12 April 2021
Two years ago, Li Dongliang opened his clothes factory in Myanmar. Today, he fears he will be forced to close his business and lay off 800 workers.
Li's business had already been struggling during the COVID-19 pandemic. Then on February 1, the army took over the country and arrested many of its democratic leaders. People began to protest and were attacked by the army. During the violence, someone set fire to Li's factory. New orders for clothes stopped.
Clothes make up a third of Myanmar's exports. Clothing factories employ about 700,000 workers, United Nations data shows. The problems facing clothing businesses in Myanmar have had a major effect on the country's economy.
"We would have no choice but to give up on Myanmar if there are no new orders in the next few months," Li told Reuters. He explained that he has been operating at about 20 percent of his normal work level. And he has already laid off 400 workers.
Li said he and many other business leaders were considering moving to other low-cost clothes manufacturing countries, like China, Cambodia and Vietnam. Several large, international clothes buyers have refused to trade with Myanmar because of the army takeover.
Chinese nationals like Li own and run nearly a third of Myanmar's 600 clothes factories, says the Myanmar Garment Manufacturers Association, a large investor group.
At least two other Chinese-financed clothes factories in Myanmar have decided to close, said Khin May Htway. She is managing partner of MyanWei Consulting Group, which assists Chinese investors in Myanmar. The two factories will lay off 3,000 workers.
Foreign investment in clothes rose sharply in Myanmar over the past ten years. Economic reforms, an end to Western sanctions and trade deals helped establish clothing as a major industry.
U.N. trade data shows that Myanmar clothing exports rose from less than $1 billion in 2011 to more than $6.5 billion in 2019.
But all clothing businesses have been hit hard by the pandemic, which brought on a recession. People have stopped going to stores to buy clothing. Ten of thousands of jobs have been lost in Myanmar and other parts of Asia.
Then the army took over the government.
The protests that followed made the streets dangerous and unpassable. Many people could not get to work. The banking system stopped working and it became impossible to get goods in and out of the country.
European and U.S. clothing importers said in a statement last month that they would not pull out of Myanmar. But they may not have a choice if the country's situation does not change.
Some large clothing companies recently decided to halt orders from Myanmar. One of them was Sweden's H&M, the world's second-largest clothes seller.
In Vietnam, clothes factory owner Ravi Chunilal told Reuters he was starting to get more business from European buyers leaving Myanmar.
"They don't want to abandon Myanmar ... but it's being forced upon them," said Peter McAllister of Ethical Trade Initiative. It is a labor rights organization whose members include many well-known European stores.
McAllister said it would be very difficult for Myanmar's clothes industry to recover if Chinese investors left. Many people have become loudly anti-Chinese since the army takeover because China has not condemned the army for its actions.
It was for this reason that several Chinese-owned factories, including Li's, were set on fire last month.
Rights groups have repeatedly raised concerns about Myanmar's clothing industry. The businesses employ mostly women workers who earn as little as $3.40 a day, the lowest pay in the area.
But the industry has provided an escape from poverty for many. Workers have left rural areas to work in the factories. They often send money back to their families.
Khin Maung Aye is the managing director of Lat War clothing factory, which employs 3,500 people. He says the industry could die if the military does not restore the democratically elected government.
That would result in "terrible outcomes of poverty," he said.
The United States has placed targeted sanctions on Myanmar's military government and has also ended all trade talks.
I'm Susan Shand.
The Reuters News Agency reported this story. Susan Shand adapted it for Learning English. Bryan Lynn was the editor.
Words in This Story
lay off – v. to end employment for workers while there is not work for them to do
sanction – n. a restriction, usually limiting trade, that are meant to cause a country to obey international law
abandon – v. to stop doing something before it is finished
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