Garment Exports Double Spurred by Rising Orders From Europe

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Myanmar garment exports have doubled in 2016 compared to export values of the previous year, according to the Ministry of Commerce.

Rising orders from European countries have caused the surge in garment exports, said U Win Myint, Director of Ministry of Commerce.

As of December 15th, garment exports reached $1.05 billion, up from $460 million during same period last year, the ministry’s data showed.

“This year, orders from European countries have risen because we have EU’s Generalized System of Preferences (GSP). Last year exports were slightly down because of labour issues,” U Win Myint added.

In 2013, in the wake of reforms by the Thein Sein government, the EU reinstated its Generalised Systems of Preferences (GSP), which gives poor nations favourable trade benefits when dealing with the EU.

Within the EU’s GSP system, Myanmar qualifies for the lowest rung ‘Everything But Arms’ programme, which allows the least developed countries generous duty free access to the European market on everything but arms and ammunition.

Garment factories must comply with international labour rights and environmental standards to be eligible for the programme and while some owners have strived to raise their factories up to these standards, many have been reluctant.

Under the USDP-led government, the garment industry was marred by conflicts between garment factories owners and workers, who clashed over demands for a basic minimum wage and claims of egregious labor rights abuses .

“Myanmar garment exports are going well. Six investment proposals were recently approved by the Myanmar Investment Commission (MIC), including five garment businesses from Hong Kong,” said U Aung Naing Oo, Director General of Directorate of Investment and Company Administration (DICA).

While most garments exports went to Japan and the EU, followed by South Korea, the EU might overtake Japan next fiscal year, said Daw Khaing Khaing Nwe, Secretary of Myanmar Garment Entrepreneurs Association.

To gain eaccess to more lucrative markets, Myanmar’s garment industry is trying to shift to the more advanced Free on Board (FOB) assembly system from the low-skilled, labour intensive Cut-Make-Pack (CMP) system employed in most factories.

 

Source: Myanmar Business Today

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