Rising plant and business closures since February are hurting workers’ well-being
YANGON – Many companies across Myanmar have gone out of business temporarily or permanently following protests and internal political instability since the February 1 takeover.
Among them are factories and CMP companies (cutting, manufacturing and packaging). Some of them had to close due to a total lack of orders from abroad.
A Chinese-owned clothing factory in Hanmauk (Myanmar) employing 1,000 people in the Shwe Thanlwin industrial zone in Hlinethaya township officially announced its closure on its Facebook page on June 19 because it could no longer survive despite various difficulties. The administrator of the Shwe Thanlwin industrial zone management committee cited severe shortages of raw materials and lack of orders as the reasons for the shutdown.
âThey sent us a letter informing us that they had to close because they had not received any orders from abroad. Another reason can be political instability. The main reason is that they couldn’t get the raw materials, âhe said.
On September 21, Myanmar Unique Garment Factory in Hlaing Tharyar Industrial Zone closed temporarily after operating for five years due to a lack of orders. The factory is owned by a citizen of Myanmar.
âThe operation of the plant has been suspended. This is in part due to the Covid-19 crisis. We have received few orders since 2020. The political issue is also one of the reasons. We stopped the operation because we have not received any orders. But, this is only a temporary shutdown, âsaid a plant official.
There are three industrial zones – Hlaing Tharyar, Shwe Linban and Shwe Thanlwin – in Hlaing Tharyar township where most of the factories and businesses in the Yangon region are concentrated.
Many factories in these industrial zones have closed since February this year, according to zone committees.
Twenty-nine factories in the Hlaing Tharyar industrial zone have closed so far, an area committee official said.
âIn our area, 29 have closed since February. But they said in their letters that they had only closed temporarily. The factories closed after paying all compensation to the workers according to the law, âhe said.
Likewise, nine factories in the Shwe Thanlwin industrial zone have closed temporarily or permanently, an area committee official said. He said, however, that some factories had moved elsewhere.
There were 35 factories in the industrial zone of Shwe Linban which closed temporarily or permanently.
In our area, around 30 factories have closed temporarily while around five others have closed. They only closed after paying wages and salaries to their workers, âsaid an official in the area.
He added that at least 10 garment factories were among the 35 closures.
Thousands of workers were left unemployed after factories and businesses closed.
The closure of 29 factories in the industrial zone of Hlaing Tharyar alone has left around 7,000 workers unemployed, an official in the zone said.
Likewise, nearly 3,000 workers lost their jobs after the closure of nine factories in the industrial zone of Shwe Thanlwin, while around 10,000 workers were left unemployed after the closure of 35 factories and businesses in the industrial zone. of Shwe Linban, according to the respective zone committees.
âThey will have a hard time because they don’t have a job. As you know, all are in difficulty. There are various trials and difficulties, including a high rate of inflation. Even factories and operational companies are more or less faced with difficulties. There are closed factories as well as operational factories. But, the runners have to struggle. Things are not going well, âsaid an official of the management committee of the industrial zone of Shwe Linban.
A worker said most of the workers at the Yangon factory came from various parts of the country. When their factories closed, they found themselves unemployed and faced with problems with living conditions such as rents and meals in hostels.
âI came from another city to work here in a factory. I came to work despite the political situation in our country. With the factory closures and the current political situation, it is very difficult for us to find a job. While looking for a job, we have to fight for our cost of living, âcommented the woman.
In some cases, entire families have moved to Yangon to work in factories. When the factories closed, they found themselves unemployed with many problems.
With the high prices of raw materials, even those who go to work regularly have to cope with their daily life because they are poorly paid.
âI still have to go to work. I receive my salary regularly. We also charge overtime charges. As our factory continues to operate, we can still afford to live on our wages, even though we may be poorly paid. Due to the high prices of raw materials, we have to tighten our belts. I paid rent in a youth hostel, âsaid a worker at a garment factory in Yangon.
The clothing industry, a lifeline for workers
Among other businesses, garment factories require a large number of workers. Although there is a wide range of factories in industrial areas, garment factories have a much larger workforce.
The garment industry plays an important role in Myanmar’s economic growth. The clothing sector tops the list of products exported in 2019. Clothing companies are also the best prospects for the labor-intensive industry.
Myanmar’s garment industry is based on a CMP (cut, manufacture and package) system. The value of apparel exports was US $ 1 billion in fiscal year 2013-14 and jumped to US $ 3 billion in fiscal year 2017-218, with a triple increase in five years.
According to data from the Myanmar Garment Manufacturers Association (MGMA), nearly 600 garment factories with around 500,000 workers exported clothing and textile products worth US $ 4.37 billion in 2019.
As part of its 10-year strategic plan, MGMA estimated that the garment industry will be able to create up to 1.5 million jobs and export clothing products worth around 10 billion. of dollars.
Not only the garment industry but also other companies such as shoe making and bag making are operating in Myanmar under the CMP system.
However, the closure of so many garment factories does not bode well for the country’s future and economic prospects.