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Wednesday, June 19, 2024

Myanmar’s garment industry has shrunk by 25% since the military coup

The workforce in Myanmar’s garment industry, which once had a small but thriving export industry, has shrunk by 25 percent since the military coup in February 2021

The Myanmar Garment Manufacturers Association recently said that 298 member factories have stopped operating, an increase of 52 factories since December 2023.

This new number accounts for 36 percent of the total number of closed member factories, up from 31 percent in December 2022.

Before the Covid-19 pandemic, the country’s garment exports had surged to historic highs, thanks to low wages and a weak currency. They were the top export earner, accounting for 30 percent of overall exports.

According to a labor relations official at MGMA, some garment factories struggle to maintain operations due to reports of labor shortages in the last six months.

“The workers are increasingly moving to other industrial sectors which offer higher wages or shifting to other countries,” the MGMA official added.

The military regime in October 2023 forced companies to provide a special subsidy on top of the minimum wage, raising the minimum payment to 5,800 kyat ($2.76) per day.

But rice prices have tripled since 2018, and workers are not benefiting much from the wage increase.

On the other hand, the military regime has encouraged migrants to work abroad as a solution to unemployment and foreign currency shortages.

The growing conflict between the military regime and armed ethnic groups is also causing young workers to leave the country, with 60-70 percent of workers making their way to other countries to work.

As the unstable situation in Myanmar remains unpredictable, many fashion brands say it is too early to discuss emergency action plans and are caught in a catch-22 situation.

If they continue to outsource to Myanmar under military rule, they will face risks. Workers will suffer if business relationships with Myanmar garment factories are terminated entirely.

In 2023, several well-known global brands reduced or ceased operations in Myanmar due to allegations of human rights violations against workers.

This has created a slowdown in export orders for Myanmar garment factories, resulting in factory closing and job losses.

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