Myanmar Covid-19 fund unlikely to cushion garment jobs - Just Style
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Myanmar Covid-19 fund unlikely to cushion garment jobs

By Hannah Abdulla 25 Mar 2020

The government of Myanmar has unveiled an initial US$70m stimulus package to cushion the blow of the coronavirus outbreak on the country's economy, but sources suggest it might not be enough to save "tens of thousands" of garment workers who are likely to find themselves out of a job in the near future.

Myanmar Covid-19 fund unlikely to cushion garment jobs

The government of Myanmar has unveiled an initial US$70m stimulus package to cushion the blow of the coronavirus outbreak on the country’s economy, but sources suggest it might not be enough to save “tens of thousands” of garment workers who are likely to find themselves out of a job in the near future.

In its announcement, the government said it had created the Covid-19 fund with MMK100bn to assist garment manufacturing and hotel and tourism businesses as well as small and medium-sized enterprises. The package includes loans, with a 1% interest rate, eased deadlines for tax payments and tax exemptions for affected businesses, according to local press. 

Small and medium-sized garment enterprises had previously voiced their struggles with raw material shortages from China, which was interrupting production.

In an update to just-style, SMART Myanmar – a European Union-funded initiative aimed at promoting ‘Made in Myanmar’ garments and sustainable practices – says the private sector was “hit quite hard” by supply chain disruptions during February and March, specifically a shortage of input materials from China, although this has “significantly recovered.”

“It’s not at its normal state, but getting closer and closer to prior capacities,” says Jacob Clere, team leader of SMART Myanmar.

“The new challenges are the actual arrival of Covid-19 in Myanmar and the decrease in orders from buyers.

“We’ve conducted a rapid survey of workers at 40 factories on the impact Covid-19 related disturbances have had on their workplaces, and it seems about half are already significantly impacted, with perhaps up to 10% of the entire industry temporarily shutting down by the end of March. If so, this could mean tens of thousands of workers unemployed in the near future.

“The Myanmar government has focused on boosting local businesses who are struggling, which is good, but direct support programmes for workers to get through this period will also be needed.”

Click here for additional insight on the coronavirus outbreak: How coronavirus is impacting the global clothing industry