The global outbreak of the Coronavirus is slowing down the economy and eliminating thousands of jobs in the global supply chain in South East Asia. Cambodia and Myanmar are among the most affected countries in the region.
Garment factories rely on raw materials from China, and as manufacturing plunged in China, factory owners in Cambodia and Myanmar have begun suspending operations and retrench workers.
Ten factories in Cambodia informed the government that production would be suspended. It is estimated that 200 factories in the sector will either suspend operations or decrease productivity. One source reported that 5,000 Cambodian workers have already lost their jobs.
Factories who have suspended operations are obliged to pay workers 60 per cent of the minimum wage, and the Cambodian government has offered affected employers to pay 20 per cent of that.
During the suspension, workers are to receive training conducted by Ministry of Labour and Vocational Training at the workplace.
The economic situation in Myanmar is also acute. The Confederation of Trade Unions of Myanmar has sounded the alarm bell over the lack of raw materials from China that has caused closure of 16 factories and layoffs of 7,000 workers.
Union representatives are meeting with employers and the government tomorrow to discuss the issue. IndustriALL affiliate Industrial Workers Federation of Myanmar (IWFM) will also approach brands sourcing from Myanmar to discuss the impact on workers.
“There are policy measures that can be taken,”
says IWFM president Khaing Zar.
“The government can create a special fund to support affected workers, consider tax reductions on electricity and provide soft loans to employers.”
Annie Adviento, IndustriALL South East Asia regional secretary, welcomes the Cambodian government’s announcement, but urges the government to be prudent in approving the application of lowering the minimum wage.
“It’s an emergency measure that could easily be exploited by employers by not paying minimum wage to workers. There must be a due diligence process to prevent frauds.
“As many jobs as possible must be saved and the government should intervene when workers lose salaries. Both Cambodia and Myanmar have participated in ILO’s decent work country programme, which focuses on employment creation and social protection for workers.”