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Viral Disruption Forces Asian Factories Closed

China’s production delays due to COVID-19 are taking a toll on the fashion supply chain in neighboring nations. While Cambodia and Myanmar have seen very few cases of coronavirus to date, more than two dozen garment factories in the nations are temporarily closing their doors as they lack the necessary raw materials to maintain production.

As the outbreak dealt a blow to manufacturing and shipments from China, there were worries about the potential for factory closures in nations that heavily depend on Chinese imports. According to the Garment Manufacturers Association in Cambodia (GMAC), the nation’s garment industry sources 60 percent of its raw materials from China. Meanwhile, Myanmar factories import up to 90 percent of their raw materials from the country where the coronavirus emerged late last year.

These concerns have reportedly been warranted. Union federation IndustriAll Global Union says that 10 Cambodian factories have closed so far, leaving 5,000 employees out of work. Meanwhile, 16 factories in Myanmar have shuttered, affecting 7,000 workers.

Among the closures in Myanmar is one of three Letwar Garment Factories in Yangon, which temporarily closed on March 11. Factory manager Tun Tun Myint told The Daily Eleven, “We have nothing to make clothes… We can’t expect raw materials will come to our country in May, June or July. Without orders, we have to shut our factory temporarily.”

The number of closures could escalate. IndustriAll estimates that a total of 200 Cambodian factories could either lower their productivity or completely suspend manufacturing.

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About 700,000 individuals work in Cambodia’s garment factories, and fashion represents around 40 percent of the nation’s exports. Cambodian factories that close are required to pay laid-off workers 60 percent of the minimum wage, with the government offering to pay 20 percent of this amount. Additionally, workers will receive instruction from the Ministry of Labour and Vocational Training while they are out of a job.

IndustriAll is concerned about the potential for companies to take advantage of this reduction in minimum wage.

“As many jobs as possible must be saved and the government should intervene when workers lose salaries,” said Annie Adviento, regional secretary for IndustriAll South East Asia. “Both Cambodia and Myanmar have participated in ILO’s decent work country program, which focuses on employment creation and social protection for workers.”

These closures in Cambodia have come despite governmental measures that sought to resupply factories’ raw materials.

Late last month, Cambodian Prime Minister Hun Sen asked China to send raw materials by air to prevent work suspensions, which were expected to hit mid March if more materials did not arrive. China has since allocated vessels to transport orders by sea from March to May.

Per a GMAC statement, as of March 9, raw materials arrived at the Sihanoukville Autonomous Port, with 12 more shipments expected to arrive. Cambodia’s Ministry of Economy and Finance and the General Department of Customs and Excise created a “Green Lane” to expedite the clearance for these goods. Additionally, the Phnom Penh Municipal Association is working to remove traffic delays for the trucks and is allowing them to enter the city around the clock.

Compared to China’s more than 80,000 cases of coronavirus, Cambodia just reported its first official case a week ago and Myanmar has not yet had any citizens test positive for the virus as of press time.