Terra Firma

As Barack Obama sets up shop in the White House, observers in America and around the world await signs of a substantial strategic shift in US foreign policy.

There are important philosophical differences between the George W. Bush and Obama foreign policy teams – and between the outgoing and incoming presidents themselves. These differences will become apparent as Obama begins to address daunting near-term challenges and longer-term opportunities. But the most powerful forces shaping foreign policy over the first year of his presidency are the various constraints that will limit the new president’s available options and the power of unforeseen events to define his agenda. Financial crisis has to be the number one priority.

The first constraint comes from the developing global financial crisis, which has metastasized across the rich world and into emerging and frontier markets. The new administration’s first priority must be to restore confidence in US financial institutions and to break ground on a new financial regulatory framework that addresses the complexities of a globalised international marketplace. Until this process is underway, old and new US challenges in Iraq, Afghanistan, Iran, Pakistan, Russia, China and the Middle East peace process may not receive the attention many expect. In addition, the $700 billion that Congress has allocated to limit the impact of the financial market meltdown will increase public (and therefore congressional) scepticism of efforts to spend, for example, on aid to states like Pakistan and on far-reaching climate change initiatives.

But once Obama can turn more of his attention to foreign policy, it will become apparent that the new president places much less emphasis on the achievement of ideological objectives than on a more pragmatic and cautious approach to US relations with other states and their governments. That approach will centre less on the export of American democratic and free-market values than on the pursuit of US interests via co-operation and co-ordination with other states wherever possible. There are a select set of issues on which the new administration will likely stand on principle – in finding creative ways to halt genocide, for example. But for the time being, limits on available resources will discourage the most ambitious proposals even on these issues.

Building a Consensus

The financial crisis will not prove the only foreign policy obstacle. First, though fellow Democrats have bolstered their majorities in both houses of Congress, tensions over priorities are likely to emerge between the White House and the congressional leadership. Obama’s choice of Rahm Emanuel to serve as White House chief of staff will help. Though Obama has built strong relationships with many of his Senate colleagues, including some Republicans, the new president will rely on Emanuel for help in the House of Representatives. Emanuel, elected to four terms, has served as an effective Democratic powerbroker in the outgoing Congress and enjoys close relations with House Speaker Nancy Pelosi.

But many members of Congress, in both parties, feel that the Bush-led executive branch of government has usurped a substantial amount of power from the legislative branch. The next Congress will want some of that power back, creating the potential for confrontation on, for example, the pace of US troop withdrawals from Iraq and leadership on trade relations with China. Obama’s ability to build consensus and to avoid the emergence of a destabilising rivalry between the two branches will determine how much of his time must be devoted to managing the kind of bitter political infighting that has undermined the formulation of coherent policy in Washington for the past several years.

Foreign Governments have their Own Problems

In addition, while governments in Western Europe in particular will welcome a more collaborative approach on looming transnational problems – like the establishment of a climate change response agenda, collective security, the creation of a new global financial architecture and nuclear nonproliferation efforts – Obama will discover that many governments are less than fully willing to accept his invitation to shoulder a broader range of international burdens. The financial crisis leaves governments all over the world with immediate threats to their economic (and, in some cases, their political) stability. Many who have expressed deep resentment of the Bush administration’s unilateralist approach to global leadership and are happiest to welcome a new US president will remain reluctant to accept new responsibilities that divert them from the need to solve immediate problems much closer to home. Further, the new president will face assumptions from friends and foes alike that US power has diminished and need not always be accommodated.

US Troop Movements

With all these constraints in mind, the Obama administration will have to balance opposing pressures on Iraq. CENTCOM commander General David Petraeus and others in uniform will press the new president to carefully manage (slow) the pace of planned troop withdrawals from Iraq. A war-weary public, and therefore Congress, will expect him to keep his campaign promise to remove virtually all US troops from Iraq within 16 months. Obama pledged during the campaign season that by late 2010, only a ‘residual force’ will remain behind to maintain security and to continue to train Iraqi troops and police. It remains unclear how the administration would respond should a sharp spike in violence hand this small remaining force more than it can handle.

In Afghanistan, Obama will first deliver on his pledge to provide General David McKiernan with thousands more US troops. Next, he will consider a plan to transition from the Bush administration’s strategy of heavy reliance for stability on support for Hamid Karzai’s government toward more active collaboration with Afghan tribal leaders – and, perhaps, even some elements of the Taliban. If this plan is to work, the White House will have to persuade these increasingly sceptical, would-be partners that co-operation with US forces is in their interest.

Obama and his foreign-policy advisors appear to recognise that security in Afghanistan depends on political stability in Pakistan, a country plagued with a floundering economy, a deteriorating security environment, and a government that faces more than its share of domestic rivals and enemies. Obama has pledged material support for democracy in Pakistan following criticism of the Bush administration’s full embrace of former President Pervez Musharraf’s military government. But US economic woes leave the White House without the cash needed to offer effective near-term support for the Pakistan Peoples Party-led civilian government. Obama must find a way to bolster America’s remaining friends in the country while subduing military threats to US troops in Afghanistan from the lawless tribal areas just across the border inside Pakistan.

Iran

Near the top of the new president’s crowded agenda will be management of the international conflict over Iran’s nuclear programme. The risk of US military action against Iran has significantly decreased over the past year, as US intelligence estimates of the threats Iran poses have sidetracked any momentum toward military confrontation. The election of Obama further diminishes this risk, particularly as lower oil prices fuel hopes that sanctions on Iran might now be more effective. How Obama might respond should Israel launch military strikes remains an open question.

Israel

Further, the new president would like to correct what he sees as the Bush administration’s negligence on the Israeli-Palestinian peace process. But while the Bush team’s progress was limited by Arab scepticism of Washington willingness to act as an honest broker, Obama will first have to persuade the Israeli government that he can be trusted to provide leadership that guarantees Israeli security. Success in creating a credible peace framework will depend to a large degree on active help from Saudi Arabia. But US-Saudi relations will depend, as they always have, on durable personal bonds between the president and the Saudi leadership. Obama will have to build that relationship almost from scratch.

Russia

US-Russian relations have fallen to their lowest point since Yuri Andropov paced the Kremlin in the early 1980s. Each side blames the other and both are probably right. But if Obama wants Russian help in restraining Iran’s nuclear ambitions and in securing Cold War-era nuclear material on Russian soil, he will have to establish a higher degree of trust with Prime Minister Vladimir Putin and President Dmitry Medvedev than Russia’s leaders expect. Early indications are that the Russian leadership will test Obama’s willingness to make deals – particularly on issues like placement of US missile defence systems in Poland and the Czech Republic. Continued US support for Western-oriented governments in Ukraine and Georgia will continue to roil relations.

China

Obama’s greatest challenge in building on the Bush administration’s success in US-China relations may well be in resisting efforts within Congress to enact punitive trade legislation meant to redress a growing trade imbalance. President Hu Jintao stands near the head of a long line of leaders anxious to meet the new president and to take his measure. Reassuring foreign leaders that his youth and inexperience do not leave them with a vacuum of leadership in Washington will be among his earliest priorities.

Willingness to listen

Yet, Obama’s multilateralist approach will create many opportunities, as well. Persuading traditional allies that he will listen to them will win him and his administration new foreign friends. Opening a constructive dialogue with Iran after three decades of hostility and missed opportunities, however limited in scope, won’t be easy. But the likelihood that both sides may be willing to give it a try is higher now than at any time in the last several years. Relations with Venezuela, and even Cuba, could improve as official US rhetoric moderates, and if a Venezuelan president chastened by falling oil revenue and a Cuban leadership on the verge of generational change adopt a more pragmatic stance toward Washington. In Africa, where Obama will be greeted as a hometown hero in many quarters, new investment ties can serve longer-term interests on both sides of the Atlantic.

Dealing with the Unexpected

Much of the world will welcome a new American president who promises a more deliberative approach, one that offers hope for deeper US engagement with friends and foes alike. Barack Obama’s first job will be to re-establish stability – in the US economy, in global financial markets and in US relations with a broader range of states than many expect. But every administration is shaped by events and trends that are well beyond Washington’s control.

The Iranian revolution and the hostage crisis that followed crippled Jimmy Carter’s presidency. Ronald Reagan benefited from the political and economic implosion of European communism. George H.W. Bush mastered the moment when Saddam Hussein invaded Kuwait, but a sharp downturn in the US economy devastated his chances of re-election. Bill Clinton profited mightily from the wave of democratic idealism that reunited Europe and the power of technological innovation to fuel an information-age US economy. The shock and horror of the 9/11 terrorist attacks set the George W. Bush administration on the trajectory that would define his presidency.

The response of Barack Obama and his team to challenges from unexpected directions will shape his foreign-policy agenda and help define the international investment landscape for many years to come.


Ian Bremmer, President, Eurasia Group

Ian Bremmer is president of Eurasia Group, the world’s largest political risk consultancy. He is also a columnist for Slate, a contributing editor at The National Interest, and a political commentator on CNN, Fox News and CNBC.