Gap, Inc. the parent company of Old Navy, Gap, Banana Republic, Athleta, and Piperlime is joining other US companies, including Coca-Cola, MasterCard and GE in expanding operations and investments in Myanmar (Burma). Myanmar is viewed, after opening up its economy and political space, as a new lucrative Southeast Asian market, with some investors speculating that it may even be “the new Thailand.” The comparison is being made because of Thailand’s high economic growth, with the Neo-Liberal institution, The World Bank, dubbing Thailand as “one of the great development success stories.”
Gap, which calls itself a “responsible company” is putting a sugary spin on its decision to invest in Myanmar, describing it in moralistic terms as an investment “in the economic and social development of Myanmar,” when in reality it is all about beating the competition and reaping the most profit.
Gap has an abysmal history when it comes to outsourcing,
In 1999, Gap and several other companies were sued in a class action lawsuit in Saipan claiming that workers were subject to unsafe working conditions, forced abortions, and unpaid overtime. Gap eventually settled the lawsuit in 2002 without admitting liability.
In 2006, a Jordanian supplier for Gap, Wal-Mart (NYSE: WMT ) , and other companies was charged with using adult and child employees for up to 109 hours per week. Some workers had been unpaid for up to six months. The following year, BBC broadcast footage of child labor in Gap’s factories in India. Gap denied knowledge of those practices, but nonetheless removed the piece of clothing featured in the report from British stores.
Last April, the collapse of Rana Plaza in Bangladesh — the deadliest garment factory accident in history — claimed 1,129 lives and injured 2,515 people. Many North American retailers had outsourced their apparel from the factory, although Gap was not among those implicated.
Gap and other North American retailers announced a broad plan to improve factory safety in Bangladesh last July, but the plan didn’t legally bind the companies to actually pay for those improvements. By comparison, The Accord on Factory and Building Safety in Bangladesh, an earlier plan introduced in May, legally required the companies to pay for those improvements. Gap’s rivals Abercrombie & Fitch (NYSE: ANF ) , American Eagle Outfitters (NYSE:AEO ) , PVH (NYSE: PVH ) , and H&M all signed that accord, but Gap and several other major U.S. retailers refused.
The announcement by Gap was made in partnership with USAID, the US Ambassador, Derek Mitchell, was also present. The operation is sold as being motivated by humanitarianism, with an emphasis on helping the women of Burma through providing female garment workers with “life skills education and technical training.”
Gap, Inc./USAID: US Ambassador Derek Mitchell speaking
Of course the deep involvement of the US government with corporations is not a reality-shattering phenomenon; it is a familiar gimmick that odiously packages capitalistic motives and goals in a thin veneer of humanitarianism.
This is also enmeshed with President Obama’s proclaimed foreign policy objective of “pivoting towards Asia.” The US doesn’t want to miss out on an emerging market in Southeast Asia, one where China already has beaten the US in terms of economic influence,
Although Gap is the first U.S. retailer to enter Myanmar, other U.S. companies like General Electric, MasterCard, Visa, and Coca-Cola have already made investments in the country. However, U.S. direct investment in Myanmar only accounts for 1% of the country’s overall foreign direct investments (FDI), compared to 30% from China.
Myanmar appears advantageous to the likes of Gap because of the cheap labor force it provides, the cheapest in Southeast Asia,
Myanmar’s low wages — an average of $1,100 per year — are considerably lower than its neighbors in Southeast Asia. Vietnam’s wages are double that of Myanmar, and wages in Thailand are six times as high. Cambodia is Myanmar’s closest competitor, with an average annual wage of $1,424.
Yet in an interview with The Wall Street Journal, Gap stated that its Burmese workers will be paid an average of $110 per month, and supervisors will be paid as much as $1,000 — far exceeding the national average. Gap has also launched education and training programs for Burmese women with the aid of U.S. agencies. Those strategies are clearly aimed at shielding Gap from the controversies that dogged the company in the past.
The reality is that Gap is investing in a country in which human rights are not respected, in which pogroms are common place and where ethnic minorities are denied basic recognition. Just yesterday it was reported that Buddhist mobs have for a second straight night attacked Muslims in the historic city of Mandalay, the violence has left 2 dead and 14 injured.
Two people are dead and 14 injured after Buddhist mobs on motorbikes drove through Burma’s historic city of Mandalay in a second night of attacks on minority Muslims.
The past two years have seen grisly attacks on Muslims and other minorities: Massacres such as Buddhists killing 9 Muslim pilgrims, 36 school children and their teachers butchered in front of local police are common place. Myanmar saw the near complete destruction of the Muslim quarter in the city of Kyaukpyu. Human rights groups have reported on the systematic killing and ethnic cleansing of the Rohingya in Rakhine State, where the Rohingya Muslim population is herded into concentration camps. Mosques, Muslim homes, and orphanages across the country are torched in arson attacks. Numerous internet sites are replete with Islamophobic dehumanization messages about Islam and Muslims spread by the extremist movement ’969.’ Myanmar is where the “symbol of Democracy,” the Noble Peace Prize winning Suu Kyi not only says she won’t speak out for the persecuted Rohingya but denies their existence. Myanmar’s government has given official backing to the violent, extremist 969 movement. Ministers in the Myanmar government have backed discriminatory legislation that would limit Rohingya women to two children. Local officials have severely restricted humanitarian aid to Rohingya concentration camps and the rest of Rakhine State, where tuberculosis, waterborne illnesses and malnutrition are endemic.
These basic facts don’t begin to touch the deep suffering of the families that have been expelled from their homes, tortured, had loved ones murdered or drown on perilous boat journeys.
It is cynical and callous for Gap to then describe Myanmar as making “slow progress.” Of course it is not out of the norm for a corporation to laughably try and convince consumers that it does “more than sell clothes.”
Doubly egregious is the complicity of Western diplomats, who as Matthew Smith of Fortify Rights points out have been giving Myanmar a free pass,
Western diplomats eschew efforts to end the culture of impunity in the country, fearing it will stall the reform process. This is an entirely wrong-headed view.
Ending impunity comes in many forms but typically requires at least a proper accounting of the facts. As such, foreign governments should press Myanmar to set up an independent inquiry into ongoing wartime crimes in ethnic states, and redouble support for the country’s human rights defenders, most of whom are working under demoralizing conditions with limited resources.
Ultimately, high praise for thin reforms is no way to promote democracy or the rights of Myanmar’s least advantaged populations.
It’s worth mentioning pop-philosopher Slavoj Zizek’s theory of cultural capitalism, which asserts the farcical nature of contemporary enterprises seeking to put a charitable, in this case “humanitarian,” face on their products, i.e. “global capitalism with a human face.”
In the near term the violent and extremist 969 movement continues to get stronger, atrocities proliferate and human rights take second place to capitalistic ventures. Corporations such as Gap that invest in Myanmar can save us the feel-good facade, we know what this is all about.