400 factories in Cambodia suspend operations, affecting over 150,000 workers due to COVID-19

About 400 garments, footwear and travel goods factories in Cambodia have suspended their operations, leaving over 150,000 workers jobless due to the COVID-19 pandemic, according to a joint statement on Wednesday.

The statement was jointly released by the Garment Manufacturers Association in Cambodia, the Cambodia Footwear Association and the European Chamber of Commerce in Cambodia.

“This number is likely to rise sharply in the coming weeks as 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,” the statement said. Consequently, millions of Cambodians could fall back into poverty due to this crisis.

It added that unemployed workers only receive a stipend of 30 U.S. dollars from the factory and 40 dollars from the government per month.

The statement renewed its call on the European Union to postpone the effective date on Aug. 12 of the partial withdrawal of Cambodia’s Everything But Arms (EBA) trade benefits for a year due to the pandemic in Cambodia.

The garment, footwear and travel goods industry is Cambodia’s biggest export sector, employing about 750,000 people in about 1,100 factories and branches. The sector earned a gross revenue of 9.32 billion U.S. dollars last year, up 11 percent compared to the year before.

The EU through EBA has become its largest market for footwear, said Ben Kao, secretary general of the Cambodia Footwear Association.

“Our factories and workers have suffered enormously from the pandemic, and many are trying to survive until demand, hopefully, resumes later in 2020,” he said. “A second blow from the withdrawal of EBA benefits could be a second blow that most factories will not be able to sustain.”

 

 

Source: China – ASEAN Business Council