1 UK debt goes 500% over GDP (The Guardian) Britain faces a difficult challenge over the next decade as it slowly adjusts to an economy less dependent on debt-fuelled growth, according to new research by McKinsey. An international study found Britain had the highest level of debt after Japan, that the debt had risen over the past three years to more than 500% of national output, and that on current trends it would take until 2020 for UK households to return debt levels to the pre-bubble trend. The report says this burden could leave the economy vulnerable when interest rates have to rise to more normal levels from their current record low of 0.5%.
2 Goldman Sachs cuts pay as profits halve (BBC) US banking giant Goldman Sachs has cut its pay and bonus payments during 2011 to $12.2bn. It said its total compensation - including staff bonuses - was down 21% from 2010. The bank also said that its quarterly profits had more than halved from the previous year, but still beat analysts' forecasts. In the whole of 2011, Goldman said that it made 47% less in profits than in 2010. The bank said that it had cut total staff numbers by 7% in 2011 - to 33,300 people, meaning the average compensation per member of staff is about $366,360.
3 School with a difference in South Africa (Johannesburg Times) It is early Monday morning and, after rising at 4am for the early flight from Bloemfontein, I was not in the mood for small talk. I expect the teachers on their first day back from the holidays to exhibit that semi-depression that we all go through on returning to hard work. It is exactly the opposite at Leicester Road School in Kensington, Johannesburg; these teachers are bristling with excitement, almost literally jumping for joy.
The first thing that strikes you is that nobody talks about academic results. The emphasis at Leicester Road is on caring, and the vision and mission statements on the school website are filled with words of compassion and belonging. "What is the thing you talk about most on your governance agenda?" I ask the chairwoman of the governing body. "That the children are okay; that the parents are okay; that the teachers are okay."
In the cut-throat and competitive focus on academic results, and the threats that teachers and principals are subjected to by the authorities if they do not perform, this school puts care and compassion for their people first. This applies to all. Renee Abrahams is only the fourth principal in 73 years at Leicester Road and the teachers also tend to form part of a stable personnel tally; after all, who would want to leave this place? As the teachers begin filing out of the staff room, the principal reminds them of a borrowed theme to guide them in 2012: "Dream more, learn more, become more." My kind of school.
4 China finds a new route to Indian economy (The Wall Street Journal) India's economy rarely opens the front door to China. But New Delhi shouldn't be too concerned that China has found a new point of entry. Reliance Communications Ltd. opened a window this week. India's second-largest mobile phone carrier by number of subscribers was under pressure to refinance $1.18 billion of foreign-currency convertible bonds. In the current market, that looked like a stiff challenge, as lenders in the U.S. and Europe struggle with their deteriorating economies.
Enter a consortium of Chinese banks to bail out the Indian company with a loan paying just 5%. The deal gives the banks the sort of exposure to India's fast-growing communications space that Chinese companies couldn't get otherwise. The Reliance loan deal puts the Chinese banks in a strong position over a prominent Indian business. It might also help China Inc. get more leverage in the Indian economy.
5 Ambanis’ mixed fortunes tell the India story (The Financial Express) Tales of the Ambani brothers' mixed fortunes tell the same story -- declining opportunities for investment in India. Mukesh may be cash-rich while Anil is in stark need of funding. Mukesh Ambani's Reliance Industries is considering a share buyback, in which Mukesh himself is thought unlikely to participate. The firm has net cash of around $10 billion. But the buyback announcement suggests a dearth of sound investment opportunities for India's richest man. That's not good news for the Indian economy, reinforcing the impression that political paralysis is stifling investment.
Nor is it good news for Anil. Reliance Communications, whose share price nearly halved last year, is saddled with around $6 billion in net debt. Anil has been trying to sell his telecoms tower unit for almost two years. In the absence of hard cash from the sale of his infrastructure, Anil has this week raised funding from several Chinese banks to refinance $1.18 billion of outstanding convertible bonds.
Neither story paints a hopeful outlook. Indeed, the tale of the Ambanis is a microcosm for corporate India: some businesses are struggling to unwind excessive leverage while others can't find productive uses for their surplus cash.
6 India Muslims get quotas, not skills (Mint) Only one out of every six Muslim children entering an Indian school stays till his matriculation. I use “his” deliberately; the figures are worse for girls—only two out of five Muslim girls enter schools, and fewer than one-tenth complete secondary education. Such low enrolment figures and high dropout rates mean that only one of 25 undergraduate students, and barely one out of 50 postgraduate students in Indian universities, is a Muslim. India defines literacy rather generously, and yet Muslim literacy rate is only 59.1%. According to the Rajinder Sachar committee’s report in 2006, Muslim enrolment at the Indian Institutes of Management was 1.3%, and at the Indian Institutes of Technology, out of 27,161 students, only 894, or some 3.3%, were Muslim.
Given such a bleak picture, one would think that Maulana Abul Qasim Nomani, the rector of the Darul Uloom Deoband, would know his chief priority: to ask the government to implement the Sachar report, identify the root causes and fix those, instead of tinkering at the margins. But Nomani seems to have a more pressing concern: keeping Salman Rushdie out of the Jaipur Literature Festival. Politicians and clerics gain by keeping the population uninformed. They fight chimeric battles and offer illusory benefits to Muslims, who want education and jobs. Instead they get quotas, and not skills.
7 Cartoon in Financial Chronicle, featuring the India Army chief who is fighting a legal battle with his government on his date of birth: 'I want to retire as a general who fought a major war'
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