Gar­ment man­u­fac­tur­ers wel­come sanc­tions re­lief

The Myan­mar Gar­ment Man­u­fac­tur­ers As­so­ci­a­tion says sanc­tions re­lief will be a boon for the in­dus­try and is back­ing a re­turn to the 2000s when the US was the largest mar­ket for gar­ment ex­ports.

The Myanmar Times - - Front Page - SU PHYO WIN su­phy­owin@mm­times.com

MYAN­MAR’S lead­ing gar­ment in­dus­try body has been buoyed by the lift­ing of sanc­tions it hopes will see a re­turn to the glory days for the sec­tor, when in the early 2000s a ma­jor­ity of coun­try’s gar­ments were shipped to the US.

Speak­ing at a man­u­fac­tur­ing trade fair in Yan­gon yes­ter­day, U Myint Soe, chair of the of Myan­mar Gar­ment Man­u­fac­tur­ers As­so­ci­a­tion (MGMA), told The Myan­mar Times that the lift­ing of sanc­tions is a boon for the fledg­ling in­dus­try, as in­ter­na­tional gar­ment buy­ers from the US would have more con­fi­dence in do­ing busi­ness with Myan­mar, while re­liev­ing pres­sure on fi­nan­cial trans­ac­tions would also en­cour­gae more US trade.

He said that Ja­pan, Europe and South Korea are the lead­ing mar­kets for lo­cal gar­ment ex­ports, with the US trail­ing those coun­tries.

“There has not been a lot sent to the US mar­ket in the last year utill re­cently,” U Myint Soe said. “The ex­ports to the US are said to be low be­cause of the sanc­tions.”

But the in­dus­try is con­fi­dent that is all about to change, U Myint Soe said.

In 2001, to­tal gar­ment ex­ports reached US$817 mil­lion, he said, which was the sec­ond largest ex­port in­dus­try be­hind oil and gas. At the time, the US mar­ket made up about 65 per­cent of the gar­ments shipped, he said.

“If we can get that kind of mar­ket back this time, gar­ment ex­ports will reach up to 3 bil­lion in 2017,” U Myint Soe pre­dicted.

The MGMA chief said reen­try into the Gen­eral Sys­tem of Pref­er­ences (GSP), an­nounced by US Pres­i­dent Barack Obama at the same time as the lift­ing of sanc­tions, would not re­turn im­me­di­ate ben­e­fits like it does with sim­i­lar trade pref­er­ences in the EU, as gar­ments were not among the list of 5000 prod­ucts cov­ered by the US GSP.

In­creased ex­ports would even­tu­ally lead to greater for­eign in­vest­ment into the in­dus­try, U Myint Soe added, but poor in­fra­struc­ture was still a key ob­sta­cle to FDI.

Both tax in­cen­tives and lo­gis­tics costs needed greater clar­ity in or­der to stim­u­late in­vest­ment, he added.

“Es­pe­cially for lo­cal fac­to­ries, they need sup­port re­lat­ing to the gov­ern­ment’s tax reg­u­la­tions or they will be out of busi­ness in the next five years,” he said.

Speak­ing at the trade fair, U Thein Naing, di­rec­tor of Baw Ga Mandaing Man­u­fac­tur­ing, said in­creased ex­ports to the world’s largest con­sumer mar­ket was a big win for the lo­cal in­dus­try.

“As the EU’s econ­omy is slow­ing at the mo­ment, the US will be­come an­other route for Myan­mar’s gar­ment sec­tor to take off af­ter the sanc­tions are lifted,” he said.

But more would need to be done to lift stan­dards in the in­dus­try if it was to cap­i­talise on op­por­tu­ni­ties, he said.

“I am ex­port­ing to Ja­pan at the mo­ment, and some­times it is very hard to meet their qual­ity stan­dards and I can’t get reg­u­lar or­ders,” he said.

Pres­i­dent of tex­tile trade event orginiser Messe Frank­furt France, Mr Michael Scherpe, said that the ex­port in­dus­try was still dom­i­nated by coun­tries like China and Bangladesh, but Myan­mar was see­ing steady im­prove­ments in the sec­tor.

“From 2013 on­ward, within a very short time, Myan­mar has achieved a very good re­sult,” he said.

‘If we can get that kind of mar­ket back this time, gar­ment ex­ports will reach up to 3 bil­lion in 2017.’

U Myint Soe MGMA

Photo: Aung Htay Hlaing

Work­ers stitch gar­ments at a gar­ment fac­tory in Yan­gon.

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