Cambodian Workers Lose Up to US$40 Million Due to the Economic Crisis

Cambodian Workers Lose Up to US$40 Million Due to the Economic Crisis

The Mirror, Vol. 13, No. 640

"Phnom Penh: Cambodian families lose between US$35 and US$40 million because of the global economic crisis, resulting in unemployment for 20% to 30% of the workers in the garment and construction sectors, and in tourism. As it is mainly the poor who are facing the impact, the United Nations released a report offering suggestions that can help reduce those impacts.

"In the statement, the UN said that what Cambodia can do to reduce the impacts of the global economic downturn becomes more an emergency topic, as the basis of fast economic growth in the past in the garment industry and in tourism is suffering from the recession of the global economy. 20% to 30% of the workers in the garment and construction sectors and in the tourism industry lost their jobs since late 2008, making them lose between US$35 and US$40 million to be sent to their homes. Impoverished people, mostly women in the garment sector, suffer from the declining economy.

"From a small village in Kompong Cham, 30% to 40% of the people had left their village to Phnom Penh and Siem Reap to find jobs, but now they gradually return home. After two years in Phnom Penh, Mr. Chun Phon and Rany, his wife, lost their jobs at a construction site. They had earned about US$150 per month and could send about US$100 back home to support their children in the village. Rany said, 'The money that we can now find is just enough only to survive.'

"Such cases are occurring all over the country, while foreign investment for construction projects is decreasing, buying orders for garment products drop, and the number of tourists is declining also. This downturn is not only a challenge for individuals, but also for the growth of Cambodia to achieve the Millennium Development Goals [3].

"The most serious impact from the economic downturn is happening to poor people and to people living near the poverty line, especially those having debts to repay face more difficulties. Such cases happen mostly in rural areas, from where many vulnerable people migrate to the cities to seek employment. Women are among the most vulnerable people, suffering from the impact of this crisis. After they lose their jobs in garment factories or in the construction sector, because of the lack of other professional skills, most women who continue to live in the city have no choice but to work in the entertainment service industry. The report pointed out that also the children of those women suffer under the burden of the impact of the economic downturn.

"The UN had conducted a study to learn more about the impact of the global economic downturn in Cambodia, as well as to identify different measures to reduce the impact on human development already achieved, and to restart development to alleviate poverty, and to be prepared for the future. This report estimated the impact caused by this crisis at the national level as well as the impact on individual Cambodians. The report mentioned policy choices that can help to minimize the impact, including equal rights to receive incentives through lower taxes, structural reforms to improve the competitiveness of the country in the world, and reforms to develop mixed systems for national social protection, to lessen the impact of the economic downturn in the short term, and to bring sustainable and equitable growth back in the long term.

"The UN Resident Representative for Cambodia, Mr Douglas Broderick, noticed, 'A social safety network is no longer considered as a luxury, as before, where only rich countries had the ability to maintain such networks. Such networks are also related to the success of not-so developed countries.' However, he remarked, 'On average, the expenses for safety networks in developing countries are from 1% to 2% of the GDP, but the resources allocated at present in Cambodia are less than 1%.'

"The global economic downturn creates also opportunities to accelerate reforms to prepare for the future, and to improve the competitiveness of Cambodia in the world. Recent events encourage such reforms. The UN vows to cooperate with the Royal Government of Cambodia to accomplish the country's development goals. The global economic downturn poses new obstacles and political challenges, but provides also opportunities that cannot be overlooked.

"Phon and Rany are so worried about what to do in the future. Rany said, 'We do not have rice fields, and now we only have little money... we need it for everyday expenses and for our children.'" Rasmei Kampuchea, Vol.17, #5057, 26.11.2009

This article was first published by The Mirror, Vol. 13, No. 640 - Thursday, 26.11.2009

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