In the last two decades, Myanmar has steadily improved its manufacturing capabilities – mainly in manufacturing garments and textiles.
According to the same 2016 journal article in the Journal of Global South, ‘Myanmar’s clothing exports jumped from [USD] 700 m to [USD] 1.7 billion between 2011 and 2014’.
Overall, a 2017 report by the UK Overseas Development Institute stated, ‘manufacturing alone [went] from less than 10% [of GDP in 1997] to over 20% [in 2017]’.
In terms of the labor force, the labor force is simultaneously cheaper and very capable. The minimum wage for workers stands at approximately USD 95 per month but, surprisingly, 21.3% of the labor force have tertiary education.
However, the main risk associated with relocating production or outsourcing to Myanmar would be the highly unstable political system. It is ranked 22nd on the Fragile States Index. To put this into perspective, Myanmar is in the same category as North Korea (30th) and Pakistan (25th).
Infrastructure is also another major issue, ranking 137th on the Logistics Performance Index.
Ultimately, when it comes to relocating or outsourcing manufacturing to SEA, each economy offers their own opportunities:
Singapore and Malaysia possess highly sophisticated, capital-intensive, and competitive manufacturing sectors.
Vietnam, on the other hand, possesses an incredibly dynamic and exponentially growing manufacturing sector.
Thailand is the go-to destination to relocate automotive manufacturing plants.
Indonesia and the Philippines are two ‘Newly Industrialized Countries’ that can be good destinations for components and electronics manufacturing, respectively.
Myanmar’s sudden spike in garments and textile goods exports should also not be underestimated.
Kusu is here to help you evaluate the pros and cons that each SEA country offers and how they complement your company’s own strengths.