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Council on Foreign Relations Daily News Brief
October 9, 2013

Top of the Agenda

Top of the Agenda: Obama to Nominate Yellen as Fed Chair

President Barack Obama will nominate Janet Yellen to run the U.S. Federal Reserve, ending months of speculation over who will succeed Chairman Ben Bernanke, whose term expires on January 31 (Reuters). Meanwhile, the partial U.S. government shutdown has suspended death benefits for the U.S. military, adding to the suffering of the families of four soldiers who died in Afghanistan on Sunday (USA Today). Investor concern about a potential U.S. default deepened on Tuesday, doubling short-term borrowing costs by the Treasury Department to the highest rate since 2008 (WaPo).


"Yellen is quite simply more qualified for the job than any of her predecessors. She's an imaginative and technically adept economist possessed of a brilliant and precise mind. As a researcher, she has made fundamental contributions to our understanding of unemployment and the importance of smoothing out the ups and downs of the economy," writes Justin Wolfers for Bloomberg.

"Staff at the Fed found it amusing to see a Yellen appointment depicted as a soft option compared with the supposedly tempestuous Mr. Summers. She has relentlessly pushed for the Fed to consider new communications policies during the past few years, and sometimes ruffled feathers among the staff," write Robin Harding and Richard McGregor in the Financial Times.

"Never before has America faced a government at war and a government shutdown at the same time. Even if much of America forgets the former while enduring the latter, the grim truth of these dueling realities is that they should not coexist given Washington's central role in prosecuting America's conflicts," writes CFR Senior Fellow Gayle Tzemach Lemmon in Defense One.



Kerry Presses China, Neighbors on Maritime Disputes

U.S. secretary of state John Kerry will urge China's prime minister and ten members of the Association of Southeast Asian Nations (ASEAN) to cool tensions over territorial disputes in the South China Sea (AP).

This CFR InfoGuide examines maritime disputes in the South and East China Seas.

JAPAN: Ten tons of highly radioactive water may have leaked from the Fukushima nuclear plant, coming into contact with six workers but not reaching the sea, the plant's operator said (Kyodo).



Pakistani Taliban Set Conditions for Peace Talks

Pakistani Taliban set tough conditions for peace talks with the Pakistani government, including a cessation of U.S. drone strikes (Reuters). Pakistan's Pashtun lands along the Afghan border, known as the Federally Administered Tribal Areas, have never been fully under the control of any government.

BANGLADESH: At least nine people died in a fire at a garment factory in Bangladesh, raising pressure for reforms in an industry that has suffered repeated lethal accidents (al-Jazeera).

This blog post discusses Bangladesh and the future of corporate social responsibility.



U.S. to Cut Back Aid to Egypt

The United States plans to suspend substantial financial aid to Egypt, which receives $1.5 billion a year in aid with $1.3 billion earmarked for the military (NYT). The decision is expected to further strain Washington's relationship with Cairo's military-backed government and its Arab allies.

IRAN: Tehran is preparing proposals that would end the impasse on its nuclear program and soften U.S. and EU sanctions, which it will present in talks in Geneva next week (WSJ).



Poll Observers Report Voting Irregularities in Guinea

International observers said there were "irregularities" in Guinea's first parliamentary elections late last month, the first vote in over a decade (AFP). Opposition parties called for the election to be annulled.

KENYA: One-third of Kenya's government spending couldn't be accounted for, the country's auditor said, and only six percent of its financial statements were deemed "clean" (Daily Nation).



Russia Bans Some Imports from Former Soviet Bloc

Russia's consumer-protection agency banned Lithuanian dairy imports and will begin more stringent testing of Georgian wine as a group of former Soviet bloc nations prepare to deepen their cooperation with the EU (FT).

ICELAND: Iceland's private sector is running out of cash needed to repay its $5.8 billion foreign-currency debt, posing a risk to the country as it scales back on currency controls (Bloomberg).



Venezuela's President Seeks to Govern by Decree

Venezuelan president Nicolas Maduro asked parliament in a three-hour speech to grant him special powers to fight corruption and "economic sabotage" (BBC). The measure, previously invoked by his predecessor Hugo Chavez, would allow the president to rule by decree for a set period of time.



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