Myanmar’s clothing industry has a hard road ahead

Jun 7, 2012. The clothing industry in Burma (Myanmar) looks set to grow as the country once shunned by the West starts to reform. But there is still a long way to go if it is to become the new Asian outsourcer of choice.

Before US sanctions were imposed in 2003, the US was the premium buyer of Burmese textiles.

U.S. Imports of clothing produced in Burma are still banned under the Burmese Freedom and Democracy Act of 2003. It’s up for renewal this summer, although it may now be allowed to lapse.

“With US and EU sanctions lifted, we can expect the annual export volume to grow by 100-200% over the next couple of years,” says Evelin Petkov, director of Bagan Capital Ltd, the parent company of the Myanmar Business Network, a local industry watchdog based in Yangon, the country’s manufacturing hub.

“There are over 200 garment factories in Myanmar, employing about 20,000 people,” Petkov told just-style. “In the post-sanctions period, if the jobs lost due to the sanctions are restored, then employment in the Myanmar garment industry can grow to as high as 100,000 workers.”

In the US, a partial waiver of restrictions under the Trafficking Victims Protection Act was signed on 6 February 2012. The waiver allows the US to support assessment missions and provide some technical assistance to Burma by international financial institutions (such as the World Bank and International Monetary Fund).

The European Union eased sanctions regarding restrictions on certain individuals in Burma before announcing an end to sanctions in April.

The garment industry is slated to be a big future player within Burma’s underdeveloped economy. In 2010 to 2011, Burmese newspapers reported that the number of clothing factories had increased from approximately 120 to 200.

The country’s predicted economic growth and the low-cost of labour are seen as pros for foreign companies.

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