Obama's challenges

There is widespread anxiety about the economic future and about the ability of the American political system to get its act together.

Barack Obama finally managed to win another four years in the White House. With a clarion call to national unity, he underlined: “In the weeks ahead I look forward to sitting down with governor Romney to talk about where we can work together to move this country forward.” He went on mention about his optimism about the future of America.Mitt Romney responded by saying that “this is a time of great challenges for America and I pray that the president is successful in guiding our nation.”

It was a close election though in the end Obama managed to scrape through in key battleground states. For a president who had come to office on grandiose rhetoric of hope, the ground realities had changed. He was no longer as popular as he was in 2008 and the state of the economy remained parlous. But his Republican challenger never managed to craft a larger narrative about his policy priorities and despite his impressive performance in the first debate, he was always responding to events on the ground. His was a reactive campaign and the Democrats succeeded in presenting him as a caricature by negative ads that ran through the length and breadth of the country, especially in key swing states.

Despite Obama’s victory, America remains a country as deeply divided as ever. This is clear in the popular vote where Obama received 50 per cent and Romney around 48 per cent. It is also reflected in the composition of the new US Congress. Democrats retained their majority in the US Senate whereas the Republicans kept control of the House of Representatives, leaving Congress divided along the lines that have led to gridlock for the past two years on some of the nation’s most pressing issues. The Democrats will be expanding on their current 53-to-47-seat edge but they will not be in a position to gain the seats necessary to win a filibuster-proof 60-seat majority, meaning a continuation of the gridlock that has been a hallmark of the modern Senate.

Meanwhile, the Republicans will be maintaining at least a 20-seat margin, thereby a strong hold over the House. And this continued Republican dominance in the House of Representatives probably will lead to renewed clashes with Democrats in Senate with whom the conservative caucus feuded for the past two years in budget battles that brought the federal government to the brink of defaulting on its debt.

The markets, therefore, responded negatively immediately after Obama’s re-election. There is widespread anxiety about the economic future and about the ability of the American political system to get its act together. Politically, nothing much has changed and as the fiscal cliff looms large, With taxes on track to rise sharply and spending to be slashed absent a deal between Obama and Congress before January 1, each side will at least threaten to allow the nation to go off the fiscal cliff, likely prompting a recession, to get their way.

Economic concerns

The economic concerns about the American future will persist and it will have a strong impact on the global economic recovery as well. The world wants the US political system to work but it is not readily evident if Obama’s election will pave the way for more efficient policy making. And so the world will wait with bated breath.

The foreign affairs landscape is also unlikely to wait for Obama to savour his victory. The Iranian nuclear crisis will be high on the agenda. There is some speculation that the Obama administration in its second term would be making a grand gesture towards Tehran to normalise Washington’s ties with the country. But it is easier said than done at a time when the Cold War between Iran and Saudi Arabia is at an all time high and the Arab Gulf states who are long-standing allies of the US have been demanding strong action against the Iranian nuclear programme and the increasing propensity of the regime in Tehran to create problems elsewhere in the region.

Afghanistan will continue to hog the headlines at lest till the withdrawal of the US forces in 2014. As the situation deteriorates further, there will pressure on Obama to do more to assuage the concerns of ordinary Afghans about the possibility of the return of the Taliban post-2014. Obama will have to take an even harder line vis-à-vis Pakistan if America wants to retain any semblance of order in Afghanistan after the departure of western troops. And given his past record, he won’t be loathe to take a hard line against the military-jihadi complex in Rawalpindi.

Most significant, however, would be the ability of the Obama administration to manage China’s rise and the political transition already underway in Beijing. As a new generation of Chinese leaders take office, Washington will have to tread carefully in articulating American interests and its willingness to stand up for them. There is growing demand for a robust American presence in the Asia-Pacific from China’s neighbours and to some extent, the Obama Administration has already made its intentions clear by explicating its ‘pivot’ to Asia. But there are a lot of issues that still remain mired in confusion about the true extent of American commitment to the region.

Though Obama’s second term will be very much like his first in so far as India is concerned, New Delhi has significant stakes in almost all the issues which will be the focus of Obama’s second term. It will have to critically assess its own interests as president Obama will go about redefining the terms of his ‘new’ foreign policy.