President Premadasa a Man of Action

By Lakshman. R. Watawala

As a young professional Chartered Accountant who served as Chairman of three state institutions including the Peoples Bank during the tenure of President J R Jayewardene and continued as Chairman of Peoples Bank during the period of President Premadasa, I was appointed as the Chairman and Director General of the Greater Colombo Economic Commission which later became the Board of Investment (BOI) of Sri Lanka.

As the First Chairman of the BOI from 1991-93 it will be appropriate for me to write about the economic developments undertaken during this period especially connected to export development and the 200 Garment Factory Programme on the 30th death anniversary of President Premadasa.

The Garment Factory Programme

I was Chairman of the Peoples Bank and one evening I had a call from Mr 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 would be quite different to the Peoples Bank, a leading state commercial bank with 350 branches and over 10,000 employees in 1991.

The GCEC/BOI was used as the vehicle to achieve this massive task of setting up 200 garment factories which indeed was a dream come true due to the dynamic leadership provided by President Premadasa.

In 1977 President J R Jayewardene who ushered the Open Economy set up the Greater Colombo Economic Commission to attract foreign direct investment, setting up Free Trade Zones and promoting export oriented projects. The first Chairman of the GCEC was the late Upali Wijewardene, a leading entrepreneur/businessman selected by the president.

The GCEC/BOI was a very powerful organization coming directly under the President and had the power of giving tax Incentives, approval to open foreign currency banking accounts and customs functions on imports and exports relating to GCEC companies.

The first zone was set up in Katunayake and the second in Biyagama initiated by now President Ranil Wickremesinghe. They can be considered to be among two of the successful free trade zones in the world. President Premadasa set up the Koggala Free Trade Zone which was officially inaugurated as soon as I took over as Chairman.

The 200 garment factories programme could be considered one of the main achievements and contributions made by President Premadasa to uplift the rural economy of Sri Lanka and promote exports with the help and support of big companies in the private sector. For the first time we saw factories shifting out of the Katunayake and Biyagama in the Colombo and Gampaha Districts to other provinces.

The criteria was for all garment factories to have a minimum of 500 employees each so that there will be money circulation of rupees two to five million a month in the villages around the factories. All factories also had to give free breakfast to the workers.

The target was to set up 200 factories employing 100,000 youth pumping Rs. 500 million to one billion per month into the national economy. The youth especially the girls in the villages were for the first time producing export quality garments for markets in the USA and UK.

The incentives to those setting up factories included export quotas to the US depending on the area of location of the factory. These ranged from 10,000 dozens for factories located in non-difficult areas, 25,000 dozens for difficult locations and 50,000 for most difficult areas.

The private sector was drawn into the programme with tax incentives, infrastructure such as land, electricity, telephones, water, roadways and other benefits and assured quotas depending on factory location. These enabled expansion into new projects without much hassle and free of bureaucracy. This was the era where the One Stop Shop concept for the approval and implementation of projects carried out by the BOI. All approvals were done under one roof at BOI.

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 enabled Sri Lanka to be one of the top exporters in garments and even after abolition of the quota system to produce quality products at competitive prices.

The garment industry became the largest industrial exporter from Sri Lanka due to the vision of the late president. Workers who had to leave their villages and come to Colombo and Katunayake and live in expensive boarding houses were now able to travel to work from their homes and have a substantial take home pay.

I remember the frequent meetings we had at Sucharitha where President Premadasa invited investors who were due to open factories and solved any problems they brought up. The Chairmen of the CEB, Road Development Authority and the Water Board were alwas present as these meetings as investor complaints were mainly about non availability of electricity, roadways and water.

Increases in garment export quotas were also obtained to sustain the expansion, which took place. Factories were even set up in the north in Vavuniya and in the east in Batticaloa as other areas in the northeast were affected by the war.

We also had investors from UK, Hong Kong, Singapore and Germany investing in factories in rural areas hitherto not even thought of by any industrialist, local or foreign.In the 200 garment factory programme the late president was present for all the official openings of factories and he gave dates to all investors so they had to work round the clock to have their factories ready by the deadline. The opening of each factory was marked by the construction of a clocktower, paid for by the investor, in all the areas they were set up. The clocktowers were opened by the President before he opened the factory.

The novel idea to set up the 200 garment factory programme came from the late Kumar Dewapura who was the Chairman of the Tri Star Group. He was given land in the Kurunegala district by the then Chief Minister Jayawickrema Perera, a former cabinet minister to set up a garment factory and President Premadasa was invited for the opening. It was here that the idea of the 200 factories programme was developed. Dewapura was instrumental in setting up the first few factories and acted as a catalyst to arouse the interests of other investors to join the programme.

The success of the 200 Garment factory Programme from 1991 to 1993 was visible at the time of President Premadasa’s untimely death. At the time 160 locations had been allocated to construct factories and 117 factories, all opened by the late president, were running. Six were ready for opening and 37 under construction.

In 1991 the Apparel and Garment exports were approx. US $ 764 M. With the setting up of the 200 garment factory programme the exports increased tremendously and in 2022 reached US $ 5.4 billion. Many who criticised that the garments industry as a “sunset industry” could now see its sustainability for themselves as well as benefits reaped by the country. These included becoming the highest export earner and biggest employer of females. Tough environmental and working conditions were met to achieve global standards. Today we have many ‘green’ garment factories and investors striking out overseas to set up factories.

The 200 Garment Factory Programme was continued by all successive governments although while in the opposition they criticised it. They started the 50 garment factories programme and supported the garment industry but could not match the implementation capabilities of President Premadasa and the success of the 200 garment factories programme.

Conclusion

President Premadasa made use of the US garment quotas and the GCEC/BOI set up by President Jayawardena for the economic development of the entire country with benefits to rural people and export promotion. Successes achieved during this period should open the eyes of present day rulers to the vision of President Jayewardene and the implementation policies of President Premadasa to take the country forwards.

President Premadasa who never took” no” for an answer expected 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’.

He carried out his plans and was involved in all stages of these projects and gave the leadership. He was not comfortable with people who were negative or always came up with excuses.Today’s leaders should follow Premadasa policies to give a jump-start to the economy and make our country a more industrious and prosperous nation and overcome the present crisis.

Former Chairman and Director General Board of Investment of Sri Lanka, Former Chairman Peoples Bank and Peoples Merchant Bank, Former Chairman and Managing Director State Mining and Mineral Development Corporation, Former Chairman and Managing Director Ceylon Leather Product Corporation.