Financial Times

IBM takes 5pct stake in Sri Lankan-led firm
By Richard Wood
IBM has taken a five percent stake in a New Zealand software firm built by a Sri Lankan immigrant - the first local company to move into the top rung of IBM's global partners.

The value of IBM's stake in Descisys is undisclosed but it has an option for another 7 percent when a target turnover is met.

As a "strategic alliance partner" of the world's largest IT firm, Descisys is in the company of 80 firms, including global financial software heavyweights SAP and JD Edwards.

IBM New Zealand managing director Nick Lambert said the deal showed IBM's commitment to the New Zealand market.

Descisys operates in the business intelligence software market, worth $7.2 billion. Its niche is corporate performance management software for large enterprises.

Vilosh Brito founded the firm, previously known as Decision Support Services, in 1992. It is 95 percent owned by his family trust. Directors Gerald Ryder and Sefton Thesing have profit-share arrangements.

Brito said it was unusual for IBM to take a stake but useful for attracting investment.

The deal was done with IBM US after a year of discussions and was fed through the local operation, he said.

IBM will help market and sell Descisys software worldwide. But Brito said the firm would need money and was talking to venture capitalists.

Descisys has two products - Prove for corporate, and Camelot for government customers - and works with both text-based and statistical "measurable outcomes".

"It's a management execution system, for turning plans into action, monitoring them, continuous forecasting, and doing it at a low level of granularity," Brito said.

Development of the software - internally funded with a fraction of the resources of billion-dollar competitors - was an example of Kiwi ingenuity, Brito said. The company also has a patent pending for a "front end" system it developed.

"That again is a good example of how a small Kiwi company can do stuff that much larger teams in the US haven't achieved."

Brito arrived in New Zealand from Sri Lanka in 1987. He said he was proud to have been able to do something world-leading. "I couldn't have done it without the culture and environment of New Zealand."

Descisys' turnover last year was $10 million, half in export sales. Its 50 clients include Carter Holt Harvey, the Australian Department of Financial Affairs, the British Treasury and an unnamed firm, which Brito said was the fourth largest financial institution in Britain.

Its target is to reach $50 million turnover in the next four years.

"There is no way we will get that kind of growth without IBM," Brito said.

Descisys has 65 staff and has offices in Auckland, Wellington, Sydney and London. It plans to open offices in Europe and the US this year and is looking for five more consultants and developers. Brito said 20 more may also be needed in the next few months.

(New Zealand Herald newspaper, April 29, 2003)

Skywards wins global award
Skywards, the frequent flyer programme of SriLankan Airlines and Emirates, pulled a stunning finish at the prestigious Freddie Awards on April 24 in Colorado, USA.

Only three years old and competing with the leading frequent flyer programmes of the world, Skywards unseated six-time 'Programme of the Year' winner, SAS EuroBonus, the airline said in a statement.

Skywards also collected first place at the Freddies for Best Elite Level, Best Award Redemption, Best Affinity Credit Card, Best Website and Best Customer Service.

The Freddie awards are frequent flyer programmes equivalent of the Oscars and Grammys. Created by InsideFlyer magazine publisher Randy Petersen in 1988, the Freddies give travellers the opportunity to rank airline and hotel frequent traveller programmes.

To augment its services, the Skywards centre in Colombo recently moved to a prestigious address - the World Trade Centre, conveniently situated in the heart of the city. Located on level 3 of the East tower, this comfortable and spacious office is equipped to serve Skywards members even better.

Workshop on career guidance
Two top trainers are conducting a Personal Development Programme and Career Guidance Fair at the BMICH on May 24 for young job seekers or those who want to develop their career paths.

Deepal Sooriyaarachchi, a former SLIM president and marketing specialist, will speak on positive attitudes while Ms. Dila Hettiaratchy will make two presentations on professional presence and interview skills. It is sponsored by Sri Lanka Telecom and supported by CIMA.

Hettiaratchy was for 23 years at Srilankan Airlines, initially as a trainer and later as the Safety and Training Manager. In October 2001 she commenced developing her own training programmes and has been conducting seminars on Business Etiquette for the corporate sector. Sooriyaarachchi handled marketing at Eagle Insurance.

Treasury management seminar by ACCA/SLFA
ACCA (Association of Chartered Certified Accountants), Sri Lanka together with the Sri Lanka Forex Association (SLFA) is organising a two-day seminar/workshop on treasury management on May 7-8 at the ACCA office in Colombo.

Both associations represent two important professions in the financial services industry. The programme is aimed at senior finance professionals engaged in decision making on treasury activities.

It is hosted by ACCA with teaching/training support from the SLFA. The main lecturer is Sanjeeva Senanayake, Senior Country representative of International Finance Corporation while the rest of the faculty is composed of senior practising professionals from leading banks.

Misconceptions about cabin air quality will hinder airline recovery - AAPA
"The public have still not got the message that the air in aircraft cabins is probably safer than anywhere else," said Richard Stirland, Director General of the Association of Asia Pacific Airlines (AAPA), in a recent statement.

"As many of our members have reported, and we know by anecdotal evidence, the travelling public have become non-travellers due to the misconception that the chances of acquiring SARS is greater on an aircraft than elsewhere. This is principally as a result of lack of knowledge regarding air circulation in the cabin."

"In reality, as both the airlines and the aircraft manufacturers have stressed, the air in the aircraft cabin is, on average, changed every three minutes. Moreover, the air is a mix of fresh air drawn from outside the aircraft, and air that has passed through very efficient filters, which provide an environment that is as sanitised as a hospital operating theatre." Stirland said. "This information has been disseminated widely, but is still not as well known as it should be."

"What is even less well known, but of equal or even greater importance, is that air supplied to aircraft toilets and galleys is not recirculated even in a filtered form, but is expelled from the aircraft."

"A further point to stress, which passengers can see for themselves, is that air vents are at the level of overhead stowage bins, extraction is at floor level. Air is thus drawn down, not up, and most importantly, there is no longitudinal flow of air through the cabin."

"It is vital to get this message across to the public, and indeed to government authorities, otherwise the airlines will be suffering from disastrous load factors long after the epidemic is over. Travel by air does not increase the risk of contracting this infection," he said.

The AAPA is a grouping of 17 scheduled international airlines based in the Asia-Pacific region. It is the trade association of the region's airlines, created to represent their interests and to provide a forum for all members to exchange information and views on matters of common concern.

The 17 members comprise Air New Zealand, All Nippon Airways, Asiana Airlines, Cathay Pacific Airlines, China Airlines, Dragonair, EVA Air, Garuda Indonesia, Japan Airlines, Korean Air, Malaysia Airlines, Philippine Airlines, Qantas Airways, Royal Brunei Airlines, Singapore Airlines, Thai Airways International and Vietnam Airlines.

Current leaders lack Premadasa's dynamism
By Prof. Lakshman R Watawala
Ranasinghe Premadasa was one who was concerned about the common people and reached out to uplift their living conditions in many of the programmes such as the housing development projects, supply of drinking water and electricity, annual Gamudawa celebrations which culminated in the many development projects completed in the area.

Although giving free hand outs were the order of the day, the late president was able to change this concept by pushing economic development to the provinces by inviting private sector businessmen to set up garment factories in rural areas. Preference was given to Janasaviya certificate holders in the granting of jobs and this enabled the people to earn a wage rather than depend on free hand outs.

Jansaviya
This was one of the thrust projects of the government and was handled by a separate ministry. However, the two state banks the People's Bank and Bank of Ceylon were called upon to play a major role in these two schemes. Dr. Nimal Sandaratne, Chairman of the Bank of Ceylon and I were told by Premadasa to come up with a proposal to set up Agency Banks in the AGA's divisions to provide small sector loans at the doorstep of the villager. This meant that villagers would not have to come to banks and could use the agency banks to obtain their loans without going through the normal lengthy procedure applicable to the grant of loans. These agency banks were named Praja Naya Niyamaka (PNN). The banks were to identify persons to be appointed as agents or Praja Naya Niyamaka (PNN's) who could undertake the task of lending money to the people of the area. They had to provide security for the money advanced by the banks at normal interest rates and they were to only lend at rates of 3 to 4% per month which rate was very much lower than the rates charged by money lenders which was about 5 to 6% per month. The maximum money advanced to the PNN was between Rs. 50,000 to Rs. 100,000. The Janasaviya scheme was implemented by both banks and was accelerated after Premadasa assumed office after winning the presidential elections. The People's Bank had appointed 4,000 PNN's and the Bank of Ceylon a similar number. The PNN scheme provided the rural masses with another channel to obtain small sector loans. Private sector banks like the Sampath Bank also came up with a scheme for such small sector loans in certain selected areas and this was a scheme launched by N.U. Jayawardena who was the then chairman of Sampath Bank.

Due to the thrust on rural development and small sector loans both the state banks came forward with various loan schemes between Rs. 5,000 and Rs. 25,000 without providing any security. The People's Bank which was set up mainly for the rural sector at the inception was able to play a lead role in the setting up over 4,000 PNN's, grant of loans without security, self-employment loans to youth, agricultural loans, start up loans, tiny sector loans, athamaru loans, pawning, Janasaviya loans, assisting the co-operatives and the co-operative rural banks. The competition between the two banks also resulted in the rural sector benefiting and areas hitherto not visited by banks were targeted for the grant of loans. Staff of the People's Bank which was set up mainly to serve the rural masses were more positive towards rural banking and were able to overtake the Bank of Ceylon in the grant of loans in rural areas.

The policies of the late president resulted in a change of attitudes of the staff of banks to go to the small man who was earlier neglected and meet their requirements rather than wait for the people to come to the banks and queue up and fill forms.

Often promises made by politicians are hardly or never fulfilled. However, Premadasa made it a point to monitor and evaluate performances of banks, ministries, departments and officials not only by verifying statistics but also by sending his staff to visit the sites and give him a report after inspection. This enabled him to identify officials who worked tirelessly to achieve results as well as those who bluffed him and thus provided an effective monitoring and control mechanism and also to take early remedial action.

200 garments factories
This could be considered as one of the main achievements and contribution made by him to uplift the rural economy of Sri Lanka with the help and support of big private companies. For the first time we saw factories shifting out of the Katunayake and Biyagama Free Trade Zones in the Colombo and Gampaha districts to other provinces. US garment quotas were utilized by Premadasa as a tool for developing the rural economy and to help alleviate poverty in Sri Lanka and was far more effective than the billions of rupees spent by the international lending agencies to implement their trickle down approach through massive projects, the benefits of which never reached the poor man. The garment industry became the largest industrial export from Sri Lanka due to the vision of the late president. Workers who had to leave their villagers and come to Colombo and Katunayake and stay in boarding houses with measly savings were now able to travel to work from their homes and have a substantial take home pay.

In fact governments which criticized the 200 Garment Factories Programme when in the opposition, commenced the 50 Garment Factories Programme once in power but were not successful to the same extent as they did not have Premadasa's implementation capabilities.

The private sector were drawn to the 200 garment factories programme by giving tax incentives, infrastructure such as land, electricity, telephone, water, roadways and other benefits, quotas depending on the area selected to enable them to undertake expansions or new projects without much hassle and free of bureaucracy.

To undertake this project the late president selected the then Greater Colombo Economic Commission (GCEC) and converted it to the Board of Investment of Sri Lanka in order that the BOI would cover the entire country. Since the BOI was directly under the president we found that we could withstand political interference and work to achieve targets and goals according to set rules and regulations. The grant of tax incentives, textile quotas and luxury vehicles - always a hot item for political interference - were carried out without any interference and abuse. In this respect the staff of the BOI and others who were seconded from various ministries played a gigantic role in making the 200-garment factory programme a success. This shows that given the right management and authority the public sector could play a major role in the economic development of our country.

In fact the BOI was a one-stop shop where investors could come to one place for all their requirements. 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 shop. This was the difference with Premadasa and his secretary and other staff who were men of action and always result oriented. The private sector and foreign investors appreciated such speedy action and were not pushed from pillar to post but were served from one centre.

The twin objectives of the trickle down benefits of large loans given for projects going to the grass root level and poverty alleviation preached by the international agencies such as the World Bank and ADB were achieved directly by the implementation of the 200 garments factory programme. In fact in each area there were a minimum of 500 employed in each factory with a money circulation per month of Rs. 1.5 million to Rs. 3.0 million. The target was 200 factories employing 100,000 youth and putting into the economy Rs. 300 million to Rs. 1.0 billion per month. The youth in the villages were for the first time producing export quality products going to the main markets of USA and UK.

Credit should also be given to the US government, as the late president was able to utilize the quotas given to uplift the rural economy and move industrialization from the city to the village. The increase in quotas was also obtained to sustain the expansion, which took place. Factories were even set up in Vavuniya and Batticaloa.

At the time of his untimely death, 160 areas had been allocated to construct garment factories and 117 factories were opened by the late president, six were ready for opening and 37 factories under construction. Another special feature was that each town or village got a clock tower and this indicated that a garment factory had been opened in the area. Punctuality at the openings may be due to the clock towers that were constructed and on many occasions the president was ahead of time to open the clock towers to avoid the "rahu" time.

There were many teams working to successfully carry out this gigantic task of setting up the 200-garment factory programme.

The World Trade Centre was one of the significant investments that took place during Premadasa's time, the exhibition and convention centre in Fort, and many other hospitals, housing, TV, radio, mobile phones and new hotels were other projects. Today the biggest investment is in the infrastructure sector and this includes the port development, telecommunication, power plants, hospitals and housing. We are still awaiting investments in the highways and road network.

Breaking the bureaucracy
Premadasa was able to activate the government servants who willingly and readily served the people avoiding criticism from the public. The term bureaucracy was nowhere to be seen during this period.

This was an era where government servants worked round the clock and were very effective. Many of them were awakened early in the morning by the late president if there were any adverse stories in the newspapers or to check on the progress of work he had given them. This also kept the government servants on their toes and the government machinery moving.

Conclusion
Today with people in the North and the South having a lot of expectations from the peace process it is essential to implement development programmes to accelerate economic development and alleviate poverty and usher in prosperity.

The ambitious programmes of the government could be easily achieved if they follow Premadasa's policies by providing leadership, be action and result oriented. The leaders should go to the villages and see for themselves whether their needs are met and work for the upliftment of the rural poor.

Watawala who served as the People's Bank chairman and Chairman/Director General of the Greater Colombo Economic Commission which was converted to the Board of Investment of Sri Lanka during Premadasa's regime, wrote this piece to mark the 10th death anniversary of the late president which fell on May 1. Watawala is a Fellow of the Institute of Chartered Accountants of Sri Lanka, Fellow of the Chartered Institute of Management Accountants, UK and Fellow of the Society of Certified Management Accountants of Sri Lanka.

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