3 August
Exports of garments manufactured under the cut-make-pack (CMP) system were valued US$3.6 billion in the past ten months of the current financial year 2019-2020, according to the data from the Ministry of Commerce. The export figures reflect a decrease of $60 million as against a-period ago. Myanmar’s manufacturing sector is largely concentrated in CMP garments and textiles, which contribute to the country’s GDP to some extent.
The garment sector is among the prioritized sectors driving up exports. The CMP garment industry has emerged as a promising one, with preferential trade from Western countries. The majority of Myanmar’s garment factories operate under the CMP system, and those engaged in this industry are striving to transform CMP into the free-on-board (FoB) system, according to the Myanmar Garment Manufacturers Association.
At present, some CMP garment factories have shut down on the reason for the lack of raw materials due to the coronavirus negative impacts, leaving thousands of workers unemployed.
The labour-intensive enterprises are badly battered by the coronavirus impacts, said an official of the Directorate of Investment and Company Administration. However, foreign direct investments flow into many types of businesses including the garment enterprises. The foreign investors are not bothered by the disputes between employers and employees and the closure of some CMP businesses during the mean times. Of the investment proposals, the manufacturing and labour-intensive businesses are prioritized by the commission. Myanmar Investment Commission is planning to accept investment projects in manufacturing masks, pharmaceuticals and others which can contribute to the fight against the coronavirus in the country at the soonest.
The CMP garment sector which contributes to over 20 per cent of Myanmar’s export sector is struggling because of the cancellation of order from the European countries and suspension of the trade by western countries amid the pandemic. It can harm the export sector to a certain extent, the businesspeople pointed out. The export value of CMP garments was only $850 million in the 2015-2016 financial year, but it has tripled over the last two FYs. In the 2016-2017FY, about $2 billion was earned from exports of CMP garments. The figure increased to an estimated $2.5 billion in the 2017-2018FY and $2.2 billion in the 2018 mini-budget period (from April to September).
It tremendously grew to $4.6 billion in the 2018-2019FY, according to the Commerce Ministry. Myanmar mainly exports CMP garments to markets in Japan and Europe, along with the Republic of Korea, China, and the US. Since an outbreak like COVID-19 might happen in the future it is necessary to prepare for a sufficient supply of raw materials. The public and private sectors will cooperate in setting up the supply chain on our sources, including weaving, knitting, dyeing, and sewing factories.
The MGMA has more than 500 members, and garment factories in Myanmar, employing more than 500,000 workers. Investors prefer to invest in countries with inexpensive labour, such as Myanmar.
Ko Htet (Translated by Ei Myat Mon)
