Garment makers fight to survive

A low-skilled workforce, import sanctions and comparatively unfavourable tax policies are blocking the development of Myanmar’s garment industry, members of the Myanmar Garment Manufacturers Association said recently.

The comments were made by officials during a press conference at the Union of Myanmar Federation of Chambers of Commerce and Industry workshop on August 25.

It was the first time that manufacturers had spoken to the media since worker unrest broke out five months ago. Workers from approximately 70 garment factories held strikes between May 1 and July 30 to demand salary increases and improved working conditions, such as lifting the prohibition against forming a labour union.

MGMA president U Myit Soe said: “The countries that sell raw materials to Myanmar, such as Singapore and Malaysia, are geographically distant from our export markets in Japan and South Korea, which increases production time. As we are constantly under pressure to meet deadlines, workers are forced to work long hours and overtime payments are low.”

He said Myanmar produces low quality garments due to a lack of skilled workers and total earnings amount to about 10 or 15 percent of an item’s total export value.

“We are paid a ‘sewing fee’ – we do not design the clothes and we must import the raw materials too,” he added.

In 2000, the industry was worth US$300 million,” said U Myint Soe, adding that the following year earnings jumped to about $800 million but have fallen since because the United States imposed sanctions in 2003 following accusations of forced labour by the International Labour Organisation (ILO).

Countless factories closed down and more than 100,000 garment workers became unemployed. Myanmar garment factories then looked to Japan for business.

“Japan is less rigorous about ensuring good working conditions than the United States was,” he said.

“The industry hasn’t recovered since [the sanctions were imposed in] 2003,” said Daw Khaing Khaing Nwe, MGMA’s general secretary.

“We’ve tried hard to develop the skills of our workers. But once the skills are acquired, workers often quit and move to factories along the Chinese and Thai borders in search of better pay. We are yet to get the high turnover rate under control,” she added.

“Myanmar is one of the world’s poorest countries. However, unlike equally poor nations, such as Cambodia, Laos and Vietnam, Myanmar is not permitted to export goods to European countries at lowered tax rates under the ‘generalising system for preference’ (GSP) for Least Developed Countries. This makes it difficult to develop Myanmar’s garment industry into one that is competitive with others in the region, as well as making inroads into the western market,” she said.

Myanmar was removed from GSP following a 1997 ILO report that documented labour standards violations.

U Khin Hlaing from Zawtika garment factory said that even if US sanctions are completely lifted, the lack of skilled workers will continue to make it tough for Myanmar to compete.

“Even if we were able find Western buyers, it would be difficult to fulfil their demands because there aren’t enough skilled workers in Myanmar. It’s a huge difficulty,” said U Khin Hlaing.