Myanmar’s Work Hopes Still Up in the Air
By Reform, Simon Roughneen 25 November 2013
PANTANAW/YANGON — U Than Zaw shook his head as he stared across the waterlogged fields. “Over there, that’s where my land is,” he said, swinging a tattooed arm out through the bamboo frame of a waterside hut.
We were standing just off the road linking Yangon, Myanmar’s heaving commercial capital, with Pantanaw, a flood-prone farming township in Ayeyarwady Region, famous as the birthplace of former UN Secretary General U Thant.
In 2002, an army officer commandeered 60 acres of land belonging to U Than Zaw and several other local farmers—one of thousands of land-grab cases that have come to light since Myanmar’s glasnost began in 2011.
U Than Zaw has written to officials about the stolen land, but to no avail. He’s afraid to protest without a permit as three of the other dispossessed locals are in jail for doing just that.
He received the six-acre plot in 1995, but seven years later learned the hard way that that which gives can just as easily take away, and with little or no redress. U Than Zaw was handed a take-it-or-leave-it 6,500 kyats (US$7) per acre for his land by the acquisitive army man.
From being a relatively prosperous smallholder in the 1990s, U Than Zaw has been reduced to planting a single acre of betel-nut trees. “Only enough to pay for food,” he said, lamenting that he cannot afford to send all three of his children to school. Asked his thoughts about Myanmar’s reforms and whether the country’s embryonic opening-up can bring jobs and economic opportunity, he sneered. “We don’t see much change in these places,” he said.
Change on the ground for Myanmar’s rural population is not just a matter of justice, but also something that will determine the country’s ability to provide work for millions of its people. The country’s unemployment rate is a hefty 37 percent, according to research by a parliamentary committee published earlier this year.
Of the 63 percent that are employed, an estimated 52 percent are working in agriculture. The overall number of Myanmar’s farm workers—15 million or so—is likely to remain more or less unchanged even if the country’s economy lifts off over the coming two decades, according to a detailed report on Myanmar published by the McKinsey Global Institute in June.
On his old farm, U Than Zaw grew matpe, one of several bean and pulse varieties grown by around 10 million farmers in Myanmar, mostly for export to India, according to the main Myanmar beans and pulses exchange in Yangon. Along with rice, such cash crops are a mainstay of the rural economy, and could be far more productive—and possibly provide more work—if they had more backing. “We would like to see some financial support from the government, and from the donor countries, especially for seed purchase,” U Myint Oo, an executive committee member of the beans exchange, told The Irrawaddy.
But growth along the lines projected by McKinsey—a quadrupling of Myanmar’s economy by 2030—will mean other sectors of the economy rising relative to agriculture, potentially producing millions of manufacturing and services jobs.
Already there are some new jobs being created, though precise overall figures are hard to come by. U Aung Naing Oo, head of Myanmar’s Directorate of Investment and Company Administration, said in September that 20,000 new jobs in garment-making had been created since April, seemingly basing his numbers on the establishment of 20 new factories that should, he contended, see around 1,000 jobs created in each.
According to Heang Chhor, a senior partner at McKinsey & Company and one of the authors of the McKinsey Global report, the latest data on foreign investment in Myanmar is a step in the right direction. “Much of the investment has been concentrated in the manufacturing sector, whereas in the past, it was primarily directed toward the energy sector,” he told The Irrawaddy.
Other observers have noted that businesspeople, especially in Yangon, are upbeat about the prospects for an economic takeoff and are acting accordingly. “People are investing in their businesses and buying new machines. There is a sense of overall optimism that is spurring some new hiring and new spending,” said Yangon-based economist Jared Bissinger.
Indeed, manufacturing is likely to be the main locus of new jobs in Myanmar in the near future, with investors attracted by low wages, but also hindered by Myanmar’s gutted education system, which means a dearth of skilled and trained workers. As a consequence, “it is natural that the garment industry, which requires lower skilled labor and is less capital intensive, is one of the first to benefit from [foreign direct investment],” said Heang Chhor.
In recent decades, rural villages such as Pantanaw have been emptied of their youth, many of whom have gone to Thailand and Malaysia in search of manual jobs, and to Singapore, where the small number of educated and skilled Myanmar nationals are drawn.
If low-skill manufacturing jobs come about in big numbers, it could mean a slowdown in the emigration of millions of young Myanmar citizens, particularly women, who could find garment jobs in Yangon or in one of the proposed new special economic zones such as Thilawa, where Japanese manufacturers hope for an infrastructure-laden oasis—a refuge from the power shortages and slow Internet speeds elsewhere in Myanmar.
But even if low-wage, low-skill farming or manufacturing jobs come to Myanmar, the exodus of workers is not likely to reverse direction anytime soon. Eva Daw Moe Thi Da, the manager of Golden Dragon, a Myanmar-oriented recruitment agency based in Singapore, said that despite many of her city state-based compatriots expressing a yen to go home, repatriation just isn’t happening yet. “I do not see many going back to Myanmar to find jobs. We do not have any other choice for the time being,” she told The Irrawaddy.
Myanmar’s brain drain means a shortage of educated workers and makes hiring a challenge. ACE Insurance, one of the world’s leading companies in the sector, opened an office in Yangon in May. That move came on the back of new licenses being granted after four decades of just one state-owned insurance provider in Myanmar. This history means that “there is not a lot of insurance experience and expertise in the market,” as an ACE spokesperson told The Irrawaddy.
But ACE believes that Myanmar’s reforms and a young population “make Myanmar a very attractive market for the future.” And reviving Myanmar’s education system should mean, in time, more people with more opportunities to find better-paying, less labor-intensive jobs, and in turn will enable Myanmar to attract higher-tier investment than is the case at present, or is likely to be the case for the foreseeable future.
Khin Sanda Hal Myint, a business student at Myanmar Imperial College, a private school in Yangon, said that there is a sense that her generation will have more opportunities than those who came before as Myanmar’s economy opens up. But she’s aware that such breaks might not come to everyone, unless Myanmar’s education system is reformed. “I have a lot of opportunities and a better chance than the majority,” she told The Irrawaddy.
In response to the country’s immediate needs, opposition leader Daw Aung San SuuKyi has called for more vocational training as a practical way to make Myanmar’s younger generation more employable and to provide local and foreign businesses with the personnel they need.
It seems the government agrees that this emphasis on hands-on training is the way to go, at least for now. U Chan Nyein, the chairman of the Lower House (Pyithyu Hluttaw) Education Upgrading Committee, said the forthcoming draft national education law will be down to earth. “It will feature formal, non-formal and informal education, and we will emphasize vocational training,” he told The Irrawaddy.
In the meantime, several other new laws have been passed that, along with the revision of older codes, could lay the bedrock for some economic growth and, in turn, some job creation. A case in point is the 2012 foreign investment law and associated rules that have paved the way for the jump in garment sector investment, though this uptick has also been prompted by an easing of Western sanctions. Minus sanctions, Myanmar’s low wages mean that garment makers can set up shop now to sell to buyers in Europe and North America. “New export markets are opening and buyers are coming looking for new orders,” said Mr. Bissinger, the economist. And new orders, he added, mean more jobs.
But there is only so much that lawmaking can do to kick-start the economy and in turn boost employment. Widespread job creation in Myanmar, in other words, is contingent on modernization of its wider economy.
Ong Chao Choon, the managing director for Myanmar of PricewaterhouseCoopers, the London-based multinational professional services firm, has warned that little economic development will take place in the country unless it improves its electricity supply—which most estimates gauge as reaching no more than a quarter of the population—and its banking system. “Bank lending is expensive [at 12 percent interest per annum] and the banks currently do not have the balance sheets or the banking products to support the economic and infrastructure growth,” he said.
Addressing such infrastructure time warps would do much more for business—and hence job creation—than any leg up offered by new legislation, says Lex Rieffel, a non-resident senior fellow at the Brookings Institution. “If the government could provide these to the private sector, the government could just sit back and watch the economy grow,” said Mr. Rieffel, author of several reports on Myanmar.
Back in Pantanaw, Daw Tin Hlaing said something similar. Unlike U Than Zaw, her land was not confiscated and she still grows matpe. She said, however, that her scope for increasing her yield—which could mean hiring additional farm help—is curtailed by factors outside her control. “We have no access to the bank for finance, so we cannot buy better seeds or some machinery, and the roads are so bad it costs too much to hire a truck to bring beans to Yangon,” she said.
This story was first published in the November 2013 print edition of The Irrawaddy magazine.