Myanmar's Place in the Global Garment Business Research Paper

Total Length: 1580 words ( 5 double-spaced pages)

Total Sources: 6

Page 1 of 5

Introduction

In the past few years, Myanmar has been one of the world's fastest-growing economies. This success has been the result of a new government under Aung San Suu Kyi, which has resulted in democratic reforms and a shift towards a more capitalist economy. Annual GDP growth rates in the past few years have been around 7%, which puts Myanmar in the top ten for GDP growth, but the country is still very poor, with a GDP per capita of $6300, ranked 163rd in the world. While several neighboring countries are global leaders in textiles, the industry is relatively nascent in Myanmar. Yet, clothing ranks as the #6 export earner for the country (CIA World Factbook, 2018). This paper will examine the current state of the clothing industry in Myanmar, and what this means for fashion merchandising.



The Economic Situation

When Myanmar was under military rule, even in Yangon, the largest city, the average person was very poor. Under the new economic landscape, that is starting to change. The major cities like Yangon, Mandalay and Naypyidaw are starting to see an emerging middle class, complete with shopping malls and modern stores. While the country is clearly in the early stages, it appears to be following a development pattern not dissimilar to that of other Asian nations, perhaps most closely Thailand, and more recently, Vietnam. There are risks to this progress, in particular a current account deficit, but in general the conditions for growth are positive and money is starting to flow into the country (Chern, 2017). There are definitely differing views, however, on the state of the economy (Lwin, 2017), which leads one to believe that the high end of the economy might continue to do well while those who are more dependent on government for financial security are going to be more at risk.



Surrounded by major players in the textile business, Myanmar is starting to develop an industry of its own on the manufacturing side. Akter (2017) notes that the country has a low cost of production, and that has drawn the interest of buyers.

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Garment sector exports were worth $1.8 billion, and the industry got an early head start with the former military government made it one of the only open sectors of the economy in 1988. The removal of sanctions following the installation of a democratic regime opened up many export markets for Burmese clothing. The industry is expected to be worth as much as $12 billion by 2020, a tremendous growth rate if that were to happen (Akter, 2017).



The Garment Industry

In terms of the garment industry in Myanmar, production is the largest segment of the market, and this is typically low-cost production. The country has entered in a handful of trade agreements, which has spurred further growth. The US and China are two major buyers for the country's garments (Friedman, 2017). The garment industry has been bolstered by Myanmar's participation in the World Trade Organization, and by the National Export Strategy that the government has set forth, the result being that this is one sector for which there is considerable optimism in the country (Micro-pak, 2017).



Legal Policies

The road to growth for the garment industry in Myanmar began under the former military regime, which saw the industry as a potential source of employment. The democratic government has not wavered from that view, and if anything has done even more to open doors for growth in this sector. For one, the country joined the WTO, and ASEAN, and that has helped to open opportunities for foreign direct investment. In addition, this economic growth spurs growth of Myanmar as a consumer of fashion. The fact that trade policies such as the National Export Strategy have focused on the development of the garment industry has helped Myanmar see strong growth in the sector.



The legal story has also been interesting, because the government has pushed back against activists in terms of wages in the garment sector. While the country in general seeks to portray itself as "ethical and sustainable" (Akter, 2017), it also has held wages in the sector low, as a means of maintaining cost.....

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References

Akter, A. (2017). Low cost production has drawn foreign buyers' attention to Myanmar apparel industry. Textile Today. Retrieved March 8, 2018 from https://textiletoday.com.bd/low-cost-production-drawn-foreign-buyers-attention-myanmar-apparel-industry/

Chern, K. (2017). Why the Myanmar economy is slowing, and how it could bounce back. Myanmar Times. Retrieved March 8, 2018 from https://www.mmtimes.com/business/26948-why-the-myanmar-economy-is-slowing-and-how-it-could-bounce-back.html

CIA World Factbook (2018) Burma Central Intelligence Agency. Retrieved Mar 8 from https://www.cia.gov/library/publications/the-world-factbook/geos/bm.html

Friedman, A. (2017). Myanmar's garment industry is on a growth path. Sourcing Journal . Retrieved March 8, 2018 from https://sourcingjournalonline.com/myanmars-garment-industry-growth-path/

Lwin, M. (2017). Time to focus on Myanmar's economy. Straits Times. Retrieved March 8, 2018 from http://www.straitstimes.com/asia/se-asia/time-to-focus-on-myanmars-economy

Micro-Pak (2017). Myanmar's increasing influence in the textile industry. Micro-Pak. Retrieved March 8, 2018 from http://www.micropakltd.com/myanmars-increasing-influence-in-the-textile-industry/

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