Myanmar crisis rings deadly for garment industry, jobs and hope By Reuters

© Reuters.

© Reuters. FILE PHOTO: Workers iron and fix clothes at a garment factory in Yangon’s Hlaing Tar Yar Industrial Zone

By Chen Lin and John Geddie (Reuters) – Two years after opening his Myanmar garment factory, Li Dongliang is about to close down and lay off his remaining 800 workers. Businesses had been struggling due to the COVID-19 pandemic, but after the February 1 coup that sparked massive protests and a deadly crackdown, during which their factory was burned amid rising anti-Chinese sentiment. , the orders ceased. His story is emblematic of the dangerous situation facing a critical sector for Myanmar’s economy, which accounts for a third of its exports and employs 700,000 low-income workers, according to UN data. “We would have no choice but to give up on Myanmar if there are no new orders in the next few months,” Li said, adding that it has been operating at about 20% of its capacity, surviving only on orders placed before the coup, and has it has already lost 400 employees. Li said that he and many of his colleagues were considering moving to other low-cost garment centers such as China, Cambodia or Vietnam, as big fashion brands such as H&M and Primark stopped trading with Myanmar due to the coup. Chinese citizens like Li finance nearly a third of Myanmar’s 600 garment factories, according to the Myanmar Garment Manufacturers Association, by far the largest investment group. At least two other Chinese-funded garment factories in Myanmar, which together employ 3,000 workers, had decided to shut down, said Khin May Htway, managing partner at MyanWei Consulting Group, which advises Chinese investors in Myanmar. She said the two firms were her clients, but declined to identify them, citing privacy. Foreign investment in clothing increased in Myanmar over the past decade as economic reforms, the end of Western sanctions and trade agreements helped establish the sector as the greatest symbol of its nascent emergence as a manufacturing hub. Myanmar’s apparel shipments increased from less than $ 1 billion in 2011, about 10% of exports, to more than $ 6.5 billion in 2019, about 30% of exports, according to Comtrade data from the ONU. But the sector has been rocked by the pandemic that plunged the world into a recession and stifled consumer demand, resulting in the loss of tens of thousands of jobs in garment factories in Myanmar and elsewhere. from Asia. Then the coup happened. In the weeks that followed, many garment workers joined the protests or were unable to go to work as the streets turned into battlefields. The turmoil also bogged down the banking system and made it difficult for goods to move in and out of the country, factory owners said. With growing international condemnation of the coup, European and American fashion brands last month issued a statement through their associations saying they would protect jobs and honor commitments in Myanmar. However, many have recently stopped orders there, including the world’s second-largest fashion retailer, Sweden’s H&M, Britain’s Next and Primark, and Italy’s Benetton. Next said it would split its orders that previously went to Myanmar between Bangladesh, Cambodia and China, while Benetton said it would mainly move the business to China. H&M and Primark have not commented on how they will redistribute the orders. ESCAPE FROM POVERTY In Vietnam, the owner of a garment factory, Ravi Chunilal, told Reuters he was starting to get more business from European buyers diverting from Myanmar. “They don’t want to leave Myanmar … but it is being imposed on them,” said Peter McAllister of the Ethical Trade Initiative, a labor rights organization whose members include high-profile European brands. McAllister said it would be very difficult for Myanmar’s garment sector to recover if Chinese investors left. Anti-China sentiment has risen since the coup, and opponents of the takeover noted the silent criticism of Beijing compared to the Western condemnation. It was in this context that several Chinese-funded factories, including Li’s, were set ablaze by unidentified assailants during a protest last month. Human rights groups have repeatedly raised concerns about exploitation in Myanmar’s garment sector, where most female workers earn just 4,800 kyat ($ 3.40) a day, the lowest rates in the region. But it has provided an escape from poverty for many, as workers have migrated from rural areas to factories, mainly around Yangon’s commercial center, and sent money home to their families. Khin Maung Aye, managing director of the Lat War garment factory, which employs 3,500 people, says the sector faces collapse if the military does not reestablish a democratically elected government. That would result in “dire poverty results,” he said, adding that it would also stay afloat on orders placed before the coup, but he feared that orders for the next season, which were normally due to come in later this month, would be will run out. The United States, which has imposed targeted sanctions on Myanmar’s armed forces, suspended trade talks with him late last month and said it was reviewing his eligibility for its Generalized System of Preferences scheme, which lowers tariffs and provides other benefits. trade for developing countries. That could “herald future disruption” for Myanmar’s garment sector, said Steve Lamar, president of the American Apparel & Footwear Association, which represents more than 1,000 fashion brands. But some unions representing garment workers have called on the international community to impose tougher sanctions to pressure the military, even though it may further damage their industry. “I accept orders to move,” Myo Myo Aye, founder of the Myanmar Solidarity Union, said through a translator. “Workers would face hardships and hardships because there would be no work. On the other hand, we just don’t accept the military regime.” ($ 1 = 1,400.0000 kyats)