Many developing countries in Asia have long relied on factories making T-shirts, trousers and shoes, US media said. These factories employ millions of people and help them climb the income ladder. Stores across North America and Europe were closed when COVID-19 hit. Western brands canceled billions of dollars in orders, and shipments of sweaters and jeans went unattended. Hundreds of factories have closed in the Asian industrial belt around Phnom Penh, Dhaka and Rangoon.

Hundreds of thousands of garment workers, most of them women, have been laid off or laid off. Many people are just emerging from poverty. Their wages, though low, are enough to ensure three meals a day and basic health care and education so that their children and siblings can be prepared for better-paying jobs.

In recent months, many workers have returned to the countryside to live cheaply and borrow money. The Asian Development Bank estimates that Asia's developing countries will grow just 0.1 percent this year, the slowest in 60 years.

These setbacks could last longer than disruptions to the sales industry, the report said. The global fashion industry, already facing obstacles long before the blockades wreaked havoc on sales, is in turmoil and is likely to be transformed by the covid-19 pandemic.

Bangladesh is one of the world's largest exporters of clothing. "I don't think the industry will ever be the same again," said Rubana Luk, chairman of the country's largest trade body for garment manufacturers. We're going to see a lot of change."

In recent months, JcPenney, Neiman Marcus and Crewe have all filed for chapter 11 bankruptcy protection. Achim Berg, a senior partner at McKinsey, a consultancy, says a "shakeout" could lead to the collapse or acquisition of 20-30% of companies in the value chain, including brands, wholesalers and department stores.

Western companies are expected to move more toward 'offshore outsourcing' in the future, with some production for The European market moving to Turkey, Eastern Europe and North Africa, and some production for the North American market moving to Mexico, Mr. Berger said.

"People want to work on shorter lead times and they want more flexibility," he says. They also realised they were too dependent on production arrangements in the Far East."

Garment manufacturing is a key economic engine for countries with limited infrastructure and low-skilled workers, the report said. The industry has made progress in improving factory safety standards, but problems remain, including poor working conditions and retaliation against unionized workers. The garment industry, which accounts for nearly 85 per cent of Bangladesh's export earnings, employs 4m people in the country. In Cambodia, one in five households has at least one garment worker, and 75% of exports are clothing, footwear and travel bags. Vietnam and India are also major exporters of clothing, according to World Trade Organization estimates.

"There is no alternative to the clothing model right now," said Raymond Robertson, professor of labor and development economics at Texas A&M University. So this is not just a temporary setback."

In Cambodia, nearly 250 factories were shut down, the report said. This includes Yuet State, which makes T-shirts, clothes and pyjamas for Swedish clothing brand H&M and French retailer Carrefour. In April, the Hong Kong-owned company laid off its entire Cambodian workforce of more than 3,500.

Without new orders, the company has no choice but to close indefinitely, said Albert Chen, its general manager. He said buyers did not say when they would resume large orders, and it seemed increasingly unlikely that factories would resume work this year. "We don't know for sure," he added.

Ken Loh, secretary general of the Garment Manufacturers Association of Cambodia, says that while there is not much new work at factories, many have fixed costs, such as rent for space and machinery. He says some of those factories will not survive the crisis, which will shrink an industry that is closely linked to Cambodia's economic growth.

"How can you go months with zero cash inflows and still be operating? The situation is getting worse."

The report noted that the United Nations Conference on Trade and Development predicted that businesses would reduce new overseas investment by 40 percent this year. The report says flows into developing countries, which have long relied on export-led investment, will be particularly affected. "The first steps of the development ladder may become more difficult to climb," the report said.