Tuesday, December 20, 2016

Myanmar Seeking to Turn Tide of Investment, Manufacturing

Myanmar’s economy is slowly emerging from the crippling effects of decades of military rule, where a poorly-managed resources industry dominated much of the country’s trade. The Aung San Suu Kyi-led government is encouraging foreign and local investment in job-creating export industries, with a strong focus on manufacturing. Boosted by U.S. President Barack Obama’s recent removal of executive sanctions on Myanmar, the country’s garment industry is on the rise, and aims to be the nation’s largest employer.

The NLD-led government hopes new factories can provide employment for hundreds of thousands, whose education and work opportunities were stunted under 50 years of military rule.

Exports have almost doubled in the last five years, to $1.1 billion for the 2015 financial year when, according to the United Nations’ International Labor Organization (ILO), the sector employed 380,000 people, mostly women.

The government recently passed an investment law that allows tax breaks for investment in the industry, while the U.S. dropped longstanding sanctions in September that will give international firms greater confidence in dealing with Myanmar.

The Myanmar Garment Manufacturing Association estimates the industry will employ up to 1.5 million workers by 2024.

“So with all these interests, the will of the government side, and the lifting of the sanctions, and the private sector also, the garment sector also the will grow,” said Khine Khine New, secretary general of the association.

However, many problems persist.

An inexperienced government has been slow on detailing policies that give businesses the predictability they need, said factory owner Sai Maung.

While his company has benefited from foreign help to meet international labor and production standards, many factories are still coming to grips with Myanmar’s transition.

“Before we are closed, but now we are moving to a democratic country and the people have no experience at all, I mean with how to deal with the issues,” said Maung.

Industrial relations are struggling to keep up with pace of growth, according to ILO deputy liaison officer Piyamai Pichaiwongse.

“Myanmar was never a country that was operated by the rule of law. So therefore, the law does not have supremacy in anything that they do. There is not the reference for things that they do in the past,” she said.

The ILO is working with the government to rewrite labor laws.

In the meantime, strikes have increased since a minimum wage of just $2.75 a day was introduced last year. Unions complain of increased persecution of their members, workers have little understanding of their rights and employers are struggling with compliance.

With an industry on the rise, these relations hold the key to improving the living standards of hundreds of thousands of workers and their families.

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