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Myanmar’s Garment Industry is on a Growth Path

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Myanmar is starting to get more attention and investment in the garment manufacturing sector, despite some persistent political and labor strife.

Myanmar SUMEC Win Win Garments Co., a unit of SUMEC Textile and Light Industry Co., has opened a new factory in Shwe Pyi Thar Industrial Zone in Yangon, according to Asian press reports.

Speaking at the opening ceremony, U Aung Htoo, Myanmar’s Deputy Minister for Commerce, said preferential policies and a large labor market give the industry opportunity for growth, and that the new factory will create more jobs and contribute to the country’s and industry’s economic growth, reports noted.

The new factory, with 40 production lines currently, is designed to have 50 production lines with the capacity to produce 4 million pieces of apparel annually. This would increase the company’s yearly capacity to 10 million pieces in Myanmar and lift its exports to $100 million.

Chinese Ambassador Hong Liang said with Myanmar’s economy becoming more open, more Chinese enterprises are investing there.

[Read more about China’s global growth: The Battle for African Trade Pits US Against China]

Meanwhile, U.S. apparel imports from Myanmar increased 76 percent to $77.34 million worth of goods for the year through August, with man-made fiber dresses, underwear, pants and coats the top categories.

In November 2016, the U.S. re-designated the country, formerly known as Burma, as eligible for the General System of Preference program.

While U.S. trade with Burma remains small, since the initial lifting of sanctions, it has grown significantly. In 2016, two-way goods trade was $438 million, with U.S exports totaling $194 million, having almost quadrupled since 2012, according to the U.S. Trade Representative’s Office.

The U.S. had imposed sanctions on the country during its troubled military reign and slowly started lifting them in 2011 when Myanmar formed a civilian government. The country held its first nationwide election late last year after decades of military rule and Suu Kyi won by a landslide.

Myanmar is a party to many regional free trade agreements. These include the ASEAN Free Trade Area, and ASEAN agreements with Australia, New Zealand, India, Japan, China and South Korea.

Myanmar’s most recent political crisis has seen more than 600,000 Rohingya flee predominantly Buddhist Myanmar to neighboring Bangladesh since late August to escape violence that accompanied a brutal military counter-insurgency operation after Rohingya militant attacks on security posts in Myanmar’s Rakhine State.

Stung by international criticism and accusations of ethnic cleansing, Kyi has said Rohingya refugees who can prove they were resident will be accepted back.

In February, Myanmar’s government set a $2.61 minimum daily wage, which was less than the $4.07 rate worker groups desired at the time. There have continued to be sporadic instances of worker strikes and protests over factory conditions and union organizing.

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