HE PROMOTED THE CAN DO ATTITUDE
As the first Chairman of the renamed Board of Investment of Sri Lanka from 91 to 93 it will be appropriate for me to write about the economic developments undertaken during this period especially connected to poverty alleviation and the
200 Garment Factory Programme on the 25th death anniversary of former President Ranasinghe Premadasa..
The death anniversary of Premadasa falls on May 1. It is sad that the country lost a dynamic leader who was action and result oriented and had the vision to develop the economy throughout the country. This he did by taking the industries to the villages and providing jobs to rural youth, which resulted in the alleviating of poverty in the rural sector.
I was closely associated with the implementation of pro-poor programmes such as direct lending to self-employed and small scale projects through the People’s Bank and its network of branches spread islandwide. The new concept of Premadasa for the banks was to set up Praja Naya
Niyamakas (PNN) who were given a loan of Rs 100,000 by the bank on provision of security to grant small loans ranging from Rs 500 to Rs 10,000 per person for micro projects. Further the rates of interest charged by the PNN and the lending rate was recommended by the bank to enable the people to obtain loans at a very much reduced rates compared to the money lenders
Two of the major programmes launched in which I was able to make a contribution were Janasaviya and the opening of 200 garment factories. Both programmes had a direct impact on the strengthening the rural economy. Both these programmes made a significant contribution to the economic emancipation of the rural people which comprised 70% of the population.
JANASAVIYA
President Premadasa was one who had a soft corner for the common man. This is why he initiated the housing development projects, supplies drinking water and electricity and had the annual
Gam Udawa celebrations. Although giving free handouts were the order of the day, Premadasa was able to change this concept by promoting economic development in the provinces. This he did by inviting the private sector businessmen to set up garment factories in rural areas.
Preference was given to Janasaviya certificate holders in the granting of jobs in the 200 Garment Factories programme. This enabled the people to earn a wage rather than depend on free handouts. He was also able to activate the state banking sector to play a lead role in the Janasaviya poverty alleviation programme.
This meant that villagers would not have to visit banks and could use the agency banks to obtain their loans.
These agency banks were named Praja Naya Niyamaka (PNN).
They had to provide security for the money advanced by the banks at normal interest rates. They were to lend money at rates of 3 to 4% per month which rate was very much lower than the rates charged by money lenders who charged something like 5 to 6% per month. The maximum money advanced to the PNN was between Rs. 50,000 to 100,000. The People’s Bank appointed 4000 PNNS and the Bank of Ceylon also a similar number. This programme also created competition between the two banks. Former President Ranasinghe Premadasa
MONITORING PROJECTS
The policies of Premadasa resulted in a change of attitudes in the staff of banks. Bank officials went to the small man, a section of the society which was earlier neglected.
Premadasa made it a point to monitor and evaluate performances of banks, ministries, departments and officials not only by verifying statistics, but by sending his staff to visit the sites. These staffers provided him with a report after a round of inspection.
200 GARMENT FACTORY PROGRAMME
One evening I had a call from Secretary Paskaralingam who told me that the President wanted me to take over the GCEC now BOI. This was quite a surprise and a challenge for me as I knew that the GCEC was quite different from People’s Bank having over 350 branches and over 10,000 employees.
However I had always accepted challenges and entered another new organisation which played a major role in attracting foreign direct investment and increasing exports.
There were many new changes taking place at the GCEC at this time. Some of the major challenges were the setting up of the Koggala Export processing Zone and the 200 Garment factories programme. The 200 garment factories programme could be considered as one of the main achievements and contributions made by Premadasa to uplift the rural economy of Sri Lanka.
The US garment quotas were utilised by President Premadasa as a strategic tool for developing the rural economy and to help alleviate poverty in Sri Lanka. This programme was more effective than the billions of rupees spent by the international lending agencies to implement their trickle down approach through massive projects. Credit should be given to
USA for this gift of the garment quotas which enabled Sri Lanka to be one of the top exporters of garments.
The private sector was drawn into the 200 garment factories programme and its players were given tax incentives, infrastructure such as land, electricity, telephone, water, roadways and other benefits such as quotas depending on the area selected. This was to enable them to undertake expansions or new projects without much hassle and to be free of bureaucracy. This was the era where the One Stop Shop concept for the approval and implementation of projects was carried out by the BOI.
To undertake this project the president selected the then Greater Colombo Economic Commission (GCEC) and converted it to the Board of Investment of Sri Lanka (BOI).
BOI
The BOI was used as the vehicle to achieve this massive task of setting up 200 garment factories.
Since the BOI was directly under the president our work was not subject to political interference. We were able to achieve our targets in keeping with the existing rules and regulations. In 1977 President J.R Jayewardene, who heralded the Open Economic Policy, set up the Greater Colombo Economic Commission to attract foreign direct investment, set up Free Trade Zones and promote export oriented projects. The first Chairman of GCEC Upali
Wijewardena was selected by President Jayawardena as its head.
The numerous meetings that we had with investors, Government ministries, banks chaired by the late president himself and others chaired by the finance secretary were action oriented to solve problems of
investors and not talk shops.
This was the new approach of President Premadasa and his secretary Paskaralingam and other staff who were men of action and result oriented. The private sector and foreign investors really appreciated such speedy action. President Premadasa wanted men who could perform and those with the “Can Do’ attitude.
I remember the frequent meetings we had at Sucharitha where Premadasa invited investors, who were due to open their factories, and solved their problems. The Chairman of CEB, Roadways and Water Board were always present at these meetings.
The weekly meetings with the cabinet sub committee was another vehicle which sorted out matters especially relating to the transfer of land for BOI projects.
There had to be a minimum of 500 employees. All factories had to give the breakfast to the workers.
The target was for the 200 factories to employ 100,000 youth and invest in the economy between Rs. 500 million to Rs. 1 billion per month. The youth, especially the girls in the villages, were for the first time producing export quality garments. Exports were reaching markets in USA and UK.
An increase in quotas was also obtained to sustain this expansion which had taken place. Factories were set up in villages like Vavuniya and
Batticaloa but this was not possible in areas affected by the war.
The then USA ambassador visited the opening of a garment factory in
Puttalam with an OPIC investment delegation. Thereafter, she also visited many other openings of such establishments where USA investors had made investments.
We also had investors from UK, Hong Kong, Singapore and Germany investing in factories. In the 200 garment factory programme President Premadasa was present during all their openings.
Industrialists were queuing up looking for sites to open factories. The idea came from the late Kumar
Dewapura who was the Chairman of the Tri Star Group. He was given a land in the Kurunegala District by the then Chief Minister Jayawickrema Perera, now a minister in the Government, to set up a garment factory. President Premadasa saw it and developed the idea of the 200 garment factories programme. Dewapura was instrumental in setting up of the first few factories and giving the lead to others to join in the programme.
At the time of President Premamdasa’s untimely death, 160 areas had been allocated to construct garment factories.
PUNCTUALITY AND CLOCK TOWERS
Another special feature was that each town or village got a clock tower. This construction indicated that a garment factory had been opened in the area.
Punctuality at these openings might have been due to the clock towers that were constructed. On many occasions President Premadasa was ahead of time to open the clock towers, avoiding the Rahu Kalaya (Inauspicious time) in the process.
There were many teams working to successfully carry out this gigantic task of setting up 200 garment factories. Many teams from the BOI,
UDA, Housing Ministry, CEB, RDA and Telecom were involved. They were tasked with work like identifying investors and land and to deal with the granting of quota, incentives, infrastructure, electricity, telephones, water and making of roads.
In addition, President Premadasa also spoke to investors and we had to meet almost daily in the evening at Sucharitha to review the progress in the presence of investors.
All these showed the excellent managerial skills, commitment and efficiency with which all departments worked to carry out this gigantic task under the leadership of President Premadasa.
Investors were able to upgrade their import and export facilities by the setting up of the separate BOI customs clearing centres. This largely assisted the 200 garment factories set up outside the zones and immensely benefited investors because bottlenecks were removed as a result. Therefore, it was sheer hard work,planning, implementing, monitoring and working round the clock that enabled these results to be achieved.
INFRASTRUCTURE PROJECTS
It was during the period of President Premadasa that for the first time incentives were given for infrastructure projects. The World Trade Centre (WTC) was one of the significant investments that took place during this time. Another such investment was the Exhibition and Convention
Center in Fort.
WORLD TRADE CENTRE
This was the first major infrastructure project undertaken by a Singaporean Investor S.P Tao that was commenced and approved under the BOI incentive scheme. This was going to be a 39-storey twin tower. This was the biggest project undertaken at that time. The ceremonial construction commenced with the presence of S P Tao, myself as Chairman of BOI and with Ven Podi Hamuduruwo chanting seth pirith .
KANDALAMA HOTEL PROJECT
This hotel project was approved by the BOI and when construction was to begin, there were lot of protests from politicians and villagers. The protests were mainly due to environmental hazards and pollution that would result from running a hotel in this area.
President Premadasa obtained expert opinion and found that there was no danger to the environment from this project. He carried out a campaign to inform the public of the benefits and advantages of this project.
OTHER INFRASTRUCTURE PROJECTS
Some of the leading companies today in the mobile phone industry sector such as Dialog and Singapore Telecom were approved under the new infrastructure incentives granted.
In the Television industry some of the main channels such as MTV/
Sirasa, Swarnavahini, TNL, which were approved under different names, were licensed during President Premadasa’s period.
BREAKING THE BUREAUCRACY
President Premadasa for the first time was able to motivate Government servants who willingly and readily served the people, a move which helped avoid public criticism. The term bureaucracy was nowhere to be seen or heard during this period. Premadasa had the habit of waking up early in the morning and awakening others as early as 4.00 am if there were any adverse stories in the newspapers. He had the habit of checking on the progress of work he had tasked people with. This habit also kept the Government servants on their toes and the Government machinery moving.
President Premadasa who never took ‘no’ for an answer expected the Government servants as well as the private sector to have a ‘can do’ attitude. He was a person who firmly practiced the idiom ‘Walk the Talk’. Lessons for the future
Today with people in the north and the south harbouring much expectations with regard to the peace process, it is essential to implement development programmes to accelerate economic development and alleviate poverty and usher in prosperity.
Many state that if Sri Lanka had continued with the policies which President Premadasa had introduced this island would have become another Singapore.
(The writer is a Chartered and Management Accountant who served as Chairman of three state institutions including the People’s Bank during the tenure of President J.R Jayawerdene and continued as Chairman of People’s Bank during the period of President Ranasinghe Premadasa and was later appointed as the Chairman and Director General of the Greater Colombo Economic Commission which was later converted to Board of Investment of Sri Lanka)
The term bureaucracy was nowhere to be seen or heard during this period. Premadasa had the habit of waking up early in the morning and awakening others as early as 4.00 am if there were any adverse stories in the newspapers Since the BOI was directly under the president our work was not subject to political interference. We were able to achieve our targets in keeping with the existing rules and regulations