Cambodia and the Coronavirus Recession

Although the number of coronavirus infections in Cambodia continues to be relatively low Cambodia has taken a heavy hit from the economic crisis caused by the COVID-19 pandemic with firms staring at canceled orders and people losing jobs.

Garment worker Ny Thea never expected she would be in such big trouble. Just recently she still earned about $300 (€253) per month in a clothing factory, and on top of that, she took in extra cash renting out a luxury car. 

But the coronavirus pandemic has changed everything. The factory fired Thea and 619 of her colleagues, and no one is interested in renting her vehicle anymore. "I can't find a new job. I have no idea how I am going to pay off my debts," she said.

The World Bank as well as the Asian Development Bank (ADB) warn that poverty may significantly increase. According to the ADB, the current crisis could push an additional 1.3 million Cambodians into poverty. The national poverty line defines the poor as people who earn $0.93 or less per day.

Cambodians working in the tourism industry and the garment sector are particularly hit by the crisis.
In the garment industry, many Western clothing brands have canceled orders or are ordering far less garment products than before. And in tourism, international visitors are now avoiding Cambodia and its neighbors as COVID-19 infections continue to spread and countries implement far-reaching travel restrictions.

Sunniya Durrani-Jamal, the Cambodia director of ADB, warns that Cambodia needs to prepare for the worst. "It's all hands on deck while we brace for impact. 2020 is going to be a very difficult year, a year of survival," Duranni-Jamal told DW.

In July, the United Nations warned that the crisis threatens to destroy the livelihoods of 218 million informal workers in Southeast Asia.

"Without alternative income, formal social protection systems or savings to buffer these shocks, workers and their families will be pushed into poverty, reversing decades of poverty reduction," the UN said in a recent policy brief.