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Council on Foreign Relations Daily News Brief
October 31, 2012

Top of the Agenda

Top of the Agenda: Growth Concerns in Wake of Sandy

Some economic forecasters say Hurricane Sandy may slow U.S. growth by as much 0.2 percent for the fourth quarter, representing roughly $30 billion in lost output. The deadly superstorm, which shuttered businesses and paralyzed transportation networks early this week, struck at the heart of the mid-Atlantic region, a corridor of some 60 million people that generates a disproportionate share of U.S. GDP (Bloomberg). However, many economists predict the dip in output will be recovered in the reconstruction process, perhaps netting slight growth.

Sandy, which remains slowed over Pennsylvania, is expected to move north into western New York and Canada, but more than eight million homes and businesses nationwide remain without power. Parts of New York City are still inundated and subway service may not resume for days. However, U.S. financial markets (Reuters) will open following their longest weather-related shutdown in over a century.


"There are some basic lessons in all this. First, we should invest in government services because we want them to be there when we are in a time of need. Whether it's a natural disaster that affects millions or a company closure that leaves hundreds out of work, government has the resources to help people get back on their feet and start over," writes CFR's Edward Alden.

"The rush to use Hurricane Sandy to justify a bigger federal government makes us wonder if there's an excuse liberals won't use to grow Leviathan? The reality of the federal fisc is that whoever wins next Tuesday is going to have to choose between functions best done by the federal government and those that can be done better by others. A government that can't distinguish between a big storm and Big Bird is simply too big," write the editors of the Wall Street Journal.



China Confronts Japanese Ships in Escalating Island Dispute

Four Chinese ships moved to expel Japanese vessels (FT) from the vicinity of the disputed Senkaku/Diaoyu islands in the East China Sea on Tuesday. This response comes on the heels of Beijing establishing a territorial baseline for the islands last month.

NORTH KOREA: Leader Kim Jung-un and his wife, Ri Sol-ju, made an appearance at a soccer match in Pyongyang (Reuters) on Monday, which marked Ri's first public appearance in two months. Ri's two-month absence from the public eye had fueled rumors that she had been admonished for misconduct.



Afghanistan Elections Set for April

Afghanistan's presidential elections will be held on schedule (AP) in April 2014, allaying fears that President Hamid Karzai, who is not eligible for another term, would seek to delay them. The previous vote, held in 2009, was marred with allegations of widespread fraud.

INDONESIA: Police killed one suspected militant, made two arrests, and seized bombs during a raid (AFP) in Poso on Sulawesi Island, considered a hotbed of terrorism. In the same district this month, two policemen were found murdered after going missing while investigating a suspected terror training camp.



Protesters Disrupt Libya's Cabinet Vote

In a new blow to a government stalemated for months, protesters stormed Libya's General National Congress on Tuesday, just as representatives were moving to vote on a government (Independent). They objected to several nominees for the proposed twenty-seven-member cabinet, including the minister of Islamic affairs, who they claim is a secularist.

SYRIA: Warplanes bombed opposition (VOA) targets Monday in Damascus in what activists say was the fiercest air raid campaign in the capital since the uprising began nineteen months ago.



Twenty Killed in Nigerian Village

Gunmen stormed a village in the northern state of Zamfara Wednesday, raiding houses for cash and other valuables and killing more than twenty people (Reuters). The attack does not seem to be connected to Islamic militant group Boko Haram.

RWANDA: Opposition leader Victoire Ingabire was sentenced Tuesday by a Rwandan court to eight years in prison after being found guilty of treason, conspiracy through terror, and genocide denial (AlJazeera). Ingabire, a Hutu politician who has been outspoken about recognizing Hutu deaths from the country's 1994 genocide, said the trial was politically motivated, but the country's justice minister said the verdict was based on proof beyond a reasonable doubt (VOA).



Poland Denies Explosives Found on Downed Plane

Prosecutors denied allegations (BBC) made by the daily Rzeczpospolita newspaper on Tuesday that traces of explosive materials were found in the wreckage of the plane crash that killed former president Lech Kaczynski and ninety-five other passengers two years ago. The controversial story has prompted renewed suspicions (Telegraph) among some Poles that the 2010 Smolensk crash was, in fact, an assassination.

BOSNIA: U.S. Secretary of State Hillary Clinton and EU Foreign Policy Chief Catherine Ashton convened in Sarajevo on Tuesday to pressure Bosnian leaders (VOA) to make long overdue reforms required for NATO and EU membership.



Tensions Over Wind Power With Mexico Indigenous Community

Mexico has one of the world's highest rates of wind energy expansion and most of it is concentrated in the narrow waist of Mexico, known as the Isthmus of Tehuantepec, raising tensions with the indigenous community, reports the Washington Post. They complain that the wind farms take control of their land, affect fish and livestock, and pit residents against each other for the damage or royalty payments.

BRAZIL: The country is expanding its soybean growing in the next year to meet increased demand from China, its biggest buyer, Bloomberg News reports. The move could hasten its march to outpace the United Sates as the world's largest soybean producer.



Campaigns Scale Back as Sandy Ravages East Coast

President Obama and GOP nominee Mitt Romney have scaled back their campaigns and canceled some planned events (CBS) since Hurricane Sandy hit the east coast on Monday. Romney held a storm relief rally in Ohio yesterday (NYT) and Obama will tour hard-hit areas in New Jersey (TheHill) with Governor Chris Christie today.

Although they have taken a break from the campaign trail, the candidates continue to compete in Ohio through advertisements (BostonGlobe) focusing on the auto industry and bailout.



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