The garment industry in Asia, particularly South and East Asia, is one of the largest industries in the region. For example, in 2017, the textile industry was India’s second-largest industry, valued at about $108 billion and accounting for 5% of India’s total GDP. Since the 1960s, Asia has sent $670 billion’s worth of clothes, shoes and bags annually to Europe, the United States and wealthier Asian countries.
The novel coronavirus, however, has brought the global economy to a halt. As demand for clothing has fallen, many retailers have canceled orders from factories, forcing many to shut down. For example, in Cambodia, more than 250 garment factories have suspended operations, putting more than 130,000 workers out of work. Myanmar has seen around 150 of its roughly 600 factories shut down. Despite COVID-19’s effect on the global economy and apparel market, the garment industry could be critical in restarting South and East Asian economies. Here are five reasons why the garment industry will help Asia’s poor recover economically from the COVID-19 pandemic.
5 Reasons Why the Garment Industry Will Help Asia’s Poor
- Asia is the West’s biggest supplier of apparel. The West and other advanced, wealthier Asian economies account for 60% of the Asian garment market. From January to May 2020, more than 80% of U.S. apparel imports, measured by value and quantity, came from Asia. With no other major alternative suppliers, Asia can continue to be the main source of garments for these nations.
- Asian garments are competitive in the global market. The low cost of labor in Asia makes prices competitive, and Asian garment manufacturers are viewed as reliable, flexible and fast to market, all of which are benefits that many other textile producers cannot consistently offer. Additionally, thanks to a highly integrated regional supply chain, garment factories can produce goods using automated technologies from advanced Asian nations, making Asian garments technologically competitive.
- Asia itself is one of the largest garment consumption markets in the world. China is the largest consumer of apparel, with around 40 billion units of apparel sold annually, above India (6 billion) and Japan (3.3 billion). As these economies continue to expand and advance, consumers will experience a rise in purchasing power, which could further increase the demand for garments. The rising trend of products “Made in Asia for Asia,” then, could significantly benefit garment manufacturers.
- Garment-making is a low-skill job. Low-skill jobs create work opportunities for those in poverty, who may not have had access to an education. Many countries in South and Southeast Asia suffer from high poverty rates: from 1990 to 2013, South Asia’s share of the global poor increased from 27.3% to 33.4%, despite the number of impoverished people in South Asia decreasing by 248.8 million. This means that South Asia is falling behind the global pace of eliminating poverty. The garment industry could be a solution to this problem, presenting a unique opportunity for the poor as a low-skill industry with quickly rising demand worldwide.
- The garment industry has lifted Asian citizens out of poverty in the past. For example, in 2016, the Cambodian garment industry provided jobs for 930,000 workers, nearly 79% of whom were female. Prior to the outbreak of COVID-19, the garment industry was the fastest growing industry in Myanmar, accounting for 10% of its exports and providing jobs for hundreds of thousands of workers, many of whom were migrants from rural villages. In 2018, the garment industry employed 1.6 million people in Vietnam, accounting for more than 12% of the country’s workforce. The garment industry is particularly noteworthy for providing jobs to female workers: women’s share of apparel employment is much higher than women’s share in most other industries in nearly every country in South and East Asia.
The COVID-19 pandemic has brought the Asian garment industry to a standstill, with thousands of factories shut down and millions of workers kept from work and a source of income. However, the world’s largest markets still depend on Asia for apparel, and demand will surely increase as the global market recovers. The garment industry could provide jobs to millions in Asia who were pushed into poverty by the COVID-19 pandemic and potentially help to lift them out.
– Harry Yeung