Good news for low wage earn­ers

Mizzima Business Weekly - - EDITORIAL -

Last week the Myan­mar govern­ment gave low wage earn­ers a rea­son to smile. In what was a fairly large in­crease the new min­i­mum daily wage fig­ure was pushed up to 4,800 Kyat – a 33 per­cent in­crease on the coun­try’s first-ever min­i­mum wage in­tro­duced in 2015 by the Thein Sein regime.

The change shows the Na­tional League for Democ­racy-led govern­ment, which took power in April 2016, is at­tempt­ing to stick to its core pledge of im­prov­ing the econ­omy. The pay rate change ap­plies to all busi­nesses with more than 10 work­ers.

The change will not have a dra­matic im­pact on low wage earn­ers, and there will be some em­ploy­ers who at­tempt to skirt around the manda­tory min­i­mum level. There will be some em­ploy­ers, par­tic­u­larly in the gar­ment in­dus­try, who will grum­ble about the pay hike, and there is a sixty day pe­riod for peo­ple to lodge ob­jec­tions or com­ment. But at least the govern­ment’s move sends the right sig­nal, par­tic­u­larly to the poorly paid who feel they are be­ing left out.

The govern­ment has been fac­ing crit­i­cism that it has been slow to make real progress in build­ing a ro­bust in­fra­struc­ture for the econ­omy and mak­ing Myan­mar an eas­ier place to do business.

Eco­nomic growth mat­ters for this govern­ment which came in with such prom­ise fol­low­ing the Novem­ber 2015 elec­tions. Myan­mar saw GDP growth in 2017 slow to 5.9 per­cent, the In­ter­na­tional Mon­e­tary Fund said, es­ti­mat­ing a re­bound to 6.7 per­cent this year.

Much hinges on the econ­omy. The NLD-led govern­ment needs to be seen to be boost­ing the econ­omy, sup­port­ing the business sec­tor, and im­prov­ing the lives of or­di­nary peo­ple, in part to de­tract from the slug­gish progress with other prom­ises, not least the over­all peace process and the prob­lem of the Rakhine cri­sis.

To be fair, it is prob­a­bly too early to judge the over­all per­for­mance of the govern­ment in its moves to bring change. Myan­mar’s av­er­age an­nual in­come per capita is $1,140 and roughly 37 per­cent of the coun­try’s 51 mil­lion peo­ple live near or be­low the poverty line. But with wages lower than re­gional ri­vals Cam­bo­dia, Thai­land and Viet­nam, Myan­mar wants to lure in­vestors to its man­u­fac­tur­ing sec­tor.

Way back, the coun­try was once cel­e­brated as an Asian suc­cess story. It now has some catch­ing up to do.

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