PEST Analysis of Bangladesh

Political

• Environmental issues
Environmental dreadful conditions and depletion of natural resources are often observed in Bangladesh due to poverty,
over-population and lack of awareness on the subject. It is manifested by deforestation, destruction of wetlands, depletion
of soil nutrients, etc. Natural calamities like floods, cyclones and tidal-bores also result in severe socio-economic and
environmental damage.
• Legislation
The existing Bangladeshi legislation in this area, however, dates mostly from the period of British rule. The legislation in
force are as follows:
• Patent and Design Act of 1911
• Patent and Design Rule of 1933
• Trademark Act of 1940
• Copyright Act of 1999

• Government policies for Foreign Investments

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

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

• Bangladesh Corporate Tax Rates

The standard rate of corporate tax in Bangladesh is 27.5% in 2008 - 2009 tax years. This is the standard corporate tax rate
applicable to publicly traded companies in Bangladesh, a list including tax rates for other corporations are as follows:

• Publicly Traded Company 27.5%

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

If any publicly traded company declares more than 20% dividend, 10% rebate on total tax is allowed.
• Seasonality/Weather Issues
Bangladesh is a country crisscrossed with rivers, and thus uses a wide network of water-based public transportation.
Ferries and other boats compete with the railroads as a major means of public transport. Typically overloaded and top-
heavy, ferries do capsize, particularly during the monsoon season from May to October or during unexpected thunderstorms
or windstorms. Every year there are dozens of fatalities resulting from ferry accidents.
Social

Companies are facing the challenges of adapting effectively to the changing environment in the context of globalization
and in particular in the export sector in Bangladesh. Although Consumer Rights Movement, enforcement of government
regulations and a structured view regarding the economic importance of Social responsibility are not yet so widespread in
the corporate world in Bangladesh, companies have gradually attaching more importance to Social responsibility in the local
market as well. They are increasingly aware that Social responsibility can be of direct economic value. Companies can
contribute to social and environmental objectives, through integrating Social responsibility as a strategic investment into
their core business strategy, management instruments and operations. This is an investment, not a cost, much like
quality management. So, business organizations can thereby have an inclusive financial, commercial and social approach,
leading to a long ter m strategy minimizing risks linked to uncertainty.

Technological

The need for faster technological development is increasingly felt in Bangladesh. Development plans of
Bangladesh have emphasized science and technological research to develop technologies through adoption of imported
technology as well as development of indigenous technologies. As the country is heavily dependent on imported
technologies, proper planning is required for its effective transfer through acquisition, assimilation and adoption. A
National Science and Technology Policy has been formulated and adopted by the Government. It has laid down
the directions for S and T activities and research, institutional and manpower development. Dissemination and
documentation facilities. The National Council for Science and Technology (NCST) determines S and T policies,
reviews the activities of different institutions and provides direction towards S and T research and activities.