The impact of U.S. sanctions on the Myanmar garment industry

Asian Survey

Volumn 48, Issue 6, 2008, Pages 997-1017

  Kudo, Toshihiro ^a  

^a INSTITUTE OF DEVELOPING ECONOMIES   (Japan)

Author keywords

Burmese Freedom and Democracy Act of 2003; Economic sanctions; Garment industry; Myanmar (Burma); U.S.

Indexed keywords

ECONOMIC IMPACT; GARMENT INDUSTRY; INTERNATIONAL TRADE; SANCTION; SMALL AND MEDIUM-SIZED ENTERPRISE;

ASIA; EURASIA; MYANMAR; NORTH AMERICA; SOUTHEAST ASIA; UNITED STATES;

EID: 58249085353     PISSN: 00044687     EISSN: 1533838X     Source Type: Journal    
DOI: 10.1525/as.2008.48.6.997     Document Type: Article

References (34)

1. Hildegunn Kyvik Norås, "The Global Textile and Clothing Industry Post the Agreement on Textiles and Clothing," Discussion Paper, no. 5 (Geneva: World Trade Organization, 2004).
2. On the other hand, Myanmar's exports to the U.S. constituted only 26% in 2000, 18% in 2001, and 15% in 2002 out of its total exports.
3. Ko Jay, "Karaoke Nights," Irrawaddy 13:5 (May 2005), , accessed November 14, 2005.
4. U.S. Department of State, "Report on U.S. Trade Sanctions against Burma: Congressionally Mandated Report Submitted to Congress on April 28, 2004," , accessed December 2005.
5. Tin Aung Kyaw, "Chouk Laik Cha Zo, Thunge Jin" [Let's sew! friends!], Dana [Wealth] November 2000).
6. For convenience, "MFA" rather than "ATC" is used in this paper.
7. Calculated from the U.S. Customs Service Textile Status Report, available at the website of U.S. Customs and Border Protection, .
8. Note that the rapid growth of the garment industry in Myanmar was not due solely to the MFA regime. To a certain degree, it also had an international competitiveness because of its abundant, cheap, and relatively well-educated labor force.
9. Toshihiro Kudo, "Beikoku niyoru Keizai Seisai Hatsudo gono Myanma Hosei Sangyo" [Myanmar's garment industry after the U.S. sanctions], Ajiken World Trend [IDE World Trend], no. 120 (September 2005), pp. 44-51.
10. FY starting in April and ending in March. The author gathered company-wide export data that appeared occasionally in domestic magazines, journals, and pamphlets, and combined them with the data from the Yangon JETRO office, covering the period between FY 1993 and FY 2004. Note that companies that accumulated exports of only US$10,000 or less for the period between FY 1993 and FY 2004 are excluded with the presupposition that these companies did not have substantial production facilities as garment manufacturers.
11. There were several records of export for private firms in FY 1993. However, these may be trading or similar firms without substantial production capacity.
12. The actual survey was done on 142 firms, since 22 firms declined requests for interviews, and one firm was already in liquidation.
13. Interview with U Myint Soe, chairman of MGMA, Yangon, June 2005.
14. Myanmar Textile and Garment Directory, 2002-2003 (Yangon: MMRD Publications, 2003).
15. If there were 300,000 workers in 400 firms, the average number of workers per firm would be 750. This number is supported neither by the MTGD nor by the SGIM.
16. Ministry of National Planning and Economic Development (MNPED), Review of the Financial, Economic, and Social Conditions for 1997/98 (Yangon: MNPED, 1998).
17. Since then, the fi gures ceased to be published.
18. Kenta Goto, "Sen-i Hosei Sangyo: Ryutsu Mihattatsu no Kensho" [The textile and garment industry in Vietnam: An examination of undeveloped distribution networks], in Vietnam no Kogyoka Senryaku: Global Jidai no Tojokoku Sangyo Shien [Vietnam's strategy for industrialization: How to support industrial development in a developing country], ed. Kenichi Ono and Nozomu Kawabata (Tokyo: Nihon-Hyoron-Sha Co., 2003), pp. 125-72.
19. The oil and gas sector consists of 65 projects worth US$2.5 billion and is ranked second in terms of number of projects. It is ranked fi rst in terms of capital amount.
20. Note that the author used all exports by all companies. There were 313 firms with export records in FY 2000 and 147 firms in FY 2004. The numbers of identifi ed fi rms are different from those in the previous section.
21. Even though many small and micro garment firms with 100 workers or less had disappeared immediately after the sanctions, the figures in Table 4 do not represent such reality. Note again that the SGIM covered fi rms operating in June 2005 only.
22. A firm engaged in sewing was also excluded since its production volume was disproportionately large.
23. The author counted only two kinds of sewing machines: Straight lockstitch and overlock. These two are the main kinds of sewing machines used in the garment industry in Myanmar.
24. Chaw Chaw presents a different observation, saying that "according to informants long resident in the industrial zones, rural-to-urban migration has increased remarkably. Although there are no segregated data on the place of origin of workers in industrial zones, interviews with factory employees indicate that workers from rural areas constitute more than two-thirds of all employees in each factory." Chaw Chaw, "Rural Women Migrating to Urban Garment Factories in Myanmar," in Social Challenges for the Mekong Region (Chiang Mai, Thailand: Chiang Mai University, 2003), pp. 203-24, , accessed November 14, 2005.
25. One attended a vocational school.
26. The parallel exchange rates were about 900 kyats per US$1 to 1,000 kyats per US$1 in 2004.
27. The parallel exchange rates were about 1,000 kyats per US$1 to 1,200 kyats per US$1 in mid-2005.
28. Moe Kyaw, "Textile and Garment Industry: Emerging Export Industry," in Industrial Development in Myanmar: Prospects and Challenges, ed. Toshihiro Kudo, ASEDP, no. 60 (Chiba: IDE, JETRO, 2001), pp. 143-73.
29. For example, Prof. David I. Steinberg, a prominent expert on Myanmar issues, wrote "Some 80,000 jobs have already been lost and this will be followed by another 100,000, mostly young women who provide supplementary income for impoverished families." David I. Steinberg, "Burma/Myanmar: The Triumph of the Hard-Liners," South China Morning Post, August 15, 2003.
30. Chaw Chaw, "Rural Women," p. 217.
31. Ibid.
32. Burma Campaign UK, "The European Union and Burma: The Case for Targeted Sanctions" (London, March 2004), , accessed November 14, 2005.
33. Ibid., p. 9.
34. Figure 2 apparently shows little impact of MFA abolishment on the export performance of the Myanmar garment industry.