Garment workers in Cambodia struggle with debts as lockdown continues

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After weeks without pay, debt drove Cambodian garment workers back to their factories when they reopened it reopened this month, amid a surge of COVID-19 cases on factory floors.

Cambodia has prioritised the 850,000 people who work in its US$7 billion garment industry for COVID-19 vaccines, but not all workers have been given jabs and promises of debt relief amid strict lockdowns have not materialised, according to garment worker Eang Malea.

“I need to pay rent, utilities and debts,” Malea, 26, told the Thomson Reuters Foundation. “I worry that I will get infected by going to work without being vaccinated, but I don’t really have a choice.”

In mid-April, the country had to shut its clothing factories and put some worker communities under strict lockdowns as hundreds of new coronavirus cases were detected each day, with infections at more than 100 factories.

The nation of 16 million people reported less than 500 cases and no deaths in the first year of the pandemic.

But with more than 22,000 cases and 156 deaths since an outbreak in February, authorities on April 19 established “red zones” in areas with high rates of infection – banning people from leaving their homes except for medical emergencies.

As the lockdown left tens of thousands of low-paid garment workers without income, the Cambodian Microfinance Association on April 07 told its members to assist struggling clients, following months of campaigning by advocacy groups.

But several borrowers told the Thomson Reuters Foundation they had not been offered the moratorium, and expressed fear of losing land held as collateral.

“The (microfinance) staff told me that they had not heard of this rule, so they did not have to do it,” Malea said during a break at the factory.

The Cambodian Microfinance Association did not respond to requests for comment. It has previously rejected claims of predatory lending and said last year that no land would be seized by any of its 90 members during the pandemic.

Cambodia’s microlenders have come under rising scrutiny in recent years, with researchers and activists linking predatory lending to unsafe migration, child labour and coerced land sales.

At US$3,800, the average debt per borrower is the highest in the world and more than twice Cambodia’s gross domestic product per capita.

The sector has sent thousands of Cambodians into a cycle of debt, with unregulated loan sharks profiting as borrowers take out new loans to pay old ones, researchers have found.

A 2020 survey by trade unions and rights groups found almost a third of workers had taken new loans to pay off existing debt, “as they struggle to feed their families and hold their land under immense pressure from microfinance institutions.”

Borrowers struggling to survive the lockdown “shouldn’t have to worry about how to pay their microfinance loans,” said Naly Pilorge, director of human rights group Licadho, urging the profitable industry to act.

“Many of Cambodia’s largest MFIs (microfinance institutions) made record profits in 2020, and now is the time for these institutions to live up to their promise of helping Cambodia’s poorest, by offering real and immediate debt relief,” she added. (Source: Thomson Reuters Foundation)

 

 

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