The New Nation - Internet Edition

DEADLY disease, cancer, has been spreading fast, particularly in recent years. Lack of awareness about the disease appears to be the major factor contributing to late diagnosis of the disease. Inadequacy of balanced diet and the practice of taking betel leaf with 'zarda' flavoured tobacco that is chewed are some of the factors that a believed to contribute to the growth of cancer cells in the body. As a result cancer disease incidence has increased to as many as four million in Bangladesh. The figure of patients may increase in coming years with negative effects on life and living of people at large.

A distinguished professor of Ecology, in course of his presentation of a paper on the subject, at the Jatiya Press Club in Dhaka, stated the other day that some two lakh people are atacked by cancer every year. The number of cancer patients may increase in the coming years, if preventive measures are not taken with due care and with it the death rate, if equipment for testing infections caused by cancer are not made available for early diagnosis and treatment The participants in the seminar came from forty-five local organisations and the Federation of Anti-Cancer Activists of Bangladesh (FACAB). They also pointed out that the spread of cancer in Bangladesh is quite pronounced. But preventive and corrective measures are not adequate.

That being so, social awareness about the disease and measures for control of the disease are important

An assertion made by a distinguished professor of Oncology that the number of cancer patients may increase upto twenty million in coming two decades should be viewed with care by concerned quarters. The professionals in the field of healthcare services owe a great deal to the society. They render service to patients at different medical centres and hospitals. The prices of anti-cancer medicine should also be kept at a reasonable level.

Private entrepreneurs have already set up hospitals and testing laboratories in cities and towns in the country. These institutions have earned fame for being efficient and service-oriented. They have shatered the image of public hospitals and medical colleges and universities in the country.

But prevention is always beter than cure. And the official agencies in the field may concentrate more on creating awareness about food habits that are believed to be the causative factors that lead to the disease. Experts say taking of fast food, tobacco smoking or chewing and exposure to some hazardous chemicals have more risks of causing cancer in the human body. The people may be advised to keep away from those. Then they may also be told how cancer can be detected at early and curative stages before the disease gets the patient to the terminal stage.

SMALL and medium enterprises (SMEs) are specially suited for Bangladesh having a vast workforce and a huge number of it remaining unemployed or underemployed. Large-scale industries set up to achieve the economy of scale in most cases involve high establishment and operating costs. These are capital intensive and this factor may undermine their prospects in the first place as their likely proprietors may shy away considering that they would require a great deal of capital to build and operating capital afterwards.

SMEs, by comparison, need not worry so much about capital sufficiency or capital mobilisation. They are likely to be within the affordable range of equity investments of most potential investors. Besides, in the interests of the Bangladesh economy, SMEs are desirable because these can be expected to generate more employment Unemployment is a big problem in Bangladesh and it should be obvious that forms of entrepreneurship that can create comparatively more employment compared to ones that generate less jobs would be preferable in this country. For example, if a big enterprise with capital investment of over 100 million Taka creates only 50 jobs while a project with investment as litle as two million Taka produces an equivalent or more jobs, then the later would provide proportionately greater all round benefits to the economy.

Big enterprises with their big amounts in sunk capital and operating capital also face difficulties of exit from the scene should they start losing money. SMEs do not face exit problems in such cases as their initial investments and operating costs are much smaller than those of big enterprises. Therefore, their owners do not stand to risk so much from not sustaining in operation. The SMEs are mainly in need of banking and other facilities at their doorsteps. These producers of modest means are mostly self-made entrepreneurs. They are not the recipients of any institutional credit They never went to any bank for borrowing.

But the SME-type entrepreneurs of the Dholai Khal area are playing a valuable role for the national economy. They are a dynamic breed. They do not create problems of classified loans and other burdens for the country's financial sector. But on their own strengths they have been employing a large number of people. More important is that they produce a wide range of small machine parts and machinery which should have been imported if these enterprises did not exist At present they are not being evaluated for their real worth. Given the benefits of proper institutional credit and different forms of official supports, they can produce an economic miracle by raising substantially the country's GDP growth rate, solving considerably the unemployment problem and contributing significantly towards import substitution and improvement of the country's balance of payments position.

M.Mizanur Rahman

One cannot ascertain that our educational institutes are running well. In most of the educational institutions from primary level to higher levels are overcrowded with students. There are acute shortages of teachers in comparison with the multitude of students to atend each class properly. The time frame of lecture should require being only forty-five minutes for forty-five students for every lecturer. It would be saturation beyond that limit But this standard is never maintained in our educational institutions. Has this been ever surveyed? Most probably it has never been done.

You cannot thrash away the importance of education at every step of our life being a nation. What we need is learning by demonstration and exercise also some of the subjects which cannot be covered by lecture only. The scope of acquiring knowledge by some other means is at large. Learners must expect to learn them from the most experienced teachers. For example, you cannot learn ethics of education in your classroom. This simply reflects from your character. This is equally applicable to teachers and students. Both teachers and students have vigorous library works, which need not be included in the syllabus. But syllabus must be followed by the teacher in his/her lecture in the classroom.

On way to education rigid discipline is to be maintained. The teaching profession cannot be amalgamated with heterogeneous elements of other professions. It is sacred in itself. If a teacher becomes political person or businessperson beside his/her profession then s/he fails to do the duty and responsibility of this sacred profession of teaching. We are to appreciate this profession in its value of virtues that need to make us befiting humans. Otherwise we are at a loss everywhere.

Nowadays education differs between the aspect of humanities and technology. But the mode of behaviour for imagination and inference is likely to be unaffected towards the same course. You are to think both ways. When you are flying on the air you cannot forget your home or the place where to land. At every step there is a definite goal.

A teacher must be a man of character with strong personality. A learned teacher having experienced in his/her job with the objectivity perfectly conducive to studies of the students has always been earning respect His/her only aim would have to be looking for the brilliant career of students being taught on different subjects. He must have the capacity to outwit students towards disseminating knowledge while imparting subject studies in the classroom. Prior to atend the classroom every teacher must have to learn those subjects accurately and to the point to be delivered in classes. That each student would apt to grasp those lectures eagerly. It would be the credit of the teacher to make his/her students atentive in classroom in course of their studies. Then none of the students has to bear the burden of learning the subjects additionally in coaching classes wasting valuable time. Especially the poor but meritorious student will have the boon of it The habit of cramming important notes only should be replaced by learning habit This will go a long way for the students to build their future career.

Some foreign countries stressed heavy importance in the primary education. They have rightly felt that the foundation of learning starts from the primary level.. The children start learning everything toward their growth from ab initio. Primary teachers should require to be given university education or training to that extent so that they can make the educational foundation of learning strong from primary level. They should also be given higher emoluments to keep their moral upkeep to the maximum standard. Nowadays, as I have closely observed, that the primary level education in our country is disappointing having very low standard. There are a lot of dropouts there both in urban and rural areas. This is no good for a nation. For a nation every individual must be given fair education equally for its interest Another sad thing is that there is no uniformity of education in our country. It has become unabated profit making business for some quarters. Some so-called rich or elitists prefer foreign education in English medium for their wards at the very highest cost while others can hardly afford such education at their reach. The nation automatically divides here. This anomaly in the context of education is never favourable for a nation as a whole. Psychologically these abnormal discriminatory treatments in respect of education affect the whole nation adversely and sap its vitality. You can go to the teachers from primary level to university level and ask their opinion about how they run their affairs. They must specifically indicate the overall weakness of education at hand. Most of the teachers of private and public schools, colleges and universities tend to earn a huge amount of money by practicing at coaching centres or working as part time lecturers in different private educational institutions. They can hardly spare time to put concentration on their parent institutions towards their duties and responsibilities in full. By showing some brilliant results in the examinations of a very few students of some private and public educational institutions we become overenthusiastic with exultant pride but what about the rest of the multitude of students who suffer the set-back for whose fault We are yet to evaluate this important national cause. We must remember that every individual of a state is an asset of the nation. None of the individuals of a nation can be neglected for the interest of our national integrity. Hence in order to maintain uniformity of education the curriculum from one educational institution to another should not differ whether it is in primary or secondary/ higher secondary or university level. The specific but uniform standard of education should require to be maintained equally in all educational institutions. The teachers and students must be inculcated with the spirit of nationalism. This will bring about the sense of patriotism among the educated people of Bangladesh.

In all we should make out educational plan in such a way that the whole nation can be benefited. Merits of the students should require to be adjudged accordingly to let them play the proper role befiting to any particular group of education e.g. science, commerce or arts. In the group of science modem technology should be included. Every educational institution must have its advisory council. The members of such council must be experienced and well educated whether they remain in urban or in rural areas.

Thus the backbone of a nation will be built on strong footing. And every individual of a nation can be proud of becoming a good citizen showing off its national colours with magnanimous image. Let us see that day is dawned.

Xu Limei

At the 2007 China M&A Annual Conference in Tianjin, Wu Xiaoling, Deputy Governor of the People's Bank of China, pointed out that the slow pace of private equity fund growth is partly to blame for insufficient resources available for creating healthy public companies.

Article 50 of China's Securities Law states that all public companies should have a minimum capitalization of 30 million yuan, a requirement many start-up companies find hard to meet But what if a start-up company is in need of financing during the period from inception to IPO? Private equity is an indispensable solution for companies in this period in terms of funding future growth.

In general, sector funds invest in companies with mature technologies; venture capital funds invest in hi-tech firms; and private equity funds primarily focus on companies approaching their IPOs, which are catalysts for boosting the value of start-up companies and a major driver of mergers and acquisitions.

"We need a further boost in yuan investment funds," Wu said. "With China's dual-surplus in its balance of international payments, we are no longer short of foreign exchange. The inflow of overseas private equity funds will bring advanced technologies and help groom talent Therefore, we need to borrow ideas from overseas private equity funds."

When asked about the government's role in supporting the development of private equity funds, Wu responded that the government should first work on building a highly qualified management team for enhanced supervision of fund companies.

Be it private equity funds that raise money from a small scope or public funds with a broader range of fundraising sources, the essence of their business is financial management and the quality of their team is the key, she said. The government should step up the grooming and supervision of funds management teams rather than focusing on the investment projects themselves, she added.

Furthermore, the government needs to improve legislation regarding the supervision of asset management institutions, according to Wu. For example, the U.S. Investment Company Act of 1940 and the Investment Advisers Act of 1940 were set in place to regulate funds management conduct However, China's private equity funds came into being without such laws. The addition of limited partnerships in the latest Partnership Enterprise Law provides a legal basis for institutional engagement from banks and insurers in private equity funds. Supervisory bodies are therefore advised to keep up with the times and duly revise the laws and regulations.

"It has become a trend that financial institutions take part in private equity funds, so the government is advised to allow banks, insurance companies and social securities firms to hold stakes in private equity funds," said Wu. As private equity funds put investments in start-up businesses, high risks may ensue, but high returns are also expected. "Financial institutions run risks, and it's vital to keep the risks within the controllable range rather than concentrating on the risks themselves."

Regulators of institutional investors and main shareholders are advised to examine the investment portfolio concept, risk control and risk appetite, before deciding whether or not to let institutional investors become involved with private equity finds.

"About 1-2 percent of capital set aside from banks or insurance companies for high-risk investments will not detract from their healthy operation," Wu said. "Every financial institution should have appropriate risk investment portfolios."

The other pivotal role of the government is to pave the way for private equity funds to exit their investments. The number of businesses trading on the exchange is small after all. In the United States, public companies account for only 1.99 percent of all joint stock companies and the percentage in Japan and Hong Kong is 1.3 percent and 2.3 percent respectively.

It is essential to clear the way for developing over-the-counter channels such as growth enterprise markets and perfecting market-maker regulations.

At present, nurturing the varied layers of the capital market is a top priority. "Without over-the-counter trading and private equity dealing outside the exchange, it could be difficult to create a favorable environment in which enterprises can mature and grow, and it would also be impossible to provide healthily-running candidate companies to the exchange," Wu said.

The revised version of the Partnership Enterprise Law, effective as of June 1, offers vast information in favor of private equity funds-the introduction of limited partnership will be the right solution to the issues of trusts and taxes which have hindered the growth of private equity for some time.

Wang Weidong, atorney at Grandall Legal Group, said that the most popular legal form of existence for private equity funds in China is a limited company. That is, he explained, a fund operates as a limited company. Investors maintain their rights as shareholders, and fund managers, either in the capacity of shareholder or investment advisor, take the management role.

However, neither form is appropriate for private equity funds-a fund manager's rights and interests do not match his responsibilities, undertaken as a shareholder or investment advisor. Besides, a company-based fund is faced with stiff procedures for paying capital or quiting, which also doesn't match the characteristics of investment funds.

According to the new Partnership Enterprise Law, private equity funds are allowed to operate on the basis of a limited partnership. Under this framework, a fund management company, established as a common partner, is liable to unlimited responsibility and controls decision-making rights from management to investment, while also navigating some investments, capitalizing on an amount representing 1 percent of the total subscribed capital. Gains are comprised primarily from fund management fees and various dividends. The investor, taking the role of limited partner, is primarily obliged to finance but not manage the fund and answers to limited responsibility proportionate to investment quota.

The advantages of a limited partnership are that it maximizes the value of professional investment managers and provides a beter agreement on their rights and responsibilities, among other things.

The new Partnership Enterprise Law also has explicit rules on taxes. The tax imposed on operating revenue and other income of the partnership enterprise shall, pursuant to state tax regulations, be borne by the constituents in the partnership separately.

In fact, regardless of the tax conditions of different investors, the partnership mechanism offers to create a "penetrated financial" conduit, that is, profit or loss arising from fund investment is directly reflected in the financial statement of the investors, and tax treatment shall remain unchanged. This is the biggest benefit limited partnership brings to the fund in terms of tax issues.

To put it simply, the problem of fundraising is solved as a result of limited liabilities imposed on more individuals, based on the unlimited liabilities to be borne by an individual. In the eyes of investors, funds with a partnership structure are more flexible for them to enter or exit than funds with corporate and contractual structures, freeing them from onerous procedures when increasing or reducing their capital.

Partners are able to share dividends according to terms and conditions as stipulated in the partnership agreement This is conducive to flexible distribution of investment gains between the fund manager and investors.

At present, preparations for ownership reform and IPOs are in full swing, offering big opportunities for private equity funds. Take the Zhongguancun Science Park as an example. A litle over 200 of the total 18,000 enterprises that have registered in the park have completed their ownership transformation. The number of public companies is less than 100, leaving the remaining 90 percent incorporated as limited liability companies.

This year, the China Beijing Equity Exchange, working in collaboration with Zhongguancun Administrative Commitee, is pushing forward a drive to facilitate the ownership reform and listing process for companies located in the park.

It is expected that at least 100 companies may complete the reform process for a conversion into joint stock companies this year. In three years, the number of companies having converted is expected to hit 1000.

Be it in the process of reform or IPO, financial support is essential, and this is where the opportunity lies for private equity funds. First of all, the bulk of hi-tech companies in the park have net assets of over 10 million yuan, clear business structures and established corporate governance.

To complete a conversion into a joint stock company, a capital infusion is vital. However, companies don't want to lose control, either; in this case a grouped entry of private equity funds may be the way out Presumably, a hi-tech company will sell 30 percent of its stock as equity, divided by three different funds, each representing 10 percent

The process changes the equity and governance structure and offers a warranty for security for the private equity funds. To this end, the China Beijing Equity Exchange is in the process of gathering together a group of private equity funds set up around the exchange for investment

The period prior to public listing means a second round of investment opportunities for private equity funds, as another round of fundraising is needed during this period.

All the non-public companies in the park will be held under the custody of the China Beijing Stock Register and Custody Center after completing shareholding reform. Private equity funds are accessible to information from this platform and are able to negotiate the second round of investment in return for greater return if these growth enterprises should ever plan to go public.

Besides, the equity market also offers assistance in creating exit channels. Private equity funds usually choose to exit on domestic and overseas stock markets. They are also provided with free access to exit by conducting an equity transfer on the equity exchange platform, if the company receiving their investment remains unlisted.