FUBAR International
FUBAR™ International |October 14
2009 | |
|The creators of FUBAR™ are proud to present a 100% Certified Organic Fuel Bar that is the best tasting and most| |
|nutritious bar to have ever been created, eaten and enjoyed! If you think FUBAR™ is not for you…think again! | |
Company Analysis
Brief History
FUBAR( was created by the owner and VP of Sales and Marketing, Mr. David Mitchell. It was with the collaboration of two Military Special Forces staff sergeants that invested the initial investment in which their primary focus was to incorporate healthy functional food into the marketplace. The idea behind FUBAR is to allow the use of raw materials and functional foods which consists of only well-rounded and all natural products. There is a strong demand from mass retailers to create and supply customers with this new emerging brands and this is where FUBAR( comes in with a product that was designed to help consumers consume only the best and healthiest ingredients available.
The flagship brand FUBAR( was created and launched to allow cross collateralization of exotic and all natural raw materials, resources, services and revenue streams. The flagship product lines have been selectively chosen out of researched categories, backed by the credibility of experts and specialists in their respective fields, thus giving the brand the ability to attract high profile endorsers in our goal to reach the consumer. FUBAR( predicts that the time of the active, youthful and healthy buyer is here. The image of the mature and aging population as a graying and retiring audience is being shattered by a booming population that wants to live life to its fullest.
Through engaging and informative marketing initiatives, FUBAR( will produce high quality consumables for Boomers and those after them to enjoy for many years to come. The company’s initial plan is to launch not more than 5 product lines under the FUBAR( banner to maintain quality, service and build brand equity with awareness.
Location
FUBAR( is primarily available in California, Las Vegas and Canada. Plans to distribute it nationally and internationally are still in progress as the company is looking for additional funding from venture capitalist and other potential investors. FUBAR( has secured distribution through relationships and strategic maneuvers in the food and beverage industry.
During the past six months FUBAR and its management team have solicited some of the best in the food and beverage markets to join us in the sales and distribution game to hit the market hard and fast with our mass appeal products and brand.
FUBAR( will exploit these relationships with the intention to execute an explosive role out and disbursement of our product lines with pertinence to key accounts and a direct connect to Mass Retail Grocery and Convenience store chains in the targeted areas as listed below.
• Ralph’s grocery chain, a subsidiary of Krogers – Available Now
• FUBAR( Organic Fuel Bar (2 SKUS), accepted @ 200 locations in So Cal.
• FUBAR( Health and Hydration beverage, accepted @200 locations So Cal.
• FUBAR( will expand into Smith’s, a division of Kroger’s in 4th quarter 2009
• Circle K – Accepted into 250 locations throughout Southern CA – since 7/15/09
• GNC – Hawaii: 15 locations – Launched 1/1/09. Role-out to 800 stores by end of 09
• Gelson’s Food Market – Role-out 12/01/09
• Albertsons – Accepted into 255 locations in 7 states - Role-out 12/01/09
• Raley’s Food and Grocery – expected role-out 11/15/09
• SaveMart – expected role-out 12/1/09
• Whole Foods Market – Expected role-out 12/01/09
• Albertsons LLC – Privately owned stores have committed to all locations provided racing program is in place with #16 NASCAR truck Series – Driver: Brian Scott
• FUBAR( (2 SKUS) and Beverage (1 SKU), to launch in 255 locations FL, AZ, TX, NM, UT, CO, LA. All slotting and end cap display fees waived.
• FUBAR( CANADA. Initial orders executed with launch and multi-lingual packaging in process.
• Ken Hunt/Harvey Warsaw – Military contracts in works with MWR, DECA, AAFES.
• SETM Sales and Distribution, PC Water is outside Sales brokers with the following activity: Sun Flower Markets, Sprouts Market, and Royal Caribbean Cruise
• Lines, Hilton Hotels, Six Flags, Disney Corp, Jamaican Government.
• Has Distribution Company – East Coast Distributor and outside sales organization for the FUBAR( brand.
Product lines
FUBAR( as a brand concentrates on two product categories: The All Natural Beverage and Organic Fuel Bar. The FUBAR( brand is categorized under the functional food category, which is defined by the Institute of Medicine’s Food and Nutrition Board as any food or food ingredient that provides consumers with health benefits. Functional foods are one of the fastest growing categories of food products in United States. Due the growing trend of consumers who want to achieve “wellness” and have healthier choices in their diet, functional food sales are projected to exceed $30 billion by the end of the decade.
In the mind of a consumer, the FUBAR( All Natural Beverage has been compared to energy drinks such as Red Bull or sports beverage such as Gatorade. However, the real emphasis here would be that FUBAR( All Natural Beverage contains no unhealthy chemicals or high fructose corn syrup such as the ones that exist in other popular energy drinks or other sports beverage. The FUBAR( All Natural Sports Beverage contains a premium health and hydration isotonic beverage made from young coconut water. Each bottle of FUBAR( contains a proprietary blend of 100% pure young coconut water, whey protein, isotonic electrolytes, essential vitamins, minerals, sugar cane and a rare Guarana tea extract.
The G-Tea extract is a “caffeine-like molecule, which is equal to a quarter cup of coffee. It is a natural ingredient with no preservatives or artificial flavors and provides all day fuel with no peaking or crashing. The beverage is naturally good for your body and tastes nothing like you’ve ever tried, no after taste, no energy peaks and no crash associated with caffeinated and high sugar beverages that use “maltodextrin” to trick your body. FUBAR can be consumed on an empty stomach and is absolutely great to keep your metabolism going.
Retrospectively, the FUBAR( Organic Fuel Bar has been compared to a protein or a health food bar. The FUBAR( Organic Fuel Bars is strongly marketed to be a healthier choice for meal replacement and can be eaten for breakfast, lunch, dinner and even for dessert. The FUBAR( Organic Fuel Bars are made with all natural organic ingredients, which do not use any chemicals, preservatives or artificial colors to achieve its great taste and look. In the mind of the consumers, the FUBAR( Organic Fuel Bar has been an excellent alternative to snacking on high-calorie chocolate bars like Hershey’s chocolate bars or other protein or health food bar due to its great chocolate taste.
Benefits of FUBAR( Fuel Organic Bars
✓ 100% Organic ( It is 100% Organic certified food and snack bar. FUBAR( is one of only 2 brands in the entire market place that does not use any preservatives, artificial flavors or colors to achieve its great taste or look.
✓ Raw & Gluten Free ( It is alkaline forming, which is technically and scientifically the best food you can ingest into your body, as it breaks down the natural ingredients providing a clean fuel burn and energy in the purest form. It is the second best food you can eat next to vegetables.
✓ Non-GMO ( It is compliant/certified (no use of Genetically Modified Organisms) and is manufactured in a dairy free, peanut free, pesticide free, chemical free food plant rated #1 by the FDA. Steam and boiling water is used to clean all machinery used in making of the bars where no human hands ever touch the bars from start to finish.
✓ No dairy/soy/peanuts ( It is made with all organic and natural ingredients, including chocolate chips made without dairy, soy or peanuts which over 90% of the bars in the market use to achieve taste and low cost ingredients. FUBAR( is a functional food bar that encompasses all natural sugar from Agave Nectar, 8g of protein and “good for you” fats.
✓ Antioxidant ( It is made with the #1 super-fruit in the mass market, Acai that is touted as the best antioxidant known to man. The Brazilian grown fruit is mixed together with our proprietary blend of ingredients enrobed with the best essential fats your body needs; Omega 3 Oils.
✓ Probiotics ( It is made with all the same “good for you” ingredients with added organic coconut and probiotics. FUBAR( uses the only shelf stable probiotics in the market; with over 1 billion count of live bacteria with the following health benefits when consumed:
1. Promotes and supports a healthy digestive system
2. Boosts, supports and maintains the immune system
3. Deliver more active cultures than yogurt
4. Delivers 10x more cells than yogurt
In order for us to promote the FUBAR( brand into an international market such as Singapore, it is vital that we promote the brand using sports celebrities’ endorsements such as those in wakeboarding, skateboarding, beach volleyball players, marathon runners and popular local soccer athletes such as Mr. Fandi Ahmad. By utilizing local sports athletes that are recognized by the Singaporeans, the company can strategically positioned themselves in the mind of the consumer to be a hip, cool and health-conscious brand thus emphasizing that FUBAR( is “The Brand Where Health Meets Taste.”
Sales and Profit Info
FUBAR( makes approximately $1,000,000 in net sales from January till December 2008. They are expected to launch and expand into several retailers such as Smith’s, Circle K, GNC, Kmart, Trader Joe’s and Whole Foods around United States which will help to increase their sales by as much as 80%-90%.
Product Analysis
Brief History of Brand
The FUBAR( brand initially started out as a beverage made of young coconut water to supplement the military soldiers who had to endure extreme weather conditions in Iraq and Afghanistan. Two dedicated colonels from the US Special Armed Forces were given the opportunity to meet with co-owner, Mr. David Mitchell. With his background and expertise in marketing and branding, they decided to create a full-fledged product line around the brand, FUBAR( which is an acronym, to “Fueled Up Beyond All Recognition.”
During the World War II in 1940’s, the term FUBAR( was initially coined to describe soldiers who were returning home to their families either badly disfigured or without any limbs. Therefore, the brand FUBAR( resonates well with the Baby Boomer generations who have tremendous respect for the soldiers that work extremely hard to protect their fellow countrymen.
Initially, the company wanted to target the Baby Boomer demographic who was looking to consume healthy products in the “functional food” category. According to the Institute of Medicine’s Food and Nutrition Board, functional food is described as “any food or food ingredients that provide consumers with health benefits”. Functional food is a $30 Billion category and has increased in popularity among many consumers who are striving to lead an active and healthy lifestyle.
FUBAR( promotes its products by using sport celebrity figures such as up-and-coming athletes in the surfing industry, NASCAR racing, beach volleyball and mixed martial arts (MMA) fighters. By doing so, the brand FUBAR( has successfully become popular with the younger, hip and cool crowd.
Share of Users
FUBAR( heavily promotes its products through marketing and advertising initiatives by using sport celebrity endorsements such as up-and-coming athletes in the surfing industry, NASCAR racing, beach volleyball, mixed martial arts (MMA) fighters and “Weekend Warriors.” It was primarily intended to target the baby boomers that are looking for an alternative to eating a more wholesome food. However, the FUBAR( brand has transcended into a younger and hip crowd with its association with athletes such as Angie Akers, Travis Mellem, Brett Simposom, Ian Calderon and Tyler Gunter.
Target Market
The Surfing Industry-FUBAR( recognizes the surfing community as a loyal group that prefers to eat and drink good products whenever possible and typically participates in a daily routine of good health and nutrition throughout their lifetime. The surfing industry however, has yet to recognize an authentic leader in Functional Health Food and Beverage for this market. FUBAR believes its organic ingredients; viral name and lifestyle branding message “Health meets Taste” will be embraced by the surfing community.
SIMA recently released a report last summer that identified industry sales have increased nearly 15 percent in just two years, and are likely continue to increase. The report indicated that surf equipment and fashion-related retail sales have increased to $7.48 billion in 2006 up from $6.32 billion in 2004 and $4.5 billion in 2002. Additionally, other extreme sports are currently being reviewed due to success with this demographic.
Surfing continues to receive support from Hollywood movies such as ‘Blue Crush’ and grass roots efforts by film producer and director Aaron Lieber, who released the first Blue Ray DVD movie “The Pursuit”. These types of media performances, coupled with industry up-and-coming superstars such as Brett Simpson, will provide severe spikes to the industry.
FUBAR( has taken an organic approach to moving into the billion-dollar industry by product placement into the hands of high profile athletes and fostering relationships with individuals and entities entrenched in the surfing community. To date FUBAR has participated as an industry sponsor for several events including Cystic Fibrosis – Pipe Line to a Cure and sponsor of “The Pursuit.”
The Baby Boomer- FUBAR( will expand their product lines into the Baby Boomer generation, ages 41 –65. This group of power buyers has proven, more than any other demographic, their brand loyalty with the most buying power in America today. FUBAR has the ability to expand on product lines customized for the baby boomer market while constructing inventive on-line stores and e-commerce solutions, expanding fulfillment centers and provide the kind of quality and customer service this market commands. Baby Boomer spending is expected to increase from $329 billion to over $1.9 trillion by 2010, as they are the only group that takes care of both their parents and their children. Boomers account for more than half of U.S. spending; every 7.7 seconds someone turns 50, and over the next 15 years, the 50+ audiences will grow by more than 50% while the 18-40 year old population will grow only 3%.
Generation Y: Generation Y consumers are in young adulthood, born 1977 – 1994, ages 19 – 44. They are avid online users, health conscious, an important demographic target for our company; this group is known to be strongly independent and self-reliant. They are also innovative and often called the “Echo Boom”, because they are kids of the “Baby Boomers”. They represent 71 million potential consumers that FUBAR( will seek to obtain loyalty from via multi-channeled marketing campaigns. Creating customer loyalty from this demographic early in their lifecycle will be a key focus of FUBAR(.
Generation X: This group represents 45 million potential consumers, who are currently 35 – 45 years old. They are known to be cynical, sophisticated, materialistic and impatient. They tend to prefer to spend their time experiencing life instead of doing domestic chores and are known maximize the time efficiencies. They are known to fight the effects of aging and be health conscious about their diet. This demographic will also be included in marketing plans as the company plans for further expansion.
Share of Volume in Category
Functional foods are one of the fastest growing categories of food products in the United States. The U.S. alone represents one-third of the global nutrition market, and functional food sales are projected to exceed $30 billion by the end of the decade. Marketers of foods and beverages are constantly finding new ways to enhance their products with the addition of functional products, to which they're finding an increasingly accepting and willing audience.
The U.S. Market for Functional Foods and Beverages, volume 3 in the series, examines the factors driving this dramatic growth, including new product introductions and innovations, the regulatory environment that is fostering wider use and awareness of functional foods, and the growing sense among consumers that "wellness" can be achieved by taking a closer look at and improving one's diet. Indeed, the report offers a full profile of the functional food consumer, including looking at the market for functional foods according to age groups and ethnic and racial groups. The study also examines the marketers that are leading the functional food parade, both large and small, as well as offers a look at the up-and-coming companies that are poised to make a difference in the market in the years to come.
U.S. consumers spent more than $40 billion last year on functional foods & beverages. Global consumers spent more than $25 billion on wellness drinks in 2005, making up 12% of all soft drink spending worldwide. The market represents a major opportunity for CBI beverages as consumers choose healthful, non-carbonated beverages with greater regularity. There are more than 300,000 potential retail beverage outlets in the United States. The non-carbonated beverage market is consolidating and alternative brands are becoming highly sought among major retailers.
Sales Data and Distribution
Current Sales Activities – FUBAR( BRAND 2009
• Ralph’s grocery chain, a subsidiary of Krogers – Available Now
• FUBAR( Organic Fuel Bar (2 SKUS), accepted @ 200 locations in So Cal.
• FUBAR( Health and Hydration beverage, accepted @200 locations So Cal.
• FUBAR( will expand into Smith’s, a division of Kroger’s in 4th quarter 2009
• Circle K – Accepted into 250 locations throughout Southern CA – since 7/15/09
• GNC – Hawaii: 15 locations – Launched 1/1/09. Roll-out to 800 stores by end of 09
• Gelson’s Food Market – Role-out 12/01/09
• Albertsons – Accepted into 255 locations in 7 states - Role-out 12/01/09
• Raley’s Food and Grocery – expected roll-out 11/15/09
• SaveMart – expected roll-out 12/1/09
• Whole Foods Market – Expected roll-out 12/01/09
• Albertsons LLC – Privately owned stores have committed to all locations provided racing program is in place with #16 NASCAR truck Series – Driver: Brian Scott
• FUBAR( (2 SKUS) and Beverage (1 SKU), to launch in 255 locations FL, AZ, TX, NM, UT, CO, LA. All slotting and end cap display fees waived.
• FUBAR( CANADA. Initial orders executed with launch and multi-lingual packaging in process.
• Ken Hunt/Harvey Warsaw – Military contracts in works with MWR, DECA, AAFES.
• SETM Sales and Distribution, PC Water is outside Sales brokers with the following activity: Sun Flower Markets, Sprouts Market, and Royal Caribbean Cruise
• Lines, Hilton Hotels, Six Flags, Disney Corp, Jamaican Government.
• Has Distribution Company – East Coast Distributor and outside sales organization for the FUBAR( brand.
• J&J Health Stores, Bikram Yoga, Las Vegas Athletic Club, Gold’s Gym in Las Vegas.
Market Analysis
Penetration into US market
As discussed in our previous product analysis report, FUBAR( was specifically created to fill a significant void in the 30 billion dollar growing industry in the functional food and health beverage category. The health and wellness lifestyle has gained rapid momentum among many different market segmentations in United States especially for the baby boomer generations who yearn to create fulfilling lives by staying fit and maintain a healthier lifestyle. The idea behind the FUBAR( brand was to build a strong positioning in the consumer’s mind in which FUBAR( will be remembered as “The Lifestyle Brand Where Health Meets Taste.”
FUBAR was the brainchild of Mr. David Mitchell, along with several co-founders who had served in the military of the US Military Special Armed Forces. FUBAR( consists of the combined synergy and experience of the team of individuals who have since joined forces to create an explosive branding, marketing and effective advertising campaign. The diverse group has extraordinary talents in all specific areas of business with a collective ability to build and grow a Fortune 100 company. FUBAR( has generated revenue of approximately one million dollars in sales just within one year of operations. Its distribution channels are mainly through selling its product lines via existing distribution channels such as retail and internet sales. The business model of FUBAR( was inspired by the successful execution of company such as “Vitamin Water” which has recently been purchased by Coca-Cola for an estimated 4.2 billion dollars.
FUBAR( has assembled a management team with an established track record and a considerable target demographic with a proven brand loyalty and a market segment that have significant disposable incomes. FUBAR( has multiple co-packing facilities in Utah, California and Canada which strictly adheres to the practice of the Green Initiatives in the Environmental space of manufacturing, packaging and recycling programs. Extending and aligning with its brand positioning, FUBAR( fully supports the Green Initiatives in 2009 by using only eco-friendly packaging and current manufacturing process of pesticides and herbicide free USDA Organic Certified food and beverage products. Their facilities are installed with the state-of-the-art robotic technologies such as the high pressure steam at extreme temperature to ensure the most sterile conditions without the use of any harmful chemicals of any kind, starting from beginning to the end.
As part of its mission, FUBAR( created a not-for-profit organization, The Warrior Promise () to tithe and strive for the improvement of community belonging by specifically helping the courageous men and women of the National Army of Special Armed Forces. From raising awareness to bring volunteer opportunities to its community, FUBAR( strives to help this special group of individuals by donating a percentage of their sales.
Competitive Analysis
The essential competent of nutritionals of any athletic lifestyle is sports health and wellness. An overwhelming number of societies are becoming more health conscious, turning to healthy alternatives to the traditional snacks, and increasing their daily physical activities. This has caused marketers across the board to responded by downplaying their long-standing hard-core sports image and highlighting the broader nutritional, functional, and wellness benefits of their products.
FUBAR( has been tracking this market for many years and found that the sports nutritional market is quickly merging with the functional food and beverage market in addition to the organic food and beverage category. As consumers become more knowledgeable about what they eat in addition to seeking value, FUBAR( and its competitors are buckling up with lifestyle brands that fit into all these categories and have pinpointed opportunities in this quickly transforming market. As of now, FUBAR( is well ahead of the curve with information that competitors, currently not in the category, are scrambling to get into.
While there are several competitors in the individual categories listed, there are very few in the fused category of health, functional and organic food and beverages. FUBAR( is the innovator in creating the first lifestyle brand that can honestly push FUBAR( as the brand where health meets taste.
A comprehensive competitive analysis can be constructed to illustrate these multi-billion dollar markets and the competitors within. $3 billion U.S. market for food bars is a fast-growing and ever-evolving segment, spanning a broad ingredient and flavor profile from healthy to indulgent that parallels its equally broad target audience. This packaged facts report covers the broad market for food bars, including breakfast bars, snack bars, granola bars, sports bars, meal replacement bars, and diet bars. The report combines quantitative sales data (based on Information Resources, Inc. InfoScan) with extensive qualitative research and analysis to provide complete coverage of all types of food bars. From the new wave of breakfast bars to those leading the way in health, nutrition, functional. The report documents market size and composition, details marketing and retail trends, forecasts market developments through 2010, and profiles food bar consumers across the categories using Simmons Market Research Bureau data.
Sports nutritionals have gained wide acceptance as an essential component of any committed athletic lifestyle, but increasing numbers of consumers who are not necessarily health club devotees are also turning to sports nutritionals, often in lieu of traditional beverages and snacks. Marketers across the board have responded by downplaying their long-standing hard-core sports image and highlighting the broader nutritional, energy-boosting, and wellness benefits of their products. Packaged Facts has been tracking this market for many years, and this fully updated and expanded 5th edition of The U.S. Market for Sports Nutritional Products looks not just at the current scene, but also offers projections and pinpoints opportunities in this rapidly transforming market.
Pegging 2003 retail sales at over $3 billion, the report analyzes overall and mass-market (IRI) sales trends for three main product categories: supplements (including tablets, capsules, and powders, as well as liquids and other newer forms); beverages (including isotonic recovery drinks, sports-related energy drinks, and other nutrient-enhanced soft drinks, juices, and waters); and sports and energy bars and gels. Marketing and new product trends are covered for each category, and diverse competitors are profiled including industry giants like PepsiCo, Inc. (Gatorade) and Nestlé S.A. (PowerBar), specialized market leaders like Twinlab Corp. and EAS, Inc., and innovative upstarts like Red Bull GmbH. The report also explores consumer usage rates, brand preferences, and demographics, based on Simmons Market Research Bureau data for fall 2003.
Report Methodology
The information in The U.S. Market for Sports Nutritional Products is based on both primary and secondary research. Primary research involved on-site examination of the retail milieu, interviews with marketing, public relations and industry analysts within the sports nutritionals market and consultants to the industry. Secondary research entailed data-gathering from relevant trade, business, and government sources, including company literature. Packaged Facts has derived mass merchandiser sales figures from Information Resources, Inc. (IRI) InfoScan sales-tracking data. Figures provided on national consumer advertising expenditures are based primarily on data (copyright 2002/2003) compiled by CMR/TNS Media Intelligence U.S., the leading provider of strategic advertising and marketing communications intelligence. The analysis of consumer demographics derives from Simmons Market Research Bureau survey data for fall 2003.
Cambodia
Brief History
The Kingdom of Cambodia is formerly known as “Kampuchea” which is derived from the Sanskrit language. Cambodia is located in South East Asia with a population of about 14 million people. The kingdom's capital and largest city is Phnom Penh. Around the 11th and 14th centuries, Cambodia was the successor state of the once powerful Hindu and Buddhist Khmer Empire, which ruled most of the Indochinese Peninsula.
Cambodians are also identified as “Khmer” although the latter strictly refers to ethnic Khmers. Most Cambodians are Theravada Buddhists of Khmer extraction, but the country also has a substantial number of predominantly Muslim Cham, as well as ethnic Chinese, Vietnamese and small animist hill tribes.
Cambodia borders Thailand to its west and northwest location, while Laos borders its northeast and Vietnam to its east and southeast. In the south, Cambodia faces the Gulf of Thailand. Cambodia is relatively famous for its remarkable Mekong River or "the great river" and the Tonlé Sap or "the fresh water lake".
Geography and Climate
Cambodia has an area of 181,035 square kilometers (69,898 sq mi) and with 443-kilometer (275 mi) coastline along the Gulf of Thailand. The most distinctive geographical feature is formed by the inundations of the Tonle Sap “the fresh water lake”, measuring about 2,590 square kilometers (1,000 sq mi) during the dry season and expanding to about 24,605 square kilometers (9,500 sq mi) during the rainy season.
Just like many of its Southeast Asia counterparts, Cambodia is dominated by Monsoons seasons which are tropically wet and dry due to its distinctly marked seasonal differences.
Cambodia's temperatures range from 21° to 35°C (69° to 95°F) and its inhabitants experience tropical monsoon seasons. During the month of May to October, the country is engulfed in moisture-laden winds from the Gulf of Thailand. During the month of November to March, the northeast monsoon ushers in the dry season. Cambodia experiences the heaviest precipitation from September to October with the driest period occurring from January to February.
During the rainy season, which occurs from May to October, temperatures can drop to 22 °C and it is usually accompanied by high humidity. Following the hot and dry season, it is expected that temperatures to rise up to 40 °C around November till April. Travelers are advised to visit Cambodia during the month of November to January when temperatures and humidity are lower. Cambodia suffered heavy casualties due to a disastrous flooding after an extremely heavy rainfall which occurred in 2001 and 2002.
Demographics, Population, and Psychographics
In 1975, when the Khmer Rouge took power, population was estimated at 7.3 million. Tragically, an estimated of one to two million reportedly died between 1975 and 1978. The average annual rate of population growth from 1978 to 1985 was 2.3 %. In 1959, life expectancy at birth was 44.2 years for males and 43.3 years for females. By 1970, life expectancy had increased by about 2.5 years since 1945. The greater longevity for females apparently reflected improved health practices during maternity and childbirth. In 2009, it is reported that the population of Cambodia is at an estimated number of 14.5 million people.
Principal Industries
Cambodia industrial activities have been primarily centered on agricultural, manufacturing and forestry industries. In its food-processing industry, rice milling has been its main source and a very important source for its food production. After the fatality of the war in 1970, its industrial expansion suffered and came to a screeching halt. A few sectors such as textiles and beverages enjoyed a temporary spurt of wartime boom due to military orders. However, these industries lose its vitality due to insufficient transportation system and depleting resources which caused rapid decline.
In 1975, the Pol Pot government took every industry in its country under stringent state control. Tragically, as much as 100 or more industries were subsequently destroyed or abolished. When the PRK government finally took over, industrial plants slowly emerge and began to reopen. By the late 1985, more than 60 factories produced consumer related industries such as household goods, textiles, soft drinks, pharmaceutical products and other miscellaneous consumer goods. Since there are little improvement made on infrastructure and poor management, the plants productivity was highly limited. Other issues such as inadequate electric system, raw materials and spare parts were a constant problem to the efficiency of the workload.
Despite efforts made for a recovery, the situation was hampered due to the dilapidated equipments and shortage of essential parts and supply. When the Soviet Union decided to stop sending the raw materials, Cambodia already primitive industrial sector suffered a great deal. Government had to shut down cotton manufacturing plants due to shortage of raw materials.
Major industries that was affected and largely abandoned since 1975 include rice milling, fishing, wood and timber products, rubber, cement, and gem mining. Despite being a third world country, Cambodia has significant source of natural resources such as mineral deposits of gold, silver, and iron, copper, marble, limestone, phosphate and valuable gems. Construction in urban areas boomed with the signing of the Paris peace accords in 1991. After Cambodia opened oil fields to foreign investors in February 1991, sixteen companies expressed interest in oil exploration. In January 1994 it was reported that five major oil companies were conducting offshore oil and gas exploration.
In 1996, the clothing industry exports more than doubled. Cambodia workforce of 20,000 people was employed in 36 factories around the country. The average annual industrial growth rate for 1988 through 1998 was 8.5%. However, growth declined to 7.7% in 1998 due to the effects of the Asian financial crisis, civil, drought, and political disruptions. However, recovery was rapid in the industrial sector as it posted growth output of 12%, 29%, and 12.5% for 1999 to 2001. The garment industry grew by 50% during this period. In 2000, the garment industry constituted 20% of total GDP.
Within its limited industry, Cambodia depends on its agriculture sector with 59% of the population rely heavily on agriculture for their livelihood. Rice is their principal crop and vast rice fields filled up the country thus making it the most vital crop. Garments, tourism and constructions are really important in getting to revive it economy.
In 2005, oil and natural gas was found beneath Cambodia’s territorial waters and commercial extractions will begin in 2011, which means that the oil revenue could spearhead it economy. Observers however feared that much of this lucrative revenue could end up in the hands of a political tyrant. In 2007, the government reported that over 4 million foreign visitors had visited the mystical architectural structure of Angkor Wat which indicates that tourism plays a vital role in its economy.
Foreign Industries
Cambodia has many different foreign investors from countries such as United States, India, Russia, Malaysia, Japan, Korea and China. It was reported that as much as 60% foreign investment were made from its neighboring Asian countries and the Western countries made up just 15% of the total foreign investment in Cambodia.
Foreign industries such as banks, telecommunication, buildings, factories, and service, industrial amounted to more than 114.83 billion dollars, with China accounting for 1.76 billion dollars of that total amount and South Korea accounting for 1.5 billion dollars.
Currently, Cambodia is seeking help from foreign governments to develop a proficient and competent investor board. Government officials are looking to improve its current investor board by incorporating a system of balance and check specifically for the investigation of potential foreign investors.
Infrastructure
Per capita income in Cambodia is rapidly increasing, but is comparably low with other countries in the South East region. Most rural households depend mostly on its agriculture and other related sub-sections. Rice, fish, timber, garments and rubber are Cambodia's major exports.
The International Rice Research Institute (IRRI) brought more than 750 traditional rice varieties to Cambodia from its rice seed bank in the Philippines. In 1987, the Australian government funded IRRI to assist Cambodia to improve its rice production. By 2000, Cambodia was fully self-sufficient in rice. However, few Cambodian farmers grow other crops leaving them vulnerable to crop failure. In recent years, various international aid organizations have begun crop diversification programs to encourage farmers to grow other crops and helped improve abundance to its cultivation.
The recovery of Cambodia's economy slowed dramatically in 1997–98, due to the regional economic crisis, civil violence, and political instability. Foreign investment and tourism also fell off drastically. Since then however, growth has been steady. In 1999, the first full year of peace in 30 years, progress was made on economic reforms and growth resumed at 5.0%. Despite severe flooding, GDP grew at 5.0% in 2000, 6.3% in 2001, and 5.2% in 2002. Tourism was Cambodia's fastest growing industry, with arrivals increasing from 219,000 in 1997 to 1,055,000 in 2004. During 2003 and 2004 the growth rate remained steady at 5.0%, while in 2004 inflation was at 1.7% and exports at $1.6 billion USD. As of 2005, GDP per capita in PPP terms was $2,200, which ranked 178th (out of 233) countries.
Final economic indicators for 2007 are not yet available for reports. In the year 2006, GDP was $7.265 billion (per capita GDP $513), with annual growth of 10.8%. Estimates for 2007 are for a GDP of $8.251 billion (per capita $571) and annual growth of 8.5%. Inflation for 2006 was 2.6%, and the current estimate for final 2007 inflation is 6.2%.
Political Risk
Recently, Cambodia has been receiving reconstruction efforts from the government to stabilize its political interests under the form of a Democratic Constitutional Monarchy. It was reported that much of Cambodia lucrative timber industries are still being exploited by its neighboring countries such as Thailand, Vietnam, Malaysia, Singapore and Australia. This black market was created by the Khmer Rouge that ran the illegal timber operation until 1999. During those early times, travel by land and river was very precarious due to lack of accessible transportation system.
Cambodia faced political unrest in 1997 due to a military unrest. However, political stability has remained stable during these last few years. Cambodia has been aided by numerous developed countries such as United States, Great Britain, Canada, Germany, Australia, France and Japan. It is slowly pushing past its torturous war torn history and focusing on national reconstruction and economic recovery. In recent years, Cambodia has doubled its economic growth and continues to seek foreign business investment to modernize and help diminish poverty in its country.
Ethnic Groups
The oldest ethnic groups in the area are known as Khmers who reside into Southeast Asia shortly after the Mon, while displacing earlier Mon-Khmer arrivals and various other Austronesian groups. They were the builders of the Khmer Empire, and now formed the mainstream of political, cultural, and economic Cambodia.
The Khmers see themselves as being one race, but divided into three subgroups based on national origin and language. The Khmer of Cambodia speak the Khmer language. Khmer Surins are ethnic Khmers whose lands once belonged to the Khmer Empire but have since become part of Thailand. They have their own dialect and often also speak fluent Thai.
Similarly, the Khmer Kroms are Khmers living in the regions of the former Khmer Empire that are now annexed to Vietnam. The Khmers are both fluent in both their particular dialect of Khmer and in Vietnamese. Many of the Khmer Kroms have fled to Cambodia from Vietnam as a result of persecution and forced assimilation by the communist government.
The dominant religion in Cambodia is Theravada Buddhism which amounted to almost 95% of the total population. Islam is practiced by 3% and Christianity is followed by the remaining 2% of the country’s population.
Approximately 1 % of Cambodians are of Chinese descent. This group is one of the largest and most visible ethnic minorities in Cambodia. Most Chinese are descended from 18th–19th century settlers who came in search of trade and commerce opportunities.
Intermarriage between the Chinese and Khmers has been a common occurrence. This lead to an assimilation into mainstream Khmer society while retaining few Chinese customs. Much of the Chinese population dwindled under Pol Pot during the Cambodian Civil War. Although the Chinese were not specifically targets for extermination they still suffered the same brutal treatment faced by the ethnic Khmers during the period.
The Vietnamese accounted for 1-5% of the population as one of the largest minorities in the country. Distantly related to the Khmers, both speak a Mon-Khmer language. However, there are very few cultural connections between the two peoples because the early Khmers were influenced by the Indian cultural sphere while the Vietnamese belong to the Chinese cultural sphere.
The Cham are descended from the Austronesian (Malay) people of Champa. They belonged to the former kingdom of Champa which was centered on the southern coast of present-day Vietnam and former rival to the Khmer Empire. The Cham in Cambodia number under a million and often maintain separate villages in the southeast of the country although in many areas they live alongside ethnic Khmers. A Cham in Cambodia are ostensibly devout followers of Islam. Interaction between those who are Muslim and those who are Hindu is often considered a taboo. However, intermarriage between Khmers and Chams has taken place for hundreds of years. Many have assimilated into mainstream Khmer society and practice Buddhism.
Migration Rates
Amidst the peaceful conditions and its status as a developing nation and the relatively, many other ethnic groups can be found, particularly in Phnom Penh, is approximately at 2.16%. These include investors, opportunity seekers, and non-governmental organizations (NGO) employees which include Europeans, Americans, Koreans, Japanese, Thai, Lao and Russians.
Stage of Market Development
In 2007, the GNI was $540 per capital; this stage of market development is considered a Low Income sector. At any point of time, individual markets in each country are categorized in different stages of economic development according to the GNI per capita. Cambodia is within the same region as Thailand in particular is placed under the Lower-Middle income sector. This indicates that consumer markets are increasing rapidly, however they still lacked behind Thailand in terms of economic growth and standards of living, although not by much difference.
Living Conditions
Many Cambodians live in extreme poverty and standards of living are considerably much lower than its neighboring countries. Most Cambodians live in villages with basic electric and water facilities. Living conditions are usually sparse and difficult. As the country continues to develop, urban areas are slowly emerging. However, much of its buildings and roads are not well-maintained and are usually filled with waste.
The civil war and its aftermath have a major impact on the Cambodian population. More than 50% of its population is younger than 25 years old bringing its median age at about 20.6 years. Cambodia has the highest female-biased sex ratio especially in the Great Mekong region. UNICEF has designated Cambodia as the third most “landmined” country in the world. The war has attributed to over 60,000 civilian deaths and thousands have been maimed or injured since 1970 by unexploded landmines left behind during the war especially in the rural area. Majority of the landmine victims are children herding animals or playing in the open field. Adults who survived a landmine explosion often lose their limbs and resort to begging for survival.
High Context Culture
Similar to other South East Asian countries, Cambodia is known as a high context culture simply because
implicit language is most commonly preferred. Cambodians have a distinct understanding of their culture which makes it easier for them to interpret a common code of conduct. They allude to everyone’s knowledge of cultural and shared experiences especially given the war and unfathomable tragedies that the whole country had to endure. Cambodians often employed an ambiguous form of communication to convey a wide range of emotional responses. They expect and understand that the inner group to know and follow the appropriate protocol when dealing with each other in their daily lives. It is considered rude and intrusive to discuss their problems openly in public. Therefore it is uncommon that criticisms of another are done privately and indirectly to save the individual from public embarrassment and protect the integrity of the person. Cambodian prefers an indirect approach of talking which would elicit a better response rather than taking a direct approach.
Hofstedes’ Cultural Typology
Power distance: Cambodian score high on Power Distance which means there is a clear delineation between superiors and subordinates as well as between the young and old. It is perceived to be a good thing for a Cambodian to be law abiding and follow rules. The Cambodian culture expects and demands obedience from children. Obedience, respect and allegiance to superiors or those in power is considered highly desirable. Parents gives the teachers complete control in directing a student‘s learning and conduct in a classroom setting.
Uncertainty avoidance: Cambodians do not like to take risks. Although they have been living under tremendous hardship conditions, they enjoy a practicality and stability to go about their everyday lives. This reflects the extent to which a society like Cambodia accepts uncertainty and their preference to be risk-adverse. Cambodians place higher value on people, quality of life and are naturally nurturing. Meeting basic needs is considered to be a sufficient end in itself. Ambition and competitiveness are not valued traits. Their values include avoiding argument and confrontation. They considers disagreement impolite and, therefore, may verbalize ‘yes’ but act to the contrary.
Felinity/Masculinity: As with other Asian cultures, a predominant characteristic of a Cambodian is to instill values of sparing a person’s feelings or a more common term which is saving face. Confrontation or disrespect towards another is avoided. A strategy used by Cambodians to avoid verbal disagreement is to answer a question when asked. There is a clearly sex roles within the culture. The father or oldest child is seen as the head of the family. The mother is often perceived as a subordinate figure. Due to decades of war and civil unrest, the male population has been drastically reduced and women are assuming roles that were previously reserved for men. Cambodians possess strong concern for social harmony and human relationships.
Individualism vs. collectivism: According to research by Gudykunst, Ting-Toomey, & Chua (1988), the basis of the variables in communication and interaction styles predominant within each culture varies according to different cultures. Extended family usually consist of parents, children, grandparents, aunts, uncles, cousins, etc. Cambodians are loyal to the group which demonstrates their sense of belonging with group identity being strongly emphasized. There is a participation of group consensus and the omission of truth usually equates to living in harmony. Confrontation is not desirable, it is considered rude and offensive and destructible. When someone says "No” it is substituted for “Well…, maybe…, let's see…” Cambodian culture is perceived to be predominantly collectivist.
Long vs. short term orientation: This describes a society's "time horizon," or the importance attached to the future versus the past and present. In long term oriented societies, thrift and perseverance are valued more; in short term oriented societies, respect for tradition and reciprocation of gifts and favors are valued more. Eastern nations such as Cambodia tend to score especially high here which simply means that they take on a long-term view gain rather than just short term.
Social Institution
Cambodia’s Constitution of 1993 guarantees equal rights to men and women in all areas of society. Government initiatives and additional laws promotes the well-being and empowerment of women, however implementation of this remains inadequate. Cambodia has ratified the Convention on the “Elimination of All Forms of Discrimination against Women.”
Traditionally, women in Cambodia held an influential position within their family units and participate in many household decisions. This strong social position was quickly diminished during the armed conflict which created poverty and influenced discriminatory customs. The massacres during the Khmer Rouge regime from 1975 to 1979 had left many women widowed. As such, the numbers of Cambodian household headed solely by women are estimated at 25 percent which makes them particularly vulnerable to poverty. Female employment is relatively high, but mainly concentrated in the agricultural and informal sectors. Cambodian women generally have less access than men to resources, such as education and health care.
Cambodian women have protected and equal rights within the family context. The Law on Marriage and Family stipulates that all marriages shall be based on mutual consent, and the legal marriage age was set to 20 years for men and 18 years for women. In line with Chbab Srey, a traditional code of conduct, arranged marriages are still common, although it is now common practice to consult the groom and bride about the choice of spouse and either partner can reject their parents’ arrangement. A 2004 United Nations reported that a study made for most early incidents of arranged marriages, it was estimated that 12 per cent of girls between 15 and 19 years of age were married, divorced or widowed.
Monogamous marriages are the norm in Cambodia and considered to be the only legally recognized form of union. However, polygamy is still prevalent in the culture that one may have a principal wife usually is the mother of his children and a second wife or mistress who is not legally recognized.
With the high ratio of women versus men, the disproportionate number of men had left many single or widowed women to consummate relationships with married men. Following the war and up to 1980’s, women comprised of about 60-65% of the total population.
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Brunei
Brief History
Brunei reached its power between the 15th and 17th centuries when its control extended over coastal areas northwest Borneo and the southern Philippines. Brunei entered and period of decline brought on by colonial expansion of European powers, and piracy. Between, 1888 to 1984 Brunei became a British protectorate, and occupied by Japan from 10941 to 1945 during World War II. There was a small rebellion against the monarchy during the 1960’s, which suppressed help from the United Kingdom. The event became known as the Brunei revolt. On January 1, 1984 Brunei declared its independence on the United Kingdom. The same family has ruled Brunei for over six centuries.
Geography and Climate
Brunei is located in Southeastern Asia, bordering the South China Sea and Malaysia. The area of Brunei in size consists of a total of 5,7675 sq km, which is slightly smaller than Delaware. The country’s climate is tropical, hot, humid, and rainy. Natural resources consist of petroleum, natural gas, and timber. Also natural hazards of the country are: typhoons, earthquakes, and severe flooding (usually rare). However, current environmental issues are seasonal smoke and haze resulting from forest fires in Indonesia.
Demographics, Population, and Psychographics
The population of Brunei is 388,190; as of 2009 the population growth rate expects to be 1.759%. The average of age of the population is 27.8 years old. Birth rate is 18.2/1,000 population, and death rate is 3.29 deaths/1,000 population. Life expectancy for Brunei is the average age of 75.74 years, for males would be 73 years and females 78 years on average.
Principal Industries
Brunei has a small wealthy economy; Crude oil and natural gas production account for just half of GDP and more than 90% of exports. Brunei is the third largest oil producer in Southeast Asia, averaging about 149,837 barrels a day in 2008. It is also the ninth largest exporter of liquefied natural gas in the world. Brunei Shell Petroleum (BSP) is a joint venture owned by the Brunei Government and the Royal/Dutch Shell companies, and is the top oil and gas production company in Brunei. Oil and liquefied natural gas make up for all exports. Brunei has had a significant trade surplus in the 2000’s. Official statistics show Singapore, Malaysia, China and the U.S. as the leading suppliers of imports in the second quarter of 2008. The United States was the third largest supplier of imports to Brunei in 2008.
Foreign Industries
As of many oil producing countries, Brunei’s economy has followed swings of the world oil market. Economic growth averaged about 2.8% in the 2000’s, heavily dependent on oil and gas production. Brunei is estimated to have oil reserves expected to last 25 years, and enough natural gas reserves to last 40 years. Brunei Shell Petroleum (BSP), a joint venture owned in equal shares by the Brunei Government and the Royal Dutch/Shell group of companies, is the chief oil and gas production company in Brunei. It also operates the country's only refinery. BSP and four sister companies--including the liquefied natural gas producing firm BLNG--constitute the largest employer in Brunei after the government. BSP's small refinery has a distillation capacity of 10,000 barrels per day. This satisfies domestic demand for most petroleum products. The French oil company Total became active in petroleum exploration in Brunei in the 1980’s. The joint venture Total E&P Borneo BV currently produces approximately 35,000 barrles per day and 13% of Brunei’s natural gas.
The Brunei Government also encourages more foreign investment. New enterprises that meet certain criteria can receive status, exempting profits from income tax for up to 5 years, depending on the amount of capital invested. The normal corporate income tax rate is 30%. There is no personal income tax or capital gains tax. Companies in Brunei must either be incorporated locally or register as a branch of a foreign company and must be registered with the Registar of Companies. Private companies must have a minimum of two but no more than 50 shareholders. At least half of the directors in a company must be residents of Brunei. In effort to diversify the ecomomy the government selected agriculture, aquaculture, and fisheries among the industrial sectors for highest priority. Brunei’s government owns a cattle farm in Australia through which the country’s beef supplies are processed. The ranch is larger than the country itself at 2,262 square miles. Eggs and chickens are produced locally, but most of Brunei’s other food needs must be imported.
Infrastructure
Brunei’s infrastructure is well developed. In 1998, the road network serving the entire country was expanded and modernized, and totaled 2,525 Kilometers. A 1,150 kilometer main highway, of which 399 kilometers are paved, and runs the entire length of the country’s coastline. This conveniently links Muara, the port at the eastern end to Belait the oil- production center at the western end of the state. In 1995, there were 167,786 cars, 139,658 were private cars. Since 1996, the Brunei government has attempted to improve public transit by expanding taxi and bus services in Bandar Seri Begawan. Other than 8 miles private railway line, there are no rail services in Brunei. Brunei has one of the best telecommunication systems in Southeast Asia. The rate of telephone availability is currently 1 telephone for every 3 people. There are 2 earth satellite stations providing direct telephone, and telex links to most parts of the world. As of 1997, there are 2 television broadcast stations; Brunei was also connected to the internet in September 1995. By the end of 1999 there were 15,000 registered internet users in the country. Eager to develop e-commerce, the government is currently investing $55 million in installing a countrywide multimedia highway called RAGAM21 to serve both private and public sectors.
Political Risk
A territorial claim on land has been a dispute between Brunei and Malaysia in the past years. In September 2008 the countries finally agreed to resolve their offshore and seabed dispute, resume hydrocarbon exploration, and renounce any territorial clams on land. Brunei established an exclusive fishing zone surrounding Louisa Reef in the southern Spratly Island in 1984, but no public territorial clam to the offshore reefs. Also, illicit drugs are at risk, any drug trafficking and illegal imports of controlled substances are considered to be serious offenses in Brunei and result in a mandatory death penalty.
Ethnic Groups
Ethnic groups of Brunei consist of Malay 66.3% (the majority), Chinese 11.2%, and indigenous 3.4%, followed by other 19.1% of the population. Muslim is considered to be the official religion of Brunei; other religions include Buddhism, Christianity, and other (including the indigenous beliefs). Brunei’s official language is Malay, however English and Chinese is also used especially for business purposes.
Migration Rates
There is little emigration except for the Chinese minority. The government of Brunei is battling illegal immigration, from Indonesia and Sarawak. In 2000, the net migration rate was 2.6 migrants per 1,000 population. In that year there were 104,000 migrants living in Brunei, which was about one-third of the total population. Requirements to attain Brunei citizenship include passing tests in Malay culture, customs, and language. Permanent residents of Brunei are given International Certificates of Identity, which allow them to travel overseas. Majority of Brunei’s Chinese are permanent residents, and many are stateless. As an amendment to the National Registration and Immigration Act of 2002 allowed female citizens to transfer their nationality to their children.
State of Market Development
In 2007, the GNI was $26,930 per capital; this stage of market development is considered a High Income sector. Brunei is the third largest oil producer in Southeast Asia and also the ninth largest exporter of liquefied natural gas in the world. The countries labor force comprises of: agriculture, industry, and services. Brunei’s agriculture products are rice, vegetables, chicken, water buffalo, eggs, cattle, and goats. Industries include: petroleum, petroleum refining, liquefied natural gas, and construction. Brunei has also enjoyed moderate growth in the mid 2000’s due to high world oil and gas prices. However, in the past year Brunei’s growth has fallen tremendously. Brunei now continues to have one of the lowest GDP growth rates of any ASEAN nation.
Living Conditions
Brunei is a small wealthy country; the state provides free medical care, and school health services. As of 1996, there were 8 hospitals (4 of which are run by the government). Medical personnel since 1991, includes physicians, pharmacists and dentists. Life expectancy as of 1999 was estimated to be 71.8 years. By 1990, 96% of the population had access to health care services, and 90% had access to safe drinking water. During 1994, 92% of the country's children were immunized against measles. Malaria still remains a problem in some areas of the country, however cholera is close to nonexistentence. Also, there is still some risk of tuberculosis, typhoid fever and intestinal flu.
High Context Cluture
Based on Brunei’s well to do economy, the country is a high context culture. Brunei values communication between doing business with other countries such as; Southeast Asia, Middle East, Western Europe and the United States.
Hofstedes Culture Typology
Power distance exists in Brunei; the same family has ruled the country for over six centuries. All rules and decisions for lower authority of the population are made by the government. Masculinity plays a major role, the Sultan of Brunei is head of state and the country, also males are chosen as a Legislative Council to enforce rules and regulations for Brunei.
Social Institutions
Education begins with preschool, followed by 6 years of primary education then up to 7 years of secondary education. Nine years of school is mandatory. Literacy rate of the country is 92.7%: Males- 95.2% Females- 90.2%, ages 15 and over can read and write. Most of Brunei’s college students attend universities or other institutions abroad. However, 3,746 study at the University of Brunei Darussalam which was founded in 1985 and has 300 instructors, located overlooking the South China Sea. The official language is Malay, but English and Chinese is learned and used in business.
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Indonesia
Brief History
The history of Indonesia could be dated back nearly half a million years ago, this is the expected time period of the hominid fossils found of the “Java Man” in 1809 by explorer Eugene Dubois. A number of other fossils have been found dating back to 3000BC. Based on these discoveries it is believed that a large number of southern Chinese and Pacific Islander explorers migrated to the Indonesian Islands. In the 17th century the Dutch colonized Indonesia following the explorations of the Portuguese and the British. In 1942 a Japanese rebellion took over Indonesia, this lasted until 1945 when the Dutch reclaimed the land. In 1949 Indonesia declared its independence after Japan surrendered. This required four years of intermittent negotiations and UN mediation in a hostile environment before the Netherlands transferred sovereignty. In 1999 Indonesia voted in its first parliamentary election after decades of repressive rule.
Geography and Climate
Indonesia is archipelago (clustered islands formed tectonically) located in southeastern Asia between the Indian Ocean and the Pacific Ocean. There are 17,508 separate islands of which 6,000 are populated. The total area of Indonesia is 1,904,569 sq km. This is nearly three times the size of Texas. Indonesia is bordered by Timor-Leste, Malaysia, and Papa New Guinea. The smaller islands of Indonesia have a mostly costal low land terrain. The larger islands have small interior mountain ranges. The climate in Indonesia is tropical, which creates hot and humid weather.
Demographics, Population, and Psychographics
The population of Indonesia is 240,271,522 as of July 2009. Indonesia is the fourth most populous nation in the world after Chin, India, and the United States. The island of Java is one of the most populated areas in the world, with 130 million people living in an area the size of Alabama. Indonesia includes numerous related but distinct cultural and linguistic groups. Since independence, Indonesian is the language of most written communication, education, government, and business. Many local ethnic languages are the first language of most Indonesians and still important. The median age is 27.5 years old. The age breakdown is as follows:
• 0-14 years: 28.1% (male 34,337,341/female 33,162,207)
• 15-64 years: 66% (male 79,549,569/female 78,918,321)
• 65 years and over: 6% (male 6,335,208/female 7,968,876)
Principal Industries
Indonesia industries process an abundance of natural resources include: petroleum, wood, sugar, rubber, tea, coconuts, palm kernels, sisal, kapok, rice, and cassava. Manufactured products include consumer goods such as tires and tubes, rubber shoes, radios, batteries, soap, margarine, cigarettes, light bulbs, textiles, glass, paper, tractors, and trucks. Other industries established in recent decades include the Krakatau Steel Industrial Estate at Cilegon (in northwest Java), plywood factories, cement works, spinning mills, knitting plants, iron works, copper and other foundries, a ceramics plant, a leather-goods plant, and a glass factory, and the manufacture of petrochemicals and urea fertilizers, as well as, most ambitiously, facilities for automobile assembly, shipbuilding and aircraft manufacture. The Asian financial crisis doomed ambitions for the mass production of passenger airplanes. The airline industry is a major generator for the Indonesia economy. In 2007 after a deadly crash all Indonesia Airlines were banned from European Union air space. Recently the ban has been lifted which is expected to help stimulate the Indonesian economy, with the EU being one of Indonesia’s greatest markets.
Foreign Industries
Under Indonesia's current investment law, the Capital Investment Coordinating Board (BKPM) plays a key role in promoting foreign investment and approving many project proposals, including investments in Bonded Zones (Kawasan Berikat) and Integrated Economic Zones (KAPET). However, the Ministry of Industry and Trade, and relevant technical government departments responsible for oil and gas, banking, and insurance industries also have investment approval powers, leading to confusion among potential investors. Investors may also apply for investment approvals with Indonesian Embassies abroad or provincial Regional Capital Investment Coordinating Boards (BKPMDs).
Infrastructure
Indonesia has fairly effective telecommunications and infrastructure, especially roads. From 1969 to 1988, the first 3 Repelitas allocated 55 percent of expenditures on transportation infrastructure to road building and maintenance, with the rest for marine transportation, railroads, and air and river transportation. This trend has continued in the 1990s. As a result, Indonesia had 342,700 kilometers (212,954) miles of roads in 1997, although fewer than half of that number were paved. Railway lines totaled 6,458 kilometers (4,013 miles) in 1995. In 1998 there were more than 16 million vehicles on the road, but only 2.6 million were cars, with most of the rest (11.7 million) being motorcycles. There are 446 airports throughout Indonesia, but only 127 of them have paved runways. As an archipelago, Indonesia relies on a huge fleet of ships for transporting both passengers and goods. Important ports include Cirebon, Jakarta, Kupang, Palembang, Semarang, Surabaya, and Ujungpandang.
Political Risk
There is a rather large political risk for foreign investors when considering the possibility of an Indonesian endeavor. Indonesia faces a list of serious political ricks such as: Economic, riots, terrorism, sovereign non-payment, regulatory, political interference, and supply chain vulnerability.
Ethnic Groups
There are dozens of ethnic groups located through the thousands of islands which make up Indonesia. There are three main ethnic groups throughout Indonesia: Javanese, Sudanese, and Malays. The Javanese people are the largest ethnic group indigenous to Indonesia (50% of the population) and most commonly located in the central and eastern portions of Java. The Sudanese are the second largest Indonesian ethnic group, (20% of the population) located in the western portion of Java. The Sudanese are much like the Javanese but follow are more Islamic nature. The Malays are an ethnic group of Austronesia people predominately located in the Malay Peninsula, including the southeast parts of Thailand, and the coast of Sumatra.
Migration Rates
There are two types of migration that commonly affect Indonesia involve emigration. First is an increasing level of migration to more developed nations, particularly those belonging to the Organization for Economic Cooperation and Development (OECD); here the flow is predominantly permanent and consists mainly of skilled migrants. Second is the better-known, temporary movement of largely unskilled workers to the Middle East and elsewhere in Asia. Many of these migrants are women who work as domestics and are vulnerable to exploitation.
Stage of Market Development
In 2007, the GNI was $1,650 per capital; this stage of market development is considered a Lower-Middle Income sector. Indonesia has the largest economy in Southeast Asia, and is one of the emerging market economies of the world. It has a market-based economy in which the government plays a significant role by owning more than 164 state-owned enterprises and administers prices on several basic goods, including fuel, rice, and electricity. In the aftermath of the financial and economic crisis that began in mid-1997, the government took custody of a significant portion of private sector assets through acquisition of nonperforming bank loans and corporate assets through the debt restructuring process.
Living Conditions
Indonesia, a country of around 250 million people in South East Asia, is abundant in natural beauty; soaring volcanoes, and spectacular rice terraces. The housing in Indonesia is an acute problem in both urban and rural areas. In 1990 alone, 210,000 new housing units were completed and the total number of dwellings stood at 44,855,000 in the mid-1990s. The food in Indonesia is typically everything Westerners pitch into sausages is served in its original form in Indonesia. Things like sliced beef tongue and deep fried chicken intestines. Health insurance in Indonesia is typically provided by the employer. These plans usually consist of care at expat medical centers throughout the major cities. Medical care on the whole is relatively affordable and health care insurance for employers is extremely affordable compared to prices in the United States.
High Context
In Indonesia communication tends to be very efficient because of their information-flow at work and in solitude. They discuss everything in advance and consider meetings as an official ritual where the already commonly agreed decision will be announced. This exemplifies Indonesia’s high-context culture. High-context means that "most of the information is either in the physical context or initialized in the person, while very little is in the coded, explicit, transmitted part of the message."
Hofstedes’ Cultural Typology
Indonesia has a high power distance, with a great deal of separation between the rich and poor as well as separation between the old and young. The majorities of Indonesian people follow the rules of the government and trust in the governments decisions. There is very high uncertainty avoidance; the Indonesian people do not like to take social or political risks. Typically Indonesians accept their place in society and make little efforts in changing social class. This is all in efforts to avoid conflict, which is a popular trend in Indonesia. “Saving face” in a popular Asian phrase and common in Indonesia, this is the idea of sparing a person’s feelings. This causes the Indonesian culture to have little confrontation and disrespect toward others. The Indonesian people are very collective in culture; they desire a sense of belongingness from groups. This builds trust and harmony in the culture.
Social Institutions
Indonesia's size and ethnic diversity has made national identity problematic and debated. Identity is defined at many levels: by Indonesian citizenship; by recognition of the flag, national anthem, and certain other songs; by recognition of national holidays; and by education about Indonesia's history and the Five Principles on which the nation is based. Much of this is instilled through the schools and the media, both of which have been closely regulated by the government during most of the years of independence. The nation's history has been focused upon resistance to colonialism and communism by national heroes and leaders who are enshrined in street names. Glories of past civilizations are recognized though archaeological remains.
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Malaysia
Brief History
Malaysia is a country in South East Asia that consists of three Federal Territories and thirteen states. Eleven states and two federal territories are found on the Malay Peninsula; the remaining two states and one federal territory are on the island of Borneo. The country consists of 329,847 square kilometers, and is separated into two regions; the Peninsular Malaysia and Malaysian Borneo. The tropical weather is due to the country being located near the equator. Sea-lanes serve the country in a booming economic trade industry. The capital city, Kula Lumpur, has a population just over 27 million.
Geography and Climate
The tropical climate bosts an average temperature of 20°C - 30°C. Malaysia’s tropical weather is enjoyable, and the best part is it is never too hot. The Humidity is a common attribute, which can be anticipated by its proximity to waters; the exception is in the highlands where the climate is moderately hot. However, mostly tropical climate is experienced round the year.
Durring the monsoon the weather varies on the coastline of Peninsular Malaysia. On the west coast, the rainy season is from September to December, and from October to February the east coast receives rainfall. East Malaysia experiences heavy rains between the months of November to February. The Peninsular of Malaysia receives average rainfall of 2500 mm, East Malaysia flourish in 5080 mm of rain. The peak of Monsoon season is from November to February, August can also prove to be a very wet month on the west coast.
Geographic Area: 329,847 sq. km. (127,315 sq. mi.); which is slightly larger than New Mexico. Cities: Capital--Kuala Lumpur. Other cities--Penang, Ipoh, Malacca, Johor Baru, Shah Alam, Klang, Kuching, Kota Kinabalu, Kota Baru, Kuala Terengganu, Miri, Petaling Jaya. Terrain: Coastal plains, jungle-covered mountains. The South China Sea divides the peninsular of Malaysia from East Malaysia on Borneo.
Demographics, Population, and Psychographics
The age distribution of Malaysia is mainly a youthful population with an average of 4% of elderly people. Due to the increasing advances in technology there seems to be more stress. A noted rise in the use of illegal drugs has been made recently. There is also an increasing problem with AIDS among the younger generation.
The age demographics for the region is similar to that of a industrial society with life expectancies ranging from 68 – 71 years. Only 4% of the population is 65 years or older. Based on the 2000 census the population consists of the following:
• 60.4% Muslims
• 19.2% Buddhist
• 9.1% Christian
• 6.3% Hindu
• 2.6% Confucianism, Taoism, and other traditional Chinese religions
• 1.5% unknown
• 0.8% None
In 2007, the Musilm population was estimated to range between 1.3 billion to 1.8 billion. Muslims believe in the sovereignty and supremacy of Allah. Buddhism represents the second largest group in Malaysia; Buddhism in Malaysia is mostly practiced by ethnic Chinese Malaysians, where Hinduism is mostly practiced by the Indian population. Approximately 9% of Malaysians are Tamil Indians, which 90% of them are Hindu making up almost all of the 6.3% of Hindus in the region. Most Christians live in East Malaysia and represent 9% of the population based on the 2000 census.
Principal Industry
Malaysia is a rapidly changing and growing country. The country dependents on agriculture and commodities, and today, it has become an export-driven hub stimulated by technology, knowledge-based and capital-intensive industrial expansion. Malaysia is an energetic business climate strategically located in the center of South East Asia, providing cost-competitive locations for investors seeking to set up operations offshore.
Malaysia a technologically developed country, and noted as such amongst industrializing nations in the ASEAN region. Technological is an integral part of their growth. Malaysia is now recognized as an industrialized nation, and one of the greatest assets provided is their human resources. They offer a very young workforce that is well educated and productive. The emphasis on human resource development by the Government ensures that they will continue to meet the needs of the expanding manufacturing industries, as well as the growing service industry. The Government supports a market-oriented economy and is pro-business. Malaysia provides investors an energetic business environment, which is an ideal scenario for companies to grow and profit. One key component has been their highly developed infrastructure, as well as offering a productive workforce. It is politically stable with a highly-developed legal system. Attractive incentives for investors are offer to those who want to enter this market.
Foreign Investment
Strategic planning and abundant resources has allowed Malaysia to offer investors a wide spectrum of opportunities. In the area of technology Malaysia has proven to be an advanced electronics manufacturing, R&D leader, biotechnology contender, design center, innovative, and highly automated manufacture. Their objective has been to become a hub for other value chain activities. All of these benefits have made it a very attractive environment for foreign companies.
Infrastructure
The Infrastructure in Malaysia is designed to serve the businesses, and it is one of the very best in Asia. Telecommunications network served by digital and fiber optic technology, five international airports (all with air-cargo facilities), well-maintained highways and seven international seaports make Malaysia an ideal catalyst to the Asia-Pacific market. There are also specialized parks that have been developed to cater to the needs of specific industries.
Political Risk
Malaysia's predominant political party, the United Malays National Organization (UMNO), has held power in coalition with other parties continuously since independence in 1957. The UMNO coalition's share of the votes declined in a national elections held in May 1969. This caused riots to break out in Kuala Lumpur between Malays and ethnic Chinese, hundreds people were killed.
Since, Malaysia implemented several initiatives that became integral parts of its socioeconomic model, and established the New Economic Policy (NEP) in 1971. It contained affirmative action policies designed to benefit Malays and indigenous groups. The government also committed intercommons harmony as one of its official goals. Stability increase in February 2009, as the opposition Alliance lost control of one of the states through defections of its assembly members to the National Front. Prime Minister Abdullah, taking responsibility for his party’s poor showing in the March 2008 general election, stepped down as Prime Minister in a carefully timed transfer of power to his deputy in April 2009.
The political structure is as follows: “Branches: Executive--Yang di-Pertuan Agong (head of state and customarily referred to as the king; has ceremonial duties), prime minister (head of government), cabinet. Legislative--bicameral parliament, comprising 70-member Senate (26 elected by the 13 state assemblies, 44 appointed by the king on the prime minister's recommendation) and 222-member House of Representatives (elected from single-member districts). Judicial--Federal Court, Court of Appeals, high courts, session's courts, magistrate's courts, and juvenile courts.”
Ethnic Groups
Malays form the majority of the population of Malaysia. There are sizable ethnic Chinese and Indian communities as well. The Malay language and Islam are the official language and religion of the federation respectively. Malaysia is a founding member of the Association of Southeast Asian Nations and participates in many international organizations such as the United Nations. As a former British colony, it is also a member of the Commonwealth of Nations. It is a member of the Developing 8 Countries.
Migration Rates and Patterns
There were 1,392,000 migrants living in Malaysia in 2000. This number includes 50,500 refugees and the net migration rate for the year was 0.4% migrants for every 1,000, which does do not reflect the unknown number of illegal immigrants from other countries in the region.
Stage of Market Development
In 2007, the GNI was $6,540 per capital; this stage of market development is considered a Middle-High Income sector. Trade expansion is a growing manufacturing base in Malaysia. The Islamic financial system in Malaysia is on a new beginnings, and the development of Islamic finance began in 1983-1992, followed by the implementing the Islamic financial system. This has been a source of competitive advantage for greater growth and success.
Living Conditions
The cost of living in Malaysia is exceptionally low given it is referred to as a newly industrialized country. Taxes are kept to a minimum, and there is no inheritance tax or capital gains tax on assets. They seem to be struggling to keep up with other currency, which reveals why commodities and housing are cheaper. Foreigners are welcome to invest in Malaysia, since the government just recently banned short-selling. Banks give loans for housing and business enhancing their prosperous growth-economy.
High Context Culture
Cultural differences from Japan or China exist due to the fact that the country is made up primarily of three different cultures and is a typical Asian country with high-context culture. Cultural context cannot be defined as consistently same as other Asian countries and differences exist. A primary example is in a wide variety of religious beliefs; however, over 60% are Muslim, and there is a mix of different subcultures creating subtle differences.
Hofstedes’ Culture Typology
Power Distance (PDI): This area ranks high comparatively and has a high level of inequality of power, as well as wealth throughout society.
Uncertainty Avoidance (UAI): Also ranks high, which is an indicator of the society’s low level of tolerance for uncertainty demonstrated in their laws, policies, and regulations recently adopted.
Individualism (IDV): This is an area that differs slightly among other Asian cultures with high scores in individualism, due to cultural difference and education styles.
Feminity/Masculinity (MAS): This is also an area that looks to be trending away from typical Asian cultures, as women are increasingly entering the workforce and commanding higher wages. However, there still many households where traditional male and female roles still prevail.
Social Institutions
The majority of Malaysian families tend to be stable. The change in population in the 1960s, have significantly impacted Malaysian families. For over forty years, economic development, modernization, and rural-urban migration together have been impacting family ties and contributing to a more fragmented family structure. There has been a notable decline in the average size of families in recent years, as well as a change in increased life expectancy. The increase appears to be related to economic and social improvements in the region.
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Laos
Brief History
In the 14th century modern day Laos used to be the ancient Lao Kingdom of Lan Xang. Over time Laos came under domination of Siam which is modern day Thailand. From the 18th century until the late 19th century Laos became a part of French Indochina. In 1907 the Franco-Siamese Treaty was signed and it defined a current border with Thailand. In 1975 the government was under the control of the communist Pathet Lao which instituted a socialism that is closely aligned to Vietnam. In 1986 foreign investment laws were gradually installed. In 1997 Laos became a member of ASEAN.
Geography and Climate
The geographic coordinates for Laos is 18 00 N, 105 00 E. Laos is located in South East Asia. It is Northeast of Thailand and West of Vietnam. The climate is tropical monsoon. From May to November it is rainy season. From December to April it is dry season.
Demographics, Population, and Psychographics
The median age of the Laos population is 19.3. The median age for males is 19 and 19.6 for females. The birth rate is 33.94 and the death rate is 10.78. The life expectancy rate at birth is 56.68 years. 54.56 years for males and 58.9 for females. The literacy rate is 68.7% and most people 15 years old and over can read and write
Principal Industries
Laos industries include copper, tin, gold, gypsum mining, timber, electric power, agricultural processing, construction, garments, cement, and tourism. The industrial production growth rate is 11%.
Foreign Industries
The Laos exports are recorded at $1.163 billion and the export commodities include wood products, coffee, electricity, tin, copper, and gold. The export partners are Thailand, Vietnam, China, and South Korea. The Laos imports are recorded at $1.384 billion and the import commodities include machinery and equipment, vehicles, fuel, and consumer goods. The import partners are Thailand, China, and Vietnam.
Infrastructure
The reserve of foreign exchange and gold is $803 million. The exchange rate of kips per US dollar is -8,760.69.
Political Risk
Laos is one of the world’s least developed countries. The armed forces have poor funding, small and does not have many resources. The main focus for the military is to watch the border and for internal security. The arm is the third pillar of state machinery that is expected to restrain civil and political unrest. There is no external threat to the state and the army has good relations with the Vietnamese military.
Ethnic Groups
The different ethnic groups include 55% Lao, 11% Khmou, 8% Hmong, and 25% other minor ethnic groups.
Migration Rates
There are 42 airports in Laos and 10 of those airports have paved runways and 32 do not. There are no heliports. The roadways cover a total of 29,811 km. The water ways cover 4,600 km and there is one merchant marine ports. There are no railroads.
Stage of Market Development
In 2007, the GNI was $580 per capital; this stage of market development is considered a Low Income sector. The GDP per capita is $2,100. The labor force population is 2.1 million. Of the 2.1 million 80% of that population is in agriculture, and 20% is in industry and in services. The unemployment rate is 2.4%.
Living Conditions
The population below the poverty line is 30.7%. The distribution of household income or consumption by percentage share had 3.4% in the lowest 10% of the population. In the highest 10% of the population the household income or consumption by percentage share is 28.5%. Laos is one of the few one-party Communist countries. The growth rate is high but the country remains underdeveloped.
High Context Culture
Laos has a strong family based structure. Laotians have strong ties with their families and peers. Laos is a high context culture and many decisions made are based on values, beliefs, societal status, and background.
Hofstedes’ Cultural Typology
Power distance would be low because the people of the Laos work together.
The country is poor so they work together to survive. The country practices collectivism. Laos favors masculinity. The rank for uncertainty avoidance would be high. Laos uses long-term orientation.
Social Institutions
The school life expectancy is a total of 9 years. It is recorded that it is usually 10 years for males and 8 years for females. The education expenditures are 3% of GDP.
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Myanmar
Brief History
Myanmar is officially known as Union of Myanmar and formerly known as Burma. The ethnic of modern Myanmar is Indo-Aryans. The golden age of Myanmar was in 11th century when King Anawrahta united the whole country. The golden age lasted for about 250 years until Myanmar was invaded by Mongolian King Kublai Khan. Myanmar became a separate and self-governing colony of Britain in 1937 after Anglo-Burmese War and eventually became independent in 1948. The latest movement of Myanmar’s political body is in 1962 when democratic rule ended by the military junta and turned into military regime until today.
Geography and Climate
The country covers an area of 677,000 square kilometers (261,228 square miles) ranging 936 kilometers (581 miles) from east to west and 2,051 kilometers (1,275 miles) from north to south. It is a land of hills and valleys. Enclosed within the mountain barriers are the flat lands of Ayeyarwaddy, Chindwin and Sittaung River valleys where most of the country's agricultural land and population are concentrated.
The length of contiguous frontier is 6,159 kilometers. The total length of Myanmar-Bangladesh boundary is 271 kilometers (168.7 miles). The total length of Myanmar-China boundary is 2,204 kilometers (1,370 miles); Myanmar-Thailand 2,107 kilometers (1,309.8 miles); Myanmar-India 1,338 kilometers (831.8 miles); and Myanmar-Laos 238 kilometers (147.9 miles).
Myanmar has a largely tropical climate with three seasons: the monsoon or rainy season, from May to October; the cool season, from November to February; and the hot season, generally from March to April. Rainfall during the monsoon season totals more than 500 cm (200 in) in upper Myanmar and over 250 cm (100 in) in lower Myanmar and Yangon (formerly Rangoon). Central Myanmar, called the dry zone, and Mandalay, the chief city in the area, each receive about 76 cm (30 in). The mean annual temperature is 27° C (81° F ); average daily temperatures in Yangon (Rangoon) range from 18° to 32° C (64–90° F ) in January, during the cool season, and from 24° to 36° C (75–97° F ) in April, during the hot season. The climate in upper Myanmar, particularly at altitudes ranging from about 300 to 1,220 m (1,000–4,000 ft), is the most temperate throughout the year, while lower Myanmar, especially in the delta and coastal regions, is the most humid.
Demographics, Population, and Psychographics
The total population in Myanmar is estimated around 47.7 million people. About 33% of the total population resides in urban area. According to CIA, the World Factbook, out of the entire population, the adults between 15-65 years old cover about 67% of the total population. Myanmar has one of the largest AIDS epidemics in the world. The major religion in Myanmar is Buddhism which contains 89% of the total population.
Principal Industries
Industry is geared largely to the processing of agricultural, mineral, and forest products. More than half of Myanmar industrial production is accounted for by the public sector. Principal industrial products are cement, steel, bricks and tiles, fertilizers, and processed foods. Consumer goods that were imported before 1962 and are now manufactured domestically include blankets, paper, glass products, bicycles, and water pumps. Other major consumer manufactures are aluminum ware, jute and cotton cloth, pharmaceuticals, beverages, matches, and cigarettes. There is also a growing segment engaged in the assembly of television sets and motor vehicles. The main industrial area is Bago (formerly Pegu). Some manufacturing industries are privately owned and operated under government supervision.
Foreign Investment
Foreign investment in Myanmar was heavy before World War II, but in the postwar period, and particularly after independence, a government policy of economic nationalism (and later socialism) strongly discouraged private foreign investment. After the nationalization of industry in 1963–64, private foreign investment in Myanmar was eliminated entirely. In 1976, the government indicated a willingness to establish "mutually beneficial economic cooperation" with foreign enterprises having the technology that Myanmar needed. The scope of state capitalism was expanded when the Saw Maung regime legalized internal and external trade without giving up control of major industries.
Foreign investment in Myanmar has been permitted only since 1988 under the Union of Myanmar Foreign Investment Law, and the level and variety of investment is limited. Sectors eligible for foreign investment include manufacturing, oil and gas exploration and development, mining (except gold and precious stones), jewelry production, and agriculture. The Foreign Investment Commission (FIC) screens foreign investment proposals for export generation potential, technology transfer, and the size of the investment. Various investment incentives are provided, such as exemption from income tax, and relief or exemption from customs duties. Bureaucratic procedures and an antiquated and inadequate infrastructure hamper foreign and local investments alike. Foreign entities cannot own land in Myanmar. The government's maintenance of an official exchange rate for the domestic currency, the kyat, was overvalued by some 60 times its unofficial value. Foreign investors must also fear being criticized in the West for investing in a country with a long record of human rights violations. The Clinton administration pressured Unocal to sell its shares in the Myanmar Oil and Gas Company (MOGC).
In 1997, Myanmar was admitted to the Association of Southeast Asian Nations (ASEAN), a step that might have relieved some of the international pressure against doing business in the country; however, in May of that year, the US government enacted restriction against new investment in Myanmar by US companies or citizens.
Infrastructure
In most developing countries of the world including Burma, inadequate infrastructure —roads, bridges, canals, railways, ports and communication facilities— impedes economic growth. Burma's long coastline is home to many excellent natural harbors such as Bassein, Bhamo, Mandalay, Rangoon, and Tavoy. The government has taken steps to develop new ports and maintain the existing ones, although all the ports are not used to their maximum capacity. A salient geographic feature of Burma is its many rivers, especially the Irrawaddy. The country's waterways remain the most important traditional mode of transportation to many remote areas of the country. Of more than 12,800 kilometers (7,954 miles) of waterways, 3200 kilometers (1,988 miles) are navigable by large commercial vessels.
Political Risk
International sanctions are undoubtedly holding economic development in Myanmar well below potential, and there is serious doubt about the credibility of Myanmar’s official economic data, as well as distortions in its economic performance caused by the huge discrepancy between the official and market exchange rates for the kyat. Despite the junta’s suspicions of the outside world, Myanmar will try to live up to its trade obligations as a member of ASEAN, and supported by Vietnam, it will lobby within ASEAN for permission to take a more gradual approach in easing its trade restrictions, hoping to exploit its nominal reform process in order to obtain a relaxation of the pressures for economic and political change. An economy already handicapped by international sanctions and serious power shortages that constrain productivity was dealt a heavy blow by Cyclone Nargis, which hit the country in early May 2008. International sanctions will remain in place and will continue to bite hard for the foreseeable future. Although investment in the oil and gas sector will provide a sufficient boost to exports to keep the growth rate in positive territory, economic performance will remain well below potential unless and until international pressure eases.
Ethnic Groups
The recognized ethnic races in Myanmar include Bamar, Shan, Kayin, Rakhine, Mon, Kayah, and Kahchin. Barmar is the majority of the ethnic race in Myanmar which covers about 68% of the total popularity. Myanmar has one of the largest AIDS epidemics in the world.
Migration Rates and Patterns
According to , The Migration rate in Myanmar is -1.84 migrant(s)/ 1,000 populations (2001). Migration from Myanmar has developed particularly in the 1990s, in conjunction with full employment and demand for labor in Thailand. Over a few years, Burmese migrants in Thailand reached perhaps 800,000, most of them in an irregular situation. Migration was encouraged by better opportunities in Thailand, but also by difficult conditions after the military takeover in Myanmar. Burmese migrants are employed in the jobs typically refused by Thai workers, particularly fisheries, but also warehouses, small factories and restaurant/bars. Burmese women work as domestic or commercial sex workers. After the crisis, perhaps 300,000 Burmese have been repatriated. However, the long and loosely enforced border with Thailand does not provide a great barrier for the continuation of irregular migration. Thailand is also planning to return approximately 90,000 Burmese hosted in camps as refugees.
Stage of Market Development
In 2007, the GNI was $220 per capital; this stage of market development is considered a Low Income sector. Myanmar’s GNI per capita in 2007 is $386.3 which makes Myanmar remains a low-income country. In Myanmar, a high percentage of population involved in farming and the agriculture is the major principal industry. Also, due to the political instability, it is still hard for Myanmar to open up its market into.
Living Condition
According to the UN Development Programmer’s 2007 Human Development Report, public health expenditure equaled only 0.3% of Burma's GDP. High infant mortality rates and short life expectancies further highlight poor health and living conditions. Tuberculosis, diarrheal disease, malaria, and HIV/AIDS pose serious threats to the Burmese population, In 2008, the UNDP's Human Development Index, which measures achievements in terms of life expectancy, educational attainment, and adjusted real income, ranked Burma 133 out of 177 countries. There are numerous documented human rights violations, and internal displacement of ethnic minorities is prevalent. Over two million Burmese, many of them ethnic minorities, have fled for economic and political reasons to Thailand, Bangladesh, India, China, Indonesia, and Malaysia to seek work and asylum. Approximately 150,000 Burmese live in nine refugee camps in Thailand along the border with Burma. Approximately 21,000 Burmese Rohingya are registered as living in two camps in Bangladesh, and up to 200,000 unregistered Rohingya live outside of these two camps.
High Context Cultures
Myanmar is a typical Asian country with high-context culture. High context refers to societies or groups where people have close connections over a long period of time. Many aspects of cultural behavior are not made explicit because most members know what to do and what to think from years of interaction with each other.
Hofstedes’ Cultural Typology
Myanmar is a low power distance, highly feminine, moderately individualistic, high uncertainty avoidance culture with a moderate long-term orientation. According to the study of Myanmar culture, Myanmar may not be the typical Asian culture. With an individualistic, feminine, and moderate long-term orientation, Myanmar is somewhat unique in Asia. The unique circumstances of Myanmar’s political environment may be the cause, or manifestation of these differences. The lower power distance value seems to be consistent with the economic system that developed in Myanmar after gaining independence. The “Burmese way to socialism,” an earlier economic program reflected a desire to maintain economic equality among societal members. Myanmar is also a strongly Buddhist country, perhaps the most devout among the Southeastern nations. This spiritual orientation may also shape the low power distance and feminine orientations of Myanmar to a greater extent than even its other Buddhist neighboring countries. With its unique political and desperate economic situation, people in Myanmar may be more focused towards individualism at the moment as a basis for survival. This would also perhaps explain the slightly less long-term orientation in the region.
Social Institutions
Myanmar is a multicultural society comprising some 135 ethnic groups, with Bamar, Chin, Kachin, Kayah, Kayin, Mon, Rakhine and Shan being the largest communities. The right to equality of women is safeguarded in national legislation, as well as in traditions and dhammathats i.e. customary laws. Despite this legislation, there is a gender-based division of labor: in addition to performing 80 per cent of all agricultural labor, women carry the main burden of household work. Women in Myanmar are well protected in some aspects of family life, but not all. The country’s customary law sets the legal age of marriage at 20 years for women and at puberty for men. Polygamy is permitted under Myanmar customary law, but is socially frowned upon and generally unpopular. With regards to parental authority, fathers are perceived as the head of the household and have the duty of providing for their wives and children. Women in Myanmar have a moderate degree of protection for their physical integrity. The weakest area is that of violence against women. Most violent acts against women are closely linked to the country’s national instability; they include political imprisonment, forced labor and systematic sexual abuse of minority women by armed forces. Legislation in Myanmar generally supports the financial independence of women. They have the same legal rights as men in regards to access to land and to access to property other than land. In marriage, husbands and wives are considered co-owners under the following rules: either spouse is entitled to one-third of the property owned by the other spouse before the wedding, and one-half of the property accumulated or increased during the marriage. The latter case includes property given to the couple at their wedding and property earned through the work of both spouses. Women and men have equal legal rights to apply for bank loans and engage in other types of contracts. Civil liberties are quite restricted in Myanmar, but this is true for all citizens and not specifically discriminatory against women. Women enjoy freedom of dress, but are expected to wear modest apparel in Buddhist pagodas and monasteries.
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Philippines
Brief History
The Philippines was first a Spanish colony in the 16th century. In 1898 the Spanish-American War took place and the US ceded the Philippines. In 1935 the Philippines became a self-governing country. In 1942 during World War II the Philippine islands fell under the Japanese. During 1944 and 1945 the United States and the Philippines fought together to regain control over the Japanese. On July 4, 1946 the Republic of the Philippines attained its independence.
Geography and Climate
The geographic coordinates for the Philippines is 13 00 N, 122 00 E. The Philippines is located in South East Asia. It is East of Vietnam and is between the Philippine Sea and the South China Sea. The climate is tropical marine. From November to April there is a Northeast monsoon. From May to October there is a Southwest monsoon.
Demographics, Population, and Psychographics
The median age of the Philippine population is 22.5. The median age for males is 22 and 23 for females. The birth rate is 26.01 and the death rate is 5.1. The life expectancy rate at birth is 71.09 years. 68.17 years for males and 74.15 for females. The literacy rate is 92.6% and most people 15 years old and over can read and write.
Principal Industries
Philippine industries include electronics assembly, garments, footwear, pharmaceuticals, chemicals, wood products, food processing, petroleum refining, and fishing. The industrial production growth rate is 5%.
Foreign Investments
Philippine exports are recorded at $48.2 billion and the export commodities include semiconductors, electronic products, transport equipment, garments, copper products, petroleum products, coconut oil and fruits. The export partners are China, Japan, Hong Kong, Singapore, and Malaysia. Philippine imports are recorded at $60.78 billion and the import commodities include electronic products, mineral fuels, machinery and transport equipment, iron, steel, textile fabrics, grains, chemicals, and plastic. The import partners are Japan, United States, China, Singapore, Saudi Arabia, South Korea, and Thailand.
Infrastructure
The stock of direct foreign investment in Philippines is $21.4 billion. The stock of direct foreign investment abroad is $5.821 billion. The exchange rate from Philippine pesos to the US dollar is 44.439. Ports and terminals include Cagayan de Oro, Cebu, Davao, Liman, Manila, and Naspit Harbor.
Political Risk
In 1986 Manila experiences their first wave of “people power” when the 20 year ruling of Ferndinand Marcos was exiled as president and was replaced by a female president named Corazon Aquino. The second wave of “people power” was in January 2001 when President Joseph Estrada was impeached for corruption charges. The Philippines faces threats from three terrorists groups on the US Government’s Foreign Terrorist Organization List.
Ethnic Groups
The different ethnic groups include 28.1% Tagalog , 13.1% Cebuano, 9% Ilicano, 7.6% Bisaya, 7.5% Binisaya, 7.5% Hiligaynon Ilonggo, 6% Bikol, 3.4% Waray, and 25.3% Other.
Migration Rates and Patterns
There are 254 airports in the Philippines and 85 of those airports have paved runways and 169 do not. There are two heliports. The railways cover a total 897 km. The roadways cover a total of 201,910 km. The water ways cover 3,219 km and there are a total of 391 merchant marine ports.
Stage of Market Development
In 2007, the GNI was $1,620 per capital; this stage of market development is considered a Low-Middle Income sector. The GDP per capita is $3,300. The labor force population is 36.81 million. Of the 36.81 million 35% of that population is in agriculture, 15% is in industry, and 50% is in services. The unemployment rate is 7.4%.
Living Conditions
30% of the total Philippine population is below the poverty line. The distribution of household income or consumption by percentage share had 2.4% in the lowest 10% of the population. In the highest 10% of the population the household income or consumption by percentage share is 31.2%.
High Context Culture
The Philippines is family oriented and have strong ties with their families and peers. The Philippines is a high context culture and many decisions made are based on values, beliefs, societal status, and background.
Hofstedes’ Cultural Typology
Power distance would be low because the people of the Philippines believe in team work. The country practices collectivism. There is not a masculinity/femininity ratio. Women are treated well just like men. The Philippines has had a female president. The rank for uncertainty avoidance would be high although most of the country is well educated. The Philippines uses long-term orientation.
Social Institutions
Families are extended and close friends are considered and treated like family. The education population is 92.6%. The school life expectancy is 12 years. The education expenditures is 2.5% of the country’s GDP. People age 15 and up can read and write.
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Singapore
Brief History
Singapore was founded as a British trading colony in 1819. It joined the Malaysian Federation in 1963 but separated two years later and became independent. Singapore subsequently became one of the world's most prosperous countries with strong international trading links (its port is one of the world’s busiest in terms of tonnage handled) and with per capita GDP equal to that of the leading nations of Western Europe.
Geography and Climate
Singapore is an island of 646 sq. km, about the size of Chicago. It is located at one of the crossroads of the world. Singapore's strategic position has helped it grow into a major center for trade, communications, and tourism. Its geographical location is 96km north of the equator, between longitude 103 degrees 36' East and 104 degrees 25' East. Singapore is often touted as a concrete jungle with close to 90% of the population living in flats and an ever-changing skyline of monumental buildings. Government and private enterprises also conduct an orchestra of automation that makes Singapore one of the world's most efficient societies. Yet Singapore has also been known as a green city. There is a wealth of flora and fauna here that is beyond our own imagination.
Two causeway bridges link Malaysia, which is just north of Singapore. The key islands of the Riau Archipelago of Indonesia are also just a quick ferry trip away, whereas Thailand and the Philippines are a short plane journey away. Singapore, with an airport served by more than 69 airlines, is very much the gateway to Southeast Asia
Singapore is an equatorial country with relatively uniform temperature, high humidity all year round and abundant rainfall particularly during the Northeast Monsoon from November to January. It has relatively high temperatures with a daily average of 26.7°C and a high daily relative humidity of approximately 84.4%.
Demographics, Population, and Psychographics
According to government statistics for the year 2008, the population of Singapore is 4.8 million including expatriates and the rate of employment is 2.6 percent. The total population in 2008 grew by 5.5% over the previous year. Singapore’s population has grown older over the years, the medium age of resident population has rose from 20 years in 1997 to 37 years in 2008. In Singapore’s resident population, there are more females than males since 2000, and there are a total of 23,966 marriages registered. Most of the males marry when between 25-29 years old and most of females marry when 20-24 years old. Singapore is also one of the counties with the highest literacy rate in the world. Singapore’s literacy rate is about 92.5% of the total population.
In Singapore, people’s minds are more Europe –oriented set. Unlike most of Asian, Singaporeans are less materialistic. According to TBWA/Hong Kong managing director, Neil Ducray, Singapore is more a cultural melting pot and, therefore, more cosmopolitan. It's very similar to some of the big Western cities and people are more interested in conservation and the environment, which is very unlike Asia. However, in Singapore, there is not any generation like baby boomers which influence the market, culturally and economically. The closest that the region has is its static age group from their twenties and thirties. The best explanation is that younger generation had a better disposable income and that society gives them the license to behave in the way they like because they are mobile and don't have family commitment.
Principal industries
Manufacturing (24.6% of real GDP): Types--electronic and electrical products and components, petroleum products, machinery and metal products, chemical and pharmaceutical products, transport equipment (mainly aircraft repairs/maintenance, shipbuilding/repair and oil rigs), food and beverages, printing and publishing, optical and photographic equipment, plastic products/modules.
Trade (2008): Exports--$337 billion: petroleum products, food/beverages, chemicals, pharmaceuticals, industrial machinery and equipment, electronic components, telecommunication apparatus, transport equipment. Major markets--Malaysia (12.1%), Indonesia (10.6%), Hong Kong (10.4%), EU (10.2%), China (9.2%), United States (7.0%), and Japan (4.9%).
Foreign Investment
Legislation to attract new foreign investments, the Economic Incentives Act, was passed in 1967; it granted exemption from taxation for a five-year period to investors for export development and provided inducements and guarantees with respect to repatriation of profits and capital. Since the mid-1980s the government's incentive policies have broadened to include Singapore's development as a total international business center, an international air-sea cargo center, a location for the regional operational headquarters of multinational corporations, and a major exporter of services. In 2000, foreign companies’ net investment commitments in manufacturing were $4.2 billion.
Infrastructure
Singapore inherited from the colonial era a superior infrastructure and well-developed transport network. After independence, the Singaporean government made many efforts and sizable investments to improve these even further. This small city-state is served by a network of 3,122 kilometers (1,940 miles) of highways, 99 percent of which are paved. In the 1970s and 1980s, there was a steep increase in private car ownership, which led to traffic congestion and rising air pollution. The government reacted swiftly, investing significant sums in public transport, especially the mass transit system. It also restricted private car usage on Singaporean roads, using different measures, including taxes and Certificates of Entitlement. By the 1990s, 83 kilometers (51 miles)
Political Risk
Among Asian countries, Singapore has overall the lowest political risk rate. The respected Political and Economic Risk Consultancy (PERC) Group has consistently assessed Singapore's domestic political risk as low. Since 1997, on a scale of between zero and 10, with zero being the best grade possible and 10 the worst, the city-state's worst grade for domestic political risk was below 3. Singapore's scores hover mostly around the 2 mark. PERC partly attributes Singapore's low domestic political risk to the fact that it is 'very difficult for a formal political opposition to unseat the PAP (People's Action Party) from power even if there were a vibrant multi-party system.
Ethnic Groups
Chinese is the largest ethnic group in Singapore which covers 76.8% of the total population. Malay comes the second covering about 13.9% of the total population. Indian covers about 7.69% of the total population, and the other 1.4% of the total population includes the rest of minor ethnic groups.
Migration Rates and Patterns
Singapore’s migration rate in 2009 is 5.82 migrant(s)/1,000 populations. Foreigners who wish to enter Singapore would want to take note that although Singapore is liberal when it comes to attracting global talent to come to Singapore to work, there are equally tight controls when it comes to foreigners who enter Singapore to work without proper permits, or foreigners who stay beyond the duration of the approved work permit period.
The Ministry of Manpower or MOM is the government agency that administers the registrations and permits for foreigners wishing to stay in Singapore for employment purposes (work passes). The Immigration and Checkpoints Authority or ICA, issues entry visas for foreigners and handles many citizenship matters such as issuance of identity cards and traveling passports. Birth and death registrations are also handled by the ICA. Foreigners who posses travel documents from a list of countries require either a business or social visit visa in order to enter Singapore. Depending on the type of visa you are applying for (business or social visit), you are required to submit different forms and documents. Foreigners who enter Singapore on a social visit visa are not permitted to engage in any form of business or employment. The Singapore government takes a progressive view on attracting foreign talent to work in Singapore.
Stage of Market Development
In 2007, the GNI was $32,470 per capital; this stage of market development is considered a High Income sector. Singapore’s GNI per capita has reached $17,610 in 1993 which has made Singapore one of the high- income countries. Singapore is the busiest port in the world with over 600 shipping lines sending super tankers, container ships and passenger liners to share the busy waters with coastal fishing vessels and wooden lighters.[pic]One of the world's major oil refining and distribution centers, Singapore is a major supplier of electronic components and a leader in shipbuilding and repairing. It has also become one of the most important financial centers of Asia, with more than 130 banks. Business dealings are facilitated by Singapore's superb communications network which links the nation to the rest of the world via satellite, 24-hour telegraph and telephone systems.
Living Conditions
Singapore has a very high standard of living for expatriates and the city has one of the best living conditions in Southeast Asia. Imported goods are rather expensive but it is possible to economize by buying local products. Many expatriates enjoy a Housing Allowance and are housed on the expense of their employers, thus eliminating substantial costs of renting homes in Singapore. The private rental market almost exclusively concentrates on expatriates, as locals enjoy the provision of low cost public housing.
According to the latest survey by Economist Intelligence Unit in March 2009, Singapore is one of the most expensive cities in the world, moving up five positions to 10th place. This means Singapore is now Asia’s third most expensive city to live in.
For the tenth year running, Singapore has topped a list of cities around the world offering Asian expatriates the best quality of life. An annual survey by human resources consultancy ECA International found that Asian expatriates ranked Singapore as the most favorable city to live in because of the quality of its infrastructure and health facilities - low health risks, air pollution and crime rates added to its appeal. The survey compares living standards in 254 international locations.
High Context Cultures
Singapore is a high- context culture. Although Singapore does not have a long and strong history, high- context culture was carried by most of ethnic groups in Singapore, such as Chinese, Malay, and Muslim, who share the majority of total population. High context refers to societies or groups where people have close connections over a long period of time. Many aspects of cultural behavior are not made explicit because most members know what to do and what to think from years of interaction with each other.
Hofstedes’ Culture Typology
The culture of Singapore, compares to most western culture, tends to be more high power distance. The government has higher power to influence the regions in the country. Also, Singaporeans are more collective rather than individual. The society or family is more important than individuals. The society tends to be more muscular; males have greater power of influence than females in the society and the family. Compares to western culture, Singapore culture has a relatively higher rate of uncertainty avoidance. When facing uncertainty, they tend to be more emotional and motivated by inner nervous energy. The other reason that Singapore is more uncertainty avoidance is that the country tends to try to minimize the possibility of such situations by strict laws and rules, safety and security measures, and on the philosophical and religious level by a belief in absolute Truth. Also, the values of Singapore associates with short-term orientation which is respect for tradition, fulfilling social obligations, and protecting one's 'face'.
Social Institutions
The Singapore Constitution provides men and women with equal political, economic and social rights. Comparisons of the past and present show that negative stereotypes of women have been eliminated over time, largely due to increased levels of education and better job opportunities for women. Women in Singapore are fairly well protected within the family context and family matters are governed by two distinct legislative systems: the civil Women’s Charter and Islamic Sharia law. The Women’s Charter governs all civil marriages in Singapore and fixes the minimum legal age of marriage to 18 years. Following Sharia law, Singapore allows Muslim men to practice polygamy. Men may take as many as four wives, but only if the first wife consents and if permission has been granted by the religious authorities. Parental authority is exercised jointly. In the event of divorce, custody is granted according to the best interests of the children, although religious and customary practices may be considered. The physical integrity of women in Singapore is, for the most part, well protected. Singapore law prohibits violence against women, including domestic violence and sexual or physical harassment. Rape is illegal in Singapore, but the law has not yet criminalized spousal rape. Legislation in Singapore supports financial independence for women. The Women’s Charter gives women access to land and access to property other than land. In the case of access to land, it is important to note that all citizens are constrained by the fact that the government has plans to use virtually every inch of the territory. Women also have equal access to bank loans and other forms of credit, and the right to enter into legal contracts independently.
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Thailand
Brief History
Thailand or better known as “Amazing Thailand” is situated in the heart of Southeast Asia. It is bordered by neighboring Asian countries such as Laos, Burma, Cambodia, Vietnam and Malaysia. There are 26 provinces that make up Central and Eastern Thailand. Geographically and centrally located, Bangkok is the capital and the largest city of Thailand. Bangkok is heavily swarmed with locals, tourists and business travelers, all congregating and participating in the commercial, industrial, political and cultural activities.
Bangkok is the official city that seats Thailand's revered Royal Family. The current monarch of Thailand is King Bhumibol Adulyadej. His Majesty is recognized as Head of State, Head of the Armed Forces, Upholder of the Buddhist religion and Upholder of all religions. The King is Thailand’s head of state of the ruling Royal house of Chakri. The King of Thailand has reigned since 1946 which makes him the world’s longest reigning monarch. The King is revered and loved dearly by people of Thailand. His graciousness and kindness elicits huge amount of respect and reverence among the Thai people from all walks of life.
Thailand embraces a rich diversity of cultures and traditions. With its proud history, tropical climate and renowned hospitality, the Kingdom is a never-ending source of fascination and pleasure for international visitors. Thailand is filled of fun fare activities and is famously known to visitors as the Land of Smiles. People are courteous and are well disposed to tourists. Thai people are extremely polite and their behaviors are controlled by etiquette and much of their values are heavily influenced by Buddhism.
The Kingdom of Thailand has a dynamic and eloquent history. Thailand prides itself with a rich heritage of ancient temples, battlefields and ruins predominantly in Ayutthaya and Bangkok which has since continue to be a constant fascination for visitors. With its beautiful and breath-taking beaches, the region’s southern end of the coastline draws large population of travelers from all over the world. Many local residents enjoy spending long weekends for the relaxing seaside atmosphere, while holiday-makers discover the true delights of tropical beach life.
Geography and Climate
Nestled in the heart of Southeast Asia, the Kingdom of Thailand is a natural gateway to Indochina, Myanmar and Southern China. Thailand’s geography is divided into four main regions:
In the North, the geographical terrain consists of mountains and forests. Along the Central Pains, it is populated with vast rice fields where farmers harvest rice for import and export to cater to the high demand for Asian staple diet. In the Northeast plateau, the land is filled with semi-arid farm lands. In the South, Thailand boasts a myriad of tropical islands and long coastline of the peninsula.
In Thailand, there are predominantly three seasons. Understanding the seasons and weather patterns are essential for travelers to enjoy their holiday vacations in Thailand.
The summer months runs essentially from March through to June, with temperatures ranges between 33 C – 48 C (90 F -118 F) in the day, and not less than 27 C (80 F) at night. The summers are usually hot and humid. During the month of July through November, it is categorized as the Rainy/Monsoon Season with heavy and frequent rain. The temperatures range from 32 C during the day to 16 C at night. The Cool Season runs from November through to February with temperatures at 32C during the day, to a bearable 16 C at night and it could get to as low as 12C in the North.
Demographics, Population, and Psychographics
In terms of total area, Thailand is the world's 50th largest country with a surface area of approximately 513,000 km2 (198,000 sq mi). It is also the 21st most-populous country, with approximately 64 million people.
Principal Industries
Thailand is the world’s largest exporter of rice as it meets the high demand as the Asian staple diet. The agricultural, forestry and fishing is comprised of only 11.4 millions of Thailand’s GDP. In the agricultural sectors, farmers grow crops such as coconuts, corn, rubber, sugarcane, tapioca and corn. It is reported that Thailand is a major exporter of shrimp. In 2001, exports for logs and timber grew from 50,000 cubic meters to 2 million cubic meters per year. The government ensures that at least 25% of its land is protected for environmental conservation.
Thailand has numerous supplies of natural resources. In its mining and minerals industry, Thailand exports minerals such as fluorite, gypsum, lead, lignite, natural gas, rubber tantalum, tin and gypsum. To further stimulate foreign investments in the mining industry, the government granted less restriction on foreign mining companies and lowered the amount of royalties to the state. Thailand is the second largest exporter of gypsum after Canada with an annual value of about US$740 million.
In its industry and manufacturing for the year of 2007, the industry contributed 43.9% of gross domestic product (GDP) but employed only 14% of its workforce. According to data for 2004, manufacturing accounted for 34.5% of the GDP. With an increased expansion of the automotive industry, Thailand has become a significant contributor in the production of automobile manufacturing particularly for the Association of Southeast Asian Nations (ASEAN) market. Toyota and Ford are its two main automakers in Thailand. Its textiles industry faces competition from China and Vietnam while its electronics industry faces stiff competition from neighboring countries such as Malaysia and Singapore.
Thailand is a net importer for oil and natural gas, however the government promotes the use of ethanol in order to reduce imports of petroleum and gasoline additive. Thailand has four oil refineries that produce 703, 100 barrels per day. The government has established a regional oil and transportation center to cater to the growing needs of south-central China.
The services sector which comprised of services such tourism, banking, finance and these contributed to 44.7% of GDP and employed 37% of the workforce. Tourism makes up one of the largest contributor to Thailand economy more than any other Asian nations. In 2007, 14 million tourists visited Thailand.
In 2007, Thailand’s labor industry was estimated at 36.9 million. 49% of them are employed in agriculture, 37% in services and 14% in industry. Data research shows that women constitute 48% of the labor force and has increasingly held a share of professional jobs.
Foreign Investments
Thailand’s major exporter of goods is United States followed by Japan who took the second sport as the nation’s largest exporter. The surge in demand for export of automobile of Japanese makers such as Toyota, Nissan and Isuzu has contributed to the growing ranks of being the world’s top ten exporting nations.
Thailand’s principal imports include machinery, vehicles, electronic circuits, crude oil, iron and steel. Thailand is also a member of the World Trade Organization (WTO) and the Cairns Group of agricultural exporters.
Thailand has actively pursued free trade agreements with countries such as China, India, Australia and Japan especially within the agricultural industry. Tourism is still largely a major contributor to the Thai economy and the industry has benefited from the Thai baht’s depreciation as many tourists enjoy the purchase of many goods and services at relatively inexpensive price.
Infrastructure
Thailand has a more modernized infrastructure, exceptionally much improved than Cambodia. Its people travel in the Rail and Mass Transits Systems. The rail transportation system is extensive and offers an affordable ride to one destination to another. The system covers 55 kilometers and serves over 300,000 passengers every day.
Thailand transportation systems are essential to its economy. There are currently 122 ports, wharves and jetties to accommodate vessels for international trade including eight international deep sea ports.
Thailand is also acknowledged to have one of the world’s most intricate transportation networks in the world that provide links to every province in its country.
Political Risk
Thailand political structure is that of a constitutional monarchy, whereby the Prime Minister is the head of government and a hereditary monarch is Head of State. The Executive power is exercised by a military junta, its appointed Prime Minister and Cabinet. Legislative power is secured by a junta-appointed legislature. The Judiciary is independent of the executive and the legislature. Thailand prohibits the conduct of political activities. Prior to the 2006 coup, the kingdom was a parliamentary democracy, with an elected bicameral legislature.
Thailand had been ruled by a monarchy of Kings since the thirteenth century. In 1932, the country officially became a constitutional monarchy, although in reality, Thailand’s government was dominated by the military and the elite bureaucracy. However, the King still gathers enormous respect and moral authority although the King of Thailand has very little direct power under its constitution. King Bhumibol is a symbol of national identity, pride and unity. His Majesty had used a number of occasions to resolve political instability among its military and elite bureaucracy.
Thailand’s politics has been a dangerous run-in with its Military Junta (Council for National Security) who staged a coup that overthrew the elected government of Thaksin Shinawatra. Currently, Thailand is governed by the military junta headed by General Sonthi Boonyaratglin, who later appointed General Surayud Chulanont, who is a member of King's Privy Council, as Prime Minister. Both the coup and the governing junta were publicly endorsed by King Bhumibol Adulyadej in royal decree which permanently ousted previous Prime Minister, Thaksin Shinawatra.
Although little economic investment reaches other parts of the country except for tourist zones, the government has been successful in stimulating provincial economic growth in the Eastern Seaboard of Thailand, and the Chiang Mai area. Despite much talk of other regional developments, these 3 regions and other tourist zones still dominate the national economy.
Although the economy has demonstrated moderate positive growth since 1999, future performance depends on continued reform of the financial sector, corporate debt restructuring, attracting foreign investment, and increasing exports. Telecommunications, roadways, electricity generation, and ports showed increasing strain during the period of sustained economic growth and may pose a future challenge. Thailand's growing shortage of engineers and skilled technical personnel may limit its future technological creativity and productivity.
Bangkok is one of the most prosperous parts of Thailand, and heavily dominates the national economy, with the infertile northeast being the poorest. An overriding concern of successive Thai Governments, and a particularly strong focus of the recently ousted Thaksin government, has been to reduce these regional disparities, which have been exacerbated by rapid economic growth in Bangkok and the financial crisis.
Ethnic Groups
About 75% of the population is ethnically Thai, 14% is of Chinese origin, and 3% is ethnically Malay. 8% of the rest belong to minority groups including Mons, Khmers and various hill tribes. An estimated 2.2 million legal and illegal migrants are living in Thailand. With inexpensive cost of living, Thailand has attracted a small number of expatriates from developed countries in the West particularly in Bangkok, Phuket, Pattaya and Ko Samui. The country's official language is Thai.
Thailand is one of the most devoutly Buddhist countries in the world. The national religion is Theravada Buddhism which is practiced by more than 94.7% of all Thais. Muslims make up 4.6% of the population and 0.7% belong to other religions. The culture and traditions in Thailand are significantly influenced by India.
Migration Rates
Thailand’s population is culturally a homogeneous community. This trend however is slowly changing due to a surge in immigration. More than 85% of the population speak Thai and share a common culture. Thailand's population is relatively homogeneous, however, this is changing due to immigration. The population includes the central Thai (33.7% of the population, including Bangkok's population), Northeastern Thai or Lao (34.2%), northern Thai (18.8%), and southern Thai (13.3%). Thai language is the main educational and administrative language. Several other small Tai groups include the Shan, Lue, and Phutai
As much as 14% of Thailand's populations are of Chinese descent, but the Sino-Thai community is the best integrated in Southeast Asia. 2.3% of the population comprised of Malay and Yawi-speaking Muslims of the south which makes up a small minority group. Other groups include the Khmer; the Mon, who are substantially assimilated with the Thai; and the Vietnamese. Smaller mountain-dwelling tribes, such as the Hmong and Mein, as well as the Karen, number about 788,024. Some 300,000 Hmong, who ironically have lived this area for more generations than the Thais themselves, are to receive citizenship by 2010.
Large number of registered foreigners from Asia, Europe, and North America, as well as an estimated several hundred thousand illegal immigrants, some of which are natives, are residing in Thailand. Increasing numbers of migrants from Burma, Laos, and Cambodia as well as nations such as Nepal, India, and expats from the West and Japan have pushed the number of non-nationals residing in Thailand to close to 2 million in 2008, up from about 1.3 million in the year 2000.
Stage of Market Development
In 2007, the GNI was $3,400 per capital; this stage of market development is considered a Upper-Middle Income sector. At any point of time, individual markets in each country are categorized in different stages of economic development according to the GNI per capita. Thailand GNI per capita is at 7880 in 2007 and has world’s ranking of 86. Thailand in particular is placed under the Lower-Middle income sector. This indicates that consumer markets are increasing rapidly. GNI is the sum of value added by all residents and producers plus any product taxes plus net income from abroad. This indicator measures the total output of goods and services for final use produced by residents or non-residents within domestic and foreign claims.
Living Conditions
The Thai cuisine evolved in the Central Region. The basic diet of a Thai person consists of rice, fish, and vegetables, flavored with garlic, black pepper, and nam pla, or fish sauce, along with an abundance of fresh fruits. Other elements and flavors were added to the increasingly complex Thai blend. The fiery-hot Thai chili pepper becomes an instant staple along with the equally popular coriander, lime, and tomato. Thai sweets and desserts are based on egg yolks and sugar.
Unlike the north and northeast, where glutinous rice is popular, Central Thais like the fragrant plain variety, most commonly steamed but sometimes fried or boiled. In addition to fresh-water fish, there is seafood from the nearby gulf as well as a wide range of fresh vegetables and such fruits as mangos, durians, custard apples, guavas, and pomeloes. Sino-Thai food is popular in cities like Bangkok, particularly in the form of numerous noodle dishes.
In Thailand, the incidence of poverty or wealth is dependent on a person's occupation, location of residence or work, and level of school education. From the 1970s up till early 1990s, the poor were mostly agricultural workers in the rural areas, particularly in the north, northeast, or southern regions, whose highest level of education was in Primary 6. Meanwhile, those working in the manufacturing or service sectors in the major cities or in the central region, specifically in the Bangkok metropolitan region, has only completed at least 12 years of formal education, were more likely to be economically well-off.
Due to the concentration of economic activities in the capital, such as construction of physical infrastructure and job creation, the regional disparities in income and wealth slowly began to widen. As Thailand slowly shifted from an agrarian economy to an industrialized economy, economic resources were shifted to the industrial sector and huge demand for factory workers created huge differences in wage rates between farmers and factory workers. As the contribution of the agricultural sector to the economy decreased so did the demand for farm workers. In the latter years of the 1980s, 80 percent of the people living below the poverty line worked in the agricultural sector.
Good health care is available in Thailand, and the quality continues to improve rapidly, especially in urban areas. All of the good hospitals have outpatient services, including laboratories and X-rays with general practitioners and specialists. Some of the hospitals also have good dental clinics. When medical care is needed, there are reputable facilities that reportedly have English-speaking staff on hand.
High Context Culture
Thai people equate actions as simply a non-verbal way to communicate. It is not unusual for a Thai person to smile and “Wai” even though they are upset. Thailand is a high context culture, in which many things are left unsaid and people prefer to use culture as a source for explanation. Thai people are usually very polite and demand respect to one another. It is not a good idea to confront a Thai person as they are non-confrontational and usually avoids confrontation. Words and word choice is a very important tool when interacting with higher context communication. Actions surpassed more meaning than simply than just saying it. In a business situation, Thai people do not show their disapprovals at face value so it may seem difficult for a foreigner to read between the lines. The Thai culture is very indirect and culturally they don’t ask for favors but instead it is understood that they needed help.
In high context cultures such as Thailand people are thought to be complacent and be homogeneous. Because people in high context culture could relate to one another very well, they have a slightly more of an indirect style of communication. They tend to be less explicit and rely less on words but more on actions. It is safe to suggest that actions speak louder than words. Thai people have a more indirect style of communication which can be highly confusing for a new visitor. Since these high context cultures are very much a collectivist of society where working closely together and an acute understanding of cultural values and agendas. The overriding goal of the communication in a highly context culture is to maintain harmony and the act of “saving face”.
Hofstede’s Cultural Typology
Power Distance (PDI): The high ranking of 64 points is indicative of a high level of inequality of power and wealth within the society. This condition is not necessarily forced upon the population, but rather accepted by the society as a part of their cultural heritage. The ranking of 64 is slightly lower than the Asian average of 71.
Uncertainty Avoidance (UAI): The equal high ranking of 64 points also indicates the society’s low level of tolerance for uncertainty. In an effort to minimize or reduce this level of uncertainty, strict rules, laws, policies, and regulations are adopted and implemented. The ultimate goal of this population is to control everything in order to eliminate or avoid the unexpected. The Thailand rank of 64 is slightly higher than the Asian average of 58 which means that when compared with other Asian nations, they are much more risk-adverse and unwilling to accept change.
Individualism (IDV): At a very low score of 20 points, Thailand has indicates the society is of a collectivist as compared to individualist. This is manifest in a close long-term commitment to the member 'group', is that a family, extended family, or extended relationships are vital part of their identity. Loyalty in a collectivist culture is paramount, and over-rides most other societal rules and regulations. The society fosters strong relationships where everyone takes responsibility for fellow members of their group instead of just simply thinking of their own needs first.
Feminity/Masculinity (MAS): Thailand has the lowest ranking of 20 points when compared among their Asian counterparts. The Asian average is of 53 points and the World average of 50 points. This lower level is indicative of a society with less assertiveness and competitiveness, as compared to one where these values are considered more important and significant. This situation also reinforces more traditional male and female roles within the population.
Long-Term Orientation versus short-term orientation (LTO): This fifth dimension was found in a study among students in 23 countries around the world, using a questionnaire designed by Chinese scholars. It can be said to deal with Virtue regardless of Truth. Values associated with Long Term Orientation are thrift and perseverance; values associated with Short Term Orientation are respect for tradition, fulfilling social obligations, and protecting one's 'face'. Both the positively and the negatively rated values of this dimension are found in the teachings of Confucius, the most influential Chinese philosopher who lived around 500 B.C.; however, the dimension also applies to countries without a Confucian heritage and is applicable to the Thai people.
Social Institution
The 1997 Thailand Constitution provides its men and women with equal fundamental rights. Nevertheless, gender inequality heightened violence against women for issues such as discrimination and human trafficking for prostitution. Women make up over 40 percent of its workforce and employers are expected to give them the same wages and treatment as men. Women are mostly limited to jobs such as nursing, teaching, household duties etc. Given their limit perceptions of their physical and psychological abilities, women are not accepted in police or military academies.
According to their family code, the legislation grants protection for women. The legal age of marriage is 17 years old for both sexes and Thai people usually enjoy matrimony of their own choice. Thai law frowns upon polygamy and a man caught engaging in a second marriage can be imposed heavy fines or be imprisoned for up to six months.
Women have equal legal rights to exercise parental authority in the family, but traditionally men are seen as the head of the household. In the event of divorce in which the parents cannot agree upon custody rights, it is quite common for male judges to grant custody to fathers.
Since Thailand has never been colonized by outside influences such as the British or the French, its education system is by far much lower when compared to western standards. The Thai government provides free education to children till up to Grade 12. School instructions and educational materials are taught in its official Thai language. There are an intricate system of kindergartens, primary, lower and upper secondary schools, vocational colleges and universities. The Thai government has made it mandatory that every child gets an education.
Although attending public schools are relatively affordable, the quality of education is subjectively less than the quality of education in a private establishment. Given the fact that Thailand has never been colonized, its teaching methods depend on the rotes. Therefore the education system faced a heavy hurdle to improve the quality of its education standards. The good news is that the younger generations are computer literate and knowledge of spoken English is on the increase. In 2006, Prime Minister for Education reported that the average intelligence quotient (IQ) of Thai children is around 88 points which is considered a low average when compared to international standards. Furthermore, the level of English speaking is relatively low with the exception of wealthy well-educated class. More efforts are being made to improve the quality of spoken and written English, although efforts made are considerably gradual and slowly being implemented.
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Vietnam
Brief History
The country of Vietnam began as a French territory in 1858. By WWII, Vietnam declared its independence from France; however France continued to rule Vietnam until 1954 by the defeat of communist forces. Under the Geneva Accords of 1954, Vietnam was divided into Communist North and anti- Communist South. The United States economy and military helped South Vietnam grow during the 1960’s, but the US military forces were withdrawn following a cease fire agreement in 1973. Two years later, North Vietnam forces overran the South under communist rule. With the lack of peace, for over a decade the country has experienced little economic growth due conservative leadership policies.
Geography and Climate
Vietnam is located in Southeastern Asia, bordering the Gulf of Thailand, Gulf of Tonkin, and South China Sea. In comparison the country of Vietnam is slightly larger than New Mexico; with a climate of tropical in the south and monsoons in the north, rainy season occurs during May to September, and a warm dry season during October to March. The countries natural resources consist of phosphates, coal, offshore oil and gas deposits, forests, and hydropower.
Demographics, Population, and Psychographics
The Population of Vietnam is 86,967,524, with the average age being 27.4 years. Life expectancy for total population on average is 72 years. Major infectious diseases that occur are bacterial diarrhea, hepatitis A, malaria, and typhoid fever. The degree of risk for disease is very high.
Principle Industries
Natural resources of Vietnam are: phosphates, coal, manganese, chromate, offshore oil, and hydropower. Vietnam’s major imports are: machinery equipment, petroleum products, fertilizer, steel products, raw cotton, grain, cement and motorcycles. Partners for major imports are China, Japan, South Korea, and Thailand and at $77.61 billion. Exports for Vietnam are: crude oil, marine products, rice, coffee, rubber, tea, and shoes at $61.6 billion. Major partners for exports are the United States, Japan, Australia, and Germany.
Foreign Investment
The Total foreign direct investment approvals from 1988 to June 2002 totaled $38.58 billion. As of 1999, Singapore was the largest foreign investor with $5.9 billion of total investments approved by the Vietnam government between 1988 and 1999. Other major investors included Taiwan, Hong Kong, Japan, South Korea, France, British Virgin Islands, Russia, U.S. and the United Kingdom. The government of Vietnam controls both upstream and downstream oil and gas industries; however since 1998 foreign investment has been permitted. The Korean National Oil Company, (KNOC), SK Corporation of South Korea, and Geopetrol of France in October 2001 discovered oil along the Cuu Long Basin. In November of 2002, the Japan Vietnam Petroleum Company (JVPC) also made its first discovery. JVPC is now the operator in the joint venture, and holds a 46.5% share.
Infrastructure
As a result of years of war, Vietnam’s infrastructure is weak, but is steadily improving. In the French colonial period, a 1,075 mile rail system was developed which connected Saigon to Hanoi, and the port city of Haiphong to Yunnan, China. In the 1950’s the Chinese assisted with the development of a rail link between Hanoi and Guangxi Province. Unfortunately all of these were badly damaged during the wars.
Total railway length is 1,650 miles; in 1999 it took 32 hours to travel by hail from Hanoi to Ho Chi Minh City. Vietnam has 57,977 miles of highways, 25% of which are paved. However, many of the paved roads are in poor condition. Improvements have occurred in recent years, and a considerable amount of international economic assistance is being used to upgrade Vietnam’s weak road infrastructure. Vietnam’s telecommunications system has improved, but still remains inadequate. By the year 2000, there were only 2.6 million conventional phone lines and 730,155 cellular phones for a population of 80 million. Vietnam currently has 101 radio stations, 7 television stations, and 5 Internet service providers; however, the internet service in Vietnam tends to be slow and expensive.
Political Risk
A territorial claim on land has been a dispute between Brunei and Malaysia in the past years. In September 2008 the countries finally agreed to resolve their offshore and seabed dispute, resume hydrocarbon exploration, and renounce any territorial claims on land. Brunei established an exclusive fishing zone surrounding Louisa Reef in the southern Spratly Island in 1984, but no public territorial clam to the offshore reefs. Also, illicit drugs are at risk, any drug trafficking and illegal imports of controlled substances are considered to be serious offenses in Brunei and result in a mandatory death penalty.
Ethnic Groups
Ethnic groups of Vietnam are: Kinh (Viet) 86.2%, Tay 1.9%, Thai 1.7%, Muong 1.5%, Khome 1.4%, Hoa 1.1%, Nun 1.1%, Hmong 1%, others 4.1% (1999 census). Religions of Vietnam are: Buddhist, Catholic, Hoa Hao, Protestant, Muslim, and none. The official language is Vietnamese, English as the second language, some French, Chinese, and Khmer.
Migration Rates
The Chinese are one of Vietnam’s largest minority groups. Most important in the Vietnamese economy, of Chinese ancestry have been active in rice trading, real estate, and banking in the south. Since the war there has been an outflow of Vietnamese people migrating to other countries. About 150,000 were evacuated from the south in the final weeks of war, and many of the people eventually settled in the United States. In 1990 there were 593,213 Vietnamese ancestries living in the United States. During 1978-1987, there was an estimated 1 million that fled by sea to other countries in Southeast Asia or over to China. Many later resettled in Australia, France, and other countries. Between 1975 to 1984 about 554,000 of the population, also known as the “boat people” emigrated illegally. As of 1997, 3,000 Vietnamese remained in Hong Kong, and a couple years later some of the non-refugee “boat people” had returned to Vietnam.
Stage of Market Development
In 2007, the GNI was $26,930 per capital; this stage of market development is considered a High-Income sector. Vietnam is a densely populated developing country that in the last 30 years has had to recover from war, and loss of financial support from the old Soviet Bloc. Vietnam’s exports to the US increased 90% from 2001 to 2007. As of January 2007 Vietnam joined the WTO, and has provided an anchor to the global market. Among benefits access to WTO allows Vietnam to take advantage of the phase-out of the Agreement on Textiles and Clothing, which eliminated quotas on textiles and clothing for WTO partners on January 1, 2005. Poverty has declined significantly and is now smaller than that of China, India, and the Philippines. Vietnam is currently working to create jobs to meet the challenge of the labor force which is growing by more than one-and-a-half million people every year.
Living Conditions
Vietnamese diet is primarily base on rice; however Vietnam cuisine has been influenced by France, China, and Thailand. Cooking is highly innovative and the use of fresh herbs, lemon grass, basil, parsley, lime and chili is common. Soup is served at almost every mean, and snacks include spring rolls and rice pancakes. The national condiment is nuoc mam, which is fermented fish sauce served with every meal. Tropical fruits such as bananas, pineapples, melon, mandarin oranges, and grapes are also part of the Vietnamese nutritional diet.
The Ao Dai is one of the most popular Vietnamese traditional garments, which is often worn for special occasions such as weddings. A white Ao dai is the required uniform for girls in many high schools across Vietnam. In the past the ao dai was worn by both genders, but is now worn mainly by females except for important traditional culture related occasions.
High Context Culture
Vietnam is known to be a high context culture due to the emphasis on background, basic values, and societal status. Like many other Asian countries, Vietnam values religious, cultural and family beliefs.
Hofstedes Culture Typology
Power distance is important; Vietnam is based on a communist government therefore the government controls the country exerting power to be unequally distributed. The country is a collectivism country due to cultural and family backgrounds; the Vietnamese mainly stay together as a group. Males are the dominant figure in the Vietnamese population; therefore masculinity is important to the country of Vietnam.
Social Institutions
Vietnam has a state-controlled network of schools, colleges, and universities but the number of privately run institutions is also growing. General education in Vietnam is: Kindergarten, elementary, middle, high school, and college/university. Courses are taught mainly in Vietnamese, and a large number of public schools have been organized across cities, towns and villages with the purpose of raising the national literacy rate, which is already among the highest in the world. There are a large number of special colleges established to develop a skilled national workforce. Education from age 6 to 11 is free and mandatory, above these ages is not and low income families may find it hard to come up with tuition for their children without forms of public or private assistance. The school enrollment is one of the highest in the world, and the number of colleges and universities has increased in recent years from 178 in 2000 to 299 in 2005.
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Region selection
After much deliberation, our group has reached a consensus and selected Singapore as the country to target the marketing of our product. Of all the Asian countries that we researched, we found Singapore to be the strongest overall and the most highly developed country, and Singapore is also the only country in the world which has a 100% urbanization rate. In Singapore, all the essential infrastructure exists to provide a good commercial environment for its citizens as well as for foreign investors. This small but densely populated city-state is served by a network of 3,122 kilometers (1,940 miles) of highways, ninety-nine percent of which are paved.
Also, Singapore’s GNI per capita, at $17,610 in 1993, makes Singapore a country with citizens enjoying a high level of personal wealth and therefore they have money to purchase consumer products. Singapore prides itself with having one of the busiest ports (Fig. 1) in the world with over 600 shipping lines sending super tankers, container ships and passenger liners to share the busy waters along with its coastal fishing vessels and wooden lighters.[pic]As one of the world's major oil refining and distribution centers, Singapore is a major supplier of electronic components and a leader in shipbuilding and repairing. Business dealings are facilitated by Singapore's superb communications network which links the nation to the rest of the world via satellite, fiber optic internet and digital telephone systems.
Fig 1: Singapore’s busy and highly-efficient port.
The mind-set of a typical Singaporean is typically similar to Europeans but also embedded with traditional Asian values. Just like the United States, it is famously known as a cultural melting pot and its people are very accepting of other races and cultures. The ethnic groups in Singapore include Chinese, Malay, Indian, and a handful of other smaller ethnic groups. Singapore is also one of the countries with the highest literacy rate in the world. Compared to most of other Asian countries, Singaporeans are more open minded and willing to accept new things in their daily lives, which has proven helpful to marketers importing and marketing their products or services in Singapore. The other reason we chose Singapore as our target market was due to the fact that when compared to similar age groups in other Asian countries, Singapore citizens have the most purchasing power. Potentially valuable for our product marketing success, Singapore does not have a wide generation gap between the main consumer age groups as seen in the US with the baby boomers, which could negatively influence the market, culturally and economically. The consumers in their twenties and thirties, our target market, have better disposable income and Singaporean society gives them the license to behave in the way they like since they are mobile and do not have strenuous family commitments.
Fig. 2: Singaporeans of all ethnicities celebrating National Day Parade
Singapore has the lowest political risk for foreign investment in the world. The evaluation of the political risk of a country is based on the country’s political stability and economical policies. The respected Political and Economic Risk Consultancy (PERC) Group has consistently assessed Singapore's domestic political risk as low. Since 1997, on a scale of between zero and 10, with zero being the best grade possible and 10 the worst, the city-state's worst grade for domestic political risk was below 3. Singapore's scores hover mostly around the 2 mark. PERC partly attributes Singapore's low domestic political risk to the fact that it is extremely difficult for a formal political opposition to unseat the PAP (People's Action Party) from power even if there were a vibrant multi-party system. This favorable political environment and well established legal system similar to the US results in a high level of protection for foreign investors. Singapore is also considered to be one of the most important financial centers of Asia, with a presence of more than 130 worldwide banks and other prominent financial institutions. This progressive city successfully caters to foreigners and expatriates who recognize Singapore as one of the most attractive and safest cities in which to live.
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Fig. 3: The Merlion: Singapore’s city night view of its famous landmark.
PEST Analysis of Singapore
Political:
Singapore's export-oriented and business-oriented policies enhanced the economic development and prosperity of the country. Singapore developed economic factors that are conducive to foreign and domestic business investments. Political stability and a dynamic business-oriented population with diverse ethnic roots attracted foreign investors. The government also contributed to the development of the country by formulating favorable economic policies and active foreign relations. According to 2009 Index of Economic Freedom, Singapore's weighted average tariff rate was 0 percent in 2006. Tariffs are generally low, but import restrictions, services market barriers, import taxes, import licensing, non-transparent regulations, burdensome sanitary and phytosanitary rules, weak enforcement of intellectual property rights, and export incentive programs add to the cost of trade.
Economical:
Increases in global price for oil and food have helped to push the rate of the inflation in Singapore up to 26years.The major challenge that Singapore is currently facing is the weakening global economy which has caused a decline in the GDP growth from 7.7% in 2007 to 5% in 2009. Singapore, a re-exporting center for many agricultural goods shipped to Southeast Asia, is considered a trend-setter for health foods. Usually, new food products appear on the market first in Singapore followed by Malaysia and other countries of the region.
Sociological:
Growth in the health food industry is spurred by a media awareness campaign conducted by the government. The campaign stresses the importance of developing good eating habits and adopting healthier lifestyles that can help prevent illness and achieve good health.
Technological:
Singapore food manufacturers now have a dedicated website (.sg/etac) for easier access to information on overseas food regulations and import requirements. This website includes a new database developed by SPRING Singapore’s Export Technical Assistance Centre (ETAC).
SWOT Analysis of Singapore
Strength:
Among countries in Southeast Asia, Singaporeans have the highest ratio of population into extreme sports, such as surfing, skateboarding, and so forth, which is supported by the government. A survey conducted by the Singapore Sports Council in 2005 showed that some 30,000 Singaporeans participated in various popular types of extreme sports, of which 18,000 took part in inline skating (including aggressive and leisure skating), and skateboarding activities. Singaporeans have disposable income which makes them have stronger purchase power that allows them to have more choice to spend their money. Our target market (20s~30s) is the age demographic group which has the most purchase power among all the age groups in Singapore. Due to the high education rate in Singapore, Singaporeans have a better knowledge of healthy dietary. The knowledge of health dietary helps promote our product as we use health appeal to our target market.
Weakness:
Since the organic nutrition bar is a brand new product for Singaporean, the first weakness of our product in Singapore is the lack of the knowledge of our products. Also, Singaporeans lack the knowledge of our brand, and therefore the company may have to take the heavy cost of creating brand awareness in Singapore.
Opportunity:
As mentioned in the Pest Analysis, Growth in the health food industry is spurred by a media awareness campaign conducted by the government, which stresses the importance of developing good eating habit and adopting healthier lifestyles that can help prevent disease and reach good health. Moreover, Singapore food manufacturers now have a dedicated website (.sg/etac) for easier access to information on overseas food regulations and import requirements. This website includes a new database developed by SPRING Singapore’s Export Technical Assistance Centre (ETAC).
Threat:
Singapore is forecast to experience a recession in 2009 as it grapples with the global economic downturn. The government slashed its economic growth forecast for 2009 for the second time in three weeks, predicting that the economy will suffer its first contraction in eight years. The Ministry of Trade and Industry (MTI) expects its Gross Domestic Product (GDP) to contract between 2–5% in 2009, down from the 7% growth in 2007.The economic downturn has spread to all the key sectors of the economy. For instance, the manufacturing sector, which accounts for a quarter of the economy, fell by 29.1% in January 2009 compared to the same month a year earlier. Moreover, production in the food, beverages and tobacco industries fell about 13% compared to the previous year. The economic slowdown in Singapore has impacted the consumer’s discretionary spending capacity. This will, in turn, affect the demand for our products and services adversely.
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Prepared by:
Amanda Mitterlehner Hsieh Rudy
Blake Glenn Kim A. Pedersen
Emily Motta Mastura Zaini
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