Myanmar opening up to the world: The challenges

What makes Myanmar appealing to international buyers is the daily minimum wage. During the sanctions years the industry lost ground on its international competitors

Since international sanctions against Myanmar were suspended in 2012, the country’s garment industry has taken off.
Sanctions nearly destroyed a once-thriving industry but now the number of workers – an estimated 300,000 in peak season – is back to a pre-sanctions level.
What makes Myanmar appealing to international buyers is the 3,600 kyat [Dh11.39] daily minimum wage. Only Bangladesh has a lower legal minimum, and Djibouti has no minimum.
But during the sanctions years the industry lost ground on its international competitors.
Productivity is low and companies are still struggling to improve working conditions and to raise environmental standards. Factories need more modern equipment if they are to compete internationally. International companies are pouring into the country, eager to take advantage of the extraordinarily cheap labour costs (only Djibouti and Bangladesh offer lower labour costs than the 3,600 kyat [Dh11.39] daily minimum wage introduced last year).
But there is a catch. During the years of international sanctions, Myanmar’s garment industry was reduced to a single factory. There is a chronic shortage of skilled workers. Productivity cannot match that of the country’s more experienced rivals. What they need is money to replace their outdated machinery and the time to train up the workers.
The catch is that they can have neither. The buyers want cheap clothes now and they don’t want to pay a penny more. Catch 22.
It is a dilemma that might seem familiar to the woman whose task it is to transform the basket case that is Myanmar into a viable state.
After years under house arrest, Suu Kyi is now the most powerful woman in Myanmar. Her party trounced its rivals in November’s elections and now has an overall majority in the country’s parliament.
The voters turned their backs on ethnic parties and put their faith in the NLD because they believed that it offered the only realistic chance of fixing the country’s seemingly intractable list of problems.
The NLD is the government, but it is only the government because the Tatmadaw allows it to be so. The junta that held the country in its grip from 1962 to 2011 is gone, but the military has only relaxed its grip on power, not relinquished it.
The army still holds three cabinet seats: defence, home affairs and border affairs, and in March its commander-in-chief, senior general Min Aung Hlaing, made it clear he was in no hurry to see more change any time soon.
“The Tatmadaw has steadfastly held on to the multi-party system for five years and progress has also been made. During the next, second, five-year phase, deviating from the present situation will not be accepted," he said.
The Lady herself quickly discovered that a Nobel Peace Prize and an electoral majority might impress some people, but it would not be enough to allow her to seize her ultimate prize, the presidency.
The country’s constitution bars anyone from that office if they have married a foreigner or have foreign children.
The clause was written in with The Lady in mind: her late husband was English and both her sons hold British citizenship.  If The Lady wants to change the constitution, she need only secure a 75 per cent plus 1 majority in parliament. But she can’t, because the Tatmadaw made sure that when it wrote the constitution, it allocated 25 per cent of the parliament’s seats to its own candidates. And there is nothing she can do about that, because that would mean changing the constitution. Catch 22.
Undeterred, Suu Kyi has contented herself with the roles of foreign minister and the new role of state counsellor – which effectively puts her in charge. It is a clever compromise but it is also a reminder that the army can apply the brakes if it wants to.
Still, there are plenty of people willing her to succeed and she is going to need all the goodwill she can muster if she is to overcome the challenges ahead. Even in Yangon, the former capital and the most developed of the cities, it is easy to see the scale of the task.
Ni Ni Soe, the young factory worker, earns about 175,000 kyat a month (Dh553). That’s more than the minimum wage, but includes her overtime pay.
Her colleague Moe War, 35, says she lives “hand to mouth". She still lives with her parents despite being married and her four-year-old son stays with his grandparents while she and her husband are out at work.
War says she works two hours overtime every day.
“We need to hit the targets – that’s why we work overtime. And if I work overtime I get more money," she says.
Such routine overtime runs contrary to international labour laws. The Ethical Trading Initiative, one of the umbrella organisations which claim to exist to exist to protect worker rights, states in its base code that overtime must be used responsibly and that it “shall not be used to replace regular employment".
thenational.ae

Myanmar opening up to the world: The challenges

What makes Myanmar appealing to international buyers is the daily minimum wage. During the sanctions years the industry lost ground on its international competitors

Since international sanctions against Myanmar were suspended in 2012, the countrys garment industry has taken off. Sanctions nearly destroyed a once-thriving industry but now the number of workers an estimated 300,000 in peak season is back to a pre-sanctions level. What makes Myanmar appealing to international buyers is the 3,600 kyat [Dh11.39] daily minimum wage. Only Bangladesh has a lower legal minimum, and Djibouti has no minimum. But during the sanctions years the industry lost ground on its international competitors. Productivity is low and companies are still struggling to improve working conditions and to raise environmental standards. Factories need more modern equipment if they are to compete internationally. International companies are pouring into the country, eager to take advantage of the extraordinarily cheap labour costs (only Djibouti and Bangladesh offer lower labour costs than the 3,600 kyat [Dh11.39] daily minimum wage introduced last year). But there is a catch. During the years of international sanctions, Myanmars garment industry was reduced to a single factory. There is a chronic shortage of skilled workers. Productivity cannot match that of the countrys more experienced rivals. What they need is money to replace their outdated machinery and the time to train up the workers. The catch is that they can have neither. The buyers want cheap clothes now and they dont want to pay a penny more. Catch 22. It is a dilemma that might seem familiar to the woman whose task it is to transform the basket case that is Myanmar into a viable state. After years under house arrest, Suu Kyi is now the most powerful woman in Myanmar. Her party trounced its rivals in Novembers elections and now has an overall majority in the countrys parliament. The voters turned their backs on ethnic parties and put their faith in the NLD because they believed that it offered the only realistic chance of fixing the countrys seemingly intractable list of problems. The NLD is the government, but it is only the government because the Tatmadaw allows it to be so. The junta that held the country in its grip from 1962 to 2011 is gone, but the military has only relaxed its grip on power, not relinquished it. The army still holds three cabinet seats: defence, home affairs and border affairs, and in March its commander-in-chief, senior general Min Aung Hlaing, made it clear he was in no hurry to see more change any time soon. The Tatmadaw has steadfastly held on to the multi-party system for five years and progress has also been made. During the next, second, five-year phase, deviating from the present situation will not be accepted, he said. The Lady herself quickly discovered that a Nobel Peace Prize and an electoral majority might impress some people, but it would not be enough to allow her to seize her ultimate prize, the presidency. The countrys constitution bars anyone from that office if they have married a foreigner or have foreign children. The clause was written in with The Lady in mind: her late husband was English and both her sons hold British citizenship. If The Lady wants to change the constitution, she need only secure a 75 per cent plus 1 majority in parliament. But she cant, because the Tatmadaw made sure that when it wrote the constitution, it allocated 25 per cent of the parliaments seats to its own candidates. And there is nothing she can do about that, because that would mean changing the constitution. Catch 22. Undeterred, Suu Kyi has contented herself with the roles of foreign minister and the new role of state counsellor which effectively puts her in charge. It is a clever compromise but it is also a reminder that the army can apply the brakes if it wants to. Still, there are plenty of people willing her to succeed and she is going to need all the goodwill she can muster if she is to overcome the challenges ahead. Even in Yangon, the former capital and the most developed of the cities, it is easy to see the scale of the task. Ni Ni Soe, the young factory worker, earns about 175,000 kyat a month (Dh553). Thats more than the minimum wage, but includes her overtime pay. Her colleague Moe War, 35, says she lives hand to mouth. She still lives with her parents despite being married and her four-year-old son stays with his grandparents while she and her husband are out at work. War says she works two hours overtime every day. We need to hit the targets thats why we work overtime. And if I work overtime I get more money, she says. Such routine overtime runs contrary to international labour laws. The Ethical Trading Initiative, one of the umbrella organisations which claim to exist to exist to protect worker rights, states in its base code that overtime must be used responsibly and that it shall not be used to replace regular employment. thenational.ae