Burma is poised to step into a special, advantageous trade arrangement with the European Union, and to see an end to the US import ban. Last week, the European Commission adopted a proposal to bring the country back under the so-called 'Everything But Arms' preferential trade agreement, which grants duty-free and quota-free access to the European market for all products except for arms and ammunition. The United States government is poised to reward Burma by removing all import sanctions.
Bangladesh received the same benefits years ago, and saw its garment industry exports skyrocket. Over the past decade, Bangladesh lifted itself out of ‘basket case’ status thanks to these trade benefits from both the United States and European Union. Over three million jobs were created in the ready-made garment sector, employing young women who migrate to Dhaka from throughout the country to take these low-wage jobs. They sew clothing for global brands: H&M, Zara, Tommy Hilfiger, Adidas, Nike, JC Penney, Wal-Mart, Target, Gap, Levi Strauss and others. Bangladesh’s industrialists in this sector are perfectly aware that their single big competitive advantage is an unlimited supply of cheap labor. They are also perfectly aware of where the jobs are coming from: China, where wage rates have risen in recent years.
Burma now wants in on the act. Nobel Peace Laureate Aung San Suu Kyi, in a much-publicized speech to the World Economic Forum in June, made a point of calling for investment in jobs. “I’m extremely worried about the high level of unemployment in my country, particularly youth unemployment. That’s a time bomb,” she told reporters. We would hope she does not have sweatshop jobs in mind for Burma’s youth. This is a lose-lose scenario for both countries’ working people, but a real boon for investors seeking cheap labor – a classic ‘race to the bottom’ scenario.
The US government, struggling to make the case for continued investment in Bangladesh, has been pushing the Bangladesh government to accept a labor monitoring program, run by the International Labour Organization. The US Department of Labor will have to make a decision regarding this program shortly. The decision may be made for them, however, if the White House decides to grant Burma new access to the US market. Just as market access pulled jobs from China to lower-wage Bangladesh, so, too, may Burma succeed in pulling jobs from Bangladesh- and ironically, at just the time our government is seeking to persuade Bangladesh it is worth investing in better conditions for workers.
Bangladesh has lots of people but not enough land or natural resources, is plagued by regular natural disasters, and is losing its overcrowded land to rising coastal waters, to boot. Bangladesh’s garment manufacturers are perfectly aware that the reason the global apparel brands have stayed so long is that they can’t afford to turn down the unlimited supply of cheap labor. Given new competition with Burma, what incentive can they possibly have to give away this advantage?
Why are the EU and US now showering Burma with rewards? Human rights organizations agree that while some changes have taken place in Burma, most notably the release of political prisoners, many human rights abuses, including endemic forced labor, go unaddressed. To be sure, Aung San Suu Kyi is now an elected official and is touring the world talking to governments about the need to ‘suspend’ sanctions. But all is not yet well.
Even compared to Bangladesh, the investment climate in Burma is horrific and characterized by rampant meddling by the military in all sectors of the economy and continued mass atrocities in the resource-rich ethnic regions. Fully a third of Burma’s population- 20 million people- live in the ethnic minority states, and while cease-fire negotiations with the Burmese government have begun, they are far from concluding. In some states, such as Kachin, there is ongoing violent conflict with the Burmese military. And while we point out Bangladesh’s appalling refusal to accept Rohingya refugees the reason they are fleeing in the first place is that the Burmese government has been allowing pogroms to take place in Arakan State (also, not coincidentally, a resource-rich area), has denied the Rohingya citizenship and indeed Burma’s President Thein Sein is saying they all should be resettled in third countries.
Unlike the young women of Bangladesh, Burma’s young people may have options outside of subsistence farming or migration to the capital, IF these problems were managed. Burma is a land and resource-rich country. Managed properly, its resource-rich economy could sustain a diverse array of employment options in sectors ranging from financial services to commodity processing.
Both countries desperately need legitimate governments and legal systems to protect citizens against human rights abuses; both need transparency and accountability to end the profiteering and corruption by government and military officials and cronies. Current policy will not do this for either country. Burma will just learn that it can get a lot for giving very little, and Bangladesh will look next door and conclude that it may pay to let abuses grow even worse.
Bama Athreya is the executive director of United to End Genocide and an advisor to the International Labor Rights Forum.