coronavirus crushes Asia’s garment industry

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YANGON/DHAKA/BANGKOK (Reuters) – Zarchi Lwin pawned her only two gold bangles for $140 when the owner of the Myanmar factory where she sewed winter coats for British retailer Next Plc shut it down after orders dried up due to the coronavirus.

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

“If I have a job and an income, I can 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 due to the coronavirus. The company 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, did not respond to requests for comment.

Since the 1960s, Asia has grown into the world s garment factory, sending about $670 billion worth of clothes, shoes and bags a year to Europe, the United States and richer Asian countries, according to the International Labour Organization, a United Nations agency.

After non-essential stores were closed in many countries and people were told to stay at home to prevent further spread of the disease, international retailers from ASOS Plc to New Look said they cancelled orders with garment makers. Factory owners in Myanmar, Bangladesh and Cambodia immediately shut down thousands of factories and sent home workers with little or no pay.

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

To finish pending orders, about half of Bangladesh’s 4,000 garment factories have reopened, according to garment manufacturer associations. About 150 of Myanmar’s 600 or so factories have shut down, while 200 out of 600 or so are closed in Cambodia.

Many factories that have 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 dozens of garment workers had been infected with the virus. “Just placing hand-washing systems and checking temperatures at the entrances will not help. Inside the factories, when the workers work so closely, how will they maintain safe distancing?”

Some orders have been trickling back. Swedish fashion retailer H&M said it only paused orders for two weeks at the height of the virus outbreak. U.S.-based Walmart Inc, the world’s largest retailer, said it placed new orders with Asian manufacturers last month.

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