Myanmar’s garment sector is on track to meet a target which USD $ 10 billion in exports set under 10 year plan

19 Sep 2019
Myanmar’s garment sector is on track to meet a target which USD $ 10 billion in exports set under 10 year plan

An industry body says Myanmar’s garment sector is on track to meet a target of US$10 billion in exports set under a 10-year plan.

The export target and a goal to create one million job opportunities in the sector had been laid out under the Myanmar Garment Industry Strategic Plan 2014-2024 by the Myanmar Garment Entrepreneurs Association.

“Export volumes for the 2018-19 fiscal year up to August hit US$4.37 billion, compared with US$3.2 billion in the same period a year ago. This is an increase of US$1.17 billion in exports,” said Ministry of Commerce Deputy Secretary U Khing Maung Lwin.

Garment exports have been rising yearly in Myanmar, especially since 2013, when the European Union granted goods from Myanmar preferential access to the EU market under the Everything But Arms tariff scheme.

Export figures for the sector have ballooned from US$800 million in fiscal 2015-16 to over US$4 billion in the current fiscal year

“The industry in Myanmar is being boosted by factors such as Thai cut-make-pack companies setting up shop in Myawaddy, Kayin State, near the Myanmar-Thai border to gain benefits from the EU’s preferential treatment for Myanmar,” U Khing Maung Lwin said.

New factories are also boosting volumes he added.

“As the number of factories increased last year, export volumes also increased as well. We also saw more investments in the sector this year, so export volumes are projected to continue rising for next year. Based, on such factors the goal of hitting US$10 billion in exports should be achievable said,” said Myanmar Garment Manufacturers Association Chair U Myint Soe.

“In the near term, more Chinese businesses are also relocating here as the US-China trade war is intensifying. Some 80 percent of the new investments in the cut-make-pack businesses in Myanmar are from China,” U Myint Soe said, adding that garment factories from China, Hong Kong and Taiwan have entered Myanmar.

“There are about six new garment factories being set up every month. These are huge factories that can employ at least 3000 people, unlike the smaller factories set up in the past,” he said.

The US-China trade war has provided an opportunity for Myanmar as businesses have become more interested in investing in Myanmar, US Ambassador to Myanmar Mr Scot Marciel told the Myanmar Times in an exclusive interview.

Yangon Chief Minister U Phyo Min Thein also said essentially the same thing during a press conference in June.

As a consequence of the US-China trade war, US demand for garments made in countries other than China has also risen.

While the EU and Japan have been major markets for garments exported from Myanmar, the US is now growing also, said U Myint Soe

 “Now job opportunities are growing and are projected increase in 2020 so there is possibility of labour shortages,” he commented.

The rapid development in the sector and its potential are why it is a priority under the National Export Strategy, said U Khing Maung Lwin 

As the sector develops, garment businesses will need to ensure even more accountability and responsibility than before, which is why the association is conducting training courses covering everything from legal to human resource matters, said U Myint Soe.

“The courses will help reduce labour issues and encourage garment factories to be accountable so that the industry will be successful. When the garment sector thrives, the country’s image will improve,” he said.

However, despite the potential, the sector also faces challenges.

While Myanmar exports garments to Japan, South Korea, Canada, the US, China and other countries, the EU remains one of its largest markets, accounting for up 50 pc of garment exports. 

Due to the ongoing conflict and humanitarian crisis in Rakhine State, the EU has said it is reviewing the preferential treatment given to Myanmar. Should the status be withdrawn, the garment industry would be greatly affected, experts project.

A report issued in August by a UN fact-finding commission on Myanmar strongly urged governments and companies worldwide to impose trade sanction against military-owned businesses. For now, the EU’s preferential treatment for exports from Myanmar remain in place, nor have any sanctions been imposed on the military-owned businesses. – Translated


(The Myanmar Times: )

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