Trade and Poverty Link Experiences from trade in garments and fisheries
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1 Trade and Poverty Link Experiences from trade in garments and fisheries Neak Samsen Researcher 1
2 Contents 1. Analytical framework 2. Garment industry Overview Effects of trade in garments on poverty 3. Fisheries sector Overview Effects of trade in fisheries on poverty 4. Conclusion 2
3 1. Analytical framework Economic Structural effect Economic growth Government revenue Physical and financial infrastructure Government policies Effects of trade on poverty Employment effect Income/wage Human development effect Human capital (health & education) Opportunities & voice Wealth Vulnerabilities Food security 3
4 2. Garment Industry: Overview Producers/ Exporters Production (US$ Million) Market US: 1% (1996) EU: 96% Other: 3% Sources: Customs and excise ; GMAC US: 63 (%) EU: 34 (%) Other: 3 (%) ,197 US: 70% EU: 22% Other: 8% 4
5 2. Garment industry : Economic structural effect Contribution to economy % of GDP Share in exports of goods Physical infrastructure Financial infrastructure Government policies 1% 3% 9% 70% 15% 82% Rehabilitation and new construction Enhancement of banking and financial services Globalization & regionalization Institutional reforms Institutional establishment: GMAC, Trade unions, ILO better factories, Arbitration Council 5
6 2. Garment industry: Employment & wage effect Employment (direct) Employment (indirect) Nominal Wage (US$/month) Remittance , , ,000 5 garment jobs => 1 indirect job % of monthly wage; 110 US$ Million (2005) 6
7 2. Garment industry: Human development effect Housing and sanitation - Usually cramped and dilapidated rooms - But, generally access to clean water and sanitation (88% of 1,500 respondents in CRD/ADB survey in 2003) Food and clothing - Minimizing spending on food and clothing (74% limit on food; 68% limit on clothing by 300 respondents in EIC survey in 2006) 7
8 2. Garment industry: Human development effect Health - Deteriorated due to malnourishment, overtime work, and working-place environment (cloth dust and smoke, dying chemicals) - But, contributed to family healthcare expenditure (88% of 112 respondents reported survey by ADI in Prey Veng) Education and other skills - Low education but gained skill development from work. However, no other skills development - But, contributed to young siblings education (60% of 112 respondents reported survey by ADI in Prey Veng) 8
9 2. Garment industry: Human development effect Opportunities & voice - empowerment (85-90% are female workers) - trade unions (53% of 300 respondents are member of union, EIC survey in 2006) - Yet, women less represent in union leadership Vulnerability - largely risk to international trade s shocks - unsafe commute due to robbery, overloaded transportation, and harassments - Risk to losing reputation and chance of marriage 9
10 3. Fisheries - Overview Exporters Production Market KAMFIMEX (closed in 2003), Lian Heng, Sun Wah, Other smaller exporters 274,000 tons Local: 87% Export: 13% (Thailand: 67%, Vietnam: 25%) 10
11 3. Fisheries: Economic structural effect Contribution to economy % of GDP 13% 11% 9% Share in exports of goods 1% Government revenue 2 US$ Million Government policies Globalization & regionalization Institutional reforms: Law on fisheries, redistribution of fishing lots, KAMFIMEX Institutional establishment: fisheries communities 11
12 3.Fisheries: Employment and income effect Direct jobs: 380,000 (2004) Population around Tonle Sap Family Fishing 67% Handicraft Fishing 16% Industry Fishing 1% Aquaculture 5% Processing 11% 12
13 3.Fisheries: Employment and income effect Gate Poi Pet Koh Kong Sihanouk Ville Wage Rate (US$/month) Source: Keang Seng (2006) Facility No facilities, such as housing, healthcare, etc. Food, house and some healthcare (small-scale export) Dormitory and some healthcare (large-scale export) Basically, earnings are barely enough for daily expenditure 13
14 3.Fisheries: Human development effect Housing and sanitation - Workers live with fish exporters (Koh Kong & Sihanouk Ville) - Workers live in own huts (Poi Pet); limited access to clean water and electricity Health - Generally, poor health due to poor living conditions Food and clothing -Barely enough Education -Low education - On the job-training but less opportunities to have further education 14
15 3.Fisheries: Human development effect Opportunities & voices - Little opportunities due to no possession of land & further education - Little voices because of no representation Vulnerability - Depends largely on a daily wage, thus risks from international trade shocks & disruptions Food security - No significant threat 15
16 3.Tonle Sap Zone & Poverty Rate The second highest after Plateau/Mountain zone which was 52% Siem Reap 52% Kampong Thom 52% Kampong Chhnang/Pursat 40% Banteay Meanchey 37% Battambang 34% Tonle Sap Zone 43% Cambodia 35% 0% 10% 20% 30% 40% 50% 60% MOP, Poverty profile (2006) 16
17 4. Conclusion Export (US$ Million) Trade surplus Employment Minimum wage (US$/month) Worker income (US$ Million) Remittance (US$ Million) Garment 2, ,000 (direct+ indirect) Fisheries ,000 (67% family fishing) generally daily wage 18 (industry fishing)? 17
18 4. Conclusion cont d Trade in garments appeared to have significant impacts on poverty (structure, income and human development) Trade in fisheries appeared to have minimal impacts on poverty but secured food security The main reasons are minimum wage, share in export & institutional support arrangements 18
19 Thank You 19
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