Wednesday, January 14, 2009

Burma’s Economy Feeling the Pain


(Irrawaddy News) -Businesses in Burma are struggling to sell a backlog of stock buildup due to the global financial recession, which is undermining trading and the economy, said Khin Maung Nyo, a Rangoon-based economic analyst.

“Even though the financial crisis hasn’t affected the banks in Burma, because the banking system is not integrated with global banks, in trading a lot of businesses have been affected,” he said.

Business people at the wholesale Nyaung Binlay and Mingalar markets said consumers are not buying as much and as a result, manufacturing and commodity sales could decrease as much as 50 percent.

Many business sectors have been letting workers go because of falling orders due to the global financial crisis and lack of local demand.

“We reduced workers’ wages because we cut the normal working hours,” said one business owner in the Hlaing Tharyar industrial zone on the outskirts of Rangoon. “I am not sure how much I can control labor under these market conditions.”

According to statistics from the Ministry of Labor, there are 134,900 registered workers in 18 industrial zones in Rangoon Division. No statistics were available on how many have been laid off.

Burma’s garment industries have faced factory closures since September last year.

“Since the financial crisis, orders for new consignments have been reduced, and we will see a serious impact by the middle of December,” Myint Soe, the chairman of the Myanmar Garment Manufacturers Association, told The China Post on October 15, 2008.

The success of the country’s apparel industry is largely tied to global demand, so a fall in orders will lead to workers being dismissed and the closure of some production facilities, Myint Soe said in the report.

More than 100,000 garment workers have already been laid off at garment factories across the country, according to sources with the Myanmar Garment Manufactures Association.

Meanwhile, the powerful Burmese businessman, Tay Za, told senior officials at his Htoo Trading Company that the global recession has affected his businesses.

Tay Za, a crony of Burma’s junta chief Than Shwe, plays a major role in the Burmese economy. Htoo Trading’s business activities range from logging, tourism, hotels, air transport and construction to technological investment in Yadanabon Cyber City in Mandalay Division.

Htoo Trading, which is one of Burma’s largest timber exporters, has been hit heavily by falling global demand.

Burma businesses associated with tourism declined severely in 2007 and 2008 compared to previous years, following the 2007 September pro-democracy uprising and the 2008 Cyclone Nargis.

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