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Council on Foreign Relations Daily News Brief
October 4, 2013

Top of the Agenda

Top of the Agenda: Obama Cancels Asia Trip

After cancelling two stops of a scheduled Asia trip this week, President Barack Obama called off plans to attend two summits in Indonesia and Brunei, raising concerns about the strategic "pivot" to Asia as the partial U.S. government shutdown continues (WaPo). The cancelled trip was seen as a boost for Chinese president Xi Jinping, who visited Indonesia and Malaysia and is seeking to smooth over its strained ties in the region (AP). The IMF managing director and U.S. Treasury secretary warned that failure to raise the debt ceiling this month is a greater threat to the global economy than the government shutdown (MercoPress).


"America's troubles give a sense to outsiders that its political system is flawed, and standing up regional leaders suggests its foreign policy is broken. Obama's much-vaunted pivot to Asia is said to be about counterbalancing China's rising might. Events this week seem to show China stealing a march," the South China Morning Post writes in an editorial.

"The Cruz faction is a rump caucus, but it will have more influence the more GOP leaders fail to deliver any reform. Mr. Obama can reduce its influence if he uses this moment as an opening for compromise rather than to humiliate House Speaker John Boehner into surrender or a debt-limit crack-up," the Wall Street Journal writes in an editorial.

"Although China's currency reserve managers may lose some sleep this month, its leaders will gain in global stature as they come across as serious and moderate in the face of the Washington frat-house spectacle," writes William Pesek for Bloomberg.



China Enhances Ties With Malaysia

China and Malaysia agreed to upgrade their bilateral relationship to a "comprehensive strategic partnership," and plan to enhance military cooperation and boost annual trade to $160 billion by 2017 (Xinhua).

JAPAN: Bank of Japan's governor said a prolonged U.S. budget standoff would severely impact global markets, and that the bank would expand its stimulus if Japan's recovery was threatened (Kyodo).



Former Islamist Warlord Registers for Afghan Presidency

Abdul Rasoul Sayyaf, a former Islamist warlord who brought al-Qaeda's leading figures to Afghanistan, registered Thursday to run in the country's presidential elections next year (WSJ). Sayyaf is backed by the chairmen of both chambers of the Afghan parliament.

PAKISTAN: A roadside bomb targeted a police van, killing one officer in Peshawar on Friday (Dawn), and gunmen shot dead a policeman in another part of the troubled city.



Egypt Seizes Muslim Brotherhood Assets

The Egyptian government is moving to take over the assets of the recently banned Muslim Brotherhood (BBC), and plans to take over the group's social services functions, which include schools, hospitals, and charities.

LIBYA: A thirty-three-year-old leader of a militia in eastern Libya holds the fate of half of the nation's oil wealth, and has closed a major export terminal in July to win more autonomy for his region (WSJ).



Kenyan Soldiers Looted Shops During Mall Attack

Kenya's military has appealed to the public to help identify soldiers caught on security cameras looting stores in the Nairobi mall that was attacked by terrorists last week (Star).

SUDAN: Khartoum braced for more protests against Omar al-Bashir's government on Friday after more than two hundred people were killed in a week of demonstrations (SudanTribune).

CFR's Aala Abdelgadir writes about Sudan's crumbling economy in this blog post.



Merkel Starts Tricky Coalition Talks

German Chancellor Angela Merkel is launching talks to form a "grand coalition" following her September 22 victory in federal elections (al-Jazeera). Merkel, leader of the Christian Democratic Union, will meet on Friday with Social Democrats for talks that could drag into next year.

This Issue Guide explains what the German elections mean for Europe.

ITALY: Divers off the coast of southern Italy continue to search the wreckage of a boat that sank on Thursday and drowned more than three hundred African migrants (Telegraph).



U.S. Judge Bars Argentina Debt Swaps

A U.S. judge decided that Argentina's plan to use a debt swap to pay some of its creditors would violate a previous court's injunction (Bloomberg). Roughly 93 percent of creditors agreed to the swap, but a handful of hedge funds held out for a full payout.



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