Empowering women in Myanmar’s nascent garment value chains
- Participation in garment global value chains has positively affected the condition of women with many moving out of the informal sector to industrialised salaried employment.
- Harnessing the social upgrading potential of Myanmar’s growing garment industry for women’s economic empowerment will require targeted and comprehensive action from private and public actors in the value chain.
Myanmar has been identified as a “new hotspot” among least developed countries entering the industrialisation process. An important part of Myanmar’s integration into the global economy following the lifting of international sanctions in 2013 has taken place through the development of an export-oriented garment industry.
The garment industry is currently the only domestic manufacturing export activity that is integrated in a global value chain (GVC). Thanks to a significant inflow of foreign direct investment – primarily driven by preferential access schemes to Western markets, low wage labour, and risk diversification on the part of buyers – Myanmar’s garment exports have increased from US$300 million in 2005 to US$2.5 billion in 2017.
The growth of Myanmar’s garment industry has created new jobs, supporting the realisation of UN Sustainable Development Goal 1 (SDG 1) related to poverty reduction. The International Labour Organization estimates that 380,000 workers were employed in the garment sector in 2015, up from 120,000 in 2005, comprising 16 percent of overall manufacturing employment. The Myanmar government is actively seeking to seize trade and GVC opportunities to reduce poverty and increase employment.
Our paper Opportunities for Sustainable Development in Global Value Chains: A Case Study of the Myanmar Garment Sector argues that Myanmar’s nascent garment industry provides an opportunity to advance sustainable development objectives and facilitate women’s economic empowerment. The question remains how to design trade and investment policies and incentives to turn these opportunities into concrete outcomes.
In the Myanmar garment value chain, upgrading challenges and opportunities are defined by ownership structures and end markets. Local owners struggle to grow and upgrade due to an underdeveloped financial infrastructure and lack of access to international lead firm networks and technical knowledge. Regarding end markets, European buyers generally require compliance with social and environmental standards, which incentivises product, process, and skills upgrading. Meanwhile, Japanese and Korean buyers commonly prioritise production quality, with less attention paid to working conditions.
In view of the rising importance of the European market – the EU is Myanmar’s largest and fastest growing export market since the lifting of sanctions – compliance to international standards is an increasingly necessary, yet costly, condition for participation. This disproportionally limits the economic upgrading opportunities of Myanmar’s domestic manufacturing owners vis-à-vis foreign owners. On the other hand, compliance with Western market standards has generated social upgrading and better working conditions. Our research indicates that female workers are more likely to find favourable working conditions in foreign-owned factories producing for western markets.
Labour rights, however, remain a concern. Our surveys show that women employed in the sector worry about the absolute level of compensation and the work environment. Our findings, consistent with other research, describe the existence of child labour, poor health and safety conditions, violation of minimum wage requirements, limits to the freedom of association, and excessive overtime. The latter – compounded by poor implementation of maternity leave legislation – has a disproportionately negative impact on women who are often responsible for homecare in additional to formal work responsibilities.
Empirical findings from our case study revealed a low degree of concern about gender inequality among garment sector workers in Yangon, Myanmar’s largest city and commercial hub. Yet, according to the ILO, the gender wage gap in Myanmar’s garment industry is above 20 percent (ILO, 2017) – this is slightly higher than in the Philippines and below countries such as Sri Lanka, India, and Pakistan where the gap stands at over 30 percent. For the time being, the increase in women’s employment, together with the recently introduced minimum wage law may have diverted attention away from pay inequality.
From a policy perspective, Myanmar’s economic and social reform agenda does not comprehensively address gender equality. A policy recommendation aimed at promoting gender equality through economic and social upgrading should involve the engagement of both public and private actors and encourage public-private sector cooperation. The EU-funded programme "Empowered Civil Society Organizations and Local Authorities Promoting Gender Equality in Myanmar" is an example of how civil society organisations and local authorities can work together to promote equal opportunities and women empowerment.
In addition, the government must help build the capabilities of female workers through targeted skills development. Policies should go beyond export promotion and the attraction of foreign investment in order to promote learning and functional upgrading. Women must have access to training in technical skills at all levels of employment. This should be paired with social support mechanisms, such as childcare, to relieve the burden of domestic work and allow more women to benefit from formal employment. Additionally, women must be made aware of their rights, especially their right to a sexual harassment-free workplace. Any customary law or practices that undermine these legal rights must be addressed through the common law system.
By instituting such policies, Myanmar can leverage action on gender equality as a competitive advantage with socially conscious consumers and brands, thereby benefiting from increasing demand due to compliance with social and environmental bottom lines in the value chain.
At the same time, investors, producers, and lead firms can harness existing initiatives to increase productivity while promoting the empowerment of women. An example is the SMART Myanmar initiative designed to promote and support sustainable production and raise awareness about labour and social standards among female workers. Participation in such initiatives can be encouraged by rewarding companies who successfully incorporate gender sensitive principles into their corporate policies and practices.
This post is derived from the paper Opportunities for Sustainable Development in Global Value Chains: A Case Study of the Myanmar Garment Sector commissioned by ICTSD and authored by Samah El-Shahat and Violante di Canossa.
Violante di Canossa is an independent consultant based in China.