TOKYO, April 10 (Bernama-BUSINESS WIRE) — The use of non-equity modes (NEMs) of production has been increasing in both Lao PDR and Myanmar. This is demonstrated in exports from these countries as new forms of trade. For example, an estimated $274 million in electrical machinery and $132 million in garments from Lao PDR, and an estimated $1 billion in garments, more than 70% of total garment exports from Myanmar are through NEM, according to new findings by the ASEAN-Japan Centre on NEMs in their reports (Non-Equity Modes of Trade in ASEAN: Lao People’s Democratic Republic; and Non-Equity Modes of Trade in ASEAN: Myanmar [https://www.asean.or.jp/en/trade-info/nem_papers/]), released today at the same time.
Both country firms are in the infancy stage of participation in NEMs, using subcontracting, management contracts and franchising etc.
The garment industry is among the highest generators of exports and employment in NEM businesses engaged in subcontracting. International hotels are typically operated in these countries through either management contracts or franchise agreements.