Covid-19: Thousands of garment workers lose jobs across Asia
Owing to the Covid-19 pandemic, the western brands have cancelled orders worth billions of dollars. As a result, hundreds of factories closed in waves across Asian industrial belts near Phnom Penh, Dhaka and Yangon.Updated: Jul 12, 2020 10:54 IST
Hundreds of thousands of garment workers in Asia, a vast majority of them being women, were suspended or laid off when the coronavirus pandemic struck as stores closed across North America and Europe.
As per WallStreet Journal reports, millions of people belonging from various Asia’s developing countries relied on factories producing T-shirts, trousers for employment. But owing to the pandemic, the western brands canceled orders worth billions of dollars, leaving shipments of sweaters and jeans with no takers. As a result, hundreds of factories closed in waves across Asian industrial belts near Phnom Penh, Dhaka and Yangon.
In recent months, Bangladesh, Vietnam and Myanmar are the most affected countries in Asia as many workers have returned to their villages, cut back on food and borrowed money to survive.
The Journal cites an example of Zin Mar Oo, 22, who had to lose her job in Myanmar after the South Korean-owned factory where she worked closed down operations in April. The owner has not been there seen since and left no word about the fate of the jobs or the factory, according to Oo, the country’s garment manufacturers body and the local labor-relations official.
Oo, who didn’t finish high school, made USD155 a month by working in the garment factory located in the outskirts of Yangon. Her role was to check that clothes being made did not have crooked stitching lines or mismatched thread colours. Her income supported her mother and helped repay the family’s debt.
These setbacks could be longer lasting than the disruption to shopping. The global fashion industry, which was already facing headwinds before lockdowns decimated sales, is in deep turmoil and is likely to be reshaped by the pandemic.
“I don’t think this is a sector which is going to come back to the same point again,” said Rubana Huq, president of the top industry group for garment manufacturers in Bangladesh, among the world’s largest clothing exporters.
Meanwhile, J.C. Penney Co., Neiman Marcus Group Inc. and J.Crew Group Inc. have filed for bankruptcy protection in recent months.
Western companies are expected to turn more to “near-shoring”--moving some of their production to Turkey, Eastern Europe and North Africa for European markets, and to Mexico for North American markets, said Achim Berg, senior partner at McKinsey & Co. who advises global fashion and apparel companies.
For countries with limited infrastructure and low-skilled workers, garment manufacturing has been a key economic engine. Operating sewing machines does not require much education or training, unlike car or smartphone production, and low wages help meet the West’s demand for inexpensive clothing.
Clothes make up nearly 85 per cent of Bangladesh’s export earnings, and the sector employs four million people there. In Cambodia, one in five households has at least one garment worker, and 75 per cent of exports are garments, footwear and travel bags. Vietnam and India are also top exporters, according to estimates by the World Trade Organization.
Before they moved to the industrial area on the outskirts of Yangon, Oo’s mother sold vegetables in their village market, earning USD2 a day. That meant that on some days, the family don’t even have enough for a full meal. Oo is now helping a local nonprofit make cloth face masks for a small wage while she hunts for job openings.
Myanmar, which suffered years of underdevelopment, appeared on the radars of garment manufacturers around 2013, when the military junta that had been in control for decades was loosening its grip. The US and European Union lifted sanctions that had long deterred investment and granted duty-free access to their markets under a program designed to help the world’s least developed countries.
Hundreds of factories owned by firms from China, South Korea and elsewhere set up to make clothes for Western brands, seeking to take advantage of the low wages compared with locations like China and Vietnam. Myanmar became a part of a global production network in which designs are created in one country, the textiles woven in another and clothes sewn in a third place.
However, the coronavirus pandemic started disrupting the cross-border supply chain behind the shirts and dresses that fill store racks.
Developing Asia will grow by just 0.1 per cent this year--the slowest rate in six decades, the Asian Development Bank estimates.
Globally, the pandemic could increase the number of people who are extremely poor--living on less than USD1.90 a day--by 71 million to 100 million, estimates a World Bank study. This would be the first increase since 1998, and almost half of the projected new poor would be in South Asia, the bank said.