As Burma (Myanmar) opens up to the world, businesses that want to reap the benefits are expected to play by the rules, judged under an international spotlight. In a society changing as quickly and drastically as Burma, however, simply playing by the rules may not be enough.
The emergence of mass business is likely to have unintended negative consequences. Predicting these consequences based on the lessons of other developing countries, and addressing them within the companies themselves, may be the best way to mitigate any collateral damage.
According to a recent McKinsey and Co. report report, manufacturing has the potential to be Burma’s largest sector by 2030, overtaking agriculture, energy and mining. The Wall Street Journal recently reportedthat Coca Cola and Unilever will invest a total of nearly $1b in Burma over the next decade, making the biggest commitments by western multinational corporations and becoming the first prominent global companies to restart manufacturing in the country.
Many other industries, from textiles to furniture to automobiles, will soon take advantage of and contribute to Burma’s growing infrastructure. Already this year, the country’s garment exports have seen a record$300m in earnings in the first quarter, and its investment commissionrecently granted permission for additional foreign garment companies to set up operations in various industrial zones.
The development of responsible manufacturing in Burma will provide a critical boom in employment in a country desperate for jobs.
Yet as manufacturing increases, societal and cultural shifts are likely to occur. Burma has remained predominantly agricultural while globalisation has occurred just outside its borders. Over the next few years, Burma is likely to see mass migration from the rural areas into the cities and industrial zones. Many of these migrant workers will be young people leaving their homes for the first time, and many will be doing so alone.
As has been seen in countries such as China and Sri Lanka, such rapid demographic change can have a significant impact on the cultural fabric. To be truly responsible, companies will need to take into account the potentially profound social implications for their employees.
In Sri Lanka, Mas holdings has done exactly that, with positive results for both its employees and its bottom line. Mas, an apparel company that prides itself on its reputation as an ethical source for partners like Gap, Nike and Victoria’s Secret, noted that women constitute 80% of the labour force in the Sri Lankan garment industry. In fact, between garment workers and domestic workers, women are Sri Lanka’s biggest earners and significant contributors to the nation’s GDP.
Industrial zones in the capital Colombo caused mass migration of young rural women away from their villages and into the city, leading to a new derogatory stereotype called ‘juku girls’ that reflected on the industry as a whole. In response, Mas decided to build garment factories in rural communities, at an additional cost, so women would be able to stay near their families. Mas also created its esteemed women go beyond initiative, which attempts to helps women think beyond their job and develop a greater sense of pride and self-esteem, while addressing issues such as work/life balance and stress management.
The programme has resulted in higher retention and worker productivity, as well as improved relations with strategic partners and numerous awards from the international community. Significantly, Mas’s reputation, aided by Women go beyond and other internal initiatives, has given it a competitive edge to counter its inability to produce at the volume of many Chinese or Bangladeshi factories.
In addition to using internal resources to support employees, manufacturing companies in Burma can also use partnerships to make life easier for migrants. Microsoft’s Sri Lankan office, for instance,provides migrant workers with training on Skype and other programmes so that they can stay in communication with their families. In the public sector, resources, such as those provided by the International Organisation for Migration, can be used to help determine employee issues and create effective corporate responses.
In the end, of course, context is critical; what works in Sri Lanka or China or Thailand may not necessarily work in Burma. Yet companies wishing to engage in manufacturing in Burma need to be aware of the bigger picture. Although it may not be economically or logistically feasible for all companies to develop plants in rural communities, the burdens placed on migrant employees can be alleviated – and Burma’s overall human capital improved – through studied and strategic corporate responsibility initiatives.
If done well, the positive impacts can have substantial impacts on companies’ reputation and bottom line. With the speed at which Burma is advancing, however, the time to develop and integrate such initiatives is rapidly approaching.-GURDIAN