Gap will soon be making clothes in Myanmar, the Wall Street Journal reported, becoming the first major US retailer to set up shop in the former pariah state.
Jackets and other outerwear manufactured in Myanmar will beginning hitting Old Navy and Banana Republic stores this summer. The clothes will be made in factories owned by a South Korean firm that the US retailer would not name to protect itself from competition. Myanmar, formerly Burma, was completely isolated until it transitioned to a kind of democracy in 2011 and pushed through reforms, leading to international sanctions being lifted. Myanmar’s garment industry accounted for more than a third of its exports before the US trade embargo in 2003, the Journal said, so the Gap deal could lead to a revival of “Made in Myanmar” products in US and European shops.
Last year, Myanmar’s foreign minister visited in New York and urged US companies to “join the gold rush” as the formerly reclusive kingdom opens up to the world. But US companies aren’t quite there yet; the Journal said that US direct investment in the country was only 1%, or $244 million, of the overall foreign direct investment in the country so far, compared to China’s 30% or $14 billion.
Despite the lifting of sanctions, some democracy advocates still advise a total boycott of the country because of the deep links between former members of the military junta and the private sector. Recent controversies, such as those over Sodastream’s factory in an Israeli settlement in the occupied Palestinian territories and the Rana Plaza factory collapse in Bangladesh, have shone a brighter spotlight on the true costs of consumer goods. Gap is likely more than aware of the risks: The retailer told the Journal that workers at its factories in Myanmar are paid an estimated average of $110 a month—with supervisors earning as much as $1,000—which is four times the average Myanmar garment worker’s salary.