The World Next Week: The U.S. Debt Ceiling Suspension Expires, the African Union Meets, and East Timor Celebrates Its Independence

The World Next Week podcast is up. Bob McMahon and I discussed the expiration of the U.S. debt ceiling suspension, the African Union summit in Ethiopia, and the eleventh anniversary of East Timor’s independence.

[audio: http://www.cfr.org/content/publications/media/editorial/2013/20130516_T…]

The highlights:

• The suspension of the national debt ceiling that Congress and the White House agreed to in January expires this week. Two years ago an impasse over raising the debt ceiling was broken only at the last moment, and the standoff resulted in Standard & Poor’s downgrading the U.S. government’s AAA rating. Treasury Secretary Jack Lew says that the federal government will continue to be able to borrow “until at least after Labor Day.” Washington can put off the day of reckoning until summer’s end partly because the Treasury can employ a variety of “extraordinary measures” to avoid hitting the ceiling. But it’s also because the U.S. economy is picking up steam, and as a result, so are federal tax revenues. The Congressional Budget Office now projects that the federal deficit will be $642 billion in FY13. That’s down $200 billion from what CBO projected in February, and it’s down more than half from the highs reached during the financial crisis.
• The African Union summit begins this Sunday in Addis Ababa, Ethiopia, and it will run through May 27. Secretary of State John Kerry is expected to attend. The summit will mark the 50th anniversary of the founding of the Organization of African Unity, the predecessor to the African Union. The meeting’s theme is the “Year of Pan-Africanism and African Renaissance.” The news coming out Africa is mixed. On the one hand, many African countries are experiencing strong economic growth, and as a result, attracting increased interest from both China and the United States. On the other hand, countries like Nigeria and Mali are buffeted by extremist violence and the threat of war between Sudan and South Sudan persists.
• East Timor, or Timor-Leste if you prefer, celebrates its eleventh independence day next week. The country first won its independence from Portugal in 1975 after 400 years of colonial rule. It was invaded almost immediately by Indonesia, and only won its independence back in 2002. East Timor’s economy has been booming in recent years; The Economist rates it the world’s 6th fastest growing economy in 2013. A main driver of growth is oil. Despite this good news, the country, which is home to 1.2 million people and is the size of Connecticut, faces many economic and political challenges. Forty percent of East Timorese live in poverty, and the unemployment rate is near 20 percent. The political violence that rocked East Timor in 2006 has not returned, but significant political tensions remain.
• Bob’s Figure of the Week is Nawaz Sharif. My Figure of the Week is six. As always, you’ll have to listen to the podcast to find out why.

For more on the topics we discussed in the podcast check out:

U.S. debt ceiling: CFR.org has a backgrounder on the debt ceiling. CNBC reports on Treasury Secretary Jack Lew’s announcement that the United States will not reach the debt ceiling until Labor Day. Reuters describes the “emergency cash measures” that will be used by the U.S. Treasury after this weekend. The New York Times explain the legislation that House Republicans passed last week prioritizing debt payments.

African Union summit: The BBC profiles the African Union. The African Union website marks the fiftieth anniversary of the OAU and explains why 2013 is the “Year of Pan Africanism and African Renaissance.” Global Post reports that John Kerry will attend the African Union summit and that the relationship between African “powerhouses” South Africa and Nigeria may be improving.

East Timor’s eleventh anniversary: The U.S. Department of State summarizes U.S. relations with East Timor. The Economist ranks East Timor as the sixth fastest growing economy in 2013. ABC News (Australia) reports on East Timor’s tenth anniversary celebration and summarizes East Timor’s recent history. Frank Brennan argues that the time has come to settle the territorial dispute between Australia and East Timor.