PHNOM PENH, Jan 28 (IPS) - Cambodia’s export
business is in the process of changing due to shifts in manufacturing in
Asia. A business publication in the country has reported unexpected
growth in the “machinery and transport equipment” sector and speculated
it was as “probably bicycles.” But when Cambodia jumped into the top ten
exporters of bicycles to the EU in 2012, it prompted the European
Bicycle Manufacturers’ Association (EBMA) to investigate.
In 2011,
366,000 bikes were exported from Cambodia to the EU
but “in the first half of 2012 the country managed to almost triple its
bike export to the EU. Cambodia’s exports totaled close to 520,000
units in the first six months of 2012 compared to 140,000 in the same
period of 2011,” according to Bikeeu.com.
The EBMA discovered that bicycle companies had moved their production
to Cambodia from Thailand and China, citing increased expenses. The
move is estimated to save 14 percent on taxes. A favourable scheme is in
place for Least Developed Countries (LDCs) under the
Generalized Scheme of Preferences (GSP) known as the Everything But Arms (EBA) agreement. The
EBA allows countries ranked among the 48 LDCs to export products duty-free to the EU, except arms and ammunition.
Introduced at the beginning of 2011, it ushered in a surge of 53
percent in export growth to European countries that year, making the EU
Cambodia’s second largest export partner after the U.S., according to
local business reports.
Increasing expenses in China and Thailand have been attributed in part to
rising wages.
The minimum wage in Thailand was recently raised to 300 baht per day
(10 dollars) and salaries in China in this business have risen to 400
dollars per month. By contrast, minimum wages in Cambodia are set at
just 61 dollars per month.
Strongman and A & J - listed as a subsidiary of Atlantic Cycle Co. - was reported to have originally
opened their factory in Cambodia in 2005. A government website
listing investments
into the country shows three bicycle factories in the “Tai Seng zone”
in the Svay Reing province - A &J, Atlantic Cycle Co. and Smart Tech
- and a fourth bike factory, Best Way Industry, in the ‘Manhattan zone’
in Svay Reing.
The Special Economic Zone (SEZ), according to a USAID report, offers
pro-business perks to investors, a quick turnaround on red tape, low
taxes, low wages, ease of doing business and a “young and educated”
population. The report listed 1,500 workers in the bicycle industry. The
minimum monthly salary then for factory work was 60 dollars a month, or
33 cents per hour, which would necessitate working six days per week to
make 60 dollars monthly. Dated 2008, this shows that
wages have not risen in four years.
Local media recently revealed that a minimum wage increase for
garment factories was in the works due to a labour shortage.
Manufacturing overall has been shifting from China and Vietnam to
Cambodia, and there are
not enough workers
in this country. The social affairs ministry has called for a wage
increase but asked unions to agree on an amount - with suggested
salaries ranging from 93 dollars to 150 dollars per month.
Bicycle factory workers face similar labour issues to garment
workers. Srun Srorn, activist and NGO consultant, explained how factory
workers live on wages which amount to just two dollars per day.
Workers pool money and share a single meal. "Usually they do this:
four friends x 500 riels (12 cents) = 2000 riels (50 cents). Then they
eat some food which costs 500 riels or less. Usually the maximum is 5000
riels (1.25 dollars) for three or four people.”
Some factories include a meal stipend with the monthly salary.
Workers have short meal breaks and eat from vendors located just outside
the factory gates. Some employers include a transportation stipend.
There is no public transportation system in Cambodia, requiring workers
to pay for motorbike taxi rides which cost 50 cents to a dollar.
In mid-December 2012, local media reported 1,000 workers at a Smart Tech bike factory in Svay Rieng
went on strike to raise their salary. Two months prior,
another strike had been reported at A& J.
Moeun Tola, a lawyer at the labour programme of the Community Legal
Education Centre (CLEC) said he assisted the workers with legal advice.
He said they were not part of a union but had organised the strike on
their own. “They are not advised by anyone but we would give legal
assistance and advice.”
Better Factories, an International Labour Organisation (ILO)
programme, was created to help factory workers but at this time only
assists garment factories, according to a spokesperson contacted by IPS.
IPS spoke with Nhanh Kosol, one of the workers, about the strike for
an update. Kosol said that their wage is still just 61 dollars a month
but the factory had agreed to a transportation subsidy of 13 dollars per
month and overtime pay. They can work overtime between two hours and
five hours a day, depending on the factory. Overtime of five hours earns
an additional three dollars.
He thought the bike factory was “not too bad, because I have a job.
The working conditions are some days good, and some days bad but the
salary is not sufficient to support living and everything is always
going up.” In his two years working there, the workers went on strike
two or three times already and “it can help, but not too much.”
Bike EU listed the per unit price imported from Cambodia as about 200
euros. The U.S. has also recently had an upsurge in imports in bikes
from Cambodia, according to
foreign trade statistics.
In 2009, 2.06 million dollars worth of goods were imported from
Cambodia under the label “toys, shooting and sporting goods, and
bicycles.” In 2010, the amount tripled to 6.8 million dollars and by
2011 it was 10.3 million dollars.
When asked how much he thought the bikes he helped make sold for,
Kosol said workers thought between 1,400 dollars and 3,000 dollars, the
low end of which is 25 times his monthly salary.
( Source
Independent European Daily Express (IEDE) )
