Cambodian Workers Getting a Better Deal

I’m not saying Cambodia doesn’t still have a long way to go, but my contention has always been that the trend here is positive. A barrage of personal observations and news reports over the past couple of weeks has just strengthened my position. These are the top 6 reasons why I believe Cambodian workers are getting a better deal:

1) Last week somebody made an offer on our house. It was the first time an offer has been made in a couple of years. A little behind the times, I asked my friend Joe about land prices and building costs. Land prices have stayed pretty constant, but labour and materials costs have skyrocketed. When we built our house, the going rate was about $5 a day per worker. Now they’re asking for $15 a day and getting it. I turned down the offer because it wasn’t enough to cover replacement costs.

2) A neighbour of ours has been squeaking by on the little money she makes from doing laundry for years. Over the past couple of years, she’s been getting so much work, she’s been able to save money. Last month, a work crew, headed by a female carpenter, knocked down her little shack and built her a new stilt house. It’s still just a simple structure, but it’s nice and high off the ground, giving her more space to work and relax in the shade under the house.

Photo from National Public Radio broadcast cited in this article

3) Every year residents on our block toss dirt on the road in preparation for the rainy season. This year, they took up a collection and we got 24 trucks full of crushed asphalt laid down our road. Everybody pitched in as much as they could and no individual or family bore the brunt of the cost. In the past, we could never have afforded it.

4) In an article in the New York Times about growing business development in Cambodia, Peter Brimble, senior economist for Cambodia at the Asian Development Bank stated: “People along the Mekong River are being lifted out of poverty by foreign investment inflows driven by higher Chinese wages”. The same article said that some companies are offering better benefits to entice workers.

5) On International Labour Day, thousands of workers in Cambodia marched for better wages. They were demanding $150 a day. Prime Minister Hun Sen, far from having them beaten and dispersed, said, “This is their freedom” in front of a gathering of workers at Sihanoukville Autonomous Port. He went on to point out that in 2008, they were making a minimum of just $50 a month. In 2010, that jumped to $61 and in May of 2013 was up to $80. Hun Sen also said he would be happy if employers were able to increase wages.

6)Young men in our neighbourhood just quit if they’re being underpaid, overworked or feel mistreated. They don’t worry about it because, as one told me, “It’s easy to get a job now.”

20 years ago, Cambodia started over from scratch. Educated Cambodians were either dead or had fled the country. Land title and financial records had been destroyed. Education was virtually non-existent. Khmer Rouge were still lurking in the shadows. At the same time, the United States was at the top of the heap and even ordinary Americans were cashing in, thanks to rising property prices and easy loans. In 1999, the Euro became the official currency in Europe and countries like Greece, Spain, Portugal and Ireland were experiencing unprecedented growth thanks to cheap credit. Enough said about these countries’ growth since 2008.

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Growth here in Cambodia has been far less dependent on credit than it was overseas. Foreign (mostly Chinese) aid has given the country a boost, but the scales are tipping as foreign businesses set up shop here, using their capital to spur growth. As I pointed out in a previous post, business investment in Cambodia per capita outstripped investment in China for the first time in 2012. Confidence in investing in Cambodia is so great, in fact, that even India is Competing with Cambodia for investment dollars and losing. Not only that, but Cambodia is now seen as less corrupt than India.

Interestingly, though, Cambodia is not just grabbing all it can get, but is taking a cautious approach. Only 606 new companies opened in Cambodia in the 1st quarter of 2013. That was a 33% drop from the 1st quarter of the previous year, but the reason was not because of lack of interest: it was because of a tightening of restrictions.

Cambodian banks are not lending money to unqualified borrowers like they did in the U.S. and Europe, either, much less dangling low interest starter loans to people to entice them to take out mortgages they can’t really afford. While that creates problems for low income families who could afford to pay back the loans, one lender seems to have found a way to help poorer Cambodians. I don’t know much about 1st Finance except what I learned from an article on National Public Radio and on their website, but the bank does take a unique approach tailored to Cambodians’ special circumstances. They send credit officers into the field to observe applicants at work and see how popular their businesses are. No, I haven’t been compensated by 1st Finance and can’t vouch for them. I just think it’s an interesting concept and if they are as committed to helping Cambodians as they say they are, they could make a big difference to a lot of lives. Listen to the audio or read the transcript on NPR, New Mortgage Program Helps Cambodia’s Poor Find Better Homes, and decide for yourself.

About Rob Schneider

Rob Schneider is a writer based in Sihanoukville, Cambodia, where he has lived since 2006.
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