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A new United Nations report
says Cambodia needs to diversify the economy to help protect vulnerable groups,
such as women workers, from downturns. As Ron Corben reports from Bangkok, the
report also calls for the government to see the current slump as an opportunity
to speed up structural changes.
The United Nations
Development Program urges the Cambodian government to shift away from relying
on the garment industry, which is vulnerable to sharp economic shocks such as
the recent financial crisis.
The report, released last week, focuses on Cambodia's challenges; the country
has been among those in Asia hit hardest by the collapse in global exports.
It says the poor, especially those in debt, have felt the pain the most.
The garment sector accounts for about 70 percent of Cambodia's export income.
The United States is the leading market but exports there fell by over 22
percent in the past year because of the recession.
Nearly all of the workers in Cambodia's garment factories are women, mostly
from rural areas. At least 50 factories have closed in the past year, and more
than 60,000 workers lost their jobs.
Chan Sophal, lead research consultant on the report, said Tuesday the lack of
alternatives means more Cambodian women must work in the entertainment
industry. The United Nations Inter-Agency Project on human trafficking sees
more young women entering the industry.
Mr. CHAN SOPHAL said "Karaoke
parlor, the massage places and the beer promotion industry, and all of those
have women at risk in terms of being a disguised sex worker and at the exposure
The global downturn also hit Cambodia's construction industry, tourism
businesses and migrant workers.
But the UNDP report says the crisis should be seen as an opportunity that spurs
efforts to address structural weaknesses in the economy.
Chan Sophal says the report calls for institutional reforms, and more equity in
public spending to lift the economy and reduce the effects of external shocks. Mr.
CHAN SOPHAL added "This crisis may
represent an opportunity for the government to speed up the structural reforms
which takes time - but now we have no time. The quicker we can do to improve
competitiveness, the economic diversification the better chance we will recover
from the economic downturn."
Recently, the International
Monetary Fund said garment exports from Cambodia would fall by as much as 15
percent this year.
However, the Asian Development Bank forecasts that the economy will grow just
over three percent next year, as the global recovery takes hold and increases
clothing exports and tourism arrivals.