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10 November 2012, Gateway House

The second term

U.S. President Barack Obama will certainly have the benefit of continuity in his second term, but he has a range of impending crises to address immediately - be it to avert the so-called fiscal cliff before the end of the year when automatic cuts kick in or plan for the military drawdown from Afghanistan.

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U.S. President Barack Obama has won a hard-fought second term but the challenges he faces on both the domestic and foreign policy fronts are immense given the “divided” states of America.

It was a status quo result with an implicit message to both parties to compromise and rekindle the spirit of bipartisanship so dead for so long in Washington. It is clear that half the country is not going to disappear just because one side sticks to its guns.

The U.S. Congress is still split between a Republican-controlled House of Representatives and a Democratic-controlled Senate, making legislative pathways just as tricky as before. Many in the Republican Party refuse to accept Obama’s mandate and plan to adopt the same confrontational tone.

The Republican Party is in turmoil trying to find reasons for Mitt Romney’s defeat when it thought the force was with him. Two distinct schools of thought are emerging – one suggesting that he went too far to the right and another saying he didn’t go far enough.

But both grudgingly accept that the party failed to recognize the changing demographics of the country and lost 71% of the Hispanic vote to Obama. It didn’t bother trying for the African-American vote. Interestingly, Romney lost a lot of the party’s traditional vote that goes for a fiscally conservative but socially moderate message.

While the churning continues, opinion makers are advising Obama not to cede any more ground than he already has to his opponents. That would amount to snatching defeat from the jaws of victory. It would be succumbing to blackmail from intransingent Republicans in the Congress.

The first order of business for Obama is to avert the so-called fiscal cliff before the end of the year, when tax cuts for the wealthy granted during former President George W. Bush’s tenure and payroll tax cuts given by Obama are set to expire, and automatic cuts in defence spending and other programmes are set to kick in. This will lead to $500 billion in automatic tax hikes and budget cuts which could push the U.S. economy into a recession. These provisions were negotiated in 2011 when the two sides were discussing raising the debt ceiling.

The failure to strike a deal could have consequences for the world economy. The International Monetary Fund has already warned that failure to raise the U.S. debt ceiling would have “international spillover.” In addition, the Congressional Budget Office has warned that going over the fiscal cliff would mean higher unemployment at around 9%.

House Speaker John Boehner, who leads the Republican team in the House, struck a somewhat conciliatory note by saying that he was “the most reasonable, responsible person here in Washington” only to be shouted down by some in the rank and file that they would never vote for tax increases. In turn, the Democrats would have to agree to cuts in social security and Medicare programmes.

The weeks ahead are likely to be full of brinkmanship and political heartburn. The question is whether Obama should stand his ground and let the economy go into recession as noted economist Paul Krugman advised, or should he find common ground.

On the international front, Obama has a range of impending crises from Iran to Syria to Afghanistan to Pakistan that will test both his acumen and his resolve. Each is messier than the other with multiple and shifting players.

In South Asia, Obama faces the formidable task of getting U.S. troops out from Afghanistan by 2014 but without letting the gains they have made fritter away because the Afghan forces were not ready. A sizeable U.S. presence is expected to remain in Afghanistan but the contours are not yet clear. The “peace” talks with the Taliban have not progressed over the past year despite periodic trial balloons being floated by officials through the media.

And herein comes Pakistan, a U.S. ally who often behaves like an enemy. It appears the Obama Administration would like nothing better than a “peaceful” exit from Afghanistan with Pakistan’s cooperation. But that cooperation always comes at a price and often at the expense of India. Pakistan may be able to extract more weapons, money or restrictions on India’s presence in Afghanistan in exchange for managing the American departure.

While it won’t be easy for Pakistan to recreate the 1990s and play ring master, it will try its hardest to capture maximum space and leverage in its “backyard” even though the backyard is now overgrown with Pashtuns who have stakes in the current set-up and may not fall in line with Islamabad.

Ideally, Washington would like the Taliban to accept the elections now called for in 2014 with some understanding that the Taliban would hold southern and eastern provinces. It is murky yet but the U.S. dependence on Pakistan is a reality that India must factor in.

In Middle East and North Africa, Obama’s task is no easier. As the attack in Benghazi, Libya, in which an American ambassador and three others were killed, casts a shadow over the administration, the president needs to reinvent America’s relationships all across the Arab world.

What happened in Benghazi on September 11 has raised questions about whether Obama has an overarching policy on how to deal with the upheavals caused by the Arab Spring. So far his administration has dealt with countries under sway on a piece-meal basis but the second term would demand a more coherent policy.

The civil war in Syria demands answers too. Obama has rejected any possibility of sending U.S. ground troops and the Pentagon is opposed to establishing a no-fly zone. The European allies too are befuddled and not clamouring for an intervention along the lines of Libya.

The U.S. wants the Syrian rebels – a combination of opportunists, fundamentalists and genuine fighters – to evolve a unified force so they can be a credible alternative to the Assad regime but so far that is more in the realm of hope than reality.

Iran remains a continuing nightmare for the Obama Administration but the sanctions seem to have worked in pushing the regime toward compromise on its nuclear programme. Whether the Iranian leadership – an amalgam of complex power equations – will be prepared to negotiate restrictions on uranium enrichment as sanctions create a serious economic crisis at home is yet unclear.

Indications are that Obama is willing to go for a “grand bargain” with Iran through direct talks. Iran also has sent signals lately, hinting that it can come to the negotiating table. Mohammad Javad Larijani, an adviser on international affairs to the clergy, said negotiating with Washington “is not taboo” and if the interests of Iran require it, “we are prepared to negotiate with the Satan in the pits of hell.”

The colorful language is bound to put Washington off but officials must consider it a rebuttal of the “axis of evil” nomination given by George W. Bush to Tehran. Europeans read the rhetoric as a covert invitation for talks, provided Iran gets relief from sanctions.

Obama will have a new secretary of state since Hillary Clinton has said she doesn’t want to serve another term. Names being considered are the current U.S. ambassador to the UN, Susan Rice, and Senator John Kerry, chairman of the senate foreign relations committee. Given the lengthy nomination and the confirmation process, it could be a few months before the new appointee can take over.

Obama’s plate overflows and how he deals with the many crises will determine his legacy.

Seema Sirohi, an international journalist and analyst, is a frequent contributor to Gateway House: Indian Council on Global Relations.

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