March 10, 2010 / 5:02 AM / 9 years ago

Western sanctions fuel rare strikes in Myanmar

YANGON (Reuters) - Western sanctions that have decimated Myanmar’s once-thriving garment sector have led to a rare spate of strikes that have unnerved its military rulers, fearful of civil unrest in the run-up to long-awaited elections.

Four South Korean-owned factories were brought to a halt for several days last week and another on Monday by sit-in protests by more than 3,000 workers demanding better working conditions and higher pay, demands owners say they cannot meet.

They were among 20 garment factories in the commercial capital, Yangon, that have suffered strikes since Feb. 8.

“We are doing our best to help the workers and management negotiate and reach an agreement,” a senior Labour Ministry official told Reuters.

“The security measures imposed around the factories are not meant to suppress the strikes but just to contain them so that there will not be any infiltration from outside and the strike will not grow into civil unrest,” he added.

Strikes and other forms of protests are rare in Myanmar, where small demonstrations over increases in fuel and cooking gas prices in 2007 mushroomed into countrywide marches by Buddhist monks, sparking a crackdown in which at least 31 people died.

Analysts and diplomats say the government appears to be especially sensitive to the risk of unrest with elections scheduled for this year under the a seven-step “roadmap to democracy” drawn up by the junta.

The workers say their aims are not political.

“Our strike was nothing to do with democracy or elections,” said factory worker Khin Kyaw. “None of us wants our factories to close down. If that happens, we workers and our families would be hit worse than our employers.”

CRIPPLING SANCTIONS

Myanmar’s garment industry has shrunk by an estimated 75 percent since sanctions were imposed in 2001 by the United States, the sector’s biggest market and the main source of the $816 million in revenue generated that year.

Trade embargoes led to a sharp fall in the years that followed and the latest figure, for fiscal 2008/09 (April-March), was $292 million.

Many Western governments admit sanctions, imposed because of Myanmar’s poor human rights record, have had only a limited impact on the rich ruling generals. Meanwhile, many ordinary citizens are struggling to make ends meet.

The Labour Ministry estimates Myanmar had 400 garment factories employing 300,000 workers in 2000, now down to 120 factories and with a combined total of 60,000 staff.

There is little hope of business picking up, with increased competition from Bangladesh, Cambodia, Vietnam and Thailand, which are less bureaucratic and offer low costs and cheap labour.

Those countries are also entitled to the European Union’s Generalised System of Preferences (GSP), reduced trade tariffs not available to Myanmar because of sanctions on the regime.

“The shrinking market has hit us a lot. To make matters worse, we are not entitled to GSP ... which can make your profit rise by 11 percent to 17 percent,” Myint Soe, chairman of Myanmar’s Garment Entrepreneurs Association, told Reuters.

Monthly salaries of Myanmar garment workers range from 35,000 to 45,000 kyat (about $35 to $45) compared with the $65 monthly minimum wage of their Vietnamese counterparts.

Along with hundreds of riot police, the government has dispatched Labour Ministry officials to help negotiate an end to the recent strikes, but factory owners say they have little room to manoeuvre and fear the worst.

“If they can agree an increase of 5,000 kyat, it’s okay, we can adjust it,” said one owner, who asked not to be identified. “But if they demand more than that, we won’t break even and our last resort will be to close the factory.”

Writing by Martin Petty; Editing by Alan Raybould and Alex Richardson

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