Cambodian garment industry was hard hit by the world economic crisis and due to the drop in demand from its main markets such as United States and European Union. Decline of demand of the US and EU markets also show that exports to the US and European Union decreased 35 percent and nearly 10 percent respectively from January 2008 to January 2009.
According to the figure released by the ministry of commerce, the Cambodian garment exports drop to 27 percent in the January, compared to a year earlier. Total of garment exports in January 2008 were worth about 246 million US dollar but it dropped to about $177 million in the first month of this year.
So far, there is the closure of30 garment factories this year, and more than 30,000 garment workers were left jobless in the past 12 months.
Prime Minister Hun Sen told the farmers in Kompong Speu province that laid-off workers should return home and farming jobs in a bid to shore up agriculture as a driver of Cambodia’s economic growth. He added that Cambodia is better than industrialized nations in that their workers had no farming communities to return to in most cases.
The International Monetary Fund (IMF) projected last week that, Cambodia’s gross domestic products would shrink by 0.5 percent in 2009. IMF reported that garment exports are under pressure due to the sharply lower retail demand from United States and EU. Cambodian clothing exports to the US generated 62 percent of total revenue for the sector in 2008, but export to EU markets is at around 20 percent of revenue.
Minister of Commerce Cham Prasidh, quoted by the Phnom Penh Post, said that the garment industry had contracted a huge 72 percent in January compared with the same period in 2008, from about US$70 million to $250 million. More than 20,000 garment factory workers have lost their jobs already this month and 10,000 more jobs are expected to follow, the Free Trade Union of Cambodia said this week.
The Free Trade Union of Cambodia said Monday that more than 20,000 garment workers have already lost their jobs this year, with another 10,000 at risk of becoming unemployed as more garment factories face closure, reported the Phnom Penh Post.
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