'All my dreams are shattered': COVID-19 crushes Asia’s garment industry

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

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

"If I have a job and an income, I could 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 as a result of coronavirus. The business 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, didn't react to requests for comment.

Since the 1960s, Asia is continuing to grow in to the world's garment factory, sending about US$670 billion worth of clothes, shoes and bags a year to Europe, america and richer Parts of asia, in line with the International Labour Organization, a US agency.

After non-essential stores were closed in lots of countries and persons were told to remain at home to prevent further spread of the condition, international retailers from ASOS to New Look said they cancelled orders with garment makers. 

Factory owners in Myanmar, Bangladesh and Cambodia immediately shut down a large number of factories and sent home staff with little or no pay.

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

To complete pending orders, about 50 % of Bangladesh’s 4,000 garment factories have reopened, according to garment manufacturer associations. About 150 of Myanmar’s 600 roughly factories have turn off, while 200 out of 600 roughly are closed in Cambodia.

Mg More, President of the Myan Mode garment factory union, talks about a contract in front of his hostel, within an industrial zone on the outskirts of Yangon, Myanmar on Apr 24, 2020. (Photo: Reuters/Myat Thu Kyaw)

Many factories that contain 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 a large number of garment workers have been infected with the virus. 

“Just positioning hand-washing systems and checking temperatures at the entrances won't help. In the factories, when the personnel work so closely, how will they maintain safe distancing?”

Some orders have already been trickling back. Swedish fashion retailer H&M said it only paused orders for 14 days at the height of the virus outbreak. US-based Walmart, the world’s largest retailer, said it located new orders with Asian manufacturers last month.

Despite the new orders, several garment manufacturers said the reduced volume of focus on the books means many factories in Myanmar, Bangladesh, and Cambodia will not be viable, which means many of the young women who constitute a lot of the workforce won't have jobs. 

That leaves them torn between time for 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 generated a wage fund for workers in Myanmar worth 5 million euros (US$5.3 million) to pay a portion of the salaries of the very most vulnerable for 90 days. 

Myanmar has promised to cover 40 % of the salaries of let go workers. A lot more than 58,000 have been laid off, based on the country’s garment manufacturer association.

In Bangladesh, one million staff were furloughed or let go by late March, based on the Penn State Center for Global Workers’ Rights, even though some have since returned to work. 

About 75,000 have not been paid for March, in line with the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), which estimates thousands more will not be paid wages owed to them.

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

In Cambodia, where about 60,000 garment personnel have already been “suspended,” in line with the country’s manufacturer association, workers have been promised US$70 monthly - US$40 from the federal government and US$30 from the employer - but that amounts to just over a third of the existing minimum wage.

For the reason that country’s capital, Phnom Penh, 39-year-old Rom Phary said she and her husband had racked up US$550 of debt and interest since she lost her factory job in early March, many times her monthly salary. 

She said she and her family are living off rice donated by an NGO, the guts for Alliance of Labor and Human Rights, which is working in Cambodia. 

Phary said she persuaded her landlord to let her stay rent-free instead of forcing the family to come back to relatives in the provinces.

“If we return back, it could be shameful. We don’t really 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 a getaway route from extreme poverty for hundreds of thousands of people, many of them migrants from rural areas.

In Dagon Seikkan, an professional zone on the outskirts of Yangon that's home for many migrant workers, local officials have already been giving out rations of free rice to those people who have been without jobs for quite a while. But Zarchi Lwin said she didn't qualify as she was employed until recently.

Zarchi Lwin foretells reporters in her hostel within an professional zone on the outskirts of Yangon, Myanmar on April 28, 2020. (Photo: Reuters/Myat Thu Kyaw)

She and her parents left their small village in the central Magwe region six years back after selling their house to pay for treatment on her behalf brother, who eventually died from kidney disease. Initially, they worked as cleaners and lived in a dormitory. 

Then Zarchi Lwin trained herself to sew clothes and secured a sought-after job at among the near by factories, earning US$146 per month: enough for food, rent of a tiny wooden shack, and treatment. She saved up for a year to get the bangles she pawned, she said.

Sobbing, she recounted how her mother told her she really wants to die as a way to lessen the financial burden on the family. “Sometimes I would like to kill myself as a result of this example,” she said. Her father, a guard at a furniture factory, in addition has lost his income.

Prior to the new coronavirus, garment employees in Yangon and the neighbouring province of Bago were sending more than 40 million euros (US$43 million) in remittances with their hometowns and villages in the united states every month, said Jacob Clere of SMART Textile and Garments, a European Union-funded project.

“Education for children who would otherwise not need it. Medicine for grandmothers who otherwise go without. Healthy food. Better shelter,” said Clere, describing how that money helped rural communities. Most are now at risk of being forced into early marriage or dealing with 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 personnel or 2.5 % of the population worked in garment factories, a lot of which are actually closed. 

About 70 % of Dhaka’s garment industry personnel left the city to come back to their villages, said Tuomo Poutiainen of the International Labour Organization, although he said some have since returned after some factories reopened to complete work on existing contracts.

Orders for June are down 45 % from this past year, 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 understand they are starving,” she said.

Inditex, who owns Zara, told Reuters it'll pay for orders from garment makers, whether finished or in production, based on the original payment schedule.

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