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Myanmar's garment industry hits rough weather
Aug '11
Garment factories in Myanmar are facing problems due to a rise in the country's currency Kyat, coupled with high taxes on exports. While some garment factories have shut down, others have either reduced operations or laid-off workers, as they fail to pay wages.

The garment manufacturers are struggling to avoid losses in the midst of rising cost of Myanmar's Kyat vis-à-vis the US dollar. This has led several companies to stop taking export orders in foreign currencies.

With reduction in orders, companies are trying to stay afloat by reducing wages, but are facing problems from workers. Companies that shut down are facing protests from workers seeking proper compensation.

Besides the rise in the value of the currency, the high taxes on garment exports is also seen as a reason for the problems faced by garment factory owners. The new Government excluded garment items from the list of products for which it reduced the tax on exports from 10 percent to 7 percent, effective July 1 this year.

Experts also blame mismanagement of the economy by the Government to an extent for the crisis being faced by the garment industry. They say if the situation continues, there would be more instances of workers being laid-off followed by their protests in near future.

Myanmar has about 300 garment factories that employ around 70,000 to 100,000 workers, as per the statistics of the Union of Myanmar Federation of Chambers of Commerce and Industry.

Fibre2fashion News Desk - India

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