Coronavirus crushes Asia’s garment industry

Coronavirus crushes Asia’s garment industry

Coronavirus crushes Asia’s garment industry


Garment workers returning from a workplace as factories reopened after the government has eased the restrictions amid concerns over the coronavirus disease (COVID-19) outbreak in Dhaka, Bangladesh, May 4, 2020. –Reuters Photo

Garment  workers returning from a workplace as factories reopened after the  government has eased the restrictions amid concerns over the coronavirus  disease (COVID-19) outbreak in Dhaka, Bangladesh, May 4, 2020. –Reuters  Photo

Zarchi Lwin pawned her only two gold bangles  for $140 when the owner of the Myanmar factory where she sewed winter  coats for British retailer Next Plc shut it down after orders dried up  due to the coronavirus.

She is one of hundreds of thousands of garment workers across Asia  who have been laid off, according to the Workers’ Rights Consortium, a  labour rights campaign group, and are now struggling to survive with  little welfare support, mired in debt and in many cases reliant on food  handouts.

"If I have a job and an income, I can pay for medical treatment for  my mother," Zarchi Lwin, 29, told Reuters from the home she shares with  her 56-year-old mother, who has lung disease, in a shanty town on the  outskirts of Yangon. "Now no income, no job," she said, fighting back  tears. "We don’t know what to do."

Next temporarily closed all  its stores in Britain in March due to the coronavirus. The company said  in a statement it had only cancelled some orders and “endeavoured to be  fair” to its suppliers. KGG, the factory where Zarchi Lwin worked, did  not respond to requests for comment.

Since the 1960s, Asia has grown into the world's garment factory,  sending about $670 billion worth of clothes, shoes and bags a year to  Europe, the United States and richer Asian countries, according to the  International Labour Organisation, a United Nations agency.

After non-essential stores were closed in many countries and people  were told to stay at home to prevent further spread of the disease,  international retailers from ASOS Plc to New Look said they cancelled  orders with garment makers. Factory owners in Myanmar, Bangladesh and  Cambodia immediately shut down thousands of factories and sent home  workers with little or no pay.

Retailers generally place orders at least three months ahead of  delivery and pay for the finished product when it is delivered.  Initially most retailers cancelled all outstanding orders, but many  adjusted their position in March and April after a public outcry,  agreeing to pay for goods that had already been manufactured or were  mid-production.

To finish pending orders, about half of Bangladesh’s 4,000 garment  factories have reopened, according to garment manufacturer associations.  About 150 of Myanmar’s 600 or so factories have shut down, while 200  out of 600 or so are closed in Cambodia.

Many factories that have reopened are struggling to enforce social  distancing and good hygiene practices in often cramped conditions, two  union officials told Reuters. “Most of the factories are not complying  with the safety guidelines,” said Babul Akter, president of the  Bangladesh Garment and Industrial Workers Federation, adding that dozens  of garment workers had been infected with the virus. “Just placing  hand-washing systems and checking temperatures at the entrances will not  help. Inside the factories, when the workers work so closely, how will  they maintain safe distancing?”

A garment worker wearing a protective mask, returns from a workplace  as factories reopened after the government has eased the restrictions  amid concerns over the coronavirus disease (COVID-19) outbreak in Dhaka,  Bangladesh, May 4, 2020. REUTERSA garment worker wearing a protective  mask, returns from a workplace as factories reopened after the  government has eased the restrictions amid concerns over the coronavirus  disease (COVID-19) outbreak in Dhaka, Bangladesh, May 4, 2020.  REUTERSSome orders have been trickling back. Swedish fashion retailer  H&M said it only paused orders for two weeks at the height of the  virus outbreak. U.S.-based Walmart Inc, the world’s largest retailer,  said it placed new orders with Asian manufacturers last month.

For a list of retailers and the status of their orders with Asian garment makers, see FACTBOX


Despite the new orders, several garment manufacturers said the low  volume of work on the books means many factories in Myanmar, Bangladesh,  and Cambodia will not be viable, which means many of the young women  who make up the majority of the workforce will no longer have jobs. That  leaves them torn between returning to families in the countryside,  where there are few employment opportunities, or enduring life in the  city in the hope that factories will reopen at full capacity.

The European Union has created a wage fund for workers in Myanmar  worth 5 million euros ($5.3 million) to pay a portion of the salaries of  the most vulnerable for three months. Myanmar has promised to cover 40  per cent of the salaries of laid off workers. More than 58,000 have been  laid off, according to the country’s garment manufacturer association.

In Bangladesh, one million workers were furloughed or laid off by  late March, according to the Penn State Centre for Global Workers’  Rights, although some have since returned to work. About 75,000 have not  been paid for March, according to the Bangladesh Garment Manufacturers  and Exporters Association (BGMEA), which estimates tens of thousands  more will not be paid wages owed to them.

The government has announced a $588 million aid package for its  export sector to help pay employees. Garment manufacturers, which  estimate they have lost almost $3 billion in exports since the start of  April, said the funds are not enough. Foreign-owned firms and joint  ventures are not eligible for payments.

In Cambodia, where about 60,000 garment workers have been  “suspended,” according to the country’s manufacturer association,  workers have been promised $70 per month - $40 from the government and  $30 from the employer - but that amounts to just over a third of the  current minimum wage.

In that country’s capital, Phnom Penh, 39-year-old Rom Phary said she  and her husband had racked up $550 of debt and interest since she lost  her factory job in early March, several times her monthly salary. She  said she and her family are living off rice donated by an NGO, the  Centre for Alliance of Labour and Human Rights, which is working in  Cambodia. Phary said she persuaded her landlord to let her stay  rent-free rather than forcing the family to return to relatives in the  provinces.

“If we go back, it would be shameful. We don’t know what we would do,” she said.


In Myanmar the garment industry was the fastest-growing sector of the  economy, accounting for about 10% of the country's exports and offering  an escape route from extreme poverty for hundreds of thousands of  people, many of them migrants from rural areas.

In Dagon Seikkan, an industrial zone on the outskirts of Yangon that  is home for many migrant workers, local officials have been giving out  rations of free rice to those who have been without jobs for some time.  But Zarchi Lwin said she did not qualify as she was employed up until  recently.

She and her parents left their small village in the central Magwe  region six years ago after selling their house to pay for treatment for  her brother, who eventually died from kidney disease. At first, they  worked as cleaners and lived in a dormitory. Then Zarchi Lwin trained  herself to sew clothes and secured a sought-after job at one of the  nearby factories, earning $146 per month: enough for food, rent of a  small wooden shack, and medical treatment. She saved up for a year to  buy the bangles she pawned, she said.

Sobbing, she recounted how her mother told her she wants to die in  order to lessen the financial burden on the family. “Sometimes I want to  kill myself because of this situation,” she said. Her father, a guard  at a furniture factory, has also lost his income.

Before the new coronavirus, garment workers in Yangon and the  neighbouring province of Bago were sending more than 40 million euros  ($43 million) in remittances to their hometowns and villages across the  country each month, said Jacob Clere of SMART Textile and Garments, a  European Union-funded project.

“Education for children who would otherwise not have it. Medicine  for grandmothers who would otherwise go without. Healthy food. Better  shelter,” said Clere, describing how that money helped rural  communities. Many are now at risk of being forced into early marriage or  taking on debt from loan sharks at very high rates, said Mike Slingsby,  a regional urban poverty specialist.


In Bangladesh, the world's second-largest garment maker behind China,  4.1 million workers or 2.5 per cent of the population worked in garment  factories, many of which are now closed. About 70 per cent of Dhaka’s  garment industry workers left the city to return to their villages, said  Tuomo Poutiainen of the International Labour Organisation, although he  said some have since returned after some factories reopened to finish  work on existing contracts.

Orders for June are down 45 per cent from a year ago, according to Rubana Huq, president of the BGMEA.

Banesa Begum, a 21-year-old worker laid off from a Dhaka factory  making clothes for Zara, among other brands, said she had nothing to  send to her parents, subsistence farmers in the northern district of  Rangpur. “I know they are starving,” she said.

Inditex, the owner of Zara, told Reuters it will pay for orders from  garment makers, whether finished or in production, according to the  original payment schedule.

Begum’s salary also paid for her two young brothers to go to school.  “I don’t know how I’ll manage money to continue their study,” she said.  “All my dreams are shattered.”

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