Assignment on business environment

Country analysisBANGLADESH

SUBMITTED TO PROF. HARSHA.H.N DATE- 28 th JAN 2011

SUBMITTED BY VIVEK SINGLA A04 11008784

PESTEL ANALYSIS

POLITICAL & LEGAL ANALYSIS

1. Economic policy-making is mostly centralized - government controls almost all important decisions . 2. Public trust in the financial honesty of politicians is somewhat low .

3. When deciding upon policies and contracts, government officials moderately favour well-connected firms and individuals . 4. Intellectual property protection and anti-counterfeiting measures are moderately weak and not properly enforced. 5. The national Parliament is somewhat ineffective as a law-maki ng Institution .

6. Police services often cannot be relied upon to enforce law and order . 7. The legal framework for private businesses to settle disputes and challenge the legality of government actions and regulations is moderately inefficient and subject to manipulation . 8. Complying with administrative requirements for business required by the government is often burdensome . 9. The composition of public spending is somewhat wasteful .

10. The government's efforts to reduce poverty and address income inequality are often ineffective . 11. Property rights, including over financial assets, are somewhat poorly defined and not well-protected by law . 12. Customs procedures are often slow and cumbersome . 13. The level of taxes slightly limits the incentives to work or invest . 14. Government subsidies & tax breaks do not distort competition .

15. Agricultural policy somewhat balances the interests of taxpayers, consumers and producers . ECONOMICAL ANALYSIS 1.The quality of electricity supply (lack of interruptions and voltage fluctuations) is worse than in some other countries . 2. General in frastructur e of the country is moderately underdeveloped .

3. Railroads are moderately underdeveloped . 4. Roads are moderately underdeveloped.

5. National ground transport network (bu ses, trains, taxis, etc.) offer transportation to a wide range of travellers to key business centres and tourist attractions within the country which is somewhat inefficient . 6. Port facilities & inland waterwa ys are moderately underdeveloped. 7. Passenger air transport is slightly underdevelope d . 8. The country 's postal system cannot often be sufficiently trusted to have a friend mail a small package worth US$100 . 9. The air transport network does offer good connections to some key business markets . 10. New telephone lines for business are somewhat available. TECHNOLOGICAL 1. Internet access in schools is very limited . 2. Online government services such as personal tax, car registration s, passport appli cations, business permits and eprocurement are often unavailable 3. Laws relating to the use of information technology (ecommerce, digital signatures, consumer protection) are often non existent .

4. Scientific research institutions are moderately minimal . 5. In the area of R&D, collaboration between the business community and local universities is moderately minimal . 6. Govern ment pro curement decisions do not often result in technological innovation . 7. A failed entrepreneuri al project is often considered an embarrassment .

9. The use of information and communication technologies by the governme nt has not greatly improved the efficiency of governme nt services.

ENVIRONMENT ANALYSIS Bangladesh is a country of about 147,570 square kilometers, including inland and estuarine water. 6.7% of the country are rivers and inland water bodies. The congruence of the three mighty Himalayan rivers the Ganges, the Brahmaputra and Meghna drain into the Bay of Bengal and the alluvial deposits carried down mostly by the these mighty rivers for thousands of years have formed Bangladesh.It is the largest delta in the world. Bangladesh lies north of the Tropic of cancer, located between 20034 N and 26033 N latitudes and 88001 E and 94041 E longitudes. Located in the northeastern part of the Indian subcontinent, it is bordered by India on the west, North and east, except for a small portion in the south east by Myanmar. The Bay of Bengal occupies the entire south. Nearly 50% of the country stands 10 meters above the sea level. Bangladesh has three types of landscapes: floodplains spread over 80% of the countrys land area, terraces covering 8% and hills dispersed over 12% of the land area of Bangladesh. The three major rivers, the Padma, the Meghna and the Brahmaputra, and about 700 other rivers, distributaries, streams and canals totalled an enormous length of waterareas. Rashid (1991) estimated the area to be about 24,000 km. Beels, baors, haors1, rivers and canals, floodplains, estuaries etc made up this vast network of wetlands which provide a huge refuge for wildlife, fish and other aquatic lives. The tropical climate has made the country luxuriant in vegetation. . . Bangladesh harbors a diverse and extensive fauna and flora. IUCN (2000a)reported 266 species of freshwater fish species and 442 marine species.

SUMMARY-Bangladeshs steady economic growth has created many environmental challenges, particularly in urban and industrialized areas. The Country Environmental Analysis for Bangladesh underpins complex linkages between poverty, growth and environmental management. The report identifies three significant areas that need priority attention: (i) urban and indoor air pollution threats to human health; (ii) treatment of urban and industrial sewage in Dhaka; and (iii) the continuous decline of capture fisheries. The negative impacts of these environmental issues are costly to the poor and the economy alike: they are estimated at more than 4% of GDP in this report.

COMPETITVE ADVANTAGE Increased exports, mainly due to ready-made garment industry: Export growths during the last five years have been between 10 to 16% per year. This growth has been a driving force for the economy, together with increased foreign direct investments, and it has created employment for around 1.5 million people, mainly women employed as factory workers. The growth of the garment industry, which stands for 70% of exports, is exceptional and an example of the potential entrepreneurial spirit in Bangladesh, if opportunity arises. However, the export industry need to diversify, improve productivity and increase the local value addition in the exported commodities in order to continue its success. Recent figures indicate a negative trend in productivity and reduced value added, which is worrisome if these trends continue94. - Partially improved democracy and human rights situation: The democratic process is slow but generally positive in the country, although politically induced violence has increased during the last few years. However, the political situation at the parliamentary level shows no sign of improvements. The human rights situation in Bangladesh has gradually improved during the nineties, although there are many cases of harassment and imprisonment. Media and the press are fairly open and civil society is active in various kinds of areas. Retained food sufficiency: Although the population has doubled from around 60 million at the time of independence to almost 130 million year 2000, Bangladesh has managed to keep up food production (mainly rice) in relation to the rapid population growth. This has been achieved through increased irrigation, new high yielding crops, somewhat increased mechanization, and improved distribution and market facilities and not least the manual energy from the hard working rural population.

- Improved health and education indicators: Although the health situation in Bangladesh needs substantial improvements, there has been a reduction in infant mortality from 151 per 1000 children in 1960 to 83 in 1996, a fall in child mortality (under five years of age) from 247 per 1000 live births in 1960 to 112 in 1996. Furthermore, Bangladesh has been successful in child vaccination with an increase from 30% in 1990 to 77% in 1996. The gross primary school enrolment rate has increased from around 50% in 1989 to 96% in 1998 but the overall gender bias against girls is still in place on many levels. Furthermore, there are still high drop out rates. Adult literacy rates have increased from a low 24% in the beginning of the seventies to around 50% in the 1997. - Improved disaster management: The population has demonstrated strong resilience and survival skills in dealing with natural disasters, e.g. during the flood of 1998 and the disastrous cyclone in 199192. The combined efforts of the government and NGOs, together with donor assistance, have succeeded in dealing with severe human hardships and physical destruction. However, the main reasons for the resilience are found within the individuals, the families and the village communities themselves. It is often pointed out that Bangladesh contains 120 million strong survivors, not mere victims. - Expanded micro-credits: One factor that has contributed to the increased resilience of the rural population is increased availability of micro-credits. More than 9 million poor households have access to micro-credits93. Apart from Grameen Bank, which has received world acclaim for its success, PKSF has been able to extend the outreach by lending to partner organisations, often small and local NGOs. However, micro-credits have not yet been an efficient instrument for graduating the majority of the population from poverty. Furthermore, as more and more NGOs focus on micro-credits for the sake of their financial sustainability, there has been a decrease in social mobilisation and other community activities.

CONCLUSION
Bangladesh is perhaps entrapped into low level of competiti veness. Marginal

improvements with respect to various aspects of competitiveness will not be adequate to enable Bangladesh economy to compete on equal footing at the global level Bangladeshs ranking has slipped down by 1 position (from 107 to 106 out of 139 countries). This poor performance is mainly attributed to deceleration in ranking in basic requirement sub-index Bangladeshs overall score improved by 2.5%. Highest score was obtained in case of primary education and health and it has registered highest growth in score. Lowest score and the highest drop was in infrastructure Improvement in governance and public institutions mainly attributed to decentralised policy making and less burdensome bureaucratic procedure for businesses. Significant improvement is required in such areas as financial honesty of politicians, favouritism with regard to well-connected firms and effective operation of the national parliament The weakest part of competitiveness is countrys poor infrastructure Single worst item is related to poor electricity supply. Government initiatives are perceived to be inadequate Innovation and technology, particularly related to ICT, is perceived to be moving slowly towards the upward direction Internet use in schools, online government services and digital content etc is perceived to have improved somewhat though still remains at a low level Improvement of domestic competitive environment is still insignificant. To improve the situation following areas will need to be addressed: presence of limited number of corporate groups, lax anti-monopoly policy and lax regulations on quality of products.

REFERENCES

Release of Global Competitiveness Report 2010-2011. Centre for policy dialogue (CPD) Bangladesh. Release of country analysis By Swedish International development cooperation agency.