Myanmar has made massive strides as a global apparel sourcing destination. Export revenues have more than doubled in less than three years. The country has some 275 garment factories. However, there are compliance issues around the working conditions and health and safety, including a lack of worker training on handling cleaning chemicals, exposed electrical outlets, missing warning information, and ventilation issues.
At present, Myanmar's garment shipments to the EU enjoy the added benefit of GSP Plus duty-free trade preferences. But besides compliance and ethics, Myanmar also needs to address infrastructure, energy challenges moreover the country’s financial institutions, are still in their infancy. The country needs a lot of training resources to help overcome the knowledge and experience gap it has had as a result of its long isolation.
Other challenges include the country’s tax infrastructure, which incentivises CMP-type production rather than higher margin FOB. The recent move by the Myanmar Garment Manufacturers Association to establish a voluntary code of conduct for its members is seen as a sign of its commitment to becoming a responsible sourcing destination. The code is seen as a key to addressing the health and safety concerns of international retailers and brands who demand socially responsible manufacturing practices from their producers.