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Usman Ahmad butt (R#8419) Hafiz M. RAuf (R# 8420) Farhad Hussain (R#8409)

BBA(Hons)~ C ~ 6th

PEST ANALYSIS OF BANGLADESH

PEST Analysis of Bangladesh

Political

Environmental issuesEnvironmental dreadful conditions and depletion of natural resources are often observed in Bangladesh due to poverty, over-population and lack of awareness on the subject. It is manifested by deforestation, destruction of wetlands, depletion of soil nutrients, etc. Natural calamities like floods, cyclones and tidal-bores also result in severe socio-economic and environmental damage.

LegislationThe existing Bangladeshi legislation in this area, however, dates mostly from the period of British rule. The legislation in force are as follows:

Patent and Design Act of 1911 Patent and Design Rule of 1933 Trademark Act of 1940 Copyright Act of 1999

Government policies for Foreign Investments The stated policy of the government of Bangladesh (BDG) is to pursue foreign investment actively, and it has enacted a number of policies to this end. There are no distinctions between foreign and domestic private investors regarding investment incentives or export and import policies. Incentives for investors include: 100% ownership in most sectors; tax holidays; reduced import duties on capital machinery and spares; duty-free imports for 100% exporters; and tax exemptions.

Economic

Economy situationThe economy of Bangladesh is constituted by that of a developing country. Its per capita income in 2009 was est. US$1,500 (adjusted by purchasing power parity) significantly lower than India, Pakistan, both which are also lower than the world average of $10,497.According to the gradation by the International Monetary Fund, Bangladesh ranked as the 48th largest economy in the world in 2009, with a gross domestic product of US$224.889 billion. The economy has grown at the rate of 6-7% p.a. over the past few years. More than half of the GDP belongs to the service sector; nearly half of Bangladeshis are employed in the agriculture sector, with RMG, fish, vegetables, leather and leather goods, ceramics, rice as other important produce.

Bangladesh Corporate Tax Rates

The standard rate of corporate tax in Bangladesh is 27.5% in 2008 - 2009 tax years. This is the standard corporate tax rate applicable to publicly traded

companies in Bangladesh, a list including tax rates for other corporations are as follows:

Publicly Traded Company                                     27.5% Non-publicly Traded Company                              37.5% Bank, Insurance & Financial Company                   45% Mobile Phone Operator Company                          45%

If any publicly traded company declares more than 20% dividend, 10% rebate on total tax is allowed.

Seasonality/Weather Issues

Bangladesh is a country crisscrossed with rivers, and thus uses a wide network of water-based public transportation.  Ferries and other boats compete with the railroads as a major means of public transport.  Typically overloaded and top-heavy, ferries do capsize, particularly during the monsoon season from May to October or during unexpected thunderstorms or windstorms.  Every year there are dozens of fatalities resulting from ferry accidents.

Social

Companies are facing the challenges of adapting effectively to the changing

environment in the context of globalization and in particular in the export

sector in Bangladesh. Although Consumer Rights Movement, enforcement of

government regulations and a structured view regarding the economic

importance of Social responsibility are not yet so widespread in the corporate

world in Bangladesh, companies have gradually attaching more importance to

Social responsibility in the local market as well. They are increasingly aware

that Social responsibility can be of direct economic value. Companies can

contribute to social and environmental objectives, through integrating Social

responsibility as a strategic investment into their core business strategy,

management instruments and operations. This is an investment, not a cost,

much like quality management. So, business organizations can thereby have

an inclusive financial, commercial and social approach, leading to a long term

strategy minimizing risks linked to uncertainty.

Technological

The need for faster technological development is increasingly felt in

Bangladesh. Development plans of Bangladesh have emphasized science and

technological research to develop technologies through adoption of imported

technology as well as development of indigenous technologies. As the country

is heavily dependent on imported technologies, proper planning is required for

its effective transfer through acquisition, assimilation and adoption. 

A National Science and Technology Policy has been formulated and adopted

by the Government. It has laid down the directions for S and T activities and

research, institutional and manpower development. Dissemination and

documentation facilities. The National Council for Science and Technology

(NCST) determines S and T policies, reviews the activities of different

institutions and provides direction towards S and T research and activities.