meltdown

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The Mirror, Vol. 13, No. 595

“In a meeting about textile problems among ASEAN member countries, organized in Phnom Penh last week, the Ministry of Commerce of Cambodia encouraged all garment exporting countries in the Southeast Asian region to join to persuade the United States of America to reduce import taxes. This encouragement was made because the garment industries of many exporting countries, including Cambodia, are being affected by the meltdown of the global economy.

“The Minister of Commerce of Cambodia, Mister Cham Prasidh, notorious for corruption, said that persuading the USA is crucial for exporting markets, and it might help to face the economic crisis. Mister Cham Prasidh added, ‘When there is such a global financial crisis, what you see is the decline of demands. How long can our garment sectors stand with this crisis? As we know, we all, more or less, depend on the market of the USA, and this is the reason why we have to continue to try to persuade the USA to be interested to provide us import facilities with reduced taxes or with no tax.’

“Moreover, Cham Prasidh, an in-law of [the Minister of the Council of Ministers] Sok An, went on to say that the garment sector can continue progressing as long as all ASEAN member countries cooperate to expand markets in the region, before receiving better conditions from the USA. Also the deputy director of the Indonesian Textile Association expressed support with what was mentioned above, saying that this was probably a difficult time which needs an immediate solution among ASEAN member countries. Particularly, there must be an encouragement to cooperate in order to compete on the world markets while all countries are facing this financial crisis.

“It should be noted that from 1999 to 2004, the USA provided garment importing quotas to Cambodia without charging import tax. After the Multi-Fibre Arrangement [also known as the international Agreement on Textile and Clothing, 1974 to 2004] system ended, Cambodia has to pay 12.5% tax on average, making prices of garment products from Cambodia becoming more expensive, and it is difficult to compete with products from many other countries in Asia, such as China, Siam [Thailand], Yuon [Vietnam], Indonesia, and Bangladesh; most of these countries also depend on markets in the USA and in Europe.

“However, since many years, the garment sector became the biggest source of income for Cambodia, and it provides employment to more than 350,000 workers in around 400 factories countrywide. Since 2004, garment exports to world markets increased between 20% and 25% every year. Among the income from the export of garment products of US$2.7 billion in total in 2007, the USA absorbed products from Cambodia – especially garments – and the highest level was more than US$1.9 billion, compared to US$600 million for the export to markets in Europe, and US$146 million for the export to Canada.

“Nevertheless, the garment sector in Cambodia is being affected by the decline of garment demand on the US market, after this country, the most powerful country, faced a serious economic meltdown since 2008. The Minister of Commerce of Cambodia said that the garment export from Cambodia to international markets declined by 2% in 2008, so that the government expects that the USA will have policies to promote this sector again. But economists and other experts said that this expectation seems to be baseless.

“The president of a garment factory association in Cambodia recently said that when the economy falls down like this, the USA also needs to help itself. Now, Cambodia is worrying, because so far, around 60 factories have gradually closed and approximately 25,000 workers lost their employment. From April 2009 on, there are little buying orders, and prices have to be lower than before, making many factories to face serious losses.

“Civil society officials observing the garment sector in Cambodia assessed that in mid 2009, 20 more factories will finally close, because they cannot cover losses by bank loans which are also strongly restricted. In the meantime, a foreign economist said that the situation of the Cambodian garment sector might be out of trouble in at most one or two years, when the economy of the USA is expected to grow stronger again. This means that the decline of the garment sector in Cambodia has to wait until the economy of the USA grows strong again, while tens of thousands of Khmer workers of this sector loose their employment and incomes.

“Analysts criticized that corruption in the Ministry of Commerce, managed by Cham Prasidh, and in the Ministry of Labor, administered by Vong Soth, is also a reason making the garment sector in Cambodia face serious decline, because corruption in these two ministries encourages garment factory owners to pay much kickback while their businesses do not earn much profit. Therefore, in order to prevent that the garment sector continues to decline sharply, the Hun Sen government must take action to eliminate corruption urgently, so that factories owners do not decide to close their factories and one after the other leave Cambodia.”Moneaksekar Khmer, Vol.16, #3664, 13.1.2009

Newspapers Appearing on the Newsstand:

Tuesday, 13 January 2009

Cheat Khmer, Vol.1, #2, 13.1.2009

• The Cambodian League for the Promotion and Defense of Human Rights [LICADHO] Published 84 Cases of Human Rights Violations in the Fourth Quarter of 2008

Kampuchea Thmey, Vol.8, #1845, 13.1.2009

• The Plan to Expand the Capacity of the VietTel Company Is Supported by Prime Minister Hun Sen [VietTel is a telecommunications company from Vietnam, and this company aims to help promote development in Cambodia, especially in education by providing Internet access to schools and by creating a foundation to help the government to alleviate poverty]

Khmer Aphivoath Sethakech, Vol.7, #322, 13.1.2009

• The Leader and His Terrorism Partisans [of four people who were involved in the setting of explosive devices in Phnom Penh recently] Were Accused by the Court of Creating Illegal Armed Forces, and of Terrorism
• Deputy Prime Minister Sar Kheng Said that Cambodia Is Not a Drug Producing Country
• The Sam Rainsy Party and the Human Rights Party Negotiate to Create an Alliance

Khmer Sthapana, Vol.2, #181, 13.1.2009

• More Than 60 People Protest in Front of the Provincial Primary Court to Ask for the Release of Mr. Hun Sengly from Jail [he was a representative of 415 families in Kos Krolor district in Battambang and was arrested in August 2008 regarding a land dispute]
• The Indian Embassy Reacts to the Deaths of Three Indians [in a car accident in Dangkao district in Phnom Penh, and demands the government to take action against the driver who caused the accident – one day after the accident, he escaped from a private hospital and from his house in Phnom Penh]
• [Thai Prime Minister] Mr. Abhisit Vejjajiva Received the Majority of Votes in By-Elections [his party and their allies won 20 of the 29 seats]

Koh Santepheap, Vol.42, #6550, 13.1.2009

• A Farmer Couple Brought Their Children back from a Hospital [in Phnom Penh]; the Husband Died along the Road because of Pain [when he complained about strong pain , the taxi driver dropped him and his family along the road where he died – Kien Svay, Kandal]

Moneaksekar Khmer, Vol.16, #3664, 13.1.2009

• To Persuade the United States of America to Reduce Import Taxes of Garment Products Might Face Difficulties
• Khmer and Siamese [Thai] Prime Ministers Will Discuss Border Disputes in Hua Hin [in Thailand during the ASEAN Summit from 27 February to 1 March 2009 – according to the Bangkok Post]
• Can the Japanese Aid [of around US$21 million, promised by Japan on 11 January 2009] Make the Hearings of Former Khmer Rouge Leaders Proceed Soon?
• Result of the Investigation about Illegal Logging in the Kantuy Neak [Ratanakiri] Region Is Not Yet Revealed [four park rangers who were reported to be missing during a mission returned to the Vireakchey National Park, they were not missing, they were on a 15-day patrol in the park]

Rasmei Kampuchea, Vol.17, #4793, 13.1.2009

• Producers of the Opera “Where Elephants Weep” Apologize, as It Was Prevented to Be Shown in All Television Channels, Offensive Scenes Will Be Changed [after complaints by the Buddhist orders]
• Motorbike Competing with a Truck Collided with Another Truck Coming from the Opposite Direction, Causing Three Deaths [Kompong Speu]

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