Monday, September 25, 2017

No factory closures at Hlaing Tharyar yet: zone president

Factories might not be closing at Hlaing Tharyar Industrial Zone but at least one clothing factory elsewhere in the city has: The Lin Htet clothing factory in Thingangyun township shut down at the end of July, with about 400 workers laid off. The factory’s owner tried to give workers payouts well below what they were due. However, the workers successfully appealed to the Yangon Region Ministry of Labor for assistance, which eventually negotiated payouts ranging from K30,000 to K200,000 – worth between one and five months’ salary. In this photo, workers collect their payouts on August 3. Aye Zaw Myo / The Myanmar TimesFactories might not be closing at Hlaing Tharyar Industrial Zone but at least one clothing factory elsewhere in the city has: The Lin Htet clothing factory in Thingangyun township shut down at the end of July, with about 400 workers laid off. The factory’s owner tried to give workers payouts well below what they were due. However, the workers successfully appealed to the Yangon Region Ministry of Labor for assistance, which eventually negotiated payouts ranging from K30,000 to K200,000 – worth between one and five months’ salary. In this photo, workers collect their payouts on August 3. Aye Zaw Myo / The Myanmar Times

Export factories in Yangon’s biggest industrial zone at Hlaing Tharyar continue to face problems caused by the low exchange rate for US dollars but are doing all they can to keep operating, the president of the zone’s management committee said last week.

U Myat Thin Aung said factory owners are doing what they can to maintain their workforces, adding that no factories at the industrial zone had shut down. But factory owners were paying workers only basic salaries, with no overtime.

“If factories shut down, they must report to the government and pay damages to workers but I haven’t heard of any closures here yet,” he said.

According to figures provided by the zone’s management committee, there are 43,354 workers at the zone, including 13,631 men and 29,723 women, with no reductions in the past few months.
U Win Kyaing, general secretary of the Myanmar Fisheries Federation, said fisheries factories at the Hlaing Tharyar and Shwe Lin Pan industrial zones have continued to operate, even though exports have declined.

“No fisheries factories have shut down yet,” he said.

Last week, the market exchange rate for the US dollar hovered around the K740 mark, with export credits.

In the first week of September the US dollar exchange rate reached K755 and the value of export credits was about K780.
In the past month the government has reduced export taxes on a number of important exports – including beans and pulses, fisheries, furniture and garments – from 10 percent to 2pc.

But the falling dollar has virtually wiped out any benefit from those tax reductions, exporters say. 
“If the rate keeps going down, all businesses will face serious problems and the government should start doing something about this now,” U Win Kyaing said.

An International Monetary Fund (IMF) official told The Myanmar Times in mid-August that the organisation was sending a team to advise the government on exchange rate unification in October.

“We have received a request from the authorities to help them prepare to modernise their exchange rate system and lift restrictions on the making of payments and transfers for current international transactions,” said the IMF spokesperson, Gita Bhatt.

Dr Aung Thein, the managing director of the Nibban electronics factory at Hlaing Tharyar industrial zone, said a higher dollar exchange rate was the only way to solve the problems facing the industry.

“If the exchange rate rises the market will fix itself. If not, factories will be shut down,” he said.

According to the Hlaing Tharyar industrial zone’s management committee, there are 45 garment factories at the zone, less than half the 95 located within the zone in the heyday of 2003 before the West imposed economic sanctions.

“Although the government has reduced export taxes to 2pc, garment factories are still suffering,” U Myat Thin Aung said.
Businesspeople, economists and politicians have all suggested that the government could begin buying dollars from the market to reduce the available supply, eventually increasing its exchange value.

“The dollar’s exchange rate must be at least K900,” said one Yangon-based businessman.

U Soe Thein, Deputy Ministry for Industry 2 said during a press conference in Nay Pyi Taw on August 28 that the government is working to set an exchange rate for the dollar that will benefit everybody.