Good news for low wage earners
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.