The Dark Side of Burma’s Economic Boom

BY DAVID BAULK

JULY 6, 2015 - 5:02 PM 

Yes, Burma's economy is growing — off the backs of the country's impoverished workers. 

In February of this year, Naing Htay Lwin and Myo Min Min werearrested and charged for protesting without permission — a violation of Burma’s infamous “Peaceful Assembly Law.” They have spent the last six months in prison for demanding a pay rise of $1 a day for workers who make an average of 43 cents an hour. As union leaders working in the garment manufacturing sector of rapidly liberalizing Burma, they pose a serious threat to the government’s plan for economic growth. They are also singularly vulnerable to the spectrum of human rights abuses facing workers across Burma today.

Dozens found guilty of violating the Peaceful Assembly Law in the name of workers’ rights have been detained or imprisoned in recent months, adding to the ranks of the country’s political prisoners. President Thein Sein used his May Day address to admonish protesters for hurting national output, linking walkouts and strikes to the decline in income from garment exports in 2014. The message was clear: 

Burma’s laborers exist to provide the fuel for the country’s growth, not to benefit from it.

Burma’s laborers exist to provide the fuel for the country’s growth, not to benefit from it.

For decades, small-scale agriculture provided the primary means of subsistence for the country’s people. Coupled with the absence of a coherent industrial policy and pervasive crony capitalism, Burma consistently bottomed out on various poverty and human development indices. When it launched economic reforms in 2011, there was little debate that liberalization signaled a brighter future for the long isolated economy and its people. Four years later, the government can point to sustained GDP growth — a rate that is forecasted to continue at 8.3 percent in 2015.

Thein Sein’s administration will undoubtedly cite this as positive evidence of its prudent economic reforms. Besides improving Burma’s standing in the global economy, though, the reforms have also driven displacement, human rights abuses, and social unrest that have called the country’s democratic transition into question. The country’s agricultural laborers, which make up an estimated 53 percent of Burma’s roughly 54 million people, have been hit especially hard. 

“Our country’s transition looks less rosy from a factory floor,” one labor rights activist told me.

“Our country’s transition looks less rosy from a factory floor,” one labor rights activist told me.

Some argue that the government’s attempts to modernize Burma’s economy have done far more to threaten people’s livelihoods than to secure them. More specifically, as the government has overhauled the foundations of the country’s agricultural economy, it has not created opportunities for the laborers now seeking work elsewhere. Jobs available in the domestic labor market cannot provide a living wage or basic social security, not least because the majority of people live in the unregulated — and often exploitative — informal economy.

Contrary to the rhetoric surrounding the country’s flagship development projects (such as the Thilawa and Dawei Special Economic Zones), the future for labor in these areas looks more precarious than ever. “Whole communities are being left without the means to subsist,” Soe Soe Nwe, joint general secretary of the community-based organization Women’s League of Burma, says of Dawei. “Most of these people don’t have high quality education or transferable skills.” Those forced to search for different work are sober about their prospects, she says. “Most people don’t expect to have a better life in the future. They know the government and investors don’t care what happens to them.”

The tensions in Burma’s move to modernize its economy are, to some extent, inevitable. The government has justifiably noted that developing Burma’s manufacturing base is crucial to its long-term prosperity. And it has been candid about its desire to pursue an export-oriented industrialization strategy, as stated in its ambitious Framework for Economic and Social Reforms, published in 2012. The administration’s defenders argue that improving the general welfare of the population must begin with earning the foreign reserves to allow for increased expenditure on basic services. Following the example of its neighbors, the government has been working hard to create low-skill, labor-intensive jobs — especially in the garment sector. As costs of production have increased in China, and as regulators have intensified scrutiny of labor conditions in countries like Bangladesh and Cambodia, 

Burma has emerged as the next bright hope for businesses looking to employ flexible labor on low wages.

Burma has emerged as the next bright hope for businesses looking to employ flexible labor on low wages.

Employment standards for workers, however, continueto languish. Despite the passage of a Minimum Wage Law in 2013, the National Minimum Wage Committee has been unable to broker a deal between employers and workers, leaving the latter without any guaranteed minimum for a day’s work. The current proposal — rejected by labor activists and workers alike — would seelaborers paid $3.24 for an eight hour day. Many activists see the Minimum Wage Law — alongside other efforts to by the government to improve standards for workers — as emblematic of the key tension in Burma’s reform process: the government is doing just enough to placate the international community and galvanize foreign investment without substantively improving its people’s human rights.

Potential for abuse is rife. “There will be those who take advantage of the new openness and use a window of opportunity to profit from the absence of fully developed law and accountability,” said Steve Marshall, of the United Nations’ International Labor Organization in Burma. “Conditions in factories — particularly those producing garments — are often very exploitative,” says Mar Mar Oo, a prominent labor rights activist and member of the pro-democracy 88 Generation movement. Even with reformed labor laws, she says, “factory owners across the country still undermine unions and target their leaders to keep them from getting too strong. It is not yet in employers’ interests for workers to organize effectively, particularly if it hurts their profits in the short term.”

While international governments, development agencies, and businesses have been at the vanguard of promoting socially responsible investment, they have not put enough pressure on the government of Burma to improve standards. Civil society organizations point to several development projectsas evidence of the international community’s desire to invest trumping concerns over human rights abuses. The spoils of trade agreements like theEU-Burma Bilateral Investment Treaty currently being negotiated are far more likely, they argue, to benefit the bottom lines of international investors than the country’s workforce. As tensions between an emboldened government and civil society mount, the repression of those demanding basic standards in the workplace seems likely to worsen.

Behind the headlines and impressive growth percentages, Burma’s unskilled workforce faces an uncertain future.

Behind the headlines and impressive growth percentages, Burma’s unskilled workforce faces an uncertain future. No longer able to rely on small-scale agriculture to provide for their families, laborers are fighting for jobs in the country’s modernizing economy — one characterized by poverty wages, grueling hours, and unsafe working conditions. As the government continues to ignite foreign investment and deliver on its economic potential, and the international community welcomes another producer and consumer of goods to the global economy, Burma’s growth is cause for celebration. But perhaps not for the people fueling it.

In the photo, a child carries water through a brick factory in Rangoon.