Foreign investor interest in Myanmar’s garment manufacturing sector is still strong despite a fall in the volume of garment exports in fiscal 2019-20, according to the government. Of the 178 foreign enterprises endorsed by the Myanmar Investment Commission (MIC) and permitted to invest in Myanmar between October 1 last year and May 31 this year, more than three quarters channelled capital into the manufacturing sector, according to the Directorate of Investment and Company Administration (DICA).

The new investors include garment manufacturers. The MIC will prioritise investments in garment manufacturing going forward as these are labour intensive industries likely to create a large number of jobs, DICA director general U Thant Sin Lwin told state-controlled media recently.

Manufacturers that are able to produce face masks and other personal protective equipment related to COVID-19 will also be given priority. Enquiries from investors are still flowing in even though garment exports fell to a mere $2.7 billion between October 1, 2019, and May 31, 2020, representing a $24 million decline from the same period a year before due to order cancellations from the European Union, according to U Khin Maung Lwin, assistant secretary in the ministry of commerce.

This has also led to a rising number of disputes between employers and their employees as factories are forced to lay off or close. The industry hires up to 700,000 predominantly female workers across 600 factories, according to data provided by the EU. Disruptions to the Myanmar garment sector first started in February, when raw material imports from China became sporadic as a result of COVID-19 closures and lockdowns. “We are hearing news of orders that were previously cancelled being revived again. There is also some export revenue coming from the Myanmar-Thai border, where garment businesses in Myawaddy have exported around $71 million worth of products to Thailand,” Maung Lwin said.