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ILO: Myanmar is Seeing ‘Significant Deterioration’ in Labor Market

Myanmar is hemorrhaging jobs.

Nearly six months after the military seized power from the Southeast Asian nation’s quasi-democratic civilian government on Feb. 1, estimates by the International Labour Organization (ILO) suggest a “significant deterioration” in the labor market that could further imperil an economy already laid low by the Covid-19 pandemic.

According to a new report by the United Nations agency, employment in Myanmar shrank by roughly 6 percent from the fourth quarter of 2020 to the second quarter of 2021, suggesting that 1.2 million workers lost their jobs during that time. The decline is more pronounced when measured against the fourth quarter of 2019, with numbers indicating job losses for 3.2 million people—or 15 percent of all the country’s total workforce—as a result of the one-two punch delivered by both the coronavirus and the coup.

“Myanmar was already facing economic stress with jobs and livelihoods under threat as a result of the Covid-19 pandemic,” Donglin Li, liaison officer for Myanmar at the ILO, said in a statement. “However the estimates show a serious and rapid deterioration in employment in the first half of this year on a scale that could drive many in Myanmar into deep poverty.”

Garments were among the hardest-hit sectors, the report noted, with employment falling by 25 percent and “even higher” relative losses in working hours in the first half of this year alone. Though Myanmar’s apparel industry is modest compared with those of neighboring Bangladesh and Vietnam, its 600 factories provided jobs for some 700,000 workers in 2020, according to the Myanmar Garment Manufacturers Association. The nation’s garment shipments were also on an upward trajectory, increasing sixfold from under $1 billion in 2011 to more than $6.5 billion in 2019, per UN Comtrade data. Pre-pandemic, garments accounted for more than one-third of Myanmar’s total exports.

The current situation is far less rosy. Seaborne imports of apparel from Myanmar to the United States plummeted 35.6 percent between the first and second quarters of this year even as overall imports ticked down by just 4.4 percent, according to S&P Global Market Intelligence’s Panjiva. “We may see a further reduction in Q3,” lead trade analyst Chris Rogers previously told Sourcing Journal.

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Exports were already crashing as a result of Covid-19. Supply-chain disruptions dealt the country’s economy an especially heavy blow, since its garment sector relies on imports for 90 percent of its raw materials. Extensive lockdowns in April and September 2020, meant to curb the virus, caused further upheaval. Last July, the Myanmar Garment Manufacturers Association reported a 50 percent drop in market demand, with exports down 90 billion Myanmar kyats ($54.7 million) year over year.

The ILO reckons that Myanmar’s garment sector shed 250,000 jobs during the first six months of this year, with women accounting for 86 percent of those losses. Similarly, working hours contracted by an estimated 57 percent during the same period as factory production stuttered due to a number of global brands suspending orders.

In a recent report, labor-rights consortium the Clean Clothes Campaign pegged Burmese workers’ cumulative wage losses from factory closures, layoffs and dismissals without proper compensation at 592 billion kyats ($359.8 million) from March 2020 to this past January.

While the organization wasn’t able to assess precise wage conditions for the country’s garment workers due to communications restrictions and repression by the junta, it pointed to several issues of concern for the future of workers’ wages, including the postponement of a minimum wage review and the widespread underemployment or termination of employees without adequate income support. The Clean Clothes Campaign also noted that the military regime has declared several trade unions unlawful, preventing them from advocating on behalf of their members.

“This hostile environment for trade unions further weakens prospects for workers to resolve underpayment of wages,” it wrote.

Meanwhile, the Covid-19 contagion is ripping through the population. Myanmar recorded more than 6,700 new infections and nearly 320 deaths on Thursday, bringing the total to 253,000 cases and 6,133 deaths, though experts say actual numbers could be higher because a distrust of the junta means many are dying at home without a diagnosis, let alone treatment.

When the sick do turn to hospitals, they’re often turned away because of a lack of oxygen, beds or staff, doctors say. “The situation is severe,” one doctor, who works under the name Pa Gyi, told Reuters. “The hospitals can’t do anything for them…I can’t just sit and watch as the patients are getting helpless.”