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BRANDING BANGLADESH
Strategies to develop the nation as a brand with the United Arab Emirates as
the target market
Brand Management
Term Paper
Submitted to:
Dr. Syed Ferhat Anwar
Professor, IBA, DU.
Submitted by:
Group 4
Omaer Ahmad ZR 09
Shaik Mahmood ZR 18
Kawsar Ahmad ZR 50
Rafaat Wasik Ahmed ZR 53
Rashed Al Ahmad Tarique ZR 61
BBA 16th Batch,
IBA, DU.
15th June, 2011
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Table of Contents1. Brief introduction of the UAE..................................................................................................42. Brief introduction of Bangladesh............................................................................................53. Branding Potentials of Bangladesh........................................................................................6
3.1 Tourism................................................................................................................................6
3.1.1 Cox's Bazar...................................................................................................................6
3.1.2 St. Martin's Island..........................................................................................................6
3.1.3 Nijhum Island.................................................................................................................6
3.1.4 Bandarban.....................................................................................................................6
3.1.5 Rangamati.....................................................................................................................6
3.1.6 Sylhet.............................................................................................................................6
3.1.7 Mainamati......................................................................................................................6
3.1.8 Mahasthangarh.............................................................................................................7
3.1.9 Paharpur........................................................................................................................7
3.1.10 Kuakata.......................................................................................................................7
3.1.11 Sundarbans.................................................................................................................7
3.1.12 Dhaka - The Capital....................................................................................................7
3.2 Investment and Export.........................................................................................................7
3.3 Ready-made Garments Sector............................................................................................8
3.3.1 EPZs..............................................................................................................................8
3.4 Agro-based Industry.............................................................................................................8
3.5 Frozen Foods.......................................................................................................................9
3.6 Leather.................................................................................................................................9
3.7 Labor Pool............................................................................................................................94. Justification for choosing the UAE as a target market for Bangladesh................................105. Symbiotic relationship between Bangladesh and UAE........................................................11
5.1 Benefits for Bangladesh.....................................................................................................11
5.2 Benefits for UAE................................................................................................................116. Branding strategies..............................................................................................................12
6.1 Exports...............................................................................................................................12
6.2 Governance.......................................................................................................................12
6.3 Culture and Heritage..........................................................................................................12
6.4 People................................................................................................................................12
6.5 Tourism..............................................................................................................................12
6.6 Investment and immigration...............................................................................................12
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6.7 Targeting............................................................................................................................13
6.8 Positioning..........................................................................................................................137. Branding Bangladesh Campaign..........................................................................................13
7.1 Primary stage – changing the exposure of Bangladesh in media......................................13
7.1.1 Internet........................................................................................................................13
7.1.2 Electronic and print media...........................................................................................14
7.2 Secondary stage – designing interactive touch points.......................................................15
7.3 Tertiary stage – Branding Bangladesh in UAE..................................................................16
7.4 Estimated cost of Branding Bangladesh campaign...........................................................17Annex...........................................................................................................................................18PEST Analysis.............................................................................................................................19
A1.1 Bangladesh: Political Factors..........................................................................................19
A1.1.1 Tax Policy.................................................................................................................19
A1.1.2 Employment Laws.....................................................................................................20
A1.1.3 Environmental Regulations.......................................................................................20
A1.1.4 Trade Restrictions and Tariffs...................................................................................21
A1.1.5 Political Stability........................................................................................................22
A1.2 Bangladesh: Economic Factors.......................................................................................23
A1.2.1 Economic Growth......................................................................................................23
A1.2.2 Interest Rates, Inflation & Exchange Rates..............................................................23
A1.3 Bangladesh: Social Factors.............................................................................................24
A1.4 Bangladesh: Technological Factors................................................................................25
A2.1 UAE: Political Forces.......................................................................................................29
A2.1.1 Tax Policy.................................................................................................................29
A2.1.2 Employment Laws.....................................................................................................29
A2.1.3 Environmental Regulation.........................................................................................29
A2.1.4 Trade Restrictions and Tariffs...................................................................................32
A2.1.5 Political Stability........................................................................................................33
A2.2 UAE: Economic Factors..................................................................................................34
A2.3 UAE: Social Factors........................................................................................................35
A2.4 UAE: Technological Factors............................................................................................36A3 List of Sources........................................................................................................................37
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1. Brief introduction of the UAEThe UAE has an open economy with a high per capita income and a sizable annual trade surplus.
Successful efforts at economic diversification have reduced the portion of GDP based on oil and gas
output to 25%. Since the discovery of oil in the UAE more than 30 years ago, the UAE has undergone a
profound transformation from an impoverished region of small desert principalities to a modern state
with a high standard of living. The government has increased spending on job creation and
infrastructure expansion and is opening up utilities to greater private sector involvement. The country's
Free Trade Zones - offering 100% foreign ownership and zero taxes - are helping to attract foreign
investors. The global financial crisis, tight international credit, and deflated asset prices constricted the
economy in 2009 and 2010. The economy is expected to continue a slow rebound. Dependence on oil, a
large expatriate workforce, and growing inflation pressures are significant long-term challenges1.
The country launched its first national strategy in April 2007, aiming to promote sustainable economic
growth. One of the top priorities is to stimulate the participation of the UAE national in the labor force.
From a long-term perspective, the rigid labor market is a key challenge to the country’s economy. Efforts
to labor market reform include stimulating private sector and increasing education spending. The latter
accounts for the largest part of government spending (about 30% of the total budget). Next to the
“Emiratisation” programme, the government will also pay attention to improve the working condition of
the expatriate workers. Providing better health coverage and legal protection for foreign workers are
the main focuses. The unified federal law for health insurance is one of the positive developments. As
90% of the country’s labor force consists out of foreign workers, such a high proportion would be a
potential source of social unrest if the existing problems (poor working conditions and unpaid salaries)
are not handled properly by the government.2
As a result of adverse climatic conditions (nutrient-poor soil, extreme aridity, and high summer
temperatures) in the UAE, agriculture represents a relatively small portion (an estimated 3 percent) of
the country’s gross domestic product. Dates remain the UAE’s major crop in terms of area cultivated,
but the production of vegetables has increased dramatically, particularly in Abu Dhabi, and currently
generates the most revenue. Other major products are eggs, dairy products, and poultry.3
1 https://www.cia.gov/library/publications/the-world-factbook/geos/ae.html2 Country Report United Arab Emirates - Economic Research Department, Country Risk Research October 20073 Country Profile: United Arab Emirates (UAE), Library of Congress – Federal Research Division
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2. Brief introduction of BangladeshThe economy of Bangladesh has grown 5-6% per year since 1996 despite political instability, poor
infrastructure, corruption, insufficient power supplies, and slow implementation of economic reforms.
Bangladesh remains a poor, overpopulated, and inefficiently-governed nation. Although more than half
of GDP is generated through the service sector, 45% of Bangladeshis are employed in the agriculture
sector, with rice as the single-most-important product. Bangladesh's growth was resilient during the
2008-09 global financial crisis and recession. Garment exports, totaling $12.3 billion in FY09 and
remittances from overseas Bangladeshis, totaling $11 billion in FY10, accounted for almost 25% of GDP.4
Bangladesh achieved an average gross domestic product (GDP) growth of 5.84 percent at constant price
in the last decade. The average growth rate of GDP in the 80’s and 90’s was close to 3.7 per cent while in
the present decade, it achieved a growth of 6.11 percent. However, growth rate in real sectors -
industrial and agricultural - shows that both sectors have achieved a growth rate of 4.94 and 9.74per
cent in FY2005-06, and later it followed a declining trend. Despite such declining trend of the real
sectors, the GDP maintained an average growth close to six percent from 2006 including this fiscal year.
There are foreign and local investors who are determined to start and/or expand their businesses in the
country but also pointed to a number of regulatory constraints hindering their endeavors. The anecdotal
evidence of the difficulties they encountered is validated by the country’s overall investment data.
Investment in the country has been virtually stagnant in recent years, with gross fixed investment as a
percent of GDP remaining virtually unchanged at 24 percent per annum during the 2004–2008 period.
Private sector investment has increased slightly but is far behind neighboring India and other Southeast
Asian countries. Foreign direct investment in particular lags behind, as FDI into Bangladesh in 2009 was
just below US$1 billion, while India attracted up to US$40 billion in the same period.5
4 https://www.cia.gov/library/publications/the-world-factbook/geos/bg.html5 Bangladesh Economic Growth Assessment - USAID
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3. Branding Potentials of Bangladesh
3.1 Tourism
3.1.1 Cox's Bazar
Located at a distance of 152 km. to the south of Chittagong, Cox's Bazar is the tourist capital of
Bangladesh. Having the world's longest unbroken (120 km.) beach sloping gently down to the blue
waters of the Bay of Bengal against the picturesque background of a chain of hill covered with deep
green forests, Cox's Bazar is one of the most attractive tourist spots in the world. Other tourist spots
such as Himachari, Inani, Maheshkhali, Ramu are also nearby.
3.1.2 St. Martin's Island
St. Martin's Island is a small island in the northeast part of the Bay of Bengal, about 9 km south of the tip
of the Cox's Bazar-Teknaf peninsula, and forming the southernmost part of Bangladesh.
3.1.3 Nijhum Island
This Island could be the next prime tourist spot after St. Martins Island.
3.1.4 Bandarban
Bandarban district is located in the south-east of Bangladesh about 92 km from Chittagong, covering an
area of 4479 sq km, mostly consisting of forests and hills.
3.1.5 Rangamati
Rangamati, also known as "Lake City" is an heavenly toursist spot in Bangladesh and home of the Kaptai
Lake. From Chittagong a 77 km road amidst green fields and winding hills lead to Rangamati.
3.1.6 Sylhet
Nestled in the picturesque Surma Valley amidst scenic tea plantations and lush green tropical forests,
Sylhet is a prime attraction for all tourists visiting Bangladesh. Srimangal, Tamabil and Jaflong are
popular tourist spots close to Sylhet.
3.1.7 Mainamati
An isolated low, dimpled range of hills, dotted -with more than 50 ancient Buddhist settlements of the
8th to 12th century A.D. known as Mainamati-Laimai range are extended through the centre of the
district of Comilla.
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3.1.8 Mahasthangarh
Located at a distance of 18 km. to the north of Bogra town, Mahasthangarh is the oldest archaeological
site of Bangladesh on the western bank of river Karotoa.
3.1.9 Paharpur
In Paharpur, a small village 5 km. west of Jamalganj railway station in the greater Rajshahi district, the
remains of the most important and the largest known monastery south of the Himalayas has been
excavated.
3.1.10 Kuakata
Kuakata, locally known as Sagar Kannya (Daughter of the Sea), is a rare scenic beauty spot on the
southernmost tip of Bangladesh. It is one of the rarest sea beaches on earth, which offers the unique
beauty of the full view of Rising and Setting of the crimson Sun in the waters of Bay of Bengal.
3.1.11 Sundarbans
Located at about 320km. West of Dhaka. Here in the south, spread over anarea of about 6000 sq. km. of
delta swamps along the coastal belt of Khulna is the largest mangrove forest in the world, the home of
the Royal Bengal Tiger – Sundarbans.
3.1.12 Dhaka - The Capital
Dhaka is the capital and largest city of Bangladesh. Today's Dhaka has a long story of evolution. It was
founded during the 10th century. The rich history, ancient establishments, arts and cultural heritage,
combined with the natural beauty of Bangladesh, along with the unique lifestyles, practices and
hospitality of its ever smiling friendly people, makes visiting Dhaka an Unique Experience for the
travelers markets.
3.2 Investment and Export
Bangladesh is virtually located as a bridge between the emerging markets of South Asia and fastest
growing markets of South East Asia and ASEAN countries. With the proposed concept of a "Bay of
Bengal Growth Triangle" with its apex Chittagong port extending south-west to Calcutta, Madras and
Colombo and the south-eastern arm extends through Yangon, to Thailand, to Penang with the third arm
to Colombo, this region should have growing attention of the investment world.
The following facts deserve attention in relation to assessment of Bangladesh as an investment
destination:
1. Bangladesh has never defaulted in its debt-service liabilities to multi-lateral and bilateral donors.
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2. Bangladesh grow over 21 million metric tons of food grains, basically rice and some wheat and
potatoes which is enough to feed the population of the country, and for building reserve stocks.
3. Bangladesh never experienced negative growth during last 27 years of its independence.
4. Bangladesh exports readymade garments, knitwear, brand name wind cheaters, walking shoes,
leather goods, shoes and other products, urea fertilizer, pharmaceutical, shrimps and prawn,
vegetables, jute and jute products etc. to sophisticated markets of EU, USA, Japan and many
other countries. Garments and related export account for more than US $4 billion.
5. The frequency and intensity of natural disasters are far less in Bangladesh than those in the
Philippines, Japan and even the USA; Bangladesh is located outside the major earthquake zones.
3.3 Ready-made Garments Sector
Bangladesh - the country of world famous muslin fabric has now emerged as an apparel giant in the
world textile and apparel market. The country exports its apparel products worth about 9.0 billion US$
per year to the USA, EU, Canada and most of the Scandinavian and Middle Eastern countries. At present
the country is the 6th largest apparel supplier to the USA and EU countries. The major products are Knit
and Woven Shirts and Blouses, Trousers, Skirts, Shorts, Jackets, Coats, Sweaters, Sportswear and many
more casual and fashion apparels. Today the industry has grown as the biggest export earner (76% of
total exports), employing more than 2.5 million workforce.6
3.3.1 EPZs
In order to stimulate rapid economic growth of the country, particularly through industrialization, the
government has adopted an ‘Open Door Policy’ to attract foreign investment to Bangladesh. The
Bangladesh Export Processing Zones Authority (BEPZA) is the official organ of the government to
promote, attract and facilitate foreign investment in the Export Processing Zones. The primary objective
of an EPZ is to provide special areas where potential investors would find a congenial investment
climate, free from cumbersome procedures. Two EPZs, one in Chittagong and the other near Dhaka are
now operational.7
3.4 Agro-based Industry
Being an agrarian economy, agriculture has dominated in the economy for years. It has fulfilled the
preconditions of access to input and raw materials in setting up successful agro-based industries. Alluvial
soil, a year-round frost-free environment, adequate water supply and abundance of cheap labor are
available in Bangladesh. Increased cultivation of vegetables, spices and tropical fruits now grown in
6 http://www.cherryfieldsesby.com/docs/pdf/Bangladesh.pdf7 http://www.dailyneeds.com.bd/epz.html
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Bangladesh could supply raw materials to local agro- processing industries for both domestic and export
markets.8
3.5 Frozen Foods
Frozen food sector has credible opportunities in Middle East, EU and North American countries and Far
Eastern countries. In 2004-05, total fish production was 22.16 lack metric tons of which 8.82 metric tons
were shrimp. At present, there are 868 fish hatcheries and farm of which 2.18 lacks hectors of shrimp
farm. Investment in frozen food sector with new technology and equipment has a vast potential for
growth. 9
3.6 Leather
Bangladesh produces between 2 and 3 percent of the world’s leather market. Foreign direct investment
in this sector along with the production of tanning chemicals appears to be highly rewarding. Having the
basic raw materials for leather goods as well as for the production of leather shoe, a large pool of low
cost but trainable labor force together with tariff concession facility to major importing countries under
GSP coverage, Bangladesh can be a potential off shore location for leather and leather products.10
3.7 Labor Pool
One of the biggest comparative advantages of Bangladesh is its huge and cheap labor force. As the
process of globalization has increased the connectivity and interdependence of the world's markets and
businesses, it has similarly increased migration of workers from one country to another. This is indeed
an opportunity for Bangladesh to systematically promote migration of its surplus workforce. The export
of unskilled, semi-skilled and skilled manpower from the country, which has been earning a remarkable
of amount of foreign currency, should be further encouraged.11
8 http://www.banglaembassy.com.bh/Investment%20Sectors.htm9 Foreign Direct Investment in Bangladesh (1971-2010)10 http://www.bizbangladesh.com/potential_sectors_investment.php11 http://www.thedailystar.net/newDesign/news-details.php?nid=117470
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4. Justification for choosing the UAE as a target market for Bangladesh
Bangladesh is a country with a population of 160 million.12 This huge number of population comes with a
great pool of labor which is almost 72.35 million (2009 est.)13 Bangladesh relies heavily on the inflow of
remittance. Remittance as a percentage of GDP was 11.4% in FY 2010. Total remittance receipt for
Bangladesh in FY2010 was BDT 76 billion of which, roughly 66% (BDT 50 billion) came from the Middle
East. Here again, a major proportion of the remittance was derived from three Middle Eastern countries
– Saudi Arabia, U.A.E and Kuwait.14 Although due to the great economic crisis in 2008-09 the growth in
Middle East slowed down a bit and labor demand had been sharply declined. But with the recovery from
the economic crisis it has raised again and demand for labor is growing. Again, UAE is one of very few
Middle Eastern countries which has stable political government and is not troubled with rising political
crisis. UAE has a growing economy and its GDP growth for 2011 is estimated 3-3.5% in 2011. 15 So UAE is
one of the biggest markets for skilled, semiskilled and unskilled labor force from Bangladesh.
Due to limited agriculture and industrial sectors, the United Arab Emirates (UAE) imports over 80 per
cent of its food products. A high percentage of imported products (approximately 50 per cent) are then
re-exported to Gulf Cooperative Council (GCC) countries, former Soviet states, the Indian subcontinent
and Eastern Africa. The rapidly growing population and affluence of the UAE has spiralled the demand
for high quality and specialized foods.16 Top imports in the food category of UAE include milled rice, tea,
wheat, vegetables etc.17 Furthermore Sheikha Lubna Al Qasimi, the visiting United Arab Emirates (UAE)
Minister for Foreign Trade, expressed interest to invest in Bangladesh in agriculture, food processing,
hospitality and tourism sectors. She said Bangladesh was among the 'illustrious' group of 11 3G (Global
Growth Generators) countries that had been identified as a 'source of growth potential and profitable
investment opportunities and that Bangladesh represents a huge market for their products, services and
investments.18 The types of food products that UAE has to import grow extremely well in Bangladesh.
These are the reasons which made us believe that UAE is the suitable target market in which a branding
campaign will come out with better results and return on investment.
12 CIA World Fact book, June 2010.13 http://globaledge.msu.edu/countries/bangladesh/statistics/14 BRAC EPL Macro Economy Series, 28th Feb, 201115 http://www.uaeinteract.com/news/16 http://www.austrade.gov.au/Food-to-the-United-Arab-Emirates/default.aspx17 http://faostat.fao.org/site/342/default.aspx18 http://www.priyo.com/business/2011/06/06/uae-entrepreneurs-keen-invest-28105.html
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5. Symbiotic relationship between Bangladesh and UAEThe branding of Bangladesh to UAE will be benefitting for both the countries. The symbiotic relationship
is described below from both the countries perspective.
5.1 Benefits for Bangladesh
Given the current situation Bangladesh is a developing country which needs foreign direct investments
to boost up its GDP. Again, Bangladesh is the third most efficient country when it comes to agriculture
right after China and Vietnam. Abundant production of tea, vegetables, wheat is available in almost
every year and Bangladesh will be greatly benefitted by exporting these to UAE and earning a great
amount of foreign currency.
Again, with a great pool of trainable, semiskilled, and skilled labor in Bangladesh, it has a great
opportunity to take a big role in international labor market. As UAE has high demand for semi skilled and
skilled labor Bangladesh can meet those demand with trained labor force and thus earn huge amount of
remittances.
5.2 Benefits for UAE
UAE is one of the fastest growing developed countries in Middle East. Although its growth has been
halted for a quite some time for economic depression, it is back on track and a number of construction
works is opening every single month. To make all this advancement happen, UAE has a demand for large
pool of labor which it cannot meet with its internal labor force. Almost 20% of the labor force works in
UAE is hired or contracted workers from Southeast Asia or Vietnam. With the supply of trained and
semiskilled labor from Bangladesh they will have access to a large pool of labor at a relatively low cost
which is definitely a plus on their side.
Agriculturally UAE is nowhere near self sufficient and they need to import tea, vegetables, wheat and
others which are the second largest import segment of their economy. With a food processing zone
established in Bangladesh they will have easy access to vegetables, tea, wheat and other necessary
which are quality products. Also Bangladesh has a low price range for those agro products other than
countries like SRILANKA. So for a long term trade deal with Bangladesh will definitely be on the plus side
for them.
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6. Branding strategiesBranding a nation is always a daunting one as the audience is vast and difficult to select and reach the
targeted audience through usage of varieties of media. Branding Bangladesh also covers the same
parameters. The six nation branding paradigms for Bangladesh are discussed below.
6.1 Exports
Bangladesh is a known name for its export items like garment products, leather, Jute, tea and agro
products like vegetables, and fruits. While branding Bangladesh in UAE export items like tea, vegetables,
wheat and other agro products will be one of the two key issues.
6.2 Governance
Stable governance system of Bangladesh is a key factor when it comes to building a long term strong
trade relationship with UAE. But poor management of resources and corruption is a vital issue that
hurts our image and perception about Bangladesh.
6.3 Culture and Heritage
With a rich historical background and wonderful variety of cultural values Bangladesh surely is capable
of being a major tourist attraction in South Asia. But lack of proper exposure of bangali cultural events
has been a major drawback to attract foreigners.
6.4 People
Bangladeshis are usually known for their hospitable attitude and openness though the literacy rate is still
below 40%. They are deemed as hard working people and strivers and fighters in the course of their
lives.
6.5 Tourism
Bangladesh is a land of unique natural beauty. On the south it has the longest sea beach in the world
and the largest mangrove forest with varieties of wild animals including tiger. Lack of infrastructure
development has stalled tourism of Bangladesh from its advancements.
6.6 Investment and immigration
With a stable political condition and critically important geographical location made Bangladesh a place
with high potentials for investments. Although the social condition is yet to go a long way to make it to
the upper limit, the living standards are also increasing highly.
When it comes to branding Bangladesh to UAE the two most important issue of above is exports and
investment. So our branding strategy will be focused on these two factors.
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6.7 Targeting
As we have mentioned earlier, Bangladesh has potentially competitive advantage in two factors of
nation branding when it comes to branding itself in UAE and they are export items and investment
opportunities. So given the two factors the target segment will be the potential buyers and GCC which
operates hiring from Bangladesh in UAE.
6.8 Positioning
The objectives of the whole branding campaign are to position Bangladesh as a reliable supplier of
human resource and highly suitable for investments in agro food business.
Positioning statement will be:
Bangladesh is the country, which is not only a reliable source of skilled and semiskilled labor force but
also it is the perfect country for investments with great potentials right between Chindia.
7. Branding Bangladesh CampaignTo brand Bangladesh as a vital source of skilled labor and a potential food processing zone a strong
branding campaign is required. The branding process of Bangladesh will be kicked off with this branding
campaign.
The campaign will be divided into three stages and all these phases are described in this part of the
report.
7.1 Primary stage – changing the exposure of Bangladesh in media
Media plays a vital role while building a positive or negative perception of a country. While branding
Bangladesh media will be one of the prime concerns. So the branding campaign starts with the rectifying
different media structures and educating people about the importance of creating a positive image
through media.
7.1.1 Internet
With the changing time, internet is and will be one of the vital sources of information. It is the easier and
one of the first medium through which foreigners can have excess to information about Bangladesh.
Within years it will be the most important source of information and Bangladesh as a country has
negative exposure on internet. The basic problem is widespread publishing of negative news or stories
on the online newspapers, forums, blogs and other sites and lack of emphasis on the success stories.
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This campaign starts from addressing these issues right here from Bangladesh. The steps that will be
taken are given below:
Arranging seminars and forums which includes online newspaper authority and other publishers
to create awareness about how portraying Bangladesh positively immensely important when it
comes to national image.
Workshops for journalists and news publishers and bloggers on creating strong positive national
image through emphasizing success stories.
Developing information web portals for Bangladesh which will provide comprehensive
information about different sectors like tourism, agricultural product and research, garments
industry etc.
Restructuring the existing government websites and updating them.
Applying search engine optimization to put emphasis on success stories of Bangladesh in major
sites like Google search, you tube etc.
7.1.2 Electronic and print media
Although it might seem that branding a nation is all about making the foreigners believe in our strengths
through positioning our unique selling points, it is also about how the people of the nation itself thinks
about them. Nation branding is only viable when the promised goods meets the reality or in other words
the people themselves believe in those promises and delivers them. This is why changing the perception
of Bangladesh starts from its own media.
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This perception building/ changing process starts from our own media
It is apparent that Bangladeshis have in general a negative perception about Bangladesh itself. As we
know media plays the second biggest role in perception building right after words of mouth it is the
electronic and print media that is responsible for the negative perception that prevails among us. To
prevent this a few steps will be taken and they are given below:
Celebrating the success stories from different corners of the country and encouraging people to
do believe in that.
Reduce publication of negative news which impacts in negative perception and using positive
words.
Publishing news not to terrorize people but to warn them and act as a watchdog.
Round table discussion sessions will be organized with the TV channel directors and leading newspaper
editors to illustrate them these issues using examples from countries like Britain and Russia which has
successfully implanted these theories in practice.
7.2 Secondary stage – designing interactive touch points
Ultimately all the marketing attempts fail when foreigners do have enough interest about the country
but do not get promised services which were all boasted in the marketing campaigns. So it is a must that
all the customer or in this case outsiders touch points should be interactive so that they find their
questions answered in the right manner.
The following steps will be taken to ensure that the promise is properly delivered and to take care of the
information needs of the stakeholders:
Taking vigorous quality control measures will be taken to keep the exported food items up to
the mark.
Proper training facilities will be provided to the potential expatriate workers to build them up as
skilled workers.
Restructuring government information centers like Bangladesh public information center, trade
information center, Bangladesh Parjatan information center, Agricultural information centers,
Disaster management information center etc and making sure that they are updated and
anyone can have easy access to them.
Designing one stop basic information outlets and websites which will be able to guide foreigners
to the desired location.
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Important touch points like airport, bus terminal and other modes of transport will be
monitored closely so that they are hassle free and safe for the foreigners.
7.3 Tertiary stage – Branding Bangladesh in UAE
As for the branding efforts, in this case our target country is UAE and in this stage the campaign will be
focusing on positioning Bangladesh as a promising and potential country. As we want to promote
Bangladesh a promising source of skilled and unskilled and potential agricultural hub B2B marketing
strategies will be undertaken. These are discussed below:
Recently Bangladesh has signed a tax free bilateral trade treaty with UAE. This campaign will be
focusing on developing strong trading relationships.19
AGRA Middle East shortly known as AGRAME is the largest agribusiness trade event in the
region, and an unmatched platform for international suppliers of technology, fertilizers,
irrigation systems and the like to showcase the benefits of their products to importers, buyers
and government officials from the Middle East.20 Bangladesh will be presented in this trade fair
focusing on our strengths in agricultural.
Seminars will be held to attract potential investors and in these seminars focus will be given on
the exceptional agriculture favorable climate of Bangladesh and its capability to become an
agro-product hub for UAE.
Emphasizing on vocational training programs in the country to make a skilled labor force to
offer.
To encourage UAE government to take in labor force from Bangladesh attempts will be taken to
convince our Labor Force Ministry to build a liaison with UAE’s Labor Force Ministry.
Seminars will be held focusing on Bangladesh’s immense labor force potentials and the training
facilities available to convert this labor force into semi-skilled and skilled workers.
Presenting Bangladesh in yearly International film festival through short films about Bangladesh.
Establishing special wing in UAE Bangladeshi embassy for labor force supply and potential
investors.
Audio visual will be telecast in the prime news channels.
19 http://bangladesheconomy.wordpress.com/2011/01/20/bangladesh-uae-sign-agreement-on-avoidance-of-double-taxation/20 http://www.agramiddleeast.com/
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7.4 Estimated cost of Branding Bangladesh campaign
As the branding campaign will be conducted in both Bangladesh and UAE and UAE being a top tier
developed country branding campaign will be a costly one. The estimated costs of three different stages
are given below.
Stage one
Event CostSeminar $ 700
Workshops for journalists $ 1000Developing information web portals $ 20000
SEO for success stories $ 5000
Stage two
Event Cost Restructuring govt. info centers $35000
One stop info. centers $ 15000Training facilities development $ 60000
Stage three
Event CostAGRAME trade fair $40000
Seminar to attract potential investors $ 30000Seminar on labor force $20000
Yearly film festival $ 20000Special wing in Bangladesh Embassy $ 40000
Audio visual $ 7000 for 1 min airtime*
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Annex
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The following is a detailed PEST analysis of the Bangladesh and the United Arab Emirates.
PEST AnalysisA scan of the macro-environment of the country can be expressed in terms of the
following factors:
Political
Economic
Social
Technological
The following is a PEST Analysis of Bangladesh.
A1.1 Bangladesh: Political Factors
Political factors include government regulations and legal issues and define both formal
and informal rules of the country.
A1.1.1 Tax Policy
According to the latest regulations, the following rates of taxation are applicable for companies:
Publicly Traded Company 27.5%
Non-publicly Traded Company 37.5%
Bank, Insurance & Financial Company 42.5%
Mobile Phone Operator Company 45%
Publicly Traded Mobile Operator Company 35%
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According the latest National Board of Revenue, the rate of rebates are the amount of
allowable investment is either actual investment in a year or up to 25% of total income
or Tk.10,00,000 whichever is less. Tax rebate amounts to 10% of allowable investment.
A1.1.2 Employment Laws
The People's Republic of Bangladesh has many laws governing the relationship between workers and
employers, including the 1965 Employment of Labour Act and the 1969 Industrial Relations Ordinance.
Specific laws practically apply to several industries, but enforcement is lax or virtually nonexistent.
A permanent employee at a company must give his employer 14 days notice if he wishes to quit, or one
month notice if the employee is paid on a monthly basis.If the employer doesn't provide satisfactory
redress, the fired employee can take the case to the Labor Court within 30 days of the termination. The
Labor Court may order the payment of redress or even the reinstatement of the worker. An employee
terminated on grounds not specifically defined as discharge, dismissal or retrenchment generally can
only file grievances if his employer violated requisite notice period for termination or the termination
was committed on grounds of union activity.
With millions of children employed in industries ranging from cigarette production to fish processing,
child labor is pervasive throughout all sectors of unskilled labor in Bangladesh. The garment industry
employs the most children. The law on child labor is vague, with various interpretations placing the
minimum age of employment at 12 to 13. In practice, the laws are often not enforced and children as
young as 8 have been reported working in factories.
A1.1.3 Environmental Regulations
Environmental Laws legal measures for the conservation and protection of the environment and
ecology. These laws lay down the rights and duties of citizens and public agencies in consonance with
the global call for a healthy environment. In 1989, the Ministry of Environment and Forest was
established to address environment-related issues. Bangladesh Environment Conservation Act was
enacted in 1995. The Department of Environment was also restructured. The national environment
management action plan (NEMAP) has also been finalized and is being implemented.
Roughly, the Environmental Laws can be categorized as follows:
1. Pollution (Environment Conservation Act of 1995)
2. Occupational Hazard and Safety(The Brick Burning Control Act of 1989)
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3. Dangerous substances and Public protection(Prohibition of Smoking in Show Houses Act of
1952; Pure Food Ordinance of 1959)
4. Displacement , Relief and Rehabilitation
5. Management of Land
6. Agricultural Resources Management(Agricultural Pesticides Ordinance of 1971)
7. Water Resource Management
8. Fishery(Fisheries Ordinance of 1983)
9. Forestry(The Forest Act of 1927)
10. Wildlife(The Bangladesh Wild Life Preservation Order of 1973)
11. Energy and Mineral resources
12. Rural and Urban planning(The Public Parks Act, 1904; Undesirable Advertisement Control Act of
1952
13. Transportation and Safety(Motor Vehicles Ordinance of 1983)
A1.1.4 Trade Restrictions and Tariffs
Tariff Policy regulates tax on imported and, more rarely, exported goods. It refers to deliberate
imposition or withdrawal of tax or changing the existing rate of tax on international trade in pursuit of
the government's development objectives. Till 1992-93, there was also 'export tariff' in the Second
Schedule of the Customs Act, which was repealed by the Finance Act 1993.
The items currently exempted from customs duties include:
a) Capital machinery;
b) Raw materials of Medicine;
c) Poultry Medicine, Feed & machinery;
d) Defence stores;
e) Chemicals of leather and leather goods;
f) Private power generation unit;
g) Textile raw materials and machinery;
h) Solar power equipment;
i) Relief goods;
j) Goods for blind and physically retarded people; and
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k) Import by Embassy and UN.
The following table shows a snapshot of Bangladesh’s trade regime
Policy Criteria Status
Exchange Rate Unified
Exchange Rate determination Free Float
Payment convertibility
Current account
Capital account
Yes
No
Import restrictions
Import licensing
QRs on imports
State monopolies
No
No
No
Tariff structure
Top Rate, 2010
Average Protective Rate 2010
Tariff slabs (customs duty)
Para-tariffs
25
20.1
3, 7, 12, 25
Supplementary Duties
Existence of high level of NTBs No
Trade Openness (trade-GDP ratio) 43
A1.1.5 Political Stability
Political conflict in Bangladesh has led to corruption, poverty and severe problems in the educational
system. The country is facing increasing instability. A political power vacuum is being filled by radical
Islamists, posing a threat to the secular-democratic system. Since the restoration of democracy in 1991,
Bangladesh has gone through several unstable coalitions, parliamentary gridlock, and a 2-year
suspension of civil liberties in the middle of this decade by a caretaker government to restore law and
order and to tackle corruption. However, these events have not impacted overall policy management or
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macroeconomic stability. While they may have turned policy attention from more pressing reforms, they
have not impaired the government’s ability to service its debt obligations. Hence the outlook remains
positive for the future.
A1.2 Bangladesh: Economic Factors
Economic factors affect the purchasing power of potential customers and the firms’ cost of capital. The
following are factors that affect the macroeconomic scenario of Bangladesh:
A1.2.1 Economic Growth
Growth averaged 5.4% per year over the past five years, which has been the highest 5-year average
since the country’s independence. Growth was underpinned by:
Resurgence in private investment, which grew at an annual average rate of 10% and increased its share
in GDP from 16% to 18.5%.
The share of public investment fell from 7% to 6% during the same period.
Growth has been fairly broad-based, although it has benefited from strong exports, mainly in the
garment exports.
Large remittance inflows fueled growth in construction and services sectors.
In agriculture, growth has been rather anemic, averaging just 2% over the same period.
On the policy side, a good record on growth seems to have benefited from impressive macro stability.
Inflation hasn’t touched double digits for almost two decades, while public and external debt situation is
fairly comfortable.
Saving and investment rates, currently at about 24%, are relatively high compared with other countries
at similar income levels. The pace of human development, which is a key contributor to growth and
includes progress in health, education and social protection, has surpassed that of most low income
countries (LDCs).
A1.2.2 Interest Rates, Inflation & Exchange Rates
The interest rates spreads in the country have remained adamantly between 5-6% over the last five
years. The regulatory authority for banks, the Bangladesh Bank has proved itself more willing to keep
the inflation in check rather than let the interest rates fall. As a result, despite the massive shifts in the
global food markets, the inflation has not gotten out of hand, which might have resulted in a national
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uprising. The exchange rate position of the economy has seen a relative devaluation of the BDT in
comparison with the USD. Although this has fueled an inflation in prices, the exports sector has
benefitted from this devaluation of the BDT.
Year Real GDP Growth Rate Inflation Rate Exchange Rate Bank Lending Rate
2006 6.40 % 7.00 % 69.031 14.00
2007 6.60 % 7.20 % 69.893 15.33
2008 6.30 % 9.10 % 68.554 16.00
2009 4.90 % 8.90 % 69.039 16.38
2010 5.70 % 5.40 % 70.59 14.60
A1.3 Bangladesh: Social Factors
Social factors include the demographic and cultural aspects of the external
macroenvironment. These factors affect customer needs and the size of potential
markets. The include demographic factors as well as other factors.
The country has seen a dramatic reduction in poverty over the last two decades. The
proportion of the population below the poverty line has been gradually falling. Another
general trend is that there has been a gradual shift in the population from rural
Bangladesh to the urban sphere. The proportion of the population that lives beyond the
age of 65 has been rising due to improved standards of healthcare. The growth in the
population has also stemmed down.
Year Population
growth rate
Population %
Rural
% below
poverty line
% employment to
population
% Survival
to 65
2008 1.67 155,463,100.00 73.82 56.40 67.51
2009 1.29 157,752,500.00 73.34 45 56.10 68.51
2010 1.55 160,000,100.00 72.86 36.3 56.10 69.50
2011 1.57 162,220,800.00 72.38 41 56.00 70.33
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A1.4 Bangladesh: Technological Factors
Technological factors can lower barriers to entry, reduce minimum efficient production
levels, and influence outsourcing decisions. Bangladesh has a thriving industrial sector
with a diverse range of sectors outperforming global growth rates. The abundant natural
resources of the country combined with competitive high quality labour and a business
friendly environment, make Bangladesh a compelling proposition for companies
investing in the region. The efficiency improvements must come from implementing
more modern technologies that will better utilize the vast pool of resources available.
Technological giants such as Samsung and Nokia have already set up Research &
Development centres in Bangladesh. Other sectors that hold immense promise for
fantastic R&D include leather, pharmaceuticals, biotech crops, and renewable energy.
The following is a list of local organizations conducting Research & Development activities in Bangladesh and their websites.
Organization Website
Bangladesh Agricultural Research Council barc.gov.bd
Bangladesh Agricultural Research Institute bari.gov.bd
Bangladesh Fisheries Research Institute fri.gov.bd
Bangladesh Forest Research Institute bfri.gov.bd
Bangladesh Institute of Development Studies bids.org.bd
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Bangladesh Institute of Nuclear Agriculture bina.gov.bd
Bangladesh Livestock Research Institute blri.gov.bd
Bangladesh Medical Research Council bmrcbd.org
Bangladesh Rice Research Institute brri.gov.bd
Bangladesh Sugarcane Research Institute bsri.gov.bd
Brac Research and Evaluation Division bracresearch.org
Centre for Health and Population Research icddrb.org
Geological Survey of Bangladesh gsb.gov.bd
SAARC Meteorological Research Centre saarc-smrc.org
Soil Resources Development Institute srdi.gov.bd
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The following is a list of organizations conducting Renewable Engergy Research &
Development in Bangladesh.
Technology Involved Organization
Remarks
Solar Photovoltaic/Balance of system
Grameen Shakti, CMES, IFRD, BUET
It is possible to manufacture all the balance of system components (like Charge controller, Cable, Inverter, Converter etc.) locally
Solar Water Heaters
RERC, Dhaka University, IFRD, CMES
It is possible to manufacture with local design and fabrication facilities.
Improved Stoves IFRD Number of designs have been development at IFRD with three basic categories- (I) improved stove without chimney (II) improved stove with chimney and (III) improved stove with waste heat utilization.
Solar Cooker-Parabolic
IFRD, ANANDO IFRD has successfully field-tested it’s design which can quickly raise water to boiling point under clear sunny days. ANANDO is also manufacturing and marketing it’s products with imported materials and design.
Solar Cooker-Box Type
IFRD, CMES IFRD’s design is made of locally available raw materials. The manufacturing cost of such a cooker is about Tk. 800.00 excluding the cost of utensils. The cookers are now being sold at IFRD.
Solar Dryer IFRD, BRRI, BAU
Different types have been designed and tested with locally available materials.
Solar Wood Seasoning Plant
BFRI A simple, inexpensive and effective solar kiln has been developed for seasoning timber using solar radiation. The kiln can be constructed conveniently with locally available materials. Timbers of different species and dimensions can be seasoned throughout the year in the solar kiln.
Solar Passive Architecture
BCSIR A solar house has been designed and built in the BCSIR campus, the purpose is to keep the house warm in winter and cool in summer.
Briquette Machine
BIT Khulna, BRRI
Under the “RET in Asia” program, BIT Khulna is developing better machines with longer screw life.
Biogas IFRD, LGED, BAU
Fixed-Dome type plants are indigenously designed and constructed.
Water Current Turbine
Department of Mechanical Engineering (DME), BUET
DME, BUET is studying a model water current turbine for harnessing energy from river current and in the process of developing a prototype.
Wind Turbines BUET Computational models are developed for simulation of Horizontal and Vertical Axis Wind Turbines.
Solar Photovoltaic / Balance of system
Grameen Shakti, CMES, IFRD, BUET
It is possible to manufacture all the balance of system components (like Charge controller, Cable, Inverter, Converter etc.) locally.
Solar Water RERC, Dhaka It is possible to manufacture with local design and
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Heaters University, IFRD, CMES
fabrication facilities.
Improved Stoves IFRD Number of designs have been development at IFRD with three basic categories- (I) improved stove without chimney (II) improved stove with chimney and (III) improved stove with waste heat utilization.
Solar Cooker-Parabolic
IFRD, ANANDO IFRD has successfully field-tested it’s design which can quickly raise water to boiling point under clear sunny days. ANANDO is also manufacturing and marketing it’s products with imported materials and design.
Solar Cooker-Box Type
IFRD, CMES, ShineHardy
IFRD’s design is made of locally available raw materials. The manufacturing cost of such a cooker is about Tk. 800.00 excluding the cost of utensils. The cookers are now being sold at IFRD.
Solar Dryer IFRD, BRRI, BAU, ShineHardy
Different types have been designed and tested with locally available materials.
Solar Wood Seasoning Plant
BFRI A simple, inexpensive and effective solar kiln has been developed for seasoning timber using solar radiation. The kiln can be constructed conveniently with locally available materials. Timbers of different species and dimensions can be seasoned throughout the year in the solar kiln.
Solar Passive Architecture
BCSIR A solar house has been designed and built in the BCSIR campus, the purpose is to keep the house warm in winter and cool in summer.
Briquette Machine
BIT Khulna, BRRI
Under the “RET in Asia” program, BIT Khulna is developing better machines with longer screw life.
Biogas IFRD, LGED, BAU
Fixed-Dome type plants are indigenously designed and constructed.
Water Current Turbine
Department of Mechanical Engineering (DME), BUET
DME, BUET is studying a model water current turbine for harnessing energy from river current and in the process of developing a prototype.
Wind Turbines BUET Computational models are developed for simulation of Horizontal and Vertical Axis Wind Turbines.
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The PEST analysis for the UAE is conducted in the following section.
A2.1 UAE: Political Forces
A2.1.1 Tax Policy
There are no taxes levied by the Federal Government on income or wealth of companies and individuals
in United Arab Emirates (UAE). However, most emirates have issued tax decrees of general application.
These impose income tax of up to 50% on taxable income of 'bodies corporate, wheresoever
incorporated'. In practice, however, the enforcement of the decrees is limited to oil exporting
companies and foreign banks. The tax rate may range between 55% and 85% depending on relationships
and decrees with the specific emirate. The tax of Foreign Banks is not enforced in all the emirates.
Branches of foreign banks are taxed at 20% of their taxable income in the Emirates of Abu Dhabi, Dubai,
Sharjah and Fujairah. Special arrangements also exist for major government controlled joint venture
companies and some foreign banks. No tax returns are requested or required of other businesses
operating in the United Arab Emirates (UAE). Companies establishing major ventures in the UAE might,
however, be well advised to seek formal tax exemptions from the respective Ruler in order to avoid
future assessments. UAE free zones, which permit 100% foreign ownership, grant specific tax
exemptions ranging from 15 to 50 years to companies operating in the free zones.
There are no consumption taxes or VAT (Value Added Tax) in the UAE, but individual Emirates may
charge levies on certain products such as liquor and cigarettes and on certain services such as those
provided in the hospitality industry.
A2.1.2 Employment Laws
Employment law is governed in the United Arab Emirates (UAE) by Federal Law No. 8 of 1980. Employers
need to be aware of a number of things when letting employees go. During a probation period an
employer may cancel the employment at any time without notice and without end-of-service benefits.
before the expiry date is in breach of the law (and must provide compensation) unless the reason for the
termination within the law. Child Labor below the age of 15 years is illegal in the UAE.
The UAE Labour Law governs both the employment of nationals and non-nationals.
A2.1.3 Environmental Regulation
The UAE Federal Environment Agency was formed in 1993 to manage the environment of the Emirates
and to implement national environmental laws. In addition, each Emirate has the ability to formulate
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additional laws to protect the interests of its individual interests as long as they do not impede on the
Federal Laws of the Union.
The following is a brief description of the environmental protection laws applicable in the UAE.
Year Subject of the Law
Federal Laws
1999 Concerning Exploitation, Conservation, and Development of Living Aquatic Resources in the
United Arab Emirates and its Executive Order issued by Ministerial Decree No. (302) of 2001.
1999 Concerning Protection and Development of the Environment as amended, and its Executive Order
issued by council of Ministers Decree No. (37) of 2001 which includes: Click here for more
information
Regulation concerning Environmental Impact Assessment of Projects.
Regulation concerning Handling of Hazardous Substances, Hazardous Wastes and Medical
Wastes.
Regulation concerning Protection of the Marine Environment.
Regulation concerning Agricultural Pesticides and Fertilizers.
And Council of Ministers Decree No. (12) of 2006 which includes:
Regulation concerning Protection of Air from Pollution.
Available only In Arabic
2002 Concerning Regulation and Control of the Use of Radioactive Sources and Protection against its
Hazards as amended.
2002 Concerning the Regulation and Control of International Trade in Endangered Species of Wild
Fauna and Flora and its Executive Order issued by Council of Ministers Decree No. (22) of 2003.
Regional Conventions
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1979 Kuwait Regional Convention for cooperation on the protection of the marine environment from
pollution,
1990 Protocol concerning Marine Pollution resulting from Exploration and Exploitation of the
Continental Shelf,
2003 Convention on Conservation of Wildlife and its Natural Habitats in the GCC countries
2005 Protocol on the Control of Marine Transboundary Movements and Disposal of Hazardous Wastes
and Other Wastes.
International Conventions
1974 Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter
(LDC),1972
1983 International Convention for the Safety of Life at Sea (SOLAS), 1974.
1983 International Convention for the Prevention of Pollution of the Sea by Oil, 1954 and its
amendments.
1983 International Convention Relating to Intervention on the High Seas in Cases of Oil Pollution
Casualities (INTERVENTION), 1969.
1983 International Convention on Civil Liability for Oil Pollution Damage (CLC), 1969.
1989 Vienna Convention for the Protection of the Ozone Layer of 1985 and Montreal Protocol on
Substances that Deplete the Ozone Layer of 1987.
1990 Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) 1973.
1990 Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their
disposal, 1989.
1995 United Nations Framework Convention on Climate Change for the year 1992.
1997 1992 Protocol Concerning Amendments on International Convention on Civil Liability for Oil
Pollution Damage (CLC), 1969 and International Convention on the Establishment of an
International Fund for Compensation for Oil Pollution Damage, 1971.
1997 Convention on Limitation of Liability for Maritime Claims (LLMC), 1976.
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1998 United Nations Convention to Combat Desertification for the year 1994.
1999 Convention on Biological Diversity for the year 1992.
2002 Convention on Persistent Organic Pollutants (POPS), 2001.
2002 Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in
International Trade (PIC Convention),1998.
2005 Montreal Amendments (London 1990, Copenhagen 1992, Montreal 1997, Bijing 1999).
2005 Kyoto Protocol, 1997
A2.1.4 Trade Restrictions and Tariffs
Import/export prohibitions exist in the United Arab Emirates for several reasons ranging from
environmental, health and safety, religious and even moral reasons. The prohibitions are regulated by
the GCC and include all kinds of items ranging from drugs, counterfeit money, certain toys and even
several types of waste . All imports from Israel are prohibited. The UAE also restricts any oil export due
to its membership with the Organization of Petroleum Exporting Countries (OPEC). The UAE restricts any
export of goods that may be used as weapons of mass destruction or conventional weapons. They
regulate exports by complying with international laws.
Most goods in the United Arab Emirates have a 5% tariff rate. There are not any tariff quotas, nuisance
rates or duties and taxes on imports. The tariff is based on The Gulf Corporation Council (GCC) and is
duty free within other GCC countries. Many imperative items are duty free such as agricultural raw
materials, food products, pharmaceutical products and others. The exceptions to the 5% tariff are for
alcohol at a 50% tariff and tobacco products at 100% tariff.
Duty-free imports are also allowed for, inter alia, international organizations, diplomatic missions, the
armed forces, police, and charity institutions.21 There is currently no duty-drawback scheme, although
this is permissible under Article 16 of the Executive Supplementary Notes to the GCC Common Customs
Law.
21
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The following table shows the tariff rates applicable under the Most Favored Nations(MFN) category:
Bound tariff lines (% of all tariff lines) 100
Duty-free tariff lines (% of all tariff lines) 5.8
Non-ad valorem tariffs (% of all tariff lines) 0.4
Tariff quotas (% of all tariff lines) 0.0
Non-ad valorem tariffs with no AVEs (% of all tariff
lines)a
0.4
Simple average tariff rate 5.1
Agricultural products (WTO definition)
Non-agricultural products (WTO definition)
Agriculture, hunting, forestry and logging (ISIC 1)
Mining and quarrying (ISIC 2)
Manufacturing (ISIC 3)
6.2
4.8
3.3
5.0
5.2
Domestic tariff "spikes" (% of all tariff lines)d 0.5
International tariff "peaks" (% of all tariff lines) e 0.5
Overall standard deviation of applied rates 5.6
"Nuisance" applied rates (% of all tariff lines) f 0.0
A2.1.5 Political Stability
Since its formation in 1971 the UAE has enjoyed a political stability. The existing political structures
appear to suit the tribal society of the UAE, and the distribution of huge oil revenues in the form of
social and economic infrastructure, high salaries, a high standard of social services, such as health and
education, has raised the standard of living for UAE citizens and considerably reduced the likelihood of
internal political and social unrest. The UAE government has maintained a relatively good record on
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human rights since the formation of the state. This in turn has promoted political and social stability.
The UAE is an active member of many regional and international associations such as the Arab League,
the United Nations, the Non-Aligned Movement, the Arab Gulf Cooperation Council, and the
Organization of the Islamic Conference. Relations with many countries of the world, particularly the
Western democratic countries, have been traditionally warm. Political and social stability has gone hand
in hand with liberal trade policies and has paved the way for investment (domestic and international) in
the industrial sector.
A2.2 UAE: Economic Factors
The discovery of oil opened the way for the UAE into the industrial age. The federation, formed in 1971,
used its vast oil wealth during the 1970s to transform the national economy through expansion of roads,
ports, airports, communications facilities, electric power plants, and water desalination facilities, as well
as construction of huge oil-processing complexes. With the completion of major infrastructural projects
by the early 1980s, the focus of development shifted to diversifying the economy by establishing capital-
intensive industries based on oil and gas resources.
There are several factors characterized by the UAE, which was a direct factor to attract a lot of capital &
businessmen to invest in the industrial sector, branches & various production lines. The investment
climate in the country has proved suitable becuase of some of the following factors:
Encouraging economic legislations, which are based on a clear and consistent economic policy.
Stability political factor, which the country enjoys in a light balanced relations with the
worldcountries.
Geographical proximity of the global markets, making the UAE the major station in the re-
exporttrade to the various parts of the world.
The availability of domestic capital, which encourages to joint ventures with businessmen in
thefriendly countries.
The existence of specialized banks and other commercial and national, Arab & global providers
of facilities in various banking services required by the project
The standard interest rate in UAE was last reported at 1.8%. The formal interest rate is the rate on
facilities to maintain liquidity at bank from 2006 until this year the UAE average interest rate was 3.11%
getting a historical high of 5.53% in Dec of 2006 & record low of 1.46% in Nov. The Central Bank
aligns interest rates with the US to manage money supply growth. The exchange rate is currently pegged
at 1 AED=0.272257 USD.
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A2.3 UAE: Social Factors
The three major concepts that play a primary role in the social and cultural life of the United Arab
Emirates include Islam, family values and hospitality.
Islam – Religion has played an important and influential role in shaping the society and culture of the
UAE. Islam is the official and majority religion and pervades almost every aspect of life. Laws, education,
food, clothes, daily routines and even conversations are all strongly influenced by Islam. The Islamic faith
places great emphasis on behaviours such as generosity, respect and modesty which most Emiratis will
display. Understanding Islam and the influence it has on everyday life and Emirati business culture is the
first step to conducting successful business in the UAE.
Family – Family and tribal connections form the basis of Emirati social structure. The family and tribe are
highly influential and play a role in shaping a person’s values and behaviour. It serves to support its
members both financially and emotionally and as such, the family comes before anything else and its
honour is protected by doing whatever necessary. Loyalty between family and tribe members carries
over into business where it is not uncommon for companies to be run by and employ several members
of one family or tribe.
Hospitality – Hospitality is an essential part of Emirati culture and applies to both social and professional
contexts. Guests will be received with enormous generosity. In the home this usually comes in the form
of a feast of traditional Emirati food, especially during the holidays, while in a business context,
meetings are almost always accompanied by traditional Arab coffee and pastries. The emphasis placed
on hospitality is closely connected to the importance of relationships. Foreigners should show their
gratitude and dedicate time to cultivating relationships with their Emirati counterparts.
Some of the highlights of the UAE demographics are shown in the table. The population growth is quite
high in relation to the income levels and quite a large part of the population are of working age and
increasing. These factors means that the country has a relatively bulgy population pyramid and hence
will face a decline in the work force in the future. However, due to the large population growth rate, the
influx of workers will continue until the current generation retires and will keep the country on track of
high growth rates for the forseeable future, barring external shocks.
Year Population Population %
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growth rate employmen
t to
population
2008 3.83 4,621,399 75.1
2009 3.69 4,798,491 75.1
2010 3.56 4,975,593 75.7
2011 3.28 5,148,664 75.9
A2.4 UAE: Technological Factors
The tax initiatives and massive investment of petrodollars by the UAE in setting up Research &
Development centres and universities with reputed research labs and partnerships with international
institutions has enabled it to play catchup at a rapid pace with the rest of the developed world. This has
meant that the country has attained massive efficiency gains in a number of technical fields.
ICT is one of the leading sectors where the UAE is forging ahead. Organizations such as the Dubai
Internet City have enabled the building up of a strong base of internet and telecommunication
companies. Foreign and local firms are lured in to form clusters in these areas because they are lured in
by zero taxes, 100% foreign ownership and ability to repatriate profits.
Recently, a $400 million fund was setup to creat DuBiotech R&D Park in Dubai. This sector will only grow
further in the future. This sizeable investment will only help strengthen the poisition of the country.
The UAE has also been forging strategic partnerships with hefty organizations such as the Department of
Energy of the United States of America in the development of renewable energy sources. Despite the
roots of its wealth being forged in oil, a headstart in the sector of renewable energy could give the UAE
the kick it needs when the oil eventually runs out.
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A3 List of Sources
1. https://www.cia.gov/library/publications/the-world-factbook/geos/ae.html
2. Country Report United Arab Emirates - Economic Research Department, Country Risk Research
October 2007
3. Country Profile: United Arab Emirates (UAE), Library of Congress – Federal Research Division
4. https://www.cia.gov/library/publications/the-world-factbook/geos/bg.html
5. Bangladesh Economic Growth Assessment - USAID
6. http://www.cherryfieldsesby.com/docs/pdf/Bangladesh.pdf
7. http://www.dailyneeds.com.bd/epz.html
8. http://www.banglaembassy.com.bh/Investment%20Sectors.htm
9. Foreign Direct Investment in Bangladesh (1971-2010)
10. http://www.bizbangladesh.com/potential_sectors_investment.php
11. http://www.thedailystar.net/newDesign/news-details.php?nid=117470
12. CIA World Fact book, June 2010.
13. http://globaledge.msu.edu/countries/bangladesh/statistics/
14. BRAC EPL Macro Economy Series, 28th Feb, 2011
15. http://www.uaeinteract.com/news/
16. http://www.austrade.gov.au/Food-to-the-United-Arab-Emirates/default.aspx
17. http://faostat.fao.org/site/342/default.aspx
18. http://www.priyo.com/business/2011/06/06/uae-entrepreneurs-keen-invest-28105.html
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19. http://bangladesheconomy.wordpress.com/2011/01/20/bangladesh-uae-sign-agreement-on-
avoidance-of-double-taxation/
20. http://www.agramiddleeast.com/
21. https://www.cia.gov/library/publications/the-world-factbook/geos/bg.html
22. https://www.cia.gov/library/publications/the-world-factbook/geos/ae.html
23. http://www.indexmundi.com/united_arab_emirates/
24. http://www.indexmundi.com/bangladesh/
