Chiang Mai (Mizzima) – Burma’s garment industry in industrial zones is on a downhill slide due to the global financial crisis, the Garment Industry Entrepreneurs Association said.
The Association Chairman Myint Soe said the industry has suffered a decline of 30 per cent since mid-November this year.
“The global crisis has impacted us. After the 2007 September unrest, our industry declined by 30 per cent starting from November. About 20 per cent of our industries have either suspended their business due to economic reasons or totally shut down,” Myint Soe told Mizzima.
There are 171 garment factories under the association of which 150 units are still running and over 20 factories have stopped business.
Due to the closure of these factories, over 60,000 workers have been affected and will be laid off if the factories are totally shut down, Myint Soe said.
Most of these factory workers are young and hail from rural areas. Their salaries range from Kyat 30,000 to 45,000 per month. The workers often stage protests for full payment of wages and workers’ rights.
“Almost all of them are complaining about the declining order and unprofitable business. The global economic meltdown has impacted all of us and all the workers will lose their jobs if the factories close, ” Myint Soe said.
Former dictator Gen. Ne Win practised closed-door economy for 26 years and it was abandoned by the SLORC government when it staged a coup in 1988. The new regime enacted and promulgated the Foreign Investment Law in November 1988.
Burmese garment factories are receiving job orders under subcontracts from multinational companies. Most of their finished products are going to Europe, Japan and Asian countries. Earlier, they could export garments to US. But it was banned in 2003 after the US imposed economic sanctions against Burma.
Despite low wages in Burma, factory owners are facing shortage of electricity, high fuel and transportation costs, difficulty in accessing internet telephone and email, foreign currency exchange fluctuation and unavailability of business loan from the government. So, some of the factories had to shut down their business.
“We suspended business in this unprofitable situation. There’s no electricity and cost for alternate energy source such as diesel is too high,” an official from the Rangoon based 7 Star Co. Ltd. said.
Another company exporting garments to foreign countries, Rangoon based APT Land Garment Manufacturing Co. Ltd. said, “At the moment, business is not good”.