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What can the Myanmar garment industry learn from Vietnam’s experience?

Policy Review on Myanmar Economy


Toshihiro KUDO and Kenta GOTO 1
July 2012
PDF (English)pdf(39.7KB)
PDF (Burmese)pdf(2.91MB) BUSINESS, Union of Myanmar Federation of Chambers of Commers & Industry, Vol.12, No.7, July 2012.

The garment industry has been one of the main drivers of industrialization in many Asian economies (Sachs 2005, 195), and Myanmar is no exception. With an abundant supply of labor, Myanmar has a clear comparative advantage in labor-intensive sectors such as the garment industry. Currently the largest non-resource based, export-oriented manufacturing sector, garments also represent the only industry integrated into regional and global production/distribution networks.

The Myanmar garment industry has both grown and declined over the previous two decades amid the changing international economic environment and fragile availability of market access. Between 1990 and 2001, Myanmar exports soared by 69 times. Garments’ share of Myanmar’s total exports increased from 2.5 percent in 1990 to 39.5 percent in 2000. The US offered the largest market but this was suddenly lost due to sanctions imposed upon Myanmar by the US government in 2003 (Kudo 2008). This led to a drastic decline in exports of garments, which in 2005 had contracted to about 38% of 2001.

As a response, garment suppliers in Myanmar started exploring Asian markets, and Japan took over the US position as Myanmar’s largest export destination for garments. Japan held a 45.5% share of Myanmar’s total garment exports in 2011. South Korea also became an important market for Myanmar garments, with a 30.3% share in the same year. The garment industry of Myanmar seemed to be back on track, gaining momentum via exports to Asian markets.

Moreover, with the new “civilian” government in place pushing for real changes on the political front, the US government has started relaxing its sanctions against Myanmar. In connection to this, it is expected that the Myanmar garment industry will regain access to the US market in the near future. This is good news for the industry.

  1. Toshihiro KUDO, Senior Research Fellow, Research Planning Department, Institute of Developing Economies, JETRO; Kenta GOTO, Associate Professor, Faculty of Economics, Kansai University.
  2. The parallel market exchange rate of the kyat had appreciated by two times in real effective terms for the period of January 2008 to July 2011. This was driven by large inflows of foreign currency into the economy, which could not find an outlet due to exchange restrictions. The introduction of a managed float in April 2012 as a first step toward unifying the exchange rates apparently contributed to the recent depreciation of the kyat (IMF 2012).
  3. Even though the cutting, making, and packing (CMP) arrangements provided firms in Myanmar a byroad for importing raw materials such as fabrics, Myanmar still restricted imports of sewing machines, vehicles and other necessary items for production (Kudo 2009, 81-83).

The views expressed in this publication are those of the author(s). Publication does not imply endorsement by JETRO of any of the view expressed within.
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