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Cambodian garment workers mired in poverty despite stimulus

Ailing economy struggles with the withdrawal of European trade perks and the Covid-19 pandemic

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Cambodian garment workers mired in poverty despite stimulus

Thousands of Cambodian garment workers have lost their jobs. (Photo: Human Rights Watch)

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The Cambodian government has allocated more than US$1 billion to bolster an ailing economy struggling with the withdrawal of European trade perks and the Covid-19 pandemic, but it’s the workers in the once thriving garment industry who are doing it hard.

Under its Everything But Arms (EBA) policy, the EU grants tariff-free access for goods from developing countries that meet international standards on democracy.

But a ban on the main opposition party from contesting elections in 2018 amid a crackdown on dissent and the independent press resulted in Prime Minister Hun Sen’s long ruling Cambodian People’s Party (CPP) winning every seat contested.

That angered the EU — Cambodia’s largest export market — prompting the withdrawal of some trade preferences which has cost business an initial $130 million with further losses expected.

Hardest hit is the $7 billion garment industry where about 700,000 workers once earned less than $200 a month producing garments for big brands such as Adidas, Levis Strauss and H&M.

Sao Savorn, 36, lives in a ramshackle dormitory in Phum Tmey in Svay Rieng province and has worked at the Hung Wah factory producing goods for export for the last nine years. Now she is on the poverty line.

“These days I’m facing a big problem because Covid-19 has deeply affected my family’s finances. We don’t get much work to do and I have small children and my mum is also old,” she said.

“I don’t get any extra working hours because of the coronavirus and my income is low compared to before. And now I’ve heard we will be facing losses of about 20 percent due to EBA, which means my work will be even less.”

The Garment Manufacturers Association of Cambodia (GMAC) insists the EU made a mistake by withdrawing trade preferences, which came into effect on Aug. 12, amid the pandemic and that 450 factories have suspended work and another 83 have closed, hurting about 150,000 workers.

“Numerous brands and retailers in Europe and North America have canceled or delayed orders due to the drop in retail sales in Europe from the pandemic,” GMAC secretary general Ken Loo said. “Consequently, millions of Cambodian citizens could fall back into poverty due to this crisis.”

GMAC is now suing the EU over its decision.

High debt levels among small borrowers in the microfinance industry and a sharp drop in remittances from workers abroad amid the pandemic have also taken a toll. The ports are crammed with stock once destined for the EU.

“I used to finish work at 4pm every day, then in April work was delayed by one month. Then I had no work. Then some work at lower pay and then the number of factories we operate was reduced from five to one,” Sao Savorn said.

Her sentiments were echoed by Noeuy Saran, 41, who works nearby.

“I have faced a lot of problems since January when the pandemic started. My work was less and then cut off for a month and more. And the problem now is about EBA, which means we are facing losses of about 20 percent in Cambodia,” she said.

Sao Chen works at the Meng Dah factory and says many workers have been laid off for up to six months while those with jobs are struggling to feed families on incomes as low as $100 a month.

“We have also asked many organizations and the government for income related to severance pay,” he said. “The main problem that we are facing today is some workers are the only breadwinner in the family and have to pay for the family food, rent and school fees.”

Athit Kon, president of the Coalition of Cambodian Apparel Workers’ Democratic Union, said the combination of EBA and the pandemic was a double whammy, adding if the situation does not improve then big brands might look for alternative countries to produce their garments.

“I think this issue is going to make for some job losses if we don’t have the orders or if the brand does not stay in the country,” he said.

Big brands have shown little sympathy for outsourced workers since Cambodia began opening up more than 20 years ago. And like the many Western businessmen and NGOs who left here after the elections, they can simply move to another country when the political climate changes.

Their workers, however, cannot and their plight is uncertain — a situation that has emerged from Cambodia’s human rights record and the Covid-19 pandemic, a double whammy that is unlikely to change in the short term.

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