Apparel Sourcing Intelligence - Worldwide

Japanese government subsidies for Burmese clothes factories?

In the West, Japan’s offer of subsidies to Burmese clothing factories would be shocking.

Few Japanese, of course, see things quite the same way. Few see this as support to a brutal military dictatorship – and most Japanese businesses assume as a matter of course they need to diversify away from their dependence on China, which accounts for around 92% of Japanese clothing imports. Other countries in East Asia are either expensive already (like Taiwan), are getting expensive (like Thailand or Malaysia) or, like Vietnam (see this story or this story) are getting trickier to work in. Or, like Laos, simply don’t have much capacity anyway.

Ethically, of course, the situation is a great deal more complicated than many single-issue campaigners think. South Africa emerged from apartheid in reasonable shape partly because businesses like Shell and BP kept trading there. They developed able black managers and made sure the country’s white population stayed in touch with the climate of opinion outside. Complete isolation of a country – as happens in North Korea, inevitably makes its re-absorption into the world more difficult. And a slightly more affluent Burmese population might well put up a stronger opposition than a totally repressed, impoverished one.

But the case certainly puts the occasional discovery of a retailer’s sub-contract going to a factory with child workers into perspective. Not, of course, that these assertions from Japanese officials need to be taken that seriously. The same official who’s promising subsidies now was telling us at the beginning of the year that “The cost of production and labour is getting higher and higher in China, so Japanese investors are trying to shift their factories into other countries in Asia that will be more cost effective, such as Bangladesh, Myanmar, Cambodia and Vietnam,”

In fact, Japan’s imports of apparel from Burma fell 23% in 2007