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 Contents
Brief introduction of the UAE......................................................................................5 Brief introduction of Bangladesh................................................................................7 Branding Potentials of Bangladesh.............................................................................8 3.1 Tourism.............................................................................................................8 3.2 Investment and Export......................................................................................9 3.3.1 EPZs..........................................................................................................11 3.4 Agro-based Industry........................................................................................11 3.5 Frozen Foods................................................................................................... 11 3.6 Leather............................................................................................................ 11 3.7 Labor Pool........................................................................................................12 Justification for choosing the UAE as a target market for Bangladesh......................13 Symbiotic relationship between Bangladesh and UAE..............................................14 5.1 Benefits for Bangladesh..................................................................................14 5.2 Benefits for UAE.............................................................................................. 14 Branding strategies..................................................................................................15 6.1 Exports............................................................................................................15 6.2 Governance ....................................................................................................15 6.3 Culture and Heritage ......................................................................................15 6.4 People .............................................................................................................16 6.5 Tourism...........................................................................................................16 6.6 Investment and immigration...........................................................................16

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6.7 Targeting ........................................................................................................16

6.8 Positioning.......................................................................................................16 Branding Bangladesh Campaign..............................................................................17 7.1 Primary stage changing the exposure of Bangladesh in media....................17 7.1.1 Internet..................................................................................................... 17 7.1.2 Electronic and print media .......................................................................18 7.2 Secondary stage designing interactive touch points....................................19 7.3 Tertiary stage Branding Bangladesh in UAE.................................................20 7.4 Estimated cost of Branding Bangladesh campaign.........................................21 Annex.......................................................................................................................23 PEST Analysis........................................................................................................... 24 A1.1 Bangladesh: Political Factors.........................................................................24 A1.1.1 Tax Policy................................................................................................24 A1.1.2 Employment Laws...................................................................................25 A1.1.3 Environmental Regulations.....................................................................25 A1.1.4 Trade Restrictions and Tariffs.................................................................26 A1.1.5 Political Stability......................................................................................28 A1.2 Bangladesh: Economic Factors......................................................................28 A1.2.1 Economic Growth....................................................................................28 A1.2.2 Interest Rates, Inflation & Exchange Rates.............................................29 A1.3 Bangladesh: Social Factors............................................................................30 A1.4 Bangladesh: Technological Factors...............................................................31 A2.1 UAE: Political Forces......................................................................................36 A2.1.1 Tax Policy................................................................................................36

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A2.1.2 Employment Laws...................................................................................36 A2.1.3 Environmental Regulation.......................................................................37 A2.1.4 Trade Restrictions and Tariffs.................................................................39 A2.1.5 Political Stability......................................................................................41 A2.2 UAE: Economic Factors..................................................................................42 A2.3 UAE: Social Factors........................................................................................43 A2.4 UAE: Technological Factors...........................................................................44 A3 List of Sources.....................................................................................................46

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Brief introduction of the UAE

The 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 countrys 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 countrys 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

1 2

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https://www.cia.gov/library/publications/the-world-factbook/geos/ae.html Country Report United Arab Emirates - Economic Research Department, Country Risk Research October 2007

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 countrys gross domestic product. Dates remain the UAEs 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

Country Profile: United Arab Emirates (UAE), Library of Congress Federal Research Division

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Brief introduction of Bangladesh

The 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 80s and 90s 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 countrys 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 20042008 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 5

https://www.cia.gov/library/publications/the-world-factbook/geos/bg.html Bangladesh Economic Growth Assessment - USAID

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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.

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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. 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

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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. 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

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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 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 worlds leather market. Foreign direct investment in this sector along with the production of tanning
6 7 8 9

http://www.cherryfieldsesby.com/docs/pdf/Bangladesh.pdf http://www.dailyneeds.com.bd/epz.html http://www.banglaembassy.com.bh/Investment%20Sectors.htm Foreign Direct Investment in Bangladesh (1971-2010)

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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
11

of

amount

of

foreign

currency,

should

be

further

encouraged.

10 11

http://www.bizbangladesh.com/potential_sectors_investment.php http://www.thedailystar.net/newDesign/news-details.php?nid=117470

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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
12 13 14 15 16 17

CIA World Fact book, June 2010. http://globaledge.msu.edu/countries/bangladesh/statistics/ BRAC EPL Macro Economy Series, 28th Feb, 2011 http://www.uaeinteract.com/news/ http://www.austrade.gov.au/Food-to-the-United-Arab-Emirates/default.aspx http://faostat.fao.org/site/342/default.aspx

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Bangladesh

represents

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 on investment. which made us believe that UAE is the suitable target

market in which a branding campaign will come out with better results and return

Symbiotic relationship between Bangladesh and UAE

The 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.
18

http://www.priyo.com/business/2011/06/06/uae-entrepreneurs-keen-invest-28105.html

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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.

Branding strategies
Branding 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.

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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.

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:

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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.

Branding Bangladesh Campaign

To 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. 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.

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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.

information

center,

trade

information

center,

Bangladesh

Parjatan

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Restructuring

government

information

centers

like

Bangladesh

public

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. 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.

19

http://bangladesheconomy.wordpress.com/2011/01/20/bangladesh-uae-sign-agreementon-avoidance-of-double-taxation/ 20 http://www.agramiddleeast.com/

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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 UAEs Labor Force Ministry.

Seminars will be held focusing on Bangladeshs 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.

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 Seminar Workshops for journalists Developing information web portals SEO for success stories Cost $ 700 $ 1000 $ 20000 $ 5000

Stage two Event Restructuring govt. info centers One stop info. centers Training facilities development Cost $35000 $ 15000 $ 60000

Stage three Event AGRAME trade fair Cost $40000

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Seminar to attract potential investors Seminar on labor force Yearly film festival Special wing in Bangladesh Embassy Audio visual

$ 30000 $20000 $ 20000 $ 40000 $ 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 Analysis
A 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, Company

Insurance

&

Financial 42.5%

Mobile Phone Operator Company

45%

Publicly

Traded

Mobile

Operator 35%

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Company

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

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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) 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 199293, there was also 'export tariff' in the Second Schedule of the Customs Act, which was repealed by the Finance Act 1993.

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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 k) Import by Embassy and UN.

The following table shows a snapshot of Bangladeshs trade regime

Policy Criteria Exchange Rate Exchange Rate determination Payment convertibility Current account Capital account Import restrictions Import licensing QRs on imports State monopolies Tariff structure No No No Yes No Status Unified

Free Float

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Top Rate, 2010 Average Protective Rate 2010 Tariff slabs (customs duty) Para-tariffs Existence of high level of NTBs Trade Openness (trade-GDP ratio) 25 20.1 3, 7, 12, 25 Supplementary Duties

No

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 seculardemocratic 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 macroeconomic stability. While they may have turned policy attention from more pressing reforms, they have not impaired the governments 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 by: highest 5-year average since the countrys independence. Growth was underpinned

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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 hasnt 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 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. Yea r Real GDP Growth Rate Inflation Rate Exchange Rate Bank Lending Rate

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200 6 200 7 200 8 200 9 201 0

6.40 %

7.00 %

69.031

14.00

6.60 %

7.20 %

69.893

15.33

6.30 %

9.10 %

68.554

16.00

4.90 %

8.90 %

69.039

16.38

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.
Yea r 200 8 200 9 1.29 Population growth rate 1.67 155,463,100. 00 157,752,500. 00 73.34 45 56.10 68.51 Population % Rural 73.82 % below poverty line % employment to population 56.40 % Survival to 65 67.51

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201 0 201 1

1.55

160,000,100. 00

72.86

36.3

56.10

69.50

1.57

162,220,800. 00

72.38

41

56.00

70.33

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 Bangladesh Agricultural Research Council

Website barc.gov.bd

Bangladesh Agricultural Research Institute

bari.gov.bd

Bangladesh Fisheries Research Institute

fri.gov.bd

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Bangladesh Forest Research Institute

bfri.gov.bd

Bangladesh Institute of Development Studies

bids.org.bd

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

Research

icddrb.org

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Centre for Health and Population

Geological Survey of Bangladesh

gsb.gov.bd

SAARC Meteorological Research Centre

saarcsmrc.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.

Involved Organization Solar Grameen Shakti, Photovoltaic/ CMES, IFRD, Balance of system BUET Solar Water RERC, Dhaka Heaters University, IFRD, CMES Improved Stoves IFRD

Technology

Remarks It is possible to manufacture all the balance of system components (like Charge controller, Cable, Inverter, Converter etc.) locally It is possible to manufacture with local design and fabrication facilities.

Solar CookerParabolic Solar Cooker-Box Type Solar Dryer Solar Wood Seasoning Plant

Solar Passive Architecture Briquette Machine Biogas Water Current Turbine Wind Turbines Solar Photovoltaic / Balance of system Solar Water Heaters

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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. IFRD, ANANDO IFRD has successfully field-tested its design which can quickly raise water to boiling point under clear sunny days. ANANDO is also manufacturing and marketing its products with imported materials and design. IFRD, CMES IFRDs 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. IFRD, BRRI, BAU Different types have been designed and tested with locally available materials. 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. 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. BIT Khulna, BRRI Under the RET in Asia program, BIT Khulna is developing better machines with longer screw life. IFRD, LGED, Fixed-Dome type plants are indigenously designed and BAU constructed. Department of DME, BUET is studying a model water current turbine for Mechanical harnessing energy from river current and in the process of Engineering developing a prototype. (DME), BUET BUET Computational models are developed for simulation of Horizontal and Vertical Axis Wind Turbines. Grameen Shakti, It is possible to manufacture all the balance of system CMES, IFRD, components (like Charge controller, Cable, Inverter, BUET Converter etc.) locally. RERC, Dhaka It is possible to manufacture with local design and fabrication University, IFRD, facilities. CMES

Improved Stoves

IFRD

Solar Cooker- IFRD, ANANDO Parabolic Solar Cooker-Box IFRD, CMES, Type ShineHardy Solar Dryer IFRD, BRRI, BAU, ShineHardy Solar Wood BFRI Seasoning Plant

Solar Passive BCSIR Architecture Briquette Machine Biogas BIT Khulna, BRRI

IFRD, LGED, BAU Water Current Department of Turbine Mechanical Engineering (DME), BUET Wind Turbines BUET Computational models are developed for simulation of Horizontal and Vertical Axis Wind Turbines.

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. IFRD has successfully field-tested its design which can quickly raise water to boiling point under clear sunny days. ANANDO is also manufacturing and marketing its products with imported materials and design. IFRDs 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. Different types have been designed and tested with locally available materials. 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. 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. Under the RET in Asia program, BIT Khulna is developing better machines with longer screw life. Fixed-Dome type plants are indigenously designed and constructed. DME, BUET is studying a model water current turbine for harnessing energy from river current and in the process of developing a prototype.

The PEST analysis for the UAE is conducted in the following section.

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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 benets. 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.

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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 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

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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 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 1983 International Convention for the Safety of Life at Sea (SOLAS), 1974. 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 1989 International Convention on Civil Liability for Oil Pollution Damage (CLC), 1969. 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.

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1990

Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their disposal, 1989.

1995 1997

United Nations Framework Convention on Climate Change for the year 1992. 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 1998 1999 2002 2002

Convention on Limitation of Liability for Maritime Claims (LLMC), 1976. United Nations Convention to Combat Desertification for the year 1994. Convention on Biological Diversity for the year 1992. Convention on Persistent Organic Pollutants (POPS), 2001. 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

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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.

The following table shows the tariff rates applicable under the Most Favored Nations(MFN) category:
Bound tariff lines (% of all tariff lines) Duty-free tariff lines (% of all tariff lines) Non-ad valorem tariffs (% of all tariff lines) Tariff quotas (% of all tariff lines) Non-ad valorem tariffs with no AVEs (% of all tariff lines)a Simple average tariff rate Agricultural products (WTO definition) Non-agricultural definition) Agriculture, hunting, forestry and
21

100 5.8

0.4

0.0 0.4

5.1 6.2 4.8 3.3 5.0

products

(WTO

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logging (ISIC 1) Mining and quarrying (ISIC 2) Manufacturing (ISIC 3) Domestic tariff "spikes" (% of all tariff lines)d International tariff "peaks" (% of all tariff lines) e Overall standard deviation of applied rates "Nuisance" applied rates (% of all tariff lines) f 0.0 5.6 0.5 0.5 5.2

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 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.

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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 AED=0.272257 USD. US to manage money supply growth. The exchange rate is currently pegged at 1

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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 persons 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

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the country on track of high growth rates for the forseeable future, barring external shocks.

Yea r

Population growth rate

Populatio n

% employm ent to populatio n

2008 2009 2010 2011

3.83 3.69 3.56 3.28

4,621,399 4,798,491 4,975,593 5,148,664

75.1 75.1 75.7 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 strengthen the poisition of the country.

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sector will only grow further in the future. This sizeable investment will only help

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

28105.html

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18.http://www.priyo.com/business/2011/06/06/uae-entrepreneurs-keen-invest-

19.http://bangladesheconomy.wordpress.com/2011/01/20/bangladesh-uae-signagreement-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/

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