Trade

Myanmar’s siren song

March 18th, 2013, The Phnom Penh Post, Business & Commercial Development, Exports, Foreign Investment, Garment Industry, Industry, Labor, News Source, Trade

Unions and labour rights groups have spent recent months unashamedly drilling home a stark reminder: Cambodia’s minimum garment wage, at $61 per month, compares poorly with those in Thailand – where workers earn more than $200 a month – and Vietnam, which has a base wage of $110 in some areas.

One country deliberately left out of these comparisons is Myanmar, where, according to different sources, the minimum wage for garment workers languishes between $28 and $40 a month.

With the lifting of sanctions opening up what was long regarded a pariah state, stakeholders in Myanmar’s garment industry are expecting an explosion as Western investors seek to cash in on the opportunities such conditions spawn. …

Vong Sovann, deputy secretary-general of the Ministry of Social Affairs’ strike resolution committee, told the Post that the government was strongly considering how an emerging garment sector in Myanmar might affect Cambodia’s billion-dollar industry, which provides about 85 per cent of the country’s exports and employment for 400,000-plus workers. …

When a contingent from Stanford Law School in the US visited Cambodia last month, Stephan Sonnenberg, a clinical lecturer from its International Human Rights and Conflict Resolution Clinic, said global brands were well placed to vacate a country quickly if they found a better option elsewhere.

“They can threaten to [leave Cambodia], and they have a global distribution network that’s engineered very specifically to be able to do that at very short notice,” he said.

To what extent brands, vendors and factories in Cambodia are willing to leave the country is something Rong Chhun, president of the Cambodian Confederation of Unions, is keeping a close eye on. …

Yim Serey Vathanak, a trade unions national project co-ordinator for the International Labour Organization, believes established investors in Cambodia might be reluctant to start fresh somewhere else without major incentives to do so.

“Some brands race to the bottom and don’t want to be responsible for working conditions,” he said. “Maybe some [investors] are willing to move because their production here is small . . . but for those who want to keep their reputation, there isn’t much difference in leaving Cambodia for lower wages.”

Threats of such a migration, at this point, are a “red herring”, according to Dave Welsh, American Center for International Labour Solidarity country manager. “Brands are not yet showing signs that they support a Burmese industry,” he said, adding that a minimum wage of about $40, “to the extent that it exists” in an economy that’s not formalised, would rise as inflationary pressures took effect.  …

Shane Worrell and Mom Kunthear
http://www.phnompenhpost.com/2013031861998/National/myanmar-s-siren-song.html