In a class, by themselves: pupils head back to school

Hello and welcome to The Intelligence on Economist Radio. I'm your host, Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world. Dubai is a striking place, a steel and glass oasis, a playground of the wealthy. But a lot of the money that sloshes through isn't the cleanest. That will have to change if the city wants to keep its position as a global financial hub. And lockdowns shuffled lots of habits. In Britain, one trend became clear: people read more books. And they tended to read classics—big, weighty ones. It seems the habit has stuck, and that is affecting the new titles jostling for shelf space. First up, though, some 9 million children in England are going back to school this week. Among them is 11-year-old Joseph. He's moving from primary to secondary school, a daunting event in itself, let alone during a pandemic.

I'm really nervous. It's like going from being the biggest kids to being the smallest kids again.

Like all schoolchildren, Joseph will also have to deal with newly imposed safety rules, including one-way systems and year-group bubbles.

On the bus, we're gonna have to wear masks because it's quite closely packed. If you're having school dinners, you have to take your lunch and go and sit either outside or in a classroom because they're not using the school hall.

Parents in England face fines if they don't send their children to school. Boris Johnson, Britain's prime minister, described it as a moral duty.

There's far more risk to the well-being of our children from not going to school than there is, I'm afraid, from the disease.

In America, there's also been a political push to reopen schools, but the doors of many buildings will remain closed, threatening to deepen the educational inequalities that the pandemic has exposed.

Most American school districts plan to send students back to school in the autumn.

Idris Khaloun is our U.S. policy correspondent.

That didn't happen because there was this sort of extraordinary resurgence of the virus in the summer, and now it looks increasingly unsafe to send kids to school as was once planned.

So what's the plan now?

What that means is that of the 50 largest school districts in America right now, 35 are planning to start the coming term entirely remotely. The problem there is that we know from the evidence from past educational disruptions and even what happened in the spring, that that continued disruption of forcing kids to go to school virtually will not only spell permanent learning loss for all students generally, but will increase the already wide educational disparities that exist in America between rich students and poor students and between white students and Asian students and Black and Hispanic students who tend to do worse on things like standardized tests and graduation rates, and the depth of this could be quite severe.

So do we have a sense of just how significant that learning loss will be? We have some estimates.

There are a lot of disruptions happening at the same time. There are union strikes, there are kids not going to school, but the estimate from McKinsey, which is a consultancy, found that if students didn't return to in-person instruction until January 2021, which looks increasingly likely, that the average student would suffer 7 months of learning loss. And that gets worse as you look at students who already come from disadvantaged backgrounds. And for Black students, they estimated that this would be about 10 months of loss. And for poor ones, those who receive subsidized lunch, they would fall behind by more than a year. And probably it will also increase the number of dropouts. It could be as many as 650,000 more. It could also affect students who are in educational transitions between high school and college, say, or are debating whether or not to continue college. And of course, the people who are most likely to make those decisions that adversely affect their lifetime earnings and income and all sorts of other outcomes are the ones who already are coming from disadvantaged backgrounds, who aren't able to take advantage of the counseling and all the other supports that they might be able to get if they were attending school in person.

And that's simply a reflection of the fact that online learning is simply not as good as the real thing.

That's a really big part of it. When education scholars have looked at previous attempts at virtual education by studying, for example, charter schools that were all virtual, they found pretty significantly reduced test scores in basically every subject that they looked at. And then before you even get to the quality of the online learning, there's just the simple problem of accessing those classes themselves. Nearly half of Native American students students and 35% of Black and Hispanic ones don't have access to a computer of their own or internet at home. You know, for whites, it's much less. It's only 20%.

But what about the argument that perhaps kids should go back to in-person learning just to avoid that kind of loss? I mean, that has been very much a hot-button issue, certainly here in Britain and also in the States, right?

It's gotten very polarized. Obviously, Donald Trump wants and has been pushing aggressively for students to return to school because he sees return to normalcy as a key driver of his reelection prospects.

Indefinite school closures will inflict lasting harm to our nation's children.

We must follow the science and get students safely back to school while protecting children, teachers, staff, and— You see, within school districts themselves, those that are in Republican states are more likely to be the kinds of school districts that continue with in-person learning, even if virus levels don't look to be entirely contained. And you see in Democratic states, they're much more likely to keep students at home, even when virus levels look comparatively controlled. You add to that the politicization that the unions bring into this, where in New York, for example, where it was one of the actually the few large school districts that was planning to bring students back in person, The union's concerns over the safety of its members has led the school district to delay opening by 11 days. So, you know, within cities, across states, and even nationally, the politicization of school reopenings has been pretty deep in this country.

And what about the epidemiological argument? The question from the start has been the degree to which this is a danger to kids and the degree to which kids are a danger to adults.

What we know so far is that for young children, COVID-19 doesn't appear to be a very large threat. They usually have mild symptoms if they get it. At all. We know that for older children, that the risk of transmission seems to be higher. And indeed, if you look at the American universities that have tried to bring back in-person instruction, many of them have had to embarrassingly cancel and revert back to remote learning. Now, the big problem that people worry about is even if you have in-person primary instruction for young children, that perhaps this could see transmission to staff members and to families who might become sick And there's some encouraging evidence. In England, we basically only saw 0.01% of preschools having COVID-19 outbreaks in June. And in some places where they tried to reopen secondary schools, like France and Israel, they seem to have seeded some infections. And so they've stayed shut there as well. But it does seem like there's a pretty big age disparity in terms of the risk to teachers. And in America, there's this other problem of high schools tend to be a bit more tightly packed. Than primary schools and elementary schools, and so oftentimes it's just not feasible to reopen a high school because you wouldn't be able to seat students in a socially distanced manner as you can with young children, and so the spectacle of sort of 4-year-olds in masks and plexiglass shields is going to be, I think, a bit more common in America.

And so how do you see this playing out then with all of these data just now coming in and all of these negative outcomes competing against one another?

Because America squandered its chance to suppress the virus in the summer, school districts now are placed in a really tough choice between the education of its students and the health of its teachers. I don't see those choices becoming any easier.

Idris, thanks very much for joining us.

Thanks for having me.

Gaze at Dubai's towering skyscrapers or its glitzy hotels, and it's hard to imagine that in the 1950s it was little more than a fishing village with just 20,000 people and no airport. Today, its financial center is a super-regional champion, serving as a gateway for investment from and to the Middle East, South Asia, and Africa. But it also has a reputation as a haven for dirty money, used by kleptocrats, money launderers, and other ne'er-do-wells. If Dubai wants to join the likes of Hong Kong and Singapore in the premier league of financial centers, it's going to have to make a few changes.

Dubai's financial center began to take off around the 1990s, and today it's recognized as being the biggest, the leading financial center in the Middle East.

Matthew Valencia is our deputy business affairs editor.

And it's got strong trade and transport links as well, which sort of supports the financial offering. So it's got the busiest port in the Middle East, it's got the busiest airport in the world for international passengers. And so when you put all of that together in Dubai, you basically got the closest thing to a Singapore or Hong Kong style entrepôt in the region.

So what is it that drove Dubai's rise in particular as a financial hub?

Well, the financial push has been driven very much from the ruler of Dubai down. And the key to the push really was a free trade zone called the Dubai International Financial Center. It's one of around 30, 35 such zones in Dubai and 40-odd in the United Arab Emirates. It's a site in the center of Dubai. It's about 100, 110 acres. It was set up around 15 years ago. And the idea was to boost Dubai as a destination for investment, but also as a kind of financial waystation to channel money to other parts of the region. And the DIFC, as it's known, has grown into quite an impressive cluster of banks, fund management firms, law firms. And it's a successful growing sort of financial ecosystem. You know, if you work in finance in the Middle East, the most desirable place to be is Dubai, and that's because of the financial hub. But it's also because of the fact that Dubai has the best shopping in the region and the finest dining.

But aside from the glitzy shopping and the like, why do companies want to have that presence there? What is the DIFC's appeal?

I think a big part of the appeal lies in the fact that it's allowed to have its own tax and regulatory regime, and that's separate from the national laws of the UAE. So this is something that the free zones in the country get to do. They get to set their own rules. So tax in the zones is either low or non-existent, for instance. And unlike for business undertaken elsewhere in the country, outside the zones, they can allow foreigners full ownership of firms. They can also avoid having to set local hiring quotas. The DIFC also has its own regulator, which is called the Dubai Financial Services Authority. And probably even more important than that, it has its own judicial system. The DIFC's courts hear cases in English. And this is really important. So it's a sort of private court system in a way, and it's efficient and it's predictable. And that makes it popular with a host of investors whose home countries' legal systems are a bit less dependable.

So on that basis, do you think the DIFC will just keep growing and growing?

Well, I mean, it's got a lot going for it, and the rulers there continue to push it very hard as a financial centre. But it faces a number of challenges. In the short term, one of the problems is that the Dubai economy is very vulnerable to COVID-19. It's more reliant on sectors which have been hit by social distancing. And on top of all of that, it's struggling with very high public debt, which could be as much as 140% of GDP, which is a very high level relative to most countries. It had a debt crisis back around a decade ago during the global financial meltdown. And now there's talk of another crisis. And then, you know, in terms of longer-term challenges, well, one is the oil price. You know, if it stays low for a long time, it could really hurt Dubai. But I would say that the biggest long-term threats probably come from within.

What do you mean by that?

I guess the biggest of all is Dubai's attitude to dirty money. You know, if you look at the big global or regional, super-regional financial centers around the world, Dubai is probably the shadiest of them. It's become a well-known haven for money that needs laundering. For money that's linked to sanctions-busting, funds which have been stolen by kleptocrats in Africa and elsewhere. And as a result, I mean, it's seen by quite a few experts as being one of the biggest holes, if not the biggest hole, in the global anti-money laundering system.

And is that an accident or by design? I mean, we have a financial center that has its own judicial system and regulator and so on. It could easily be a Wild West.

It seems that it's not all accident. Dubai as a jurisdiction is one of the most uncooperative. Quite often they just don't get back to foreign governments that need help with investigations at all. And then if you look on the tax front, the UAE was accused a few years ago of encouraging tax evaders from other countries to stick their undeclared money in its banks and companies. So all of this together seems to suggest that there's a blind eye of sorts being turned. Or perhaps worse, you know, that Dubai sees taking dodgy money as some sort of a competitive advantage. And I did put this to the UAE's finance ministry and to its central bank, but both declined to comment.

And so hasn't that reputation drawn interest of regulators, overseers elsewhere?

Well, it has for quite a long time, but also for a long time, not a lot happened in terms of reform. But we're seeing now some signs that things are starting to change in the past year or so, I would say. There's a very important body called the Financial Action Task Force, and that sets global anti-money laundering standards. And it issued a fairly stinging report on the United Arab Emirates earlier this year, and it's now reportedly placed the country under a year-long observation to check on whether it's going to implement anti-money laundering laws which have already been passed. And if it fails to do that, it could be added to the FATF's grey list, Now you have countries on that that include the likes of Syria and Zimbabwe, and it's just one step away from full blacklisting. Now, a full blacklisting would effectively require international banks to stop doing business with Dubai. So that's extremely serious. But I don't think it will come to that because Tupai's rulers know the risks. If Dubai's financial links to other banking centers are threatened, they will take action.

At which point, I guess, we would learn whether or not being okay with dodgy money is in fact a competitive advantage. I mean, how do you think things will go if it really does clean up its act?

Well, I think it would inevitably lose some business. On the other hand, it will still have advantages. So I think as long as the United Arab Emirates and Dubai remain stable in a region that's basically volatile, then they'll benefit from capital flight. You saw it during the Arab Spring almost a decade ago. And at the moment, there's said to be quite a lot of money coming in from Lebanon. And then you have strategic moves, if you like, looking to other parts of the world. So Dubai's leaders have worked very hard to strengthen links with the Chinese. So I think despite the challenges, there's plenty for the people who run the financial center in Dubai to be optimistic about. They have a very ambitious plan to double or triple it in size by 2030. And I'm not sure that I would necessarily bet against that.

Thanks very much for joining us, Matthew. Thank you, Jason. Travel has been hard during the pandemic, but all it takes is a little imagination to be transported to the shores of Greece's Ionian Islands after returning from a long war, or to a serene and lonely Hebridean lighthouse, or to a Gothic castle deep in the Carpathian Mountains of Transylvania. Many of us have found refuge in classic novels during lockdowns. To distract myself from coronavirus, I thought I'd finally pick up George Eliot's 19th-century masterpiece Middlemarch. Unfortunately for me, it also has a pandemic plotline.

I read Barnaby Rudge by Charles Dickens. Wines, which is probably his least popular novel, but it was the only one of his complete ones I hadn't read.

I read Pride and Prejudice with my book club. It was just really lovely because it was kind of about somebody who's very isolated, and it made us all feel a lot better. Books are great, especially during periods like this, which is so strange.

Fiametta Rocco is The Economist's culture correspondent.

This has been particularly visible in recent months. Quite a surprise, really, when you you think that people have been working from home and they've been educating their children at home, but they have found time to read as well. And mostly they have gone back to the classics.

Why the classics in particular?

I think there's a sense that they are books that have stood the test of time, but that's only partly the answer. I think one of the big things is the feeling that generations of readers have gone before you. Those are the books that people seem to be taking down off their shelves, dusting off, and trying out. We have Boris Johnson going on holiday saying he's going to read Roman poet Lucretius.

So tending towards pretty big ambitious books, I suppose. But we're in the post-lockdown era here. Do you think these habits have stuck, will stick?

According to some recent research, Brits not only read almost twice as many hours per week as they had been reading before lockdown, but it really seems to have stuck. At least a third of respondents have said they're reading more than lockdown, and only a tenth of those asked said they are now reading less. So I think books are it for the moment.

Which is to say publishers are having a field day.

Publishers are having a very, very good time, particularly publishers who have a backlist of classics. We're seeing great successes. HarperCollins is bringing forward an idea that they have been thinking about for a while to relaunch Master and Commander, Patrick OBriens series of 20 novels set against the background of the Napoleonic Wars that first started being published 50 years ago. Now, when they originally came out, they were books for chaps who liked naval warfare, cutlasses, all that kind of thing, and they are being completely repackaged because of the trend of women reading a great deal more fiction than men. As social commentary about friendship, about loyalty, love, confinement. Less Horatio Hornblower and more Jane Austen at sea.

[Speaker:GHION.AI] And so with all this focus then on the classics, what effect on new books?

[Speaker:KATE_PHILLIPS] Well, it's been very, very hard for new books. So a lot of books that were going to come out in the spring and early summer pushed into the autumn. But for first-time novelists, it's very difficult. They don't have name recognition. For a long time, there weren't bookshops in which you could browse and see whether you like the look of something. And of course, book festivals, which was the place where you often met new novelists for the first time, they've all gone online and you have to register and you have to buy tickets. Therefore, you tend to go to the things that you recognize. If you don't know an author's name, it's really, really hard.

Do you see yourself in these data here? Are you reading more? And if so, what are you reading?

Oh, Jason, you know me. I have a great weakness for fiction from Africa. A writer who I have discovered for the first time, who was completely fantastic, probably the finest novelist from Botswana. Her name is Bessie Head, and in the late '60s and early '70s, she wrote an autobiographical trilogy of novels, When Rain Clouds Gather, really about being an artist, about the struggle against apartheid in South Africa, about suffering from mental illness. It sounds very heavy going, But she's a beautiful writer. If there was anybody that I would take a friend by the elbow and get, you must read this, it's Bessie Head.

Thanks very much for joining us, Fiumetta, and happy onward reading. Thank you. Thank you, Jason. That's all for this episode of The Intelligence. If you like us, give us a rating on Apple Podcasts. And you can subscribe to The Economist at economist.com/intelligenceoffer. See you back here tomorrow.