BSBI 514 TOPICS FOR FINAL BAHRAIN BUSINESS ENVIRONMENT

The PESTEL Framework Analyse the broad macro-environment of organisations in terms of political, economic, social, technological, environmental (‘green’) and legal factors (PESTEL). Political, Economic, Social, Technological, Environmental Legal Thus PESTEL provides a comprehensive list of influences on the possible success or failure of particular strategies.

POLITICAL FACTOR • The Kingdom of Bahrain is a fully sovereign, independent Islamic Arab State whose population is part of the Arab nation and whose territory great Arab homeland. • Its sovereignty may not assigned or any of its territory abandoned. • System of government: democratic, sovereignty

THE POLITICAL ENVIRONMENT • 3 branches of government: 1. Executive – a. b. c. d. all executive authority rests with the Council of Ministers Oversee the country’s interests Formation and implementation of general government policy Supervision of the course of business in the government system 2. Legislative a. Bicameral legislature consists of Consultative Council (Shura) and Council of Representatives of Chamber of Deputies (Majlis an-Nuwab) – lower 3. Judicial system

Environmental Factors • Environmental (‘Green’) Factors: For example, environmental protection regulations, energy consumption, global warming, waste disposal and recycling.

LEGAL FACTORS: • these are related to the legal environment in which firms operate. • Legal changes can affect a firm's costs (e. g. if new systems and procedures have to be developed) and demand (e. g. if the law affects the likelihood of customers buying the good or using the service). • For example, competition laws, health and safety laws, employment laws, licensing laws, IPR laws.

LEGAL FACTORS • Different categories of law include: q consumer laws; these are designed to protect customers against unfair practices such as misleading descriptions of the product q Fair Competition laws; these are aimed at protecting small firms against bullying by larger firms and ensuring customers are not exploited by firms with monopoly power q employment laws; these cover areas such as redundancy, dismissal, working hours and minimum wages. They aim to protect employees against the abuse of power by managers q health and safety legislation; these laws are aimed at ensuring the workplace is as safe as is reasonably practical. They cover issues such as training, reporting accidents and the appropriate provision of safety equipment

THE ENVIRONMENT • Bahrain now suffers a number of environmental problems including pollution of the marine and terrestrial environments, destruction of marine, and degradation of natural resources such as groundwater and soil. • The governmental authority responsible for the environment in Bahrain is the GDEWP (General Directorate for Environment & Wildlife Protection)

THE ENVIRONMENT • Environmental Planning Process in Bahrain Research into and the development of renewable energy options, such as solar and wind power should also be pursued and seriously implemented if Bahrain wants to move forward with the rest of the world. The challenge for Bahrain is to make changes to production levels and to make more sustainable choices and decisions for future generation.

VISION OF BAHRAIN 2030 • Economic Vision 2030 of Bahrain: • We aspire to shift from an economy built on oil wealth to a productive, globally competitive economy, shaped by the government and driven by a pioneering private sector – an economy that raises a broad middle class of Bahrainis who enjoy good living standards through increased productivity and high-wage jobs. •

ECONOMIC VISION 2030 • The Economic Vision 2030 serves to fulfill this role. • It provides guidelines for Bahrain to become a global contender that can offer our citizens even better living standards as a result of increased employment and higher wages in a safe and secure living environment. • As such, this document assesses Bahrain’s current challenges and opportunities, identifies the principles that will guide our choices, and voices our aspirations. It is divided into the following corresponding sections: Introduction The need for coordinated reforms: National, regional and global developments compelling us to develop a coordinated Economic Vision.

VISION OF BAHRAIN 2030 • The guiding principles of our Economic Vision: The principles (pillars) embedded in our aspirations for the future: • competitiveness, • fairness and • sustainability. • Aspirations: Bahrain’s aspirations for the economy, government and society; and the actions required to attain them.

VISION OF BAHRAIN 2030 • SUSTAINABILITY: • Our Vision sees our economic prosperity built on a firm foundation. Government finances will adhere to the principle of sustainability, upholding a system that is stable and forwardlooking. • Bahrain will use its resources to invest for the future, improving its human capital through education and training, particularly in the field of applied sciences. • Key parts of the plan include shifting the focus of activity from the public sector to private enterprise and furthering economic diversification.

VISION OF BAHRAIN 2030 • COMPETITIVENESS: Our Vision is that Bahrain attains a high level of competitiveness in a global economy. Increased productivity comes about much more naturally in a competitive environment, driving economic growth, profitability and wages. Only high and continuously improving productivity will enable businesses to increase their employees’ wages

VISION OF BAHRAIN 2030 COMPETITIVENESS: • Higher productivity requires people with the right skills for each position. Competitive countries go to great lengths to educate their people, retain qualified staff and attract foreign workers with the skills that are lacking. The key is to make Bahrain a great place to do business for both local and foreign companies. Many factors combined make a country attractive for investors in high-value-added industries: a high-quality public service, a cutting-edge infrastructure and an appealing living environment are among the vital ingredients. Bahrain will need to offer them all.

VISION OF BAHRAIN 2030 • FAIRNESS: • Our Vision is that the country’s future economic success will impact society more widely, creating a broad base of prosperity. Every individual can make a worth-while contribution to society given the means and presented with the opportunity.

VISION OF BAHRAIN 2030 • FAIRNESS: • For fairness to be nurtured, all transactions made by both the public and private sectors must be transparent. Free and fair competition should prevail, with private and public activities taking place in the open, whether they concern employment, land for public auction or the outcome of a tender. • The role of the government is to provide the legal and regulatory framework that ensures protection of consumers and fair treatment for business owners – including foreign investors. This means stamping out corruption and seeing that laws are justly enforced.

ECONOMIC ASPIRATIONS • Bahrainis have the following interrelated aspirations for their economy, all of which will empower the private sector to drive economic growth: 1. Bahrain stimulates growth by enhancing productivity and skills 2. Bahrain diversifies and builds the economy by focusing on existing high-potential sectors 3. Bahrain transforms the economy in the longer-term by capturing emerging opportunities

EMPLOYMENT LAW • Employment is a relationship between an employer and employee. In Bahrain, employment is governed by Law No. 36 of 2012 promulgating the Labour Law for the Private Sector. • Law No. 36 of 2012 is not applicable for : • government and public corporate entities • Domestic servants and person whose job duties for the benefit of an employer or his relatives • Employer’s family members who are actually supported by him (husband, wife, blood relatives and in-laws)

EMPLOYMENT LAW • Employee statutory rights An employee is entitled to the following statutory rights under the Law: Ø Working hours Ø Weekend and public holidays Ø Compassionate leave Ø Overtime payments Ø Annual leave Ø Sick leave Ø Other leaves

EMPLOYMENT LAW • Type of employment contract There are two types of employment contract, manly fixed and indefinite term contracts • Validity of the employment contract With regard to the validity of any contractual restriction in view of statutory rights

EMPLOYMENT LAW Employee Tax There is no tax as such relating to employees, but all the employers must subscribe to GOSI. There are currently classifications of benefits: üOld age üDisability and death (covering Bahrainis only) üEmployment Accident (for all employees) • Medical Treatment • Primary Health Care • Training levy

BAHRAINIZATION • Bahrainization system is considered as one of the most vital and essential factors to regulate the labour market and provide decent job opportunities for citizens. The Labour Ministry is working with this system with the required flexibility to compromise between the employers’ interests and the need to provide decent jobs for citizens.

LABOUR MARKET REGULATORY AUTHORITY (LMRA) • The Labour Market Regulatory Authority (LMRA) • is a government body with a corporate identity that is endowed with full financial and administrative independence under the authority of a board of directors duly chaired by the Minister of Labour. • The LMRA is seeking to organize the labour market through a fair and just law, by providing efficient services that excel in transparency, resilience and are dynamic while taking into account the rights of the individual person and the rights of the society as a whole.

LABOUR MARKET REGULATORY AUTHORITY (LMRA) The Law has mandated LMRA: 1. with regulating and controlling work permits for expatriate employees and self-employed, 2. In issuing licenses for manpower and recruitment agencies. 3. In introducing Labour Market reforms and tackling all issues related to this sector by drafting a strategy and policy of employment of nationals and expatriate employees. 4. To be responsible for the collection and analysis of data, information and statistics on the economic situation in the Kingdom, especially with regards to the Labour Market

PESTEL- FACTORS • POLITICAL FACTORS • ECONOMIC FACTORS • SOCIAL FACTORS • TECHNOLOGAL FACTORS • ENVIRONMENTAL FACTORS • LEGAL FACTORS