Cambodia's garment manufacturers and labour unions talk pay rise

Feb 9, 2010, 4:10 GMT

Phnom Penh - Cambodia's garment manufacturers have held talks with unions and government officials about sharply increasing the 50-US-dollar monthly minimum wage paid to factory workers, local media reported Tuesday.

Unions and the government's National Institute of Statistics have calculated that the country's 358,000 garment workers need to earn at least 93 dollars per month to afford food, housing and travel expenses.

The president of the Garment Manufacturers' Association of Cambodia, an industry body, told the Phnom Penh Post newspaper that he was supportive of the increase 'in principle.'

'[But] today I want to emphasize to workers that we are only discussing the issue, not agreeing to an increase to 93 dollars,' Van Sou Ieng said, adding that the topic required further research before any deal could be reached.

If an agreement is settled on a wage hike, it would be the first increase in two years.

Cambodia's garment-manufacturing industry has been battered by the global downturn with exports to its main US market slumping. The Ministry of Labour reported that 93 factories closed last year for the loss of almost 70,000 jobs. A further 60 factories suspended operations as orders dried up.

In its annual country report released in December, the International Monetary Fund (IMF) noted that garment exports declined 16 percent by volume in the nine months to September. The IMF said Cambodia is hampered by high electricity costs, unreliable product supply and low productivity.

IMF figures showed garment manufacturing accounted for 15 percent of Cambodia's gross domestic product in 2008 and two-thirds of its exports.

The sector is one of the four pillars of Cambodia's economy. Two of the other pillars - tourism and construction - also registered sharp declines last year. The fourth pillar, agriculture, grew by an estimated 5 per cent.