A garment manufacturers association representative estimated factories will face issues till June amid the ongoing coronavirus pandemic, with Prime Minister Hun Sen saying around 57 factories had shuttered operations because of raw material shortages or lack of orders.
The coronavirus pandemic has seen at least 109 confirmed cases in the country and the government has taken passed tax breaks for garment factories to weather the current crisis. While the crisis was at its peak in China, the Garment Manufacturers Association in Cambodia said there was a lack of orders, but at least seven shipments of materials were received earlier this month.
Ken Loo, secretary-general of GMAC, said all factories were facing the effects of the global economic slowdown, especially because buyers had suspended orders.
“There will be many factories applying for suspension because buyers have stopped ordering goods from us. We don’t have work to do because they have suspended [orders],” he said.
Speaking at the National Assembly, Prime Minister Hun Sen on Monday said 50 factories had suspended their operations because of a lack of raw materials and seven others due to lack of orders.
He did not address why there were raw material shortages even after China, Cambodia’s major source of materials, had resumed production and sent special shipments to Cambodia.
“Seven factories closed due to a lack of buyers because some countries are closed. If they close the country, how can we export? So, there is a risk to the textile industry,” he said.
“Whether Cambodia, Vietnam, Thailand, Bangladesh, Sri Lanka, India, Myanmar, Laos, they all depend on the U.S. and European [economies]. It is not different from the economic crisis in 2008 when we closed dozens of factories.”
Prime Minister Hun Sen said that as of March 3, more than 18,000 workers had their jobs suspended after some factories shutdown operations due to a lack of raw materials from China.
Hun Sen had ordered that all workers who had been temporarily suspended would get 40 percent of their basic minimum wage from the factory from the factory and 20 percent would be covered by the state. This did not include seniority payments or overtime, which are critical to boosting workers’ meager salaries.
Yang Sophorn, president of Cambodian Alliance of Trade Unions, said many of the workers who are being suspended were in a precarious situation, adding that some factories were feeling the effects of the partial suspension of ‘Everything But Arms’ trade privileges.
The union leader said the government should ask banks and microfinance institutions to delay loan repayments, provide medical examinations, and ensure the 60 percent of their minimum wage was paid.
"I think that if they have proper [documents], they have to pay the workers at least 60 percent of minimum wage every month,” she said.
VOA Khmer could not reach Heng Sour, a Ministry of Labor spokesperson.
Chak Soth, a garment worker at Quantum Clothing garment factory at Veng Sreng, Phnom Penh, said she had been suspended on Monday, and was given her salary and overtime for the month. And while she would receive the 40 percent promised by the factory, she was unsure of the government’s 20 percent.
Like many Cambodians, Chak Soth is worried about paying back her loans, fearing she will lose her land to the financial institution.
“I am so poor and I owe a bank [more than $10,000]. I am worried if the factory closes, the bank can seize the land and take my house. I am very worried,” she said.