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Myanmar’s crisis is dying for the garment industry, work and hope




April 8, 2021

Two years after opening a garment factory in Myanmar, Li Dongliang is on the verge of closing and dismissing the remaining 800 workers.

The business was struggling due to the COVID-19 pandemic, but a coup d’etat on February 1 caused massive protests and deadly crackdowns, and his factory ignited amid rising anti-Chinese sentiment. After being put on, the order was stopped.

According to UN data, his story symbolizes the dangerous situation facing a critical sector of Myanmar’s economy, which accounts for one-third of exports and employs 700,000 low-income workers. I am.

“Without new orders, we would have no choice but to give up Myanmar. Next “A few months,” he added, adding that he survived only on pre-coup orders and had already cut 400 staff.

Lee and many of his associates are H & M and Primark Trade with Myanmar has been suspended due to a coup d’etat.

According to the Myanmar Sewing Manufacturers Association, Chinese citizens like Mr Lee fund almost one-third of Myanmar’s 600 garment factories, which is by far the largest investor group.

Khin May Htway, managing partner of the Myanmar Wei Consulting Group, which advises Chinese investors in Myanmar, said it has decided to close at least two other Chinese-funded garment plants in Myanmar. She said the two companies were her clients, but refused to identify them for privacy reasons.

In Myanmar, foreign investment in garments has skyrocketed in the last decade as economic reforms, western sanctions and the end of trade agreements have helped establish this sector as the greatest symbol of its early emergence as a manufacturing hub. did.

According to UN Comtrade data, Myanmar’s clothing shipments increased from less than $ 1 billion in 2011 (about 10% of exports) to $ 6.5 billion in 2019 (about 30% of exports).
However, the sector was shaken by a pandemic that plunged the world into depression and squeezed consumer demand, losing tens of thousands of garment factory jobs in Myanmar and elsewhere in Asia.

Then a coup d’etat happened.

In the weeks that followed, many garment workers were unable to work because they either participated in the protest or the street became a battlefield.The turmoil also disrupted banks system The factory owner said it made it difficult to get goods in and out of the country.

Amid growing international criticism of the coup, European and US fashion brands issued a statement last month through the association that they would protect jobs in Myanmar and respect their promises.

But recently, many have stopped ordering, including the world’s second-largest fashion retailer, H & M in Sweden, Next and Primark in the UK, and Benetton in Italy.

He then said he would split orders previously placed in Myanmar into Bangladesh, Cambodia and China, but Benetton said it would move its business primarily to China. H & M and Primark have not commented on how to redistribute orders.

Escape from poverty

In Vietnam, garment factory owner Rabbi Tuniral told Reuters that it is beginning to win more business from European buyers turning from Myanmar.

“They don’t want to abandon Myanmar … but it’s forced by them,” said Peter McCallister of the Ethics Trade Initiative, a workers’ rights organization whose members are European high street brands.

Mr McAllister said it would be very difficult for Myanmar’s garment sector to recover if Chinese investors left.

Anti-Chinese sentiment has risen since the coup, and opposition to the deal has focused on Beijing’s modest criticism compared to Western accusations. This is why several Chinese-funded factories, including Mr Lee, were burned by unidentified perpetrators during last month’s protests.
Rights groups have repeatedly expressed concern about exploitation in Myanmar’s garment sector, with most female workers earning only Kyat 4,800 ($ 3.40) per day, the lowest rate in the region. ..

However, workers moved from rural areas to factories, mainly around the commercial center of Yangon, and sent money to their families, bringing many people out of poverty.

Khin Maung Aye, managing director of the Lat War garment factory, which employs 3,500 people, said the sector would face collapse if the military did not revive a democratically elected government.

He said it would have “terrible consequences of poverty,” he said, as it appeared in orders placed before the coup, but he suspected that orders for the next season, usually scheduled for later this month, would be exhausted. I was afraid.

Thin Thin, a 21-year-old garment worker, said her family of five survived a monthly retainer of Kyat 86,000 ($ 59) while the factory was closed due to a coup d’etat.
“I’m very stressed … we have nothing left to pawn. We have to borrow from a moneylender at 20% interest a month.”

The United States, which imposed targeted sanctions on the Tatmadaw, suspended trade negotiations with the country at the end of last month, reduced tariffs, and considered the eligibility of a generalized system of preferential tariffs that would bring other trade benefits to developing countries. He said he was doing it.

This could be a “harbinger of future turmoil” for Myanmar’s garment sector, said Steve Lamar, chairman of the American Apparel and Footwear Association, which represents over 1,000 fashion brands.

However, some unions representing garment workers are demanding that the international community impose stricter sanctions to put pressure on the military, even if it could further damage their industry.
“I accept the order to leave,” said Myo Myo Aye, founder of the Myanmar Solidarity Trade Union, through an interpreter. “Because of the lack of work, workers will face difficulties and difficulties. On the other hand, we simply do not accept the junta.”

© Thomson Reuters 2021 All rights reserved.

Myanmar’s crisis is dying for the garment industry, work and hope

Source link Myanmar’s crisis is dying for the garment industry, work and hope

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