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Council on Foreign Relations Daily News Brief
November 5, 2012

Top of the Agenda

Top of the Agenda: G20 Officials Eye Gloomy Economic Scene

The eurozone crisis and the U.S. fiscal cliff took center stage at a two-day meeting of G20 officials beginning Sunday in Mexico City, where finance ministers and central bank governors from the world's leading economies gathered to discuss Greece's deadline, Spain's bailout, and the stalemate over a U.S. fiscal plan. Delegates pressed the United States to act decisively (Reuters) to avert a rush of spending cuts and tax hikes, warning that unless Congress reaches a deal after Tuesday's elections, about $600 billion in government spending cuts and higher taxes will kick in on January 1 and could push the U.S. economy back into recession. Spain's Economy Minister Luis de Guindos looks to outline the country's banking and labor reforms, but will not dwell (AFP) on why the country isn't seeking a sovereign bailout. The meeting, which comes shortly after the IMF and World Bank meeting in Tokyo, lacked key players, including U.S. Treasury Secretary Timothy Geithner, European Central Bank President Mario Draghi, and the finance ministers of France and Brazil.

Analysis

"Several key figures, including U.S. Treasury Secretary Tim Geithner, European Central Bank president Mario Draghi and the finance ministers of Brazil and France, are no-shows in Mexico. Their absence raises serious questions about the relevancy of the G20, which was anointed as the main coordinating body for economic policy in 2009. The G20 needs a break. The first move of Russia, which inherits the presidency from Mexico in 2013, should be to press the reset button," writes Kevin Carmichael of the Globe and Mail.

"The ECB has only announced the OMT program. So far, nobody has made an application. The Spanish prime minister is still playing hard to get and I doubt he will make an application this year. The OMT may end up as a phantom. As in Hans Christian Andersen's fairy tale – I am writing this column from Denmark – it may not be very long until some child in the bond markets points out that Mario Draghi has no clothes," writes Wolfgang Münchau for the Financial Times.

"Beyond highlighting the risks to growth – which also include a weaker expansion of emerging markets and shocks in some commodities markets – the G20 won't determine any concrete action, all the more so with key officials absent. Participants in the discussion said they are more likely to focus on technical and regulatory issues," write Costas Paris and William Horobin for the Wall Street Journal.

 

What Will Be the Top Global Hot Spots in 2013?

Each year, CFR's Center for Preventive Action asks a group of experts to rank various violent contingencies in order of their importance to U.S. national security interests. Help them create that list by telling them what international conflicts you are worried about breaking out or escalating next year. Learn more and weigh in here.

PACIFIC RIM

Premier Wen Jiabao Calls for Probe Into Family's Fortune

The Chinese Communist Party launched an investigation, at Premier Wen Jiabao's request, into the claims made by the New York Times about Wen's family amassing at least $2.7 billion in assets (SCMP) during his premiership. The move comes as the CCP prepares its once-a-decade leadership transition on November 8.

This blog post from CFR's Scott A. Snyder discusses the challenges ahead for U.S. policy toward Asia, particularly China.

SOUTH KOREA: South Korea shut down two nuclear reactors (Yonhap) after the government declared that some parts had not been properly vetted, undermining confidence in the safety of reactors.

 

SOUTH AND CENTRAL ASIA

Laos Approves Mekong Dam, Hosts Asian and European Leaders

Laos gave the green light to build a massive hydropower dam (BangkokPost) on the lower Mekong River despite opposition from neighboring countries and environmentalists. The announcement comes as leaders from Asia and Europe begin a two-day summit in Vientiane on Monday.

CFR's Joshua Kurlantzick explores Laos' renewed role in Asia in this blog post.

INDIA: Sonia Gandhi, India's ruling Congress party chief, and Manmohan Singh, the prime minister, addressed a major rally in New Delhi to gather support for economic reforms in the run-up to the 2014 parliamentary elections (TheHindu).

 

MIDDLE EAST

Syrian Envoy Seeks New UN Resolution

In a new bid to set up a transitional government in Syria, UN-Arab League envoy Lakhdar Brahimi called for a UN Security Council resolution (AlJazeera) based on a deal reached in June. Brahimi held unsuccessful talks with Russian Foreign Minister Sergei Lavrov in Cairo on Sunday, when hundreds of Syrian opposition leaders began a four-day conference in Doha.

BAHRAIN: Bombs killed two people Monday in Bahrain's capital of Manama (AP), less than a week after the country banned protest gatherings in an attempt to quell deepening unrest in the Western-backed Gulf nation.

 

AFRICA

South Sudan Expels UN Officer

South Sudan expelled a United Nations human rights official investigating several cases in the young nation, which gained independence from Sudan last July. Her expulsion could be linked to an August UN report (SudanTribune) accusing South Sudan's army of torture, rape, killings, and abducting civilians during the civilian disarmament campaign in South Sudan's Jonglei state.

RWANDA: A soldier from the Democratic Republic of Congo died in an exchange of fire at the border with Rwanda (AFP). The Rwandan army accused DRC soldiers of "provocation" in the volatile area.

Rwanda's President Paul Kagame discusses the country's domestic and foreign policies in this CFR video.

 

EUROPE

Hundreds Rally Over Ukraine Election

Protesters stormed Kiev on Monday to protest what Ukrainian opposition groups, including that of jailed ex-prime minister Yulia Tymoshenko, said was vote-rigging (Reuters) by President Viktor Yanukovich's ruling party in the October 28 parliamentary election.

GREECE: The euro tumbled to its lowest point (Bloomberg) against the dollar in almost eight weeks, amid worry that Greece won't win bailout funds.

 

AMERICAS

Cuba Accuses U.S. of Aiding Dissidents

In a foreign ministry statement, Cuba accused the United States of helping Cuban dissidents access the Internet as part of a campaign to undermine the communist government (BBC), blaming the staff at the U.S. Interests Section at the Swiss embassy in Havana.

 

CAMPAIGN 2012

Economic Challenges Loom for Candidates

The BBC provides a roundup of economists' recommendations on how either candidate should handle the economic challenges confronting the United States.

The Wall Street Journal examines Virginia's competitive race for the U.S. Senate and the impact of impending military cuts on jobs in the state.

 

 

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