SUPER SATURDAY: Five Key Foreign Policy Challenges for the New President

1. SUPER SATURDAY:Five Key Foreign Policy Challenges for the New President by Paige Johnson Tan, Ph.D. Department of Public and International Affairs, UNCW

2. What Do You Think? • What do you think are the top five foreign policy challenges the US faces?

3. President Obama’s Foreign Policy • Hints during the campaign as to how Obama looked at the world: • Summer 2008 interview, Obama praised Truman foreign policy, particularly Marshall and Kennan. • Also praised first President Bush’s foreign policy.

4. Obama’s Foreign Policy • Distilling from Obama elsewhere during the campaign: • Obama's sense of the world was more optimistic than his opponent’s. The dangers are real but not all-encompassing. • Obama spoke less of Islamic extremism in general and more of Al Qaeda and its affiliated groups specifically. • Compared to the Cold War, threats reduced. • Most people in the Muslim world, want development and a better life, not jihad. So, work to build the positive, not just combat the negative.

5. Obama’s Foreign Policy • Other important tenets: • Importance of America’s reputation and values. • World needs US leadership to solve problems. • Plans to talk more to foes (Iran, North Korea) and everyone else too. • More bipartisanship at home in foreign policy. • America must stay calm, not overreact.

6. Setting the Tone: The Inaugural Address • Very domestic in focus. • Scaled down, not as soaring as some other Obama speeches. • Sense was: We’re in for some tough times, but if we pull together and work hard, we’ll pull through. • Foreign policy content was more limited, but still important.

7. Setting the Tone:The Inaugural Address • “To all the other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born, know that America is a friend of each nation, and every man, woman and child who seeks a future of peace and dignity. • Just another line later: • “Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with the sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.”

8. The World Obama Encounters • Not the world he expected from the campaign to January 20th. • Probably expected to be the “Get-us-out-of-Iraq, Repair-our-international-reputation president.” • Instead, he’s the “Economy president.” • Becomes one of the five top issues the president encounters, the first I’ll discuss this morning.

9. Top Challenges: The Economy • Matters for foreign policy. • Resources (hard power) • Dents the supposed US model of capitalism (and thus our soft power) • Hit to the budget and US dollar over the long term unknown, threat that people will stop buying our bonds at some point. • Threat of protectionism and deglobalization.

10. The International Economy: Big Picture • IMF forecasts a global contraction of .5% – 1% in 2009, the first in 60 years.

11. Not Stimulating Enough • IMF believes 2% of GDP stimulus required. G20 spending 1.5%. • Chief economist: better to do too much than to do too little. Politicians need to reduce uncertainty or downward spiral of consumer and producer decisions. • Europe and Japan not doing enough. • China and the US doing more. • US pressures on Europeans to do more on spending, according to Luxembourg Finance Minister, “not to our liking.” Czech PM thought Obama’s spending was the “road to hell.” (early example of not-Bush-still-problems).

12. International Action: G20 Summit • To restore confidence, growth, and jobs • US$ 5 trillion expansion (already announced) • To repair the financial system, to repair lending • Pledge to take action to build a stronger, more globally consistent supervisory and regulatory framework for the future financial sector. • Financial Stability Board, early warning of macroeconomic and financial risks. If notices problems in risky behavior, will tell national authorities to regulate more stringently. • Deal with toxic assets (not a lot of specificity)

13. International Action: G20 • To strengthen financial regulation and rebuild trust • Regulate hedge funds and credit rating agencies. • “Tough new principles” on bankers’ pay. Making risky decisions, pay in shares to be held long term. • Act against tax havens, sanctions. “The era of banking secrecy is over.” • Increase funding from $250 billion to $750 billion at IMF ($100 billion from Japan, $100 billion from Europe, $40 billion from China), including $250 billion of quantitative easing, gets money flowing. • Commit to reform of vote weight in IMF and WB, heads appointed through open, merit-based process (IMPORTANT AND MISSED)

14. International Action: G20 Summit • To promote global trade and investment and reject protectionism. • No new trade barriers for 12 months. • Agree to minimize impact from domestic policy actions on trade and investment. • Calls on WTO to report on G20 trade barriers • Commitment to complete Doha

15. International Action: G20 • To build and inclusive, green, and sustainable recovery. • Recognize human dimensions of the crisis. • MDG’s affirmed, commit to maintaining aid despite crisis. • Selling of $6 billion of IMF gold to help developing world (These are loans at concessional rates, not aid). • Reaffirm commitment to control climate change, make a success of Copenhagen at the end of the year. • Analysis: No new stimulus (France, Germany), didn’t rule out more spending in future (US)And, Michelle Obama touched the queen, more what the media was interested in!!

16. Raising Barriers • Pledged to combat protectionism, but according to the World Bank, 17 of 20 members of G20 including the US have put in place 47 new trade barriers since the crisis hit. • Russia used cars • Ecuador 600 items! • China ban Irish pork, some Belgian chocolates. • India Chinese toys and steel. • EU export subsidies. • US bailout of automakers. • World Bank President: Many nations are falling for the “siren song of protectionist fixes.”

17. The Economy: Europe • Exposure to Eastern Europe: Austrian banks lending in the east, 80% of Austria’s GDP! • Economic decline: Unemployment in Spain 15% in 2009, 20% in 2010. 2009 -3 to -5% GDP. • Ireland: 2009 -5% GDP, unemployment 11% • Necessity of bailout, inability to agree, insufficient domestic stimulus, according to IMF.

18. The Economy: Eastern Europe • Crisis caused by of over-borrowing, particularly over-borrowing in euros and Swiss francs. • As currencies have slid, burden has become impossible. • Potential for defaults especially strong in Hungary, Ukraine, Latvia (GDP slide 12% this year, riots pictured above in January). • Other issues: exports plummeting, remittances falling. • Can’t recover as Asians did in1998 with exports due to global nature of slump. • Other Europeans don’t want to do the bailout, want IMF.

19. The Economy: China • Closing of half China’s 9,000 toy factories. • Threat of instability as government’s pact with the people based on delivering constantly improving standards of living over the last thirty years. • Challenge to China’s growth model as well. Save at home, send goods abroad. Chinese going to have to buy more and save less. • Changed place for China on the world stage. $40 billion big time international player.

20. Top Challenges: Afghanistan/Pakistan • Obama made the case during the campaign that President Bush dropped the ball in fighting terror by switching the focus from Afghanistan to Iraq. • Pledged to raise the number of combat troops in Afghanistan. • Deal with narco-trafficking, helping to fund Taliban.

21. Talking about Terror • Inaugural: “And for those who seek to advance their aims by inducing terror and slaughtering innocents, we say to you now that our spirit is stronger and cannot be broken -- you cannot outlast us, and we will defeat you.” • Feb 2009 Joint Session speech: pledge to “defeat Al Qaeda and combat extremism.”

22. Action on Afghanistan/Pakistan • Special Representatives for AfPak: Holbrooke • Policy review, new troops on the way. • 60 Minutes Interview, calls Afghanistan a “tough nut to crack.”

23. Get More Out of NATO • In keeping with Obama’s desire to do more in Afghanistan and to work more with allies, the administration is pressing allies to do more in Afghanistan. • VP Biden to Europe in February to deliver this message. • Obama in France after G20. Told Europeans America appreciated Europeans’ fighting alongside us. • Still, war is seen presently as being “Americanized” with increased number of US troops, unwillingness of allies to put troops where they might actually have to fight. • Other countries that are fighting: Canada, Netherlands.

24. US Goals in Afghanistan • From the State Department website: • A stable, democratic, and economically successful country. • An Afghan government committed to the protection of women's rights, human rights, and religious tolerance.

25. US Tactics • Up number of troops (Iraq) • Up economic development • Outbid Taliban for allies (Iraq) • Press Karzai to crack down on corruption, opium • Do not allow safe haven in Pakistan • Administration also talking about talking to Taliban. • Easier said than done.

26. Problems in Afghanistan • Is the Afghan government worth saving? • Attack from the left: end the war in Iraq AND end the war in Afghanistan. • Can we achieve those bold goals?

27. Elections in AfghanistanComing August 20th • Concerns that the South in particular won’t vote. • Went against Taliban warnings in 2004, but now faith in Karzai much reduced. • Fighting intense, regular security can’t be guaranteed for the citizens, poll security can’t be guaranteed, development goods not being delivered. • If the South doesn’t vote, Pashtunsdisenfanchised.

28. Problems with Pakistan • President Zardari domestic problems, battle with Sharif, lawyers and courts. • Lawless frontier region (cut deals leaving extremists in control) • US drone attacks have killed 543 people in Pakistan, only 12 top Al Qaeda. Resentment. Makes it difficult for the government of Pakistan, especially a democratic government, to cooperate with us.

29. Top Challenges: Russia • China may be the greater long-term threat to the United States, but Russia is the more immediate bugbear. • Russian oil and gas wealth + high gas prices + Putin’s use of nationalism= has led to problems for the US. • Illustrations: • Medvedev’s March 2009 declaration that Russia is going to engage in a “massive re-arming.” • 2007 claims in the Arctic as extension of Russia’s continental shelf, planting the flag. • Near-flights seen as aggressive by US, UK. • Conflict with Georgia • Despite mugging for the camera at G20 summit, Medvedev attacks US dollar as global reserve currency.

30. Relations with Russia since the Fall of the USSR: A Russian Perspective • US gloated over winning the Cold War. • Made Russia eat “shit.” • US seen as fostering economic policies that caused pain and decline from Russia’s status as a superpower. • Aid paltry. • Oil wealth allowed Russia to swagger again (Putin “contract”). Booming the last eight years with GDP growth of 8% annually.

31. Policies Aggravating Russia • NATO expansion (Baltics and more? Georgia, Ukraine?) • Abrogation of ABM • US attempts to make bases in the ‘Stans permanent • Missile defense seemingly aimed more at Russia than supposed target Iran. • Kosovo independence.

32. Putin’s Contract Breaking? • “We escaped it.” • Now it is hitting. Drop oil prices, ruble has declined, major job losses (unemployment at 7.7%), rising prices of food. • Talking shrinkage of economy 2% this year openly, may hit 5-10%. Stockmarket off 80%. • Russians cannot finance lifestyles built on import of food, cars, and tech goods. • Will Putin be more tempted to use the nationalist card to keep his “contract” in place? Still at about 65% approval. • Protests in Vladivostok.

33. Things Obama NeedsRussia to Help With • (This was sort of the extent to which Russia came up during the campaign) • Reducing nuclear weapons • Controlling proliferation • Safeguarding nuclear materials • Iran (quid pro quo on missile defense?) • Fighting terrorism • Discussed at London G20 summit. Attempt to “push the reset button” on the US-Russia relations. • Will loss of oil wealth make Russia more of a problem or less? Can be more, as Putin tries to hold on with nationalist card.

34. Top Challenges: Climate Change • During the campaign, climate change one of Obama’s top threats of the future. • Make US a leader on climate change. • Grow numbers of green jobs. • Specifically on climate change, committed to reducing green house gas emissions (1990 levels by 2020, 80% down by 2050), reverse climate change.

35. In Office • Budget plans to invest $15 billion a year for 10 years to develop technologies like wind power and solar power, and to build more efficient cars and trucks right here in America (in keeping with campaign pledge). • Cap-and-trade program for industry (getting own house in order), legislation perhaps 12-18 months, implementation over the next few years. • Appointed a special envoy for climate change: Todd Stern (suggest s priority), Clinton took him with her on Feb 2009 Asia trip (suggests priority, China and Indonesia big contributors to greenhouse gases).

36. Stern on Climate Plans • Spoke in March: “US is back” in the climate change game. “We are seized by the importance and urgency of the task.” • Where to: Copenhagen Conference in December 2009, hope to get something to replace Kyoto. • Priorities for the US: • Be guided by science • Kyoto seemed tough but with little benefits, implication need to correct that.

37. Stern, continued • “The United States is committed to reaching a strong international agreement in Copenhagen based on both the ambitious actions that will be embodied in U.S. domestic law, and on the premise that the agreement will reflect the important national actions of all major economies to contain their respective emissions. This agreement should encourage the most cost-effective reductions – including reductions from the use and management of forests . . . “ • “We recognize that developing countries, including emerging markets like China and India, have entirely legitimate development needs and cannot be asked to forfeit the aspirations of their people to a better life and a higher standard of living. Even now, for example, nearly 35% of Chinese live on less than $2 a day. And India’s per capita income and emissions are a fraction of those in OECD countries.” • Developing countries too are going to have to make cuts, developed can’t do this by themselves, while developing countries’ emissions grow.

38. Pushback/Problems • Attempt to limit carbon is going to hamstring industry and cost jobs precisely at a time America’s economy is already hurting. • Congressman Kevin Brady (R) cost us “billions”!! • Energy-intensive industries will just move abroad, “race to the bottom.” • President’s global warming initiatives not in drafts of Congressional Democrat budget plans.

39. Copenhagen • According to UN Climate Chief Yvo de Boer, what Copenhagen has to deal with is: • How much are industrial countries willing to reduce their emissions? Cost to economy, especially hard at time of recession. Not impossible. Industrial leaders asking for predictable policies at Davos. • How much are developing countries like China and India willing to limit growth of their emissions? Left out of Kyoto.

40. Copenhagen, continued • How will financial help be offered to developing countries for adaptation and mitigation? Costs to reduce and costs to deal with impacts, rising seas. • How will this money be managed? Developing countries don’t want it to be entirely donor driven. • US negotiators keep in touch with Senate (at Kyoto agreed to a treaty that could never get past the Senate). • 180 countries negotiating in Copenhagen.

41. Europeans’ Proposal • OECD-wide emissions trading by 2015. • Limit warming to 2 degrees above pre-industrial temperature. • EU estimate: transfer to developing countries E 54 billion (no time frame). • Want air and shipping included in any agreement. • Want developing countries to aim for 15-30% below business as usual by 2020.

42. Top Challenges: Iran • Obama’s past policy on Iran. • Dem debate: meet with series of foreign leaders. • Refined this position as “lead tough, principled diplomacy with the Iranian leader at a time and place of my choosing if and only if it advances the interests of the United States.” • “Not talking doesn’t make us look tough—it makes us look arrogant.” • Vowed to prevent the Iranians from acquiring a nuclear weapon. Use sticks and carrots.

43. Iran: Multiple Challenges • Iran, it turns out, poses multiple challenges to the United States. • Obvious issue of nuclear weapons, missile technology (Feb satellite launch). • But, Iran’s finger in many other pies where US has interests. • Supports Hezbollah in Lebanon, affecting Israel and prospects for Middle East peace. • Supports Hamas: ditto. • Allies and activity in Iraq and Afghanistan, too.

44. Happy Nowruz!! • Obama issued a March 2009 message to the Iranian people on the occasion of Nowruz, the Persian new year. • As with Nowruz, “a new beginning” in relations between the US and Iran. • Praises Iranian culture (music, literature) “have made the world a better and more beautiful place.” • Poet Saadi: “The children of Adam are limbs to each other, having been created of one essence.”

45. The Nowruz Message • “We have serious differences that have grown over time. My administration is committed to a diplomacy that addresses the full range of issues before us, and to pursuing constructive ties among the US, Iran, and the international community.” • Mentions Islamic Republic taking rightful place in the community of nations (not regime change) but with that place comes responsibility (can’t use terror/arms).

46. Update • Joint action on Iran at London G20 Summit. • US-Russia statement: “While we recognize that under the NPT Iran has the right to a civilian nuclear program, Iran needs to restore confidence in its exclusively peaceful nature.” • Meeting between Holbrooke and Iranian representatives to talks on Afghanistan to which Obama administration had invited Iran. Mrs. Clinton warmly responded to Iranian delegate’s statements on aid for Afghanistan/crackdown on drug smuggling. • Also, passed Iran an unsigned note asking for help with three Americans.

47. The Iranian Response • Khamenei: Points out that “Happy Nowruz” comes just a week after US extended economic sanctions on Iran. • Doesn’t want to follow this “we’ll talk but while pressuring you.” Wants relations based on mutual respect. • Says Obama’s message reverberates with the rhetoric of the Bush era. • Khamenei’s remarks also show Iran’s preoccupations.

48. More Khamenei • Problems with the US: • Freezing Iranian assets • Green light Saddam’s attack in 1980 • 8 years of support of Saddam during Iran-Iraq War • Downing Iranian passenger plane • Demands our “great and honorable nation be wiped out.” • Obama extending hand to us, BUT. • “If an iron hand is covered with a velvet glove, extending the hand is insignificant and worthless.”

49. What Khamenei Wants • Appears to want US to do something real, in advance of talks to show changed position toward Iran, let up the pressure. • “They say come and talk, come and establish relations, they change slogans. Well, where is the change?” • Mentions unfreezing assets, lifting sanctions, giving up negative propaganda, giving up unconditional support for Israel. • Will judge the new US administration by its performance.

50. Watch: Iran • Presidential elections coming in June. • Expect discussion of relations with the West and the US in particular to play a role in the campaign between Ahmadinejad and any opponent (s). • Government revenues down by half due to crash in oil price, reducing the country’s room for maneuver. • People aware of prosperity outside and seem fatigued with isolation.