VZCZCXRO4314
PP RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHPF #0720/01 2680920
ZNR UUUUU ZZH
P 250920Z SEP 09
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC PRIORITY 1215
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHC/DEPT OF LABOR WASHINGTON DC

UNCLAS SECTION 01 OF 03 PHNOM PENH 000720 
 
SIPDIS 
 
STATE FOR EAP/MLS, EEB, DRL, S/GWI 
DOL FOR ILAB 
 
E.O. 12958: N/A 
TAGS: ECON ETRD ELAB EAID PREL CB
SUBJECT: SEARCHING FOR CAMBODIA?S UNEMPLOYED GARMENT WORKERS 
 
REFS: A) PHNOM PENH 580 
 B) PHNOM PENH 277 
 
¶1. SUMMARY.  The impact of the global economic crisis on Cambodia?s 
 
garment sector has been substantial, but obtaining concrete data on 
 
the whereabouts of the women recently laid off from the factories is 
 
difficult.  If not rehired at another factory, the majority of women 
 
(who comprise over 95% of the garment sector workforce) choose to 
take vocational training, work overseas, or enter the entertainment 
 
and sex industries.  Although the Royal Government of Cambodia (RGC) 
 
has taken measures to help mitigate the overall effect of the 
financial crisis, choices for unemployed garment workers remain slim 
 
due to low skill sets and lack of English-language capabilities (Ref 
 
A).  END SUMMARY. 
 
Economic Crisis Takes Its Toll 
------------------------------ 
 
¶2.  The garment sector, which employs and supports up to 12% of the 
 
population, has been losing workers at a steady pace since the 
global 
economic crisis began to affect Cambodia in 2008.  An estimated 
90,000 workers (over 95% of garment workers are women) have faced 
either job loss or a reduction in wages since September 2008, and 
another 100,000 are at risk of losing their jobs over the next two 
years.  Recently released government figures show that exports for 
July (90% of which are garments) fell 26.4% year on year, indicating 
 
that the impacts of the economic crisis are still being felt within 
 
Cambodia's formal economy. 
 
¶3.  The RGC has attempted to respond within the framework of 
existing 
institutions: it has reduced the required Social Security payroll 
tax 
from .08% of workers' salaries to .05%; it has waived fees for 
passport processing to allow more Cambodians to travel abroad for 
work; and the Ministry of Labor and Vocational Training (MoLVT) is 
implementing a plan that aims to provide vocational training and 
living stipends for 40,000 unemployed Cambodians. (NOTE:  See Ref B 
 
for additional information on the government?s response.  END 
NOTE.) 
 
Go Back to What? 
---------------- 
 
¶4.  Although RGC officials including the Prime Minister have 
suggested that unemployed factory workers have the option to return 
 
to their home provinces and engage in agricultural activities, this 
 
may not be possible.  Employment in this mostly informal sector is 
highly seasonal and, according to the Cambodian Center for Study and 
 
Development in Agriculture (CEDAC), 50% of agricultural workers are 
 
landless and make their living as laborers.  Additionally, many 
families sold their cultivation land during the country?s recent 
real 
estate boom, and they rely on remittances from family members in the 
 
city and abroad to survive.  Moreover, the average daily salary of 
rice field workers in February 2009 was $2.59 compared to the 
average 
garment worker's daily salary of $2.85.  Returning to the rice 
fields 
decreases the overall family income and presents an additional 
burden 
to those who must feed and clothe an extra person on such a small 
salary. 
 
¶5.  According to the Cambodian Development Research Institute 
(CDRI), 
there is actually a surplus of labor within the agriculture sector, 
 
allowing little room to absorb thousands of unemployed women; the 
recent lack of rainfall has exacerbated the problem.  Caritas- 
Cambodia reports that poor farmers are experiencing decreases in 
 
PHNOM PENH 00000720  002 OF 003 
 
 
income, job losses, declining health due to malnutrition, and rising 
 
amounts of debt as families try to borrow their way out of the 
financial crisis. 
 
Women Search for Alternatives 
----------------------------- 
 
¶6.  In May, the MoLVT began a massive effort to retrain 40,000 of 
the 
nation?s unemployed with the additional benefit of $1 per day 
stipends for food and $10 per month for housing.  Many young women 
from garment factories have taken advantage of this opportunity to 
remain in urban areas.  Courses offered range from sewing to 
mobile- 
phone ringtone sales to mushroom cultivation.  Former garment sector 
 
workers tend to be concentrated in the home decoration, hair- 
dressing, sewing, and beauty classes, as their lack of education 
prevents them from benefitting from more advanced and high-skill 
courses.  At the Cambodia-India Entrepreneurship Development Center 
 
(CIEDC), former garment workers account for the majority of trainees 
 
in the beauty and sewing classes. 
 
¶7.  However, RGC and NGO contacts have highlighted funding and 
capacity issues with current retraining programs.  According to 
MoLVT 
officials, only 15,242 unemployed persons have participated in its 
vocational training program.  Several sources stated that the 
funding 
for the first phase of the government training program has already 
run out, leaving thousands of unemployed untrained.  CIEDC Director 
 
Mr. Pan Nore explained that he has to turn away approximately 10-15 
 
former garment workers each day, as classes at the center have 
already reached capacity.  Job placement also remains an issue, 
according to government and NGO contacts; it is difficult to 
ascertain where the small number of young women who complete these 
courses have and will go since the retraining program does not 
include a job placement component. 
 
From Garment Work to the "Entertainment" Industry 
--------------------------------------------- ---- 
 
¶8.  A recent study released by the UN Inter-Agency Project on Human 
 
Trafficking found that among a sample of workers in the 
entertainment 
industry, including brothel, street, karaoke, and massage parlor 
workers, 58% entered into sex work in the wake of the financial 
crisis, and 19% of those were former garment sector workers.  Such 
low-skilled work can provide salaries that often exceed those 
received while working in factories.  Women interviewed at the Rukhe 
 
Karaoke Bar in Phnom Penh confirm the findings of the report.  While 
 
the average income for an unskilled general worker in a factory 
averages $70 per month, women interviewed in Ruhke (all of whom were 
 
identified as prostitutes) reported earning over $100 in salary and 
 
tips.  All were supporting family members, and all were in need of 
immediate cash to do so. 
 
Women Working Abroad 
-------------------- 
 
¶9.  As stable work is harder to come by in Cambodia, many women in 
the garment sector have begun searching for opportunities abroad. 
According to the Association for Cambodian Recruitment Agencies 
(ACRA), the number of Cambodians applying for overseas jobs has 
increased 30% and hundreds of women from the garment factories have 
 
been placed in Korea, Malaysia, and Thailand since April.  Cambodia 
 
has only recently begun sending workers abroad, but those who are 
able to afford the upfront costs of up to $1,000 (costs stemming 
from 
three months training and language courses, insurance, and loans for 
 
families? sustenance while their supporters undergo non-paid pre- 
departure requirements), have the opportunity to make at least $180 
 
per month as a domestic worker in Malaysia and as much as $1,500 per 
 
month working in various fields in Korea that include domestic and 
 
PHNOM PENH 00000720  003 OF 003 
 
 
factory work. 
 
The Road Ahead 
-------------- 
 
¶10.  While there is general understanding of the current situation 
of 
the unemployed garment workers among NGOs and government officials, 
 
clear data that can provide the information necessary to target 
efforts toward these women is lacking.  With few statistics on 
unemployed factory workers and no collective data taken by the MoLVT 
 
on those who have participated in vocational training programs, 
there 
is no reliable way for stakeholders to measure the impact of these 
programs.  Better Factories Cambodia (BFC) in conjunction with the 
United Nations Development Program (UNDP) plan to track 2,000 
garment 
workers this year - 1,200 who are at risk for future lay-offs and 
800 
who have already been let go from the factories.  Such reporting 
could allow the RGC, NGOs, and development organizations to focus on 
 
these vulnerable women by providing targeted training.  Social 
safety 
nets such as day-care and food programs for women with children, 
caps 
on microfinance interest rates to make them more accessible to 
borrowers, and additional investment in increased living stipends to 
 
allow more women to participate in relevant vocational training 
programs, have been discussed at stakeholder forums, but lack of 
funding has been cited as a major obstacle to implementation. 
 
RODLEY