Workers work at a garment factory in Yangon, Myanmar, Sept. 18, 2015.
Orders for garment factories in Myanmar have been called off in large numbers due to the Communist Chinese virus (COVID-19) pandemic, coupled with the massive protests and violent crackdown triggered by the Feb. 1 coup. Moreover, many Chinese-owned garment factories in Myanmar have been burned down and suffered heavy losses amid growing anti-Chinese sentiment, leading to a crisis in the garment industry, which is vital to Myanmar’s economy.
According to Reuters, two years after opening a garment factory in Myanmar, Chinese national Mr. Li’s factory is on the verge of closing down. If there are no new orders in the next few months, we will have no choice but to abandon Myanmar,” he said. He said his factory, which has been operating at about 20 percent of capacity lately and can rely only on pre-coup orders, has already laid off 400 workers.
With the world’s second-largest fashion retailer, Sweden’s H&M, and major fashion brands such as Britain’s NEXT and Primark and Italy’s Benetton halting trade with Myanmar because of the coup, Lee said he and many of his peers are considering moving factories to other low-cost regions such as mainland China, Cambodia or Vietnam.
Ravi Chunilal, a garment factory owner in Vietnam, told Reuters that he is starting to receive more business moving from Myanmar.
Nearly one-third of Myanmar’s 600 garment factories are invested in by Chinese nationals, by far the largest group of investors in the country, according to the Myanmar Garment Manufacturers Association.
Khin May Htway, a partner at MyanWei Consulting Group, which advises Chinese investors in Myanmar, said at least two other Chinese-owned garment factories in Myanmar have decided to close, employing a total of 3,000 workers. She declined to identify the two companies because they are her clients.
Foreign investment in Myanmar’s garment industry has surged in the past decade with economic reforms, the end of Western sanctions and trade deals. According to the United Nations Commodity Trade Statistics Database (UN Comtrade), Myanmar’s garment shipments rose from less than $1 billion (about 10 percent of exports) in 2011 to more than $6.5 billion (about 30 percent of exports) in 2019.
Khin Maung Aye, managing director of Lat War Garment Factory, said the industry will face collapse if the military does not restore a democratically elected government. That would lead to the dire result of poverty, he said, adding that he, too, was subsisting on orders from before the coup.
Thin Thin, a 21-year-old garment worker, said her family of five was surviving on the 8,600 kyat ($59) she received from the factory each month because of its closure after the coup.
“I feel a lot of pressure ……. We don’t have anything to pawn anymore. We had to borrow money from lenders at 20 percent interest per month.” Thin Thin said.
Late last month, the U.S. imposed targeted sanctions on Myanmar’s military, suspended trade talks with the country and said it was reviewing its eligibility for the Generalized System of Preferences (GSP), which reduces tariffs and offers other trade preferences for developing countries.
Steve Lamar, president of the American Apparel & Footwear Association (AAFA), said this could portend “chaos” for the future of Myanmar’s apparel industry.
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