Price and the human rights war

Asian countries are widely known as the largest workshops of the world, especially of the famous Western fashion brands. They serve low labor cost, low production cost and loose control over environment protection, which make them totally different from expensive labor markets in the USA and Europe.

Would Aung San Suu Kyi be able to completely change Myanmar?

The continuous debates on garment industry in Asian countries, where is well known as the world’s largest factory, have become more and more stressful after a collapse of a sewing workshop happened in DhaKa, Bangladesh on April 2013, killing 1,000 people.

It is very easy to come across ordinary garments with name tags: Made in Viet Nam, Made in China, Made in Cambodia, etc, in a large number of fashion shops all over Europe. In other perspectives, Europe is the dreaming land of Asian garment producing companies.

There are many famous brands such as Asidas, Nike, Esprit, Hugo Boss…choose Asia to locate their factories because of the following reasons: low labor cost, low production cost, loose control over environmental treatment, few requirements on insurances, and so on. Therefore, by outsourcing the production process to Asian factories, foreign corporations can save a huge amount of capital and minimize their cost. And in return, they offer a large number of jobs for citizens of developing countries in Asia.

Myanmar, the hope of 80 percent labor force

The “maiden Myanmar” does not stand outside this spiral. SMEs sector, including garment industry, is considered as a solution to the abundance of unskilled labors in this country.

“There are so many girls need jobs. We – the governors – have to try our best to help them. During my entire life, I have seen a lot of young ladies (few of them were once my employees) worked as sexual workers in karaoke houses, bad coffee shops, etc after financial crisis, which directly affected the garment industry. I cannot stand that,” bitterly said PhD Khine Khine New, CEO of Best Industrial Company limited (a garment workshop in Yangon), as well as the General Secretary of Myanmar garments and textiles association. A lot of tears dropped during her nearly 2-hour touching speech.

At the peak of the garment industry, PhD Khine Khine New’s company was among the successful organizations which gained a large proportion in the total imported goods of the USA. However, when the US government levied high tariffs on its imported garments, the garment industry in Myanmar nearly collapsed.

From 400 workshops with trillions sewing machines all over Myanmar, there were only 150 factories, including Khine Khine New’s company, could be “alive” after that crisis (1999). She could help the company go through that difficulty by trying her best with experiences, wide knowledge of international business and good external relations with foreign customers, which she had accumulated from her real experiences and fellowship period in the USA.

Taking the responsibility of a secretary of the association and enterprise’s director, Khine Khine New made her great effort on approaching a new potential market, Japan. Therefore, in the context that many other companies went bankrupt, her company won the first contracts from that new market, and started expand the market from then on.

However, she always feel choked whenever she thinks about the difficult periods in the past or admits that the “bad entertainment industry” growed abnormally fast right after the collapse of the garment industry in her nation. The fact that many girls had to sell themselves to make both ends meets in big cities encouraged Khine Khine New to take more efforts and keep more hopes in the better future, especially when the open process of Myanmar has been witnessing more positive moves.

She appriciated that the garment industry in Myanmar is “recovering”, and she judged this recovery in Myanmar is stronger and more effective than the one taken in Indonesia in 1997.

According to Khine Khine New, there are 3.6 billion people in the labor force in Myanmar and 40% of them are female employees. And 80% of women labors works in garment industry. In the early 2011, there were about 50,000 female workers in Myanmar, but this number is doubled in 2013, reaching 100,000 ones.

By September 2012, the number of foreign investors reached 56, in which, 44 of them invested in garment industry.

With a basic salary base at 50,000Kyats per month (around 50USD), the people’s lives still suffer from serious insufficiency and difficulties, especially under the pressure of high living cost in Yangon. Despite those big challenges, girls and women from rural and remote areas still rush into the city to find a job. They become the bread-winners of their families, indeed.

At present, enterprises operating in garment industry cannot expand their workshops out of the urban areas because there was only 25% of the citizens of Myanmar are served with electricity. Nevertheless, Khine Khine New believes that the electricity will be provided to more households, the salary level for female workers in garment industry can be increased by 10% soon and the garments enterprises can recruit more employees.

Garment products of Myanmar are mostly exported to Japan, Korea, the USA and Europe.

“Price and the human right” war

“Garment industry in Asia” has become the main topic at a seminar in the framework of the Global Media Forum, which focused on analysing the gap between developed countries and developing countries in terms of working conditions and the value gained by labors.

Some experts at the forum criticized that the most famous fashion brand Adidas, along with some other famous brand names: Esprit, Hugo Boss, etc, focused too much on minimizing the cost, expecially labor cost that it did not concern anything about improving working conditions for its Asian employees. A speaker told a story in China, when a Chinese manager asked to increase production cost and basic salary level, his European boss from a famous fashion brand rejected it immediately and “threatened to move the fatory to a cheaper market in another country”.

Those reasons make the price competition in Asia become more and more fierce, leading to the higher risk in working conditions.

That is not the first time when a big European corporation was criticized for offering bad working conditions in its factories located in Asia. The garment workshops collapse at Dhaka was just one of the many deadly disasters happened in the garment industry in Bangladesh recently. In September 2012, a fire in a sewing line killed 112 workers. The worst thing is that all the exit doors were locked at the time of the accident, causing the victims were burried in flames.

Recently, a writer and welder, Le Thanh Ky (Viet Nam) won the first prize awarded by the Vietnamese Literature Union for the novel: “August, 19th”, which tells about “Vietnamese people have to work in sewing workshops of Taiwan, Korea in very bad conditions”. “Each worker needs to equip themselves with the “making – water theory” in order to do that no longer than 90 seconds, if not, he/she will have their salary subtracted by a manager”.

Mrs. Khine Khine New shared the idea that the competition is really a hard one, particularly for the late-comer like Myanmar. “How to sell products at competitive price in accordance with assuring good living condition for employees is a tough challenge indeed” said her.

Hoang Huong

From Myanmar