Hun Sen and GMAC Bark on The Wrong Tree

“If we demand too much, our rice pot will turn upside down and we will not have rice to eat.”

Minister of Industry and Handicraft Cham Prasidh, 3 October 2014, The Phnom Penh Post

'It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own self interest.

Adam Smith, The Wealth of Nations, (1776)

 “The military uniforms placed on the mannequins were meant to honor Chinese heroes who lost their lives in battle. Our Chinese director was not trying to insult the workers’ nationality.”

Long Yang, administrative director at Y&W garment factory, 2 October 2014, The Cambodia Daily

“Price, we always claim that it’s one of the most important factors, and it is. But before the buyers can even consider your price, they need to have the confidence that we are able to hold on to our end of the bargain, we are able to deliver the goods. If they have no confidence in our promise to uphold the contract, then we can be as cheap as you want… And the longer you delay, unless you have very clear plans, that’s going to create more uncertainty.”

Ken Loo, secretary-general of Garment Manufacturers Association in Cambodia (GMAC) 8 October 2014, The Cambodia Daily

Hun Sen government and GMAC continue with their push to secure and sell cheap labour to investors. Their favourite threat of a collapse of the rice pot is legendary.

While claiming the industry would collapse under the weight of the wage demand, absolutely nobody discloses any verifiable financials for the supposedly industry’s precarious conditions. Meanwhile, there has been a 50% rise in garment workforce since 2011 despite continual industrial unrests. Factory owners cannot be so ill-advised to continue employing more and more workers amid industrial chaos unless they make super returns on their investment. Yes, Adam Smith says so; everyone – including Hun Sen, his personal interest groups, and the investors – is looking after their own interest.

Part of keeping the wages low, the government ensures the workforce skill remains low. It has done little in the past three decades to turn around the devastated education system left by the Khmer Rouge. The current education minister still holds the regime responsible for the education system that mass produces low skill workforce, which is a perfect excuse for doing and achieving little.

Hun Sen has done more than enough for foreign investors to think the workers are so soft and thick that they can be intimidated even by scarecrows, deserving nothing better than the slave wages they are getting. Garment factory Y&W is so encouraged by the government’s contemptible treatment of the workers that it dresses up mannequins in the Royal Cambodian Armed Forces uniform, and displays them to confront its striking workers. If the mannequins were meant to honour fallen Chinese military heroes – not to insult the workers, as Long Yang claims, they would then be dressed in the Red Army uniform. Hence, either the factory could not afford live army mercenaries to bully the workers, or it just follows Hun Sen’s lead in showing disdain for the workers.

Anyhow, Hun Sen and GMAC are barking on the wrong tree. They are so focussed on securing cheap labour that they ignore what their colleague Ken Loo has to say about a more important business of certainty. Ken Loo is right it is the certainty that buyers are looking for – more than cheap labour that inevitably comes with hungry workers. If GMAC chairman Van Sou Ieng is not exaggerating that orders across all factories have fallen by 36% this year, then it is time to realise the current uncertainty arises from hunger, and the protracted disputes from greed, not the wage demand.

The $177 minimum wage would bring certainty and benefits to many. Healthy happy workers with full stomach would deliver a higher productivity and profit. The industry’s profit-to-revenue ratio might be lower, but there would be more money in absolute terms. Higher wages for garment workers mean more money would remain in the country, generating higher local economic activities. Hence, this would improve a living standard for all, except perhaps, the personal interest groups that may have to re-negotiate their facilitation fees as their rice pot would now be at risk.

Ung Bun Ang

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