Floodwaters Disrupt Production at Factories, Affecting 16,000 Workers

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Residents are rescued from floodwaters in Phnom Penh’s Dangkao district on October 17, 2020. (Tran Techseng/VOD)
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About 16,000 factory workers are currently unable to go to work due to flooding in Phnom Penh and the provinces of Kandal and Takeo, the Labor Ministry said on Wednesday, with an economist warning of a hit to the economy and rising prices due to the recent extreme weather.

Two weeks of heavy rain across the country have caused 34 deaths and 320,000 hectares of farmland to be flooded, according to the National Committee for Disaster Management, with the impact felt in several sectors.

Labor Ministry spokesperson Heng Sour said that as of Wednesday 25 factories had their production suspended due to flooding, with about 10 others having restarted operations since last week. Most were in Phnom Penh, where Dangkao district, near the Prek Tnaut stream, has been severely inundated. Two of the still-flooded factories were in Takeo, while one was in Kandal, Sour said.

He said about 16,000 workers were affected by the halt in production, but would not answer a question about whether they would be paid.

Thy Bunthon, administrative manager at Y&W Garment in Dangkao district, said his factory was flooded since October 14, and all production was stopped.

Water had rushed into the factory around midnight that day, and rose to more than 1 meter in depth, Bunthon said. “It was unbelievable.”

The children’s wear factory employed about 5,000 workers, 3,700 of whom were women, he said. Because the disruption was caused by a natural disaster, the workers would not receive wages while production was suspended, Bunthon said.

“The suspension is made under the condition of a natural disaster. It’s not bankruptcy or Covid. We’ve carried out the suspension following the Labor Law,” he said, adding that a lot of factory equipment was also damaged.

Imogen Page-Jarrett, a research analyst at the Economist Intelligence Unit, said the flooding would affect GDP forecasts as well as investor sentiment and consumer prices.

“The flooding will weigh upon economic output in the third quarter of 2020, with the agricultural, industrial and transportation sectors likely to be the worst hit,” Page-Jarrett said in an email. “In addition, the flooding will increase doubt over Cambodia’s economic recovery, which will weigh upon investor sentiment. Construction and investment timelines are likely to be further delayed.”

Consumption activity was also expected to slow as households diverted spending to repair flood damage, she said.

“We plan to revise down our real GDP estimate for 2020, from a contraction of 1.7% at present, to factor in the damage caused by the flooding,” she added. “We will also make an upward adjustment to our estimate of average consumer price inflation in 2020, from 2% currently, as the flooding will push up food and transportation costs.”

Additional reporting by Michael Dickison

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