In 2003,
around 40,000 new jobs were created in the manufacturing and SME sectors, while
around 200,000 new workers entered the labour market. Mostly favourable weather
conditions contributed to a recovery in the agricultural sector.
The
September 2003 meeting of the WTO in Cancun approved Cambodia’s accession to
the world trade body, though not without concern being expressed by NGOs that
Cambodian farmers and small businesses are ill prepared for the impacts of freer
trade.
In October
2003, the ILO released a report on working conditions in the garment sector
which showed improvements in most areas, despite continued problems with respect
to correct payment of wages, involuntary and excessive overtime and anti-union
discrimination. [1]
NGOs
believe that the essential requirements for fostering economic growth are
improving governance, improving the court system, increasing capabilities, and
improving infrastructure. Getting
these “basics” right will achieve growth much more effectively any strategy
that may erode workers’ rights, reduce environmental safeguards, or reduce
villagers’ access to land and natural resources.
Case
Study
Srey
Tuic is 23 years old from Prey Veng Province. She has been in Phnom Penh
working in a garment factory for over 3 years. She does not like the
work or the living conditions and is often sick and nostalgic for the
village. Despite this she continues to work and earn money to send home
to the family. She
started working in the factory because her parents were finding it
difficult to support the family. She recalls her father explaining
“before when you were younger we could grow enough rice to fill our
stomachs and sell the extra to the wholesalers, but now it costs too
much to grow.” Srey Tuic tells that she can only remember not having
enough, and sometimes it was because her family had to give away a
portion of the yield to the owner of the fertilizer shop, as payment in
kind for the fertilizer to be borrowed. Other times they had to sell a
large portion of the yield, so there was not enough to eat, she
attributes this to “my brother got sick and needed to go to the
hospital”. Another time it was because the family lost everything
during a protracted drought. She recalls “even though my family
borrowed money to pay for the water pumping it was never enough and the
drought killed everything that season and we were left behind and felt
despair all the time.” “So
when I heard of another girl going to Phnom Penh to work in the factory,
I and my mother went to enquire how to also pay my way to the job at the
factory. For this my family borrowed a big sum of money, … I think
about US$100. It was after this I prepared and I knew I would have to
work to help them from despair.” “Now
my family just live from the money I send them. It is so hard for me
that now I eat fish one time a week. I am sick because I do not eat good
food, and I work hard because if you do not make the pieces you do not
get money because they count the ones you make.” Srey
Tuic explained that when her father had some rice to sell it is very
cheap, because the rice from Vietnam or Thailand keeps the Cambodian
rice low. But fertilizers from the Philippines or the USA are very
expensive and the new rice varieties are dependent on them. She
also explains that she still tries to find ways to earn some money
because she knows that it is not easy in the factory and that she cannot
do the work forever. “When I am really sick I do not dare go to the
doctor because I cannot spare the money. I never go to a wedding or have
leisure time because this would be to waste the money that my parents
need from me. I am really afraid I will lose my job. Many people are
saying that the factories will close soon, if this happens I will not
know what to do because my parents will die if I cannot support them.
Many girls also fear that their jobs are on the line, the fear is
motivated by the same concern, that their families will be hopeless
without the remittances.” |
The RGC
has hailed the approval of Cambodia’s accession to the WTO as being a
major step forward in its pursuit of its pro-poor trade strategy. However, the
NGO community remain concerned about the possible negative impacts of WTO
accession. Although the NPRS
promised an “ex-ante poverty and social impact analysis” in order to
consider the impact of trade policy on the poor, none has been carried out. At
the same time there has been insufficient public debate as to the effects of
accession, or to the conditions under which Cambodia’s accession was accepted. Issues to be considered include the impacts of
accession on small farmers and on small-to-medium sized enterprises, which are
ill-prepared to face increased international competition in the domestic market.
WTO entry
is seen as essential to the survival of the garment sector, which
currently comprises almost all of Cambodia’s exports and accounts for over
170,000 jobs, employing mainly young women from the provinces.
WTO entry would provide Most Favored Nation (MFN) status, cushioning the
impact of the end of the Multi-Fibre Agreement quota system, which is to be
phased out in 2005. However,
continued market access for the garment industry is far from being assured. NGOs oppose any attempt to erode labour standards in order to
increase international competitiveness. Competitiveness
can best be achieved by increasing skills, and by reducing bureaucracy and
corruption. Informal payments to officials comprise a significant cost to
companies doing business in Cambodia and add to business uncertainty.
Current
thinking by the RGC, GMAC, and unions suggests that Cambodia might be promoted
as having a garment sector that prides itself on acceptable working conditions
and protections for its workers. To achieve this reputation, further improvement
in the enforcement of standards is needed.
A dialogue with all stakeholders in the sector, both nationally and
internationally needs to be pursued further.
Policies affecting garment workers need to be discussed with the garment
workers themselves, and proper consideration to their economic and social
circumstances is needed.
A key component in the government’s strategy to increase international competitiveness, as outlined in the NPRS, is the creation of industrial and export processing zones. Internationally, EPZs have demonstrated the trend towards creating investment, production and profit extracting enclaves with minimal backward linkages or re-investment into the local host economy. NGOs are concerned about a possible lowering of labour and environmental standards in these zones, a loss of fiscal revenue opportunities, and an intensification of existing economic inequalities.
Tourism
provides a promising, if volatile, source of foreign currency. However, the NGO
community is concerned as to whether tourism is capable of having a direct
pro-poor impact. Income raised through tourism has had a tendency to flow
outside the communities most affected by tourism, even when cultural and
eco-tourism approaches are promoted. Although
Siem Reap is a centre for tourism, it remains one of Cambodia’s poorest
provinces.
The NGO
community believes that pro-poor growth will be best be achieved through
consideration of the following factors.:
Economic growth and poverty reduction will be best facilitated by
improving governance, improving the court system, increasing capabilities,
and improving infrastructure. Increased
investment in education and vocational training to improve skills in the
workforce is necessary.
Action must continue to eliminate corruption, which is a major
constraint to private investment.
Further public debate on trade policy choices is needed.
Ex-ante impact assessment of WTO accession is needed to identify
and respond to impacts on vulnerable groups such as small farmers.
Labour standards and workers’ right to belong to a union should
not be undermined through attempts to make business more competitive in
Cambodia.
The place of export processing zones in the poverty reduction
strategy needs further critical analysis.
Tourism development needs to be controlled and affected communities
given access to decision-making, training and capacity development to
minimise negative impacts and maximise poverty reduction.
The RGC should assist small businesses, especially farmers, through
identifying potential local and international markets for products,
identifying and reducing supply chain constraints, helping to improve
product quality through appropriate technologies, and eliminating the
levying of unofficial fees.
Small businesses may contribute to improved markets and prices
through better community solidarity and cooperation.
NGOs, institutions and community groups should work together in a
systematic manner to improve livelihoods.
The RGC should explore ways to protect and increase the local
market share of locally made products, for example, through helping to
improve quality and by encouraging Cambodians to buy locally made
products.
The RGC
should provide information and support to Cambodians contracted to work
outside the country (for example as maids), to ensure that their rights
are not abused.
___________________________________________________
[1] RGC, Poverty Reduction Strategy Progress Report, draft, December 30, 2003.