BOI enters new era of economic transition after 40-year open economy
Within the next few years, Sri Lanka will unveil at least eight to nine new kinds of free trade (economic) zones to bring development to rural areas.
Reading the 40th anniversary booklet: Minister Malik Samarawickrema, President Maithripala Sirisena, Prime Minister Ranil Wickremesinghe and BOI Director General Duminda Ariyasinghe
An investment passage from Kandy to Wellawaya and other zones up to Paranthan (in the north) will also be opened showcasing it as window into a more open, globalised and competitive Sri Lankan economy.
This was disclosed by Prime Minister Ranil Wickremesinghe at the 40th anniversary ceremony of Board of Investment (BOI) Sri Lanka held at the Katunayake Investment Promotion Zone last week. President Maithripala Sirisena was the guest of honour.
The Sri Lankan economy is slowing and there are growing concerns about balance of payment issues and rising debt.
In an effort to infuse new life into the economy, Prime Minister Wickremesinghe says he now has to find ways to turn the country into something more than the open economy introduced by his late leader former President J. R. Jayewardene in 1978.
“Today, after 40 years of a free market economy we need to guide the country’s economic transition towards a more high-level growth model, so we want to do more in the service sector, do more research and development, and more exchange and improvement of talent,” the PM told the massive gathering at the ceremony.
Sri Lanka has to take a giant leap towards economic prosperity than what the then government did in 1978 by opening the economy, he said adding that the country has lost many foreign investment and other development opportunities due to three decades of war and other economic issues.
When it opened 40 years ago, the Katunayake Free Trade Zone was hyped up as a job creating hub for unemployed youth in the mid 1970s as the youth had eagerly awaited to embrace open economic reforms preached by the then President Jayewardene deviating from a closed, tightly -controlled inward looking economy pursued from 1970 to 1977.
First of its kind in South Asia
The Katunayake Export Processing Zone was the first of its kind in South Asia; the Prime Minister reminded adding that it has paved the way for countries like India, China, Bangladesh and Vietnam to set up similar zones.
Going down memory lane, the Greater Colombo Economic Commission (GCEC) (the present BOI) was established under the GCEC Law No. 4 of 1978 and its head office was located at Sir Baron Jayathilake Mawatha in Colombo Fort.
Business tycoon Upali Wijewardena was the first Director-General of the commission. The first GCEC Board of Directors comprised Mr. Wijewardena, Paul Perera, Deputy Director-General (Administration), Sivali Ratwatte Deputy Director-General (Investment), Alavi Macan Marker and A.Y.S. Gnanam.
One of the main objectives of the GCEC at that time was to promote and facilitate foreign investment into the country by developing proper infrastructure facilities and other services.
Former President Jayawardene had three priorities on his political agenda.
These were Employment; Employment and Employment!
After unveiling a sculpture of former President Jayewardene, President Sirisena and Prime Minister Wickremesinghe viewed an exhibition of BOI achievements during its 40 year history at the Katunayake Export Promotion Zone (EPZ).
The Prime Minister reminded that his former leader’s initiatives towards the implementation of open economic policies and its benefits are now being reaped by the present generation.
“At that time in the early seventies, youth had been frustrated due to lack of jobs and the country had to face a youth uprising and insurrection,” he said adding that the “UNP government which came to power in 1977 decided to set up investment zones to generate employment avenues for the unemployed”.
With the setting up of the Katunayake EPZ in 1978, foreign investors started coming in mainly to open apparel industries for the export market.
Most foreign investors took advantage of the quotas available to Sri Lanka for the US market and set up their ventures.
A high level delegation from the People’s Republic of China who visited the Katunayake EPZ during the early 1980s took back vast amounts of data information and ideas from the GCEC which apparently helped them establish the now famous “Senzieng Industrial and Commercial Township” north of Hong Kong, BOI officials revealed.
Many other delegations from various countries visited the Katunayake EPZ, some through the auspices of UNDP/UNIDO and others independently, to collect information and ideas to set up their own industrial parks.
Thereafter a Biyagama zone with 180 hectares was opened and in 1991 the Koggala Zone was inaugurated in the South and these three zones were known as “export processing zones’.
Premadasa’s 200 factories concept
The BOI was then used as the vehicle to achieve the massive task of setting up 200 garment factories under the leadership of former President Ranasinghe Premadasa after the setting up of the Koggala Zone.
At the time of President Premadasa’s assassination, 160 areas had been allocated to construct garment factories. Of this 117 factories had been opened by the late President while six were ready for opening and 37 factories under construction during the 1992-1995 period.
Nine more EPZs have been established in Mirigama ,Malwatte Wathupitiwala, Kandy, Horana Seethawake, Polgahawela, Mawathagama and Mirijjawela since 1995.
In its 40 years of existence, BOI formerly GCEC has made a complete overhaul of Sri Lanka’s economy, the opening up of major new sectors for export markets, and substantial up-grading of Sri Lanka’s infrastructure.
The credit for earning such a name should go to the management of BOI and the workers of Sri Lanka who work in the ‘free trade zones’, the Prime Minister said.
With 1,700 projects in commercial operation and providing almost half a million employment opportunities, the BOI remains a significant change agent in transforming Sri Lanka’s economy from a largely agrarian base into the modernised, manufacturing and services-based platform it is today.
Industries operating under the BOI contribute to over 70 per cent of the country’s total export earnings and for 85 per cent of the national industrial export earnings.
New model
The BOI’s latest business model is the collaborative establishment of export processing zones, where the investor is a zone management specialist, who not only develops the zone and its internal infrastructure but is also tasked to attract new investors to the zone, officials said.
BOI Chairman Dumindra Ratnayake, who was recently appointed, in his welcome address stressed on the BOI’s contribution to the economic transformation of the country, while confirming the organisation’s continued commitment towards delivering on its mandate to be a driving force of the economy.
Secretary of the Free Trade Zone Manufacturers Association, Dhammika Fernando, reminded the audience on the noteworthy economic contribution made by companies operating in the EPZs.
A female employee of Star Garments at the Katunayake zone, Diana Heshani Perera, paid a tribute to the present employers and the BOI for creating around 500,000 job opportunities for Sri Lankan youth, especially young women.
She expressed her concern on calling factory workers as ‘Juki Kello’ or ‘Garment Kello’ which insulted women and undermined their services towards earning much needed foreign exchange for the country.
Special awards were presented to long serving employees of companies operating in the EPZs and the best performing BOI companies.