less than 60 dollars per month.

"I can't imagine living without a factory job. I am so worried about
my family," she adds, wiping away tears.

The garment industry earns 80 percent of Cambodia's foreign exchange
earnings and employs an estimated 350,000 people in more than 300
factories.

The industry thrived after a unique labour-friendly deal with the
United States in the 1990s.

Under the deal, Cambodia passed new labour laws, encouraged labour
unions and allowed the International Labour Organisation (ILO) to
inspect factories and publish its findings.

In turn, the United States cut tariffs on Cambodian garment exports,
buying 70 percent of all of the country's textiles.

Cambodia maintained its higher working conditions after the deal
expired in 2005, and garment-making has made the economy one of the
fastest growing in the region. But it does not look built to last.

The industry grew only 8.0 percent last year after suffering a dismal
fourth quarter that saw orders plummet by nearly half, according to
the World Bank. It previously enjoyed growth of up to 20 percent.

Apparel exports have declined since October, mainly due to the US
economic slowdown, according to Cambodia's commerce ministry.

Exports to the United States slipped 1.44 percent in the first
quarter, compared with the same period last year, to some 500 million
dollars, it added.

Meanwhile factory owners are looking abroad for greater productivity
and lower costs, says Cambodia's Free Trade Union (FTU).

Sok Vannak, who has been working at a factory for almost 10 years,
says her Chinese bosses often threaten to move the factory to Vietnam,
where costs are cheaper.

"They warn us all the time. I'm afraid that it could come true," says
the 27-year-old.

"I have no land to farm. Without the factory we will have a hard time
surviving," Vannak says.

Garments are a shifting industry, says Kaing Monika, manager at the
Garment Manufacturers Association of Cambodia. Many manufacturers
could move to Vietnam, Bangladesh or India, he adds.

"Production costs -- oil and power -- are high in Cambodia, and the
demand for higher wages also put the country's garment industry in
danger," he says.

Factory owners complain about a proliferation of labour unions and
illegal strikes, but workers say they merely want proper wages.

About 27,000 garment workers have quit in the last year in search of
higher pay, according the FTU.

Some have gone to look for work in rural areas where the cost of
living is lower, while others have found work at karaoke parlours
where they're in danger of falling into prostitution, says FTU
president Chea Mony.

Next year will bring even more competition when US restrictions on
Chinese textile exports are scheduled to end.

"China and Vietnam are still our direct competitors, and so far we
have nothing special to offer buyers. That is why we're very
concerned," says Oum Mean, of Cambodia's labour ministry.

"To counter this competition, we must increase productivity, quality
and extend our reputation as having high labour standards," he says.
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