Hundreds of garment factories in Cambodia are facing survival issues as Western shoppers in the US and Europe have been massively cutting back on expenditure on clothing due to the global economic downturn.
According to Kaing Monika, spokesperson of the Garment Manufacturers Association in Cambodia (GMAC), the garment sector has been the country's biggest export after its entry into WTO since 2004 , bringing in $2.78 billion in 2008 (16% of the country's GDP) but that may plunge as much as 30% in 2010.
Exports of garments to the US dropped nearly 40% in January compared with a year earlier. Some 70% of the clothes go to the US, 25% to Europe and the rest mainly to South Korea and Japan.
Most of the factories were running at a maximum capacity of 70% at best. Monika added that about 20 out of 291 factories, owned mostly by Taiwanese, Chinese, South Koreans and Malaysians, have closed down.
Some 70,000 workers have been laid off since last year and another 100,000 jobs are under threat over the next two years, according to the country's leading labor union, Chea Mony.
In order to prevent possible social unrest, the industry has urged the government to provide a social safety net to help workers who had been laid off and help the sector find new export markets in the Middle East and elsewhere.
