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Council on Foreign Relations Daily News Brief
July 17, 2012

Top of the Agenda

Top of the Agenda: U.S. Navy Ship Fires on Boat in Persian Gulf

A U.S. Navy refueling ship opened fire yesterday with a 0.50-caliber machine gun on an Indian fishing boat in the Persian Gulf, near the coast of the United Arab Emirates, killing one crew member (NYT). The incident, coupled with reports that Iran is planning to increase its military presence around the Strait of Hormuz, caused international oil benchmark prices to rise by $2 per barrel. The U.S. Fifth Fleet Command said the ship fired on the smaller boat after it ignored warnings to stop. India today called on the UAE to investigate the shooting (al-Jazeera), the Indian foreign ministry confirmed.


"Iran's military planners have designed 'asymmetric' tactics that utilize the greater speed and agility of their maritime assets. Iran's small boats and midget submarines would be central to any Iranian naval engagement, and are likely the ones that would be the most difficult to initially counter. Iran has also produced thousands of naval mines, which could be littered throughout strategic sea lanes in the Persian Gulf or employed as defensive measures around key Iranian maritime infrastructure," Afshon Ostovar wrote for Foreign Policy earlier this year.

"While much of the world's attention focuses on Iran's nuclear program, Tehran has made considerable progress on another security front in recent years--steadily increasing the reach and lethality of its naval forces. The goal by 2025, if all goes as the country has planned, is to have a navy that can deploy anywhere within a strategic triangle from the Strait of Hormuz to the Red Sea to the Strait of Malacca," W. Jonathan Rue wrote late last year for Foreign Affairs.



North Korea Names New Military Chief

The North Korean government of Kim Jong-un promoted a relatively unknown general (AP), Hyon Yong Chol, to be the new vice marshal of the Korean People's Army, a day after it announced the dismissal of army chief Ri Yong-ho, the official North Korean news agency said.

CHINA: A court in the city of Chongqing today convicted a group of eighteen people for running a $10 billion money-smuggling ring (WSJ) through an underground banking network, circumventing China's strict controls on cross-border capital movements.



Pakistanis Hold Protest Over NATO Routes

Thousands of Pakistanis marched toward the Afghan border in northwestern Pakistan to protest the government's recent decision to reopen NATO supply routes (AFP/ExpressTribune) to Afghanistan. The demonstration was organized by Jamaat-e-Islami, which labeled the United States an enemy of Pakistan and the Muslim world.

PAKISTAN: Militants today attacked a UN vehicle in Karachi (BBC), severely injuring a doctor administering polio vaccines on the second day of a nationwide drive, which the Taliban has publicly threatened to undermine.



Clinton Calls for Israeli-Palestinian Peace Talks

U.S. Secretary of State Hillary Clinton, on a visit to Israel yesterday, called on Israeli and Palestinian leaders to resume "direct negotiations" (NYT) to facilitate the creation of a Palestinian state, while warning against using "international venues" or taking "unilateral actions" to resolve the ongoing conflict.

CFR's Elliott Abrams discusses Clinton's first visit to Israel in nearly two years on his blog, Pressure Points.



UN Condemns Rebel Attacks in Congo

The UN Security Council yesterday condemned attacks by the mutinous M23 rebels in the eastern part of the Democratic Republic of Congo, while calling for an end to "all outside support to all armed groups" (Reuters) in the country.

MALI: The International Committee of the Red Cross has begun an operation to deliver emergency food supplies to 160,000 people (AP) in northern Mali, who are facing a drought and ongoing fighting between radical Islamists, Tuareg rebels, and government forces for control of the area.



Bank of England Governor Testifies on Libor

Bank of England Governor Mervyn King told a parliamentary panel today that neither the UK central bank or the Federal Reserve Bank of New York had "evidence of wrongdoing" in the setting of the key London interbank offered rate, or Libor (WSJ).

In this CFR Video, CFR's Sebastian Mallaby highlights three implications of the unfolding Libor banking scandal.

GERMANY: Investor confidence dropped (Bloomberg) for the third straight month in July, according to Germany's ZEW index. At the same time, the IMF cut its global growth forecast to 3.9 percent for 2013.



U.S. Senate Report Criticizes HSBC Over Monitoring Practices

Inadequate monitoring practices at the U.S. affiliate of HSBC bank allowed it to become a hub for foreign money laundering (WaPo), drug-trafficking money, and potential terrorist financing activities, according to a new U.S. Senate report to be released today.

UNITED STATES: Former Google executive Marissa Mayer was hired as the new chief executive of Yahoo (FT), the web-based company announced yesterday.



Obama and Romney Battle Over Jobs

President Obama and Republican challenger Mitt Romney escalated their continuing campaign trail battle over the economy, the free market, and integrity Monday, each attempting to portray the other as part of the nation's problem rather than its solution (NYT).

President Obama and Mitt Romney are battling over suburban, upper-middle-class voters (WSJ), a constituency both need to win. The president drew strong support from the group in 2008 but could be turning them off with his tax rhetoric this year.

Editor's Note: For more information on the presidential election and foreign policy, check out CFR's campaign blog, The The Candidates and the World.



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