Auguet 1 - 7, 2011
LOW export orders caused by a weak US dollar are being blamed for job losses at factories across Yangon, industry sources said last week.
The country’s exports have become increasingly uncompetitive against regional challengers since early June, when the dollar hit a low of about K750. The exchange rate recovered to about K800 in late June but has slumped again in the last fortnight, with $1 changing hands on July 26 for K785.
Exporters say they had no choice but to layoff temporary workers to cut their wage bills.
“Most export-oriented factories have come to a standstill since the dollar weakened in early June,” said one electronics factory owner at Hlaing Tharyar Industrial Zone.
“The standstill has been caused by a decline in orders and because of the rains,” he said. Cold storage facilities for the fisheries sector, as well as timber and clothing factories have also been hit by layoffs, while others have reduced production, said an official from Myanmar Fisheries Federation.
“Cold storage factories have not halted work but they have cut back their workforces, keeping only their skilled employees,” he said.
U Win Kyaing, general secretary of the Myanmar Fisheries Federation, said exports in the 2011-12 financial year, which started on April 1, are about US$25 million below the same point last year.
“This does not mean demand is down – that has stayed the same – but businesses cannot afford to export when the exchange rate is as low as it has been since early June,” he said.
Ministry of Commerce figures show that exports have nearly recovered to the $561-million high reached in the 2007-08 year. In 2008-09 fisheries exports amounted to $483 million, improving to nearly $497 million in 2009-10 and $556 million in 2010-11.
U Myint Soe, chairman of the Myanmar Garment Manufacturers Association, agreed that it was a difficult climate for exporters to work in and exporters were seeking new markets for their products.
“Manufacturers are still holding onto their workers – most of whom are women – if they can because if the factories stop, what will the employees do to feed their families?” he said.
Clothing exports earned $489 million during the 2010 calendar year, U Myint Soe said, adding that export earnings for the start of the fiscal year would probably be higher than last year’s but the weakness of the dollar meant exporters were making considerably less profit.
U Myat Thin Aung, chairman of the Hlaing Tharyar Industrial Zone, said the poor export environment meant factory owners had to make tough decisions regarding their employees.
“We trained all of our workers and have a skilled workforce. We have to do whatever we can to hold onto those workers even though it’s not a good time for us now. But we’re cutting our unskilled temporary workers,” he said.
He added that the minimum monthly wage for industrial zone workers was K40,000 for 8-hour days, with extra wages paid for overtime. However, with the reduction in orders overtime work has been rare.
Hlaing Tharyar Industrial Zone is the biggest in the nation and includes about 500 factories that employ up to 40,000 workers, said U Myat Thin Aung. – Translated by Zar Zar Soe-mmtimes
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