Daily News Brief

May 2, 2023

Top of the Agenda

In a letter to congressional leaders yesterday, U.S. Treasury Secretary Janet Yellen warned that the federal government could run out of money (FT) to pay its bills as soon as June 1 if Congress does not raise the debt ceiling. President Joe Biden invited four top lawmakers (AP) to the White House for talks next week on raising the debt limit to avoid default. Economists have warned that a default could plunge the United States and other economies into recessions and hurt U.S. financial credibility. 

While Biden has called for an unconditional raising of the debt ceiling, Republicans, who control the House of Representatives, have demanded support for spending cuts and other priorities in return for their backing.

Analysis

“[Past standoffs over the debt ceiling] had tangible economic consequences, including the furloughing of 800,000 federal workers and the downgrading of the U.S.’s credit rating. But they also had political repercussions for the elected officials who caused them,” FiveThirtyEight’s Nathaniel Rakich writes. 

“Instead of shoring up the nation’s finances to meet the geopolitical moment, congressional inaction now threatens to irreparably damage the United States’ global standing,” the Hoover Institution’s Matt Pottinger and PGIM Fixed Income’s Daleep Singh write for Foreign Affairs. 

This Backgrounder explains what happens when the United States hits its debt ceiling.

Pacific Rim

Today’s meeting on the sidelines of an Asian Development Bank summit in South Korea comes amid a broader thawing (Bloomberg) of Seoul-Tokyo relations that also included a security dialogue last month. 

CFR’s Scott A. Snyder discusses South Korea’s bold diplomatic realignment.

China: In 2021, air pollution in China declined enough to meet government safety standards but still greatly exceeded the maximum level recommended by the World Health Organization, Nature reported. 

South and Central Asia

Afghan Foreign Minister Amir Khan Muttaqi has long been banned from international travel due to UN Security Council sanctions, but a Security Council committee said he can meet (Reuters) with his Chinese and Pakistani counterparts in Pakistan next week. The subject of the meeting was not immediately announced.

China/Myanmar: Chinese Foreign Minister Qin Gang called for a crackdown (AP) on cross-border criminal activity during a rare visit to the two countries’ border region. Since a military junta took control of Myanmar in 2021, opium production has reportedly risen in the country.

Middle East and North Africa

The countries worked to jointly evacuate dozens of Iranian citizens (Reuters) fleeing the conflict in Sudan in the latest sign of Iranian-Saudi rapprochement.

For Foreign Affairs, Trita Parsi and Khalid Aljabri unpack improving Iran-Saudi Arabia relations.

Israel/Palestinian territories: Khader Adnan, a high-profile prisoner and senior figure in the militant group Palestinian Islamic Jihad, died in Israeli custody (BBC) this morning after refusing medical intervention during a three-month hunger strike. 

Sub-Saharan Africa

More than one hundred thousand refugees have fled Sudan since two generals went to war on April 15, and seven hundred thousand more could follow (WaPo) if the conflict continues, resulting in a regional crisis, the UN refugee agency said. Over three hundred thousand people have been internally displaced, according to UN estimates.

Kenya: Opposition groups resumed anti-government protests (AP) after pausing during Ramadan to pursue direct talks with the government. The negotiations, regarding grievances over election reforms and high living costs, are now stalled.

Europe

More than twenty thousand Russian soldiers have been killed (The Guardian) and over eighty thousand have been injured in the war in Ukraine since December, according to estimates by U.S. intelligence officials. Many of the troops died in trench warfare around the Ukrainian city of Bakhmut.

CFR’s Thomas Graham explains how Ukraine has held off Russia’s invasion so far.

France: Nearly three hundred people were detained (France 24, AFP, AP, Reuters) yesterday during countrywide protests against the government’s recently enacted pension reform, officials said. The interior ministry estimated that 782,000 people joined the demonstrations, while some unions said 2.3 million people participated.

Americas

Colombia’s government aims to negotiate a lasting peace deal (AFP) with the National Liberation Army (ELN) guerrilla group, but a deadly ELN attack last month has raised doubts about the talks’ progress.

Paraguay: Supporters of Paraguayo Cubas Colomés, who came third in Sunday’s presidential election, demonstrated outside the electoral court (Reuters) to demand a recount, claiming fraud.

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