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Myanmar’s Labor Strikes Subside, But Garment Sector Concerns Remain High

Following government intervention, a labor dispute in Myanmar that had garment workers on strike for the last two months, is coming to an end.

Chinese-owned garment factory Fu Yuen Ltd, has agreed to reinstate workers it may have sacked without cause.

In late August, 30 workers at Fu Yuen in Yangon were fired without notice after being accused of disrupting production and having poor attitudes. Each of the workers fired were part of a labor union, the likes of which have faced persecution in the country before.

The sacking prompted as many as 300 workers to strike in an effort to get the released workers rehired, and protests turned violent last month when assailants attacked a crowd gathered outside of the factory, according to Reuters.

Fu Yuen, however, had maintained the workers were fired for cause and not for being union members.

“As the cost has been rising rapidly in the past few years, the factory had no choice but to lay off those workers with poor attitude at work while hoping to increase the productivity again,” Janice Chan, a representative for Fu Yuen told Reuters Monday.

After mediation by Yangon Chief Minister Phyo Min Thein, however, the factory has agreed to rehire the workers, and the ongoing unrest will come to a halt.

While this labor issue may have been quelled, the latter half of the year hasn’t been a good one for Myanmar and its garment sector.

As a result of human rights violations in the country, the European Union is mulling the removal of Myanmar’s trade benefits under its Generalized Scheme of Preferences program, which gives it duty free, quota free access to the EU market.

Following a mission this week to assess the human and labor rights situation in Myanmar, the European Commission said it will use its findings to inform next steps on the decision.

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“We now expect Myanmar to address the severe shortcomings that have been highlighted during this monitoring mission,” EU Commissioner for Trade Cecilia Malmström said in a statement Wednesday. “If they do not act, Myanmar authorities are putting their country’s tariff-free access to the EU market in danger–a scheme which has proved to be vital for the economic and social development of the country, providing thousands of jobs to workers in sectors such as textiles, agriculture and fisheries.”

According to the Myanmar Times, if the EU removes Myanmar’s GSP trade benefits, garment factories could shutter and as many as 400,000 garment workers could be out of jobs.

Myanmar exported $2.7 billion worth of garment products in 2017, as per data from the Myanmar Garment Manufacturers Association (MGMA), the overwhelming majority of which went to the EU.

“We may fold if the GSP is removed,” Khin Maung Aye, managing director of Lat War garment factory, told the Times.