Economy

Rising Living Costs Hit Informal Workers Hard

The increasing cost of gasoline and food is putting more pressure on Cambodia’s informal workers, who are struggling to bounce back after the pandemic.
Vendor sells vegetable along a street on the outskirts of Phnom Penh on February 11, 2021. Picture: Pring Samrang
Vendor sells vegetable along a street on the outskirts of Phnom Penh on February 11, 2021. Picture: Pring Samrang

In the relentless midday heat, Suong Cherng sits in his tuk tuk searching for customers along a boulevard in Phnom Penh. The 44-year-old has spent almost a decade working as a driver. However, rising gasoline prices coupled with a lack of customers has made his trade unprofitable.

Cherng said his daily income has dropped dramatically since COVID-19 hit hard in Cambodia in 2020. Today, even though the situation is improving, he said it remains difficult for him to find customers.

“It is difficult to live now,” he said. ‘’Most of my income now hardly even responds to the expense of gasoline and food, which keep rising.”

According to Cherng, on average he earned between 40,000 riels and 50,000 riels daily. While he said to some this may sound a lot, after paying for gasoline and food there is not much left. ‘’I spend around 20,000 riels on food and gasoline per day. So, as seen, it is not good money to support the family and my two children, who are studying now,” he said.

[ Ministry Pledges $100m to Help Covid-hit Sectors Grow ]

[ Cash Transfer Scheme Neglects Nation’s Urban and Service Workers ]

[ Fears War in Ukraine Will Spark Inflation Increase ]

Phen Pheap, 42, who is originally from Prey Veng province, is a home accessories seller in Phnom Penh. He has been trading these items for almost 20 years to support his family, who live in his hometown.

‘’It is difficult to earn money as there are not so many buyers now,” he said. ‘’I can earn around 20,000 riels to 30,000 riels. With this money, I can only support myself with basic needs like food, which has been rising lately.”

Speaking at a conference in November about, "New methods for calculating the poverty rate in Cambodia and the poverty rate in 2020", Minister of Planning, Chhay Thorn, stated that 2.8 million Cambodians, or 17.8 percent of the population, lived below the poverty line in 2020. Those who can generate less than 10,951 riels a day sit in this group based on the new method, he said.

‘’Among the people living below the poverty line in Cambodia, 4.2 percent live in Phnom Penh, 12.6 percent live in other urban areas, and the poverty rate in rural areas is 22.8 percent,” said Thorn.

Vorn Pao, President of the Independent Democracy of Informal Economy Association (IDEA), told Kiripost that informal workers continue to face a variety of challenges in their daily lives, despite pandemic-fueled restrictions easing.

‘’Though the country has fully reopened its economy, informal workers still find it hard to take their businesses back in places due to the low capital and difficulties in operating business,” he said.

Pao said people remain reluctant to spend money on unnecessary things but basic needs during these uncertain moments.

‘’This is why informal workers like street vendors, and taxi drivers, especially those who are serving in the tourism sector, can find so little money, which is unable to support the high cost of living they have now. The rising price of gasoline and necessary needs make it hard for them to live in a better condition,” he said.

He added city development can also negatively impact informal workers as they do not have places to conduct business as before. ‘’In touristic provinces like Siem Reap as well as Preah Sihanouk, we can see there is a significant development in infrastructure, which resulted in expelling those informal workers from doing their jobs. This is a big problem for them,” he said.

To facilitate informal workers’ living he said the Cambodian government should find any practical solutions to decrease the price of gasoline and make it easy for them to restart their businesses by establishing a sponsorship fund.

Meas Soksensan, the spokesperson at the Ministry of Economy and Finance, could not be reached for comments.

However, during his speech to Cambodian people living abroad in Zurich on May 21, Prime Minister Hun Sen said the gasoline price has not only increased in Cambodia but also across Europe. ‘’This is the side effect of the Russia-Ukraine war. We do not want it to happen. If this war continues, there will be a big impact,” he said.

‘’We have to analyze where this crisis will head. It now affects only fuel energy, especially gasoline, but soon it could also cause severe food safety. Cambodia is not so worried about the crisis but somehow it potentially can cause food price increases that hurt micro-sectors. Therefore, it requires proper management to tackle this issue.”

According to the new fuel price list from May​ 21 to 31, released by the Ministry of Commerce, regular gasoline per liter is 5,632 riels, and diesel is 5,459 riels.