Due to Covid-19 pandemic, stores in North America and Europe are closed and as a result hundreds of thousands of garment workers in Asia were suspended or laid off. Majority of them are women. This happened as hundreds of factories in the Asian industrial belt have closed as westerns brands canceled orders and shipments worth of billion dollars.
According to the wallStreet Journal reports, Bangladesh, Vietnam and Myanmar are the most affected countries in Asia in recent months, where many workers have returned back to their villages, cut back on food and borrowed money to survive. This is also because these country’s mostly export destinations are the EU and US.
Some giant retailers have filed for bankruptcy protection in recent month among them J.C. Penney Co., Neiman Marcus Group Inc. and J. Crew Group Inc. are noteworthy. Meanwhile, Western companies are expected to get even closer (near shoring) – some of their production has moved to Turkey for the European market, Eastern Europe and North Africa, and Mexico for the North American market.
Unlike the production of cars or smartphones, operating a sewing machine does not require much education or training and low wages meet the demand of the West’s expensive clothing. As a result, garment manufacturing was a key economic engine for these countries with limited infrastructure and low skilled workers.
According to the World Trade Organization, Garments is the main export item for Bangladesh consists 85 percent of total export and employs more than 4 million people. In Cambodia, 75 percent of export are garments, footwear and travel bags and one in five household has at least one garment workers. Vietnam and India are also top exporters.
According to Sheng Lu, Associate Professor of fashion and apparel studies, University of Delaware, the industry accounts for more than half of all manufacturing jobs in Bangladesh and 60 percent in Cambodia, where manufacturing is an important employer, especially for women. Cambodia and Sri Lanka depend on this industry for more than 60 percent of their exports.
He thinks the coronavirus epidemic could cut countries like Bangladesh, Vietnam, Cambodia and India between 4% and 9% of garment sector jobs.
The Asian Development Bank estimates that developing Asia will grow by just 0.1 percent this year, the slowest rate in six decades.
Another study by the World Bank shows that the pandemic could increase the number of extremely poor people –living on less than USD1.90 a day and the number could be in between 71 million to 100 million. This would be the first increase since 1998, about half of the expected new poor would be in South Asia.