Over the Horizon

North America Recession worries mounted in the United States this week following a drop in employment rates, expanding trade deficit and negative comments from Federal Reserve Chairman Ben Bernanke. Unfavourable prospects for the economy have driven North American markets to one of their worst starts to a calendar year.

North America

Recession worries mounted in the United States this week following a drop in employment rates, expanding trade deficit and negative comments from Federal Reserve Chairman Ben Bernanke. Unfavourable prospects for the economy have driven North American markets to one of their worst starts to a calendar year. The Dow Jones Industrial Average (DJIA) has dropped 689 points or five per cent since Jan. 1, 2008. Speculation is rife that the Fed’s next move would be a 50 basis point cut to the discount rate. This has served to weaken the American dollar and spike commodity prices like oil and gold, which briefly crested at $900 an ounce before retreating late on Friday.

South America

The Revolutionary Armed Forces of Columbia (FARC) released two politically-prominent hostages Jan. 10 after a deal was facilitated by Venezuelan President Hugo Chavez. The two female hostages, held since 2001 and 2002, thanked Chavez for his role in their release. The international community, including representatives of the U.S. Department of State, also congratulated the Venezuelan President for his assistance. Coming on the heels of set- backs in his Dec. 2 constitutional referendum Chavez views the release of the two hostages as a boost to his regional stature. It is uncertain whether or not he can help to secure the release of the estimated 700 hostages still held by FARC.

Middle East

United States President George W. Bush kicked off his seven-state tour of the Middle East this week against the back drop of a major new offensive in Iraq and renewed tensions with Iran. Beginning his tour in Israel, he reiterated American military support for Israel, while condemning the occupation of the West Bank and calling for an independent Palestinian state.
The trip is intended as a follow up to the Annapolis peace conference. However, Bush also seeks to rally Sunni majority states against Iran to reconstruct the regional balance of power, which was disrupted after the 2003 Iraq War.

Africa

Border tensions between Chad and Sudan escalated on Jan. 7 after the Chadian Air Force bombed rebel positions near the capital of Sudan’s western Darfur state. The action drew strong protests in Khartoum and engendered the “deep concern” of the African Union (AU). The Darfur rebel Justice and Equality Movement urged both Chad and Sudan to cease military operations on the border and seek a political solution.
A 3,000 strong European Union force is planned to be deployed to Chad to protect internally displaced people and refugees from Darfur. This force is intended to compliment the combined UN/AU force which is already operating in neighbouring Sudan.

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