[Myanmar] Increasing closures of factories and business since February harm the well-being of workers

Among them are CMP (cutting, making and packing) factories and businesses. Some of them had to shut down due to a complete lack of overseas order. 

Closed Down 

A Chinese-owned Hanmauk (Myanmar) Garment Factory with a 1,000-strong workforce in Shwe Thanlwin Industrial Zone in Hlinethaya Township officially announced its closure on its Facebook page on June 19 as it could no longer survive amid various hardships. The administrator of the Shwe Thanlwin Industrial Zone Management Committee cited severe shortages of raw materials and lack of orders as reasons for the shutdown.   

“They submitted a letter to us informing that they had to close down as they received no order from overseas. Political instability may be another reason. The main reason is they could not obtain raw materials,” he 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 Myanmar citizen.  

“The factory operation has been suspended. It is partly due to the Covid-19 crisis. We received few orders since 2020. The political issue is also one of the reasons. We stopped operation because we received no orders. But, it is only a temporary closure,” a factory official said.  

There are three industrial zones—Hlaing Tharyar , Shwe Linban and Shwe Thanlwin— in Hlaing Tharyar Township where most of the factories and businesses in Yangon Region are centered. 

A lot of factories in these industrial zones have closed since February of this year, according to the zone committees.  

Twenty nine factories in Hlaing Tharyar Industrial Zone have closed down so far, said a zone committee official.  

“In our zone, 29 have closed since February. But they said in their letters they have only closed temporarily. The factories closed after paying all compensations to the workers in accordance with the law,” he said. 

Likewise, nine factories in Shwe Thanlwin Industrial Zone have closed temporarily or permanently, said an official from the zone committee. He,however, said some factories had moved to other places. 

There have been 35 factories in Shwe Linban Industrial Zone which closed temporarily or permanently. 

In our zone, about 30 factories have closed temporarily while about five others have shut down. They closed only after paying salaries and wages to their workers,” said a zone official. 

He added that a least 10 garment factories were among the 35 closures. 

Thousands of workers became unemployed after the factory and business closures.  

The closure of 29 factories in Hlaing Tharyar Industrial Zone alone left about 7,000 workers unemployed, said a zone official. 

Similarly, nearly 3,000 workers lost their jobs after nine factories closed down in Shwe Thanlwin Industrial Zone while around 10,000 workers became unemployed after the closure of 35 factories and businesses in Shwe Linban Industrial Zone, according to the respective zone committees.  

“They will be facing hard times because they are out of work. As you know, all are in trouble. There are various hardships and difficulties including high inflation rate. Even operative factories and businesses are facing difficulties more or less. There are closed factories as well as operative ones. But, the running ones have to struggle. Things are not good anymore,” said an official from the Shwe Linban Industrial Zone Management Committee. 

A female worker said most of the factory workers in Yangon came from various regions of the country. When their factories closed, they became unemployed and faced problems with their living conditions such as their hostel rents and meals.   

“I came from another town to work here at a factory. I came to work despite the political situation in our country. With factory closures and the current political situation, we find it very hard to find a job. While seeking a job, we have to struggle for our cost of living,” the woman commented. 

In some cases, whole families moved to Yangon to work in factories. When the factories closed, they became jobless facing a lot of problems. 

With high commodity prices, even those going to work regularly have to be grappling with their day-to-day living as they are poorly paid. 

“I still have to go to work. I receive my salary regularly. We also receive overtime fees. As our factory continues to operate, we can still afford our living with our salary even though we may be poorly paid. Due to high commodity prices, we have to tighten our belt. I have pay hostel rents,” said a garment factory worker in Yangon. 

The garment industry, a lifeline for workers

Among other businesses, garment factories require a large number of workers. Although there are a wide range of factories in the industrial zones, garment factories have a much stronger workforce. 

Garment industry plays an important role in Myanmar’s economic growth. The garment sector topped the list of exported goods in 2019. Garment businesses are also best prospects for the labour intensive industry.  

Myanmar’s garment industry is based on a CMP (cutting, making and packing) system. The garment export value was US$1 billion in 2013-2014 fiscal year and jumped to US$3 billion in 2017-218 fiscal, seeing a triple increase in five years. 

According to the data from the Myanmar Garment Manufacturers Association (MGMA), nearly 600 garment factories with about 500,000 workers exported garment and textile products worth US$4.37 billion in 2019. 

Under its ten-year strategic plan, the MGMA has estimated the garment industry will be able create up to 1.5 million jobs and export garment products worth about US$10 billion.  

Not only garment industry but also some other businesses such as shoe making and bag making are operating in Myanmar under CMP system. 

However, the closure of such a large number of garment factories does not bode well for the country’s future and its economic prospects.

By Myo Tun/Eleven Media