Senior leaders of the garment industry in Cambodia and Myanmar pointed out that since the coup in Myanmar on February 1, 2021, due to the country’s economic and political turmoil, manufacturing orders have been transferred from Myanmar to Cambodia.
Kaing Monika, deputy secretary-general of the Garment Manufacturers Association of Cambodia (GMAC), said that major brands have begun to transfer clothing orders from Myanmar to Cambodia in order to become more competitive. price, stable quality, accurate delivery deadlines, and compliance, but it is unclear whether this will further lead to factory relocation.
He said: We will indeed get some new investors in the garment industry in 2021, but we are not sure whether they have moved out of Myanmar.
In early 2021, Vy Samnang, the governor of Kampong Speu Province in Cambodia, revealed in a local real estate publication that he was soliciting to establish a garment factory in Myanmar, but wanted to move the factory to Kampong Speu. Investors in Speu Province; Kampong Speu Province is located between the Cambodian capital of Phnom Penh and the seaport of Sihanoukville.
In the first nine months of 2021, Cambodia’s clothing exports were US$8.24 billion, an increase of 11.4% compared with the same period in 2020. Ken Loo, secretary-general of the Cambodian Garment Manufacturers Association, said that if factories were not forced to close due to the outbreak of the new crown epidemic and blockade policies in April and May 2021, orders for the industry “should grow more.”
U Aung Min, head of the garment factory and member of the Central Executive Committee of the Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), confirmed that part of the growth came from within Myanmar, although Myanmar garment manufacturing factories are still is operating, but clothing orders have been transferred to Cambodia. However, he believes that the transfer of business to Cambodia has nothing to do with the current political situation or the military government: “The main reason for the transfer of clothing orders from Myanmar to Cambodia is shipping, and the increase in taxes on postage and shipping containers.”
He added that due to these concerns, coupled with duty-free trade between Cambodia and Myanmar, and Southeast Asian countries also enjoy privileged trade with the United States and the European Union, some major of Myanmar clothing manufacturers have outsourced orders to Cambodia. He said: However, the production quality in Myanmar is higher than that in Cambodia, and we have a large number of human resources. He hopes that these advantages can reduce the outflow of orders from Myanmar; he owns a factory in the country, located in the South Dagon Industrial Zone, South Yi Yangon. He’s also unsure about the volume of orders lost: I don’t know how many orders have been moved to Cambodia.
A senior Yangon trade union executive pointed out that some Myanmar garment factories have been unable to reopen since April 2021, when political opposition to the military takeover was particularly damaging. Seriously; that is to say, only a few new garment factories will open this year, but these were all planned before the coup.
Due to Myanmar’s ongoing economic problems, the wages of garment workers are low. The World Bank estimates that Myanmar’s economy will decline by 18% in 2022. The director said that insufficient orders have led to large-scale layoffs in the garment industry, with many workers complaining that they were not only owed wages for 2-3 months, but were also immediately fired. Even workers who keep their jobs can only earn 4,000 kyats (approximately US$2.24) per day, and are unable to work overtime due to low order demand (overtime would have doubled their salary).
He also said: The military government cannot improve working conditions or solve the problems faced by workers in the garment industry. Therefore, many workers in Yangon garment factories have returned to their hometowns or worked in Thailand to support their families.
