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8 Sep 2023

Khmer Times

Cambodia: Workers at 22 garment, footwear & travel factories who face suspended employment due to factory suspensions will receive allowance

"Workers in 22 GFT factories lose jobs, to get government allowance", 8 September 2023

The Ministry of Labour and Vocational Training (MLVT) has announced that workers of 22 garment, footwear and travel goods factories whose labour contracts were suspended in the last three months will be provided allowance as per a government policy.

The factories suspended the contracts due to the slowdown being faced in the exports of GFT goods.

According to a statement by MLVT, recently, workers of the 22 factories in the GFT sector whose employment contracts were suspended in June, July and August 2023 would get the allowance as decreed by the March 15, 2023 notification on the suspension of employment contracts of GFT workers.

It, however, did not specify the number of workers whose contracts were suspended or whether the 22 factories ceased operations fully.

Workers who lost jobs will get $70 dollar each a month as allowance with factory owners contributing $30 and the remaining $40 met by the government.

MLVT also made it clear that the financial support will continue during the suspension of their contracts...

According to the trade data of the General Department of Customs and Excise (GDCE) last month, Cambodia exported $6.27 billion worth of GFT goods during the first seven months of the year, a sharp decline of over 20 percent from the $7.89 billion exported during the same period last year.

The exports for July 2023 alone showed a decline of 28.15 percent compared to the same period last year after a brief comeback in June when these exports gained one percent growth relative to June 2022. The July setback of GFT also caused the country’s overall exports to fall by 1.8 percent in the January to July period of the year.

An analysis of the GDCE data revealed that the decline in GFT goods exports for May 2023 was 17.03 percent compared to May 2022. GFT exports for April showed a decline of 30.42 percent, for March they declined by 14.60 percent, in February by 24.54 percent and by 28 percent in January, compared to the respective months last year.

Apart from the prolonged Russia-Ukraine war and subsequent inflationary pressures, the non-renewal of the Generalized System of Preferences (GSP) by the US and the reduction in Everything But Arms (EBA) benefits by the European Union (EU) have also hit the Cambodian GFT exports hard...

Ken Loo, the Secretary General of the Textile, Apparel, Footwear & Travel Goods Association in Cambodia (TAFTAC), recently told Khmer Times that the slowdown in demand that started by the second half of last year led to excess inventory with the buyers and this slowdown was mainly due to the recession experienced in several of the export markets.