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1 Feb 2021

Mayu Saini, Sourcing Journal

Myanmar: Attempted military coup threatens global garment sourcing in Myanmar, labour leaders say

"Myanmar Military Coup Threatens Sourcing in ‘Sunrise’ Garment Sector" 1 February 2021

As Yangon, the capital of Myanmar, and surrounding areas shut down after the military announced a coup early Monday morning, concerns about the situation for trade union leaders, labor, and the effects on business and manufacturing have been surfacing throughout the region, where brands from Gap, H&M, Marks & Spencer and Primark to New Look, Muji and C&A have all worked with garment factories in recent years. [...]

Labor leaders, who say the government has been slow to recognize their presence as well as the essential nature of their work helping factories ensure better working conditions, expressed concerns about the future.

Myanmar has been seen as a sunrise industry for garment production, with a growing number of global brands and retailers looking at the low wage structure as an additional advantage, along with the plentiful labor, and the high-quality production work. The minimum wage in Myanmar is 4,800 kyat ($3.61 per day, $108.3 per month), close to half that of Cambodia and Vietnam.

In a situation where the European Union is considering withdrawing Myanmar’s Generalized System of Preferences (GSP) status, the coup comes as an increased concern for factory owners who have been hoping to meet the requirements to keep GSP status, which gives Myanmar a price advantage that maintains its competitiveness in exports. [...]

Labor leaders who asked not to be named said that the destabilization and process of change in the government would discourage brands from investing in Myanmar, and further hinder an industry reeling from the Covid-19 pandemic that forced factories into lockdown again through October of last year. [...]