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India’s schoolchildren pay the price for coronavirus lockdown



Outside the locked and deserted Vidya Sagar Public School, the eight-year-old daughter of a snack vendor sits forlornly on her father’s disused pushcart.

Before coronavirus, Rachna Kashyap was one of 200 pupils whose working-class parents paid Rs400 ($5.40) in monthly tuition to send their children to the no-frills, English-medium private school instead of overcrowded and underperforming state schools.

But the school, which employed nine teachers, collapsed during India’s lockdown that cost millions of jobs. Parents could no longer afford the fees and the school lacked the wherewithal to transition to online learning.

For Rachna, her education ground to a halt. “I can’t study because my mom can’t pay,” she said.

Vidya Sagar, the founder of the school, is pessimistic about any imminent revival. “All of the teachers have left,” he said. “People are busy finding some means of livelihood to survive: parents, teachers — all of us. My business has been destroyed. The story of education for children like those at my school is over.”

Rachna Kashyap used to attend the low-cost Vidya Sagar Public School © Jyotsna Singh/FT

The pandemic has exacted a heavy toll on India’s estimated 270m schoolchildren, who have not seen the inside of a classroom since March — and may not return this year at all.

For decades, India has struggled to entice children into school and teach basic skills, while poor families have embraced education as a ticket to greater prosperity. Many scraped together the fees for low-cost private schools.

Coronavirus has set back those efforts. Elite private schools and top government schools have made a smooth transition to virtual classrooms, though concerns about excessive screen time have curbed instruction.

But millions of less privileged children, including many first-generation pupils, have had their education severely disrupted. Neither their families nor their often rudimentary schools are equipped for remote learning.

The World Bank has warned of a surge in dropouts and significant learning losses, which will “will have a lifetime impact on the productivity of a generation of students”.

Bhaskar Chakravorti, dean of global business at Tufts University’s Fletcher School, said the disruption would weigh on India’s economic prospects for many years. “If there is a breakdown in education, you are seriously hobbling the future,” he said.

India will permit schools to reopen after October 15. But whether, when and how to resume classes will be decided by state governments. With coronavirus still circulating widely, many authorities are wary of restarting. Surveys suggest most parents are reluctant to send their children to school until a vaccine is available.

Prime Minister Narendra Modi is touting a “culture” of online classes, and new education ministry guidelines state “online/distance learning shall be the preferred mode of teaching” even if schools partially reopen.

This picture, taken in July, shows children sitting on the ground as they listen to recorded lessons on loudspeakers after schools were closed due to coronavirus © Prashant Waydande/Reuters

But experts warn that protracted school closures and continuing reliance on remote learning will exacerbate yawning educational disparities.

“If you are a first-generation learner, without access to technology and without educated parents, school is everything,” said Karthik Muralidharan, a professor at the University of California, San Diego. “If you have lost that, you have nothing. It’s almost inevitable that we are going to see an increase in inequality.”

Long-term school closures also put children at risk of losing skills they had already developed. “There is genuine learning loss from not being in school,” he added. “When I miss fifth grade, I also lose much of what I learnt in fourth grade. These could be long-lasting losses.”

India was among the least prepared of any big economy for virtual learning, Mr Chakravorti said. According to the Internet and Mobile Association of India, internet penetration was just 40 per cent at the end of last year.

In rural areas, where two-thirds of Indians live, just about a quarter of the population has internet access, often through just one device per family.

“The online stuff is only for the elite,” said Rukmini Banerji, chief executive of Pratham, an educational charity. “Online requires that you have a device and that you have connectivity, which is not an assumption that you can make, even in cities.”

Before the pandemic, nearly half of India’s schoolchildren studied in private schools, estimates Gaja Capital, a private equity firm that invests in education businesses.

Of those, about 80 per cent paid less than Rs40,000 a year in tuition. But like Vidya Sagar, many of these low-cost private schools have suspended operations, hit by the economic shock and mass exodus of migrants from cities.

An Oxfam India survey of 1,158 families in five states found that 80 per cent of government school students and 60 per cent of private school students received no instruction or educational support during lockdown.

Yamini Aiyar, president of New Delhi’s Centre for Policy Research, said free government schools, which were already struggling to educate their students, would be inundated with new pupils when the virus threat recedes. “The school system,” she said, “is going to look very different.”

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Emerging Markets

Bond sell-off roils markets, ex-Petrobras chief hits back, Ghana’s first Covax vaccines




The yield on the benchmark 10-year Treasury exceeded 1.5 per cent for the first time in a year and the outgoing head of Petrobras warns Brazil’s President Jair Bolsonaro against state controlled fuel prices. Plus, the FT’s Africa editor, David Pilling, discusses the Covax vaccine rollout in low-income countries. 

Wall Street stocks sell off as government bond rout accelerates

Ousted Petrobras chief hits back at Bolsonaro

Africa will pay more for Russian Covid vaccine than ‘western’ jabs

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Petrobras/Bolsonaro: bossa boots | Financial Times




“Brazil is not for beginners.” Composer Tom Jobim’s remark about his homeland stands as a warning to gung-ho foreign investors. Shares in Petrobras have fallen almost a fifth since President Jair Bolsonaro said he would replace the widely respected chief executive of the oil giant.

Firebrand Bolsonaro campaigned on a free-market platform. Now he is reverting to the interventionism of leftist predecessors. It is the latest reminder that a country with huge potential has big political and social problems.

Bolsonaro reacted to fuel protests by pushing for a retired army general to supplant chief executive Roberto Castello Branco, who had refused to lower prices. This is politically advantageous but economically short-sighted.

Fourth-quarter ebitda beat expectations at R$60bn (US$11bn), announced late on Wednesday, a 47 per cent increase on the previous quarter. This partly reflected the reversal of a R$13bn charge for healthcare costs. Investors now have to factor the cost of possible fuel subsidies into forecasts. The last time Petrobras was leaned on, it set the company back about R$60bn (US$24bn at the time). That equates to 40 per cent of forecast ebitda for 2021.

At just over 8 times forward earnings, shares trade at a sharp discount to global peers. Forcing Petrobras to cut fuel prices will make sales of underperforming assets harder to pull off and debt reduction less certain. Bidders may fear the obligation to cap prices will apply to them too.

A booming local stock market, rock bottom interest rates and low levels of foreign debt are giving Bolsonaro scope to spend his way out of the Covid-19 crisis. But the economy remains precarious. Public debt stands at 90 per cent of gross domestic product. The real — at R$5.40 per US dollar — remains near record lows. Brazil’s credit is rated junk by big agencies.

Rising developed market yields will make financings costlier for developing nations such as Brazil. So will high-handed treatment of minority investors. It sends a dire signal when a government with an economic stake of just over a third uses its voting majority to deliver a boardroom coup.

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South Africa’s economy is ‘dangerously overstretched’, officials warn




South Africa is pushing ahead with plans to shore up its precarious public finances as officials warn the economy is “dangerously overstretched” despite the recent boom in commodity prices.

Finance minister Tito Mboweni hailed “significant improvement” as he delivered the annual budget on Wednesday and said that state debts that will hit 80 per cent of GDP this year will peak below 90 per cent by 2025, lower than initially feared.

But Mboweni warned that President Cyril Ramaphosa’s government was not “swimming in cash” despite a major recent tax windfall. The Treasury now expects to collect almost 100bn rand ($6.8bn) more tax than expected this year after a surge in earnings for miners. This compares with a projected overall tax shortfall of more than 200bn rand. Still, the finance minister made clear that spending cutbacks would be necessary.

“Continuing on the path of fiscal consolidation during the economic fallout was a difficult decision. However, on this, we are resolute,” Mboweni said. “We remain adamant that fiscal prudence is the best way forward. We cannot allow our economy to have feet of clay.”

The pandemic has hit South Africa hardest on the continent, with 1.5m cases recorded despite a tough lockdown. An intense second wave is receding and the first vaccinations of health workers started this month. More than 10bn rand will be allocated to vaccines over the next two years, Mboweni said.

‘We remain adamant that fiscal prudence is the best way forward’ – South African finance minister Tito Mboweni © Sumaya Hisham/Reuters

Even before the pandemic’s economic hit, a decade of stagnant growth, corruption and bailouts for indebted state companies such as the Eskom electricity monopoly rotted away what was once a prudent fiscus compared with its emerging market peers. 

Government spending has grown four per cent a year since 2008, versus 1.5 per cent annual growth in real GDP. The country’s credit rating was cut to junk status last year. Despite this year’s cash boost, the state expects to borrow well over 500bn rand per year over the next few years. The cost to service state debts is set to rise from 232bn rand this year to 338bn rand by 2023, or about 20 cents of every rand in tax.

The fiscal belt-tightening will have implications for South Africa’s spending on health and social services. On Wednesday Mboweni announced below-inflation increases in the social grants that form a safety net for millions of South Africans. “We are actually seeing, for the first time that I can recall, cuts in the social welfare budget,” said Geordin Hill-Lewis, Mboweni’s shadow in the opposition Democratic Alliance.

The finance minister is also facing a battle with union allies of the ruling African National Congress over a plan to cap growth in public sector wages. South Africa lost 1.4m jobs over the past year, according to statistics released this week. The jobless rate — including those discouraged from looking for work — was nearly 43 per cent in the closing months of 2020.

The South African treasury expects the economy to rebound 3.3 per cent this year, after a 7.2 per cent drop last year, and to expand 2.2 per cent and 1.6 per cent next year and in 2023 — growth rates that are widely seen as too low in the long run to sustain healthy public finances.

“The key challenges for South Africa do however persist, clever funding decisions aside,” Razia Khan, chief Middle East and Africa economist for Standard Chartered, said. “Weak structural growth and the Eskom debt overhang must still be addressed.” 

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