Washington’s World: July 18th – July 24th, 2011

The as yet unresolved impasse between the Administration and Republican Representatives and Senators over the debt ceiling continues to pre-occupy the attention of top policymakers. Whatever solution is eventually found, the prospects for American governance are not hopeful. As we noted in our January list of our drivers for 2011, the ideological split between Democrats and Republicans in Congress is deep – and getting deeper. Mutual trust is totally absent as each side accuses the other of bad faith. This predicted theme of dysfunctional governance will intensify as the 2012 election draws closer – with unpredictable implications for US policy formation, especially on economic matters where the fissures are at their widest. Foreign policy will have to navigate as best it can against this background. No grand initiatives are likely. Nonetheless, policy is not paralyzed. Secretary of State Clinton is well respected, if not for her strategic vision but for her diligent commitment to her office. After a hesitant start, she is looking for a wider US role in the ‘Arab Spring’.  She has substantially escalated US criticism of Syria and has piloted US policy toward recognition of the Transitional National Council as the lawful government of Libya. Administration officials are growing more confident, especially after recent exchanges with the Russians, that their goal of regime change is within reach. Should this happen, the Administration will enjoy a respite from the criticism it has faced in Congress. On more far-reaching matters, the Pentagon is seeking more definition in its relations with the Chinese military. Admiral Mullen, the Chairman of the Joint Chiefs, has conducted another round of negotiations with his Chinese counterparts. A Pentagon official commented to us: “Both sides are trying to understand the other, but there is much mutual suspicion. This is not going to be an easy relationship.” Finally, the Pentagon has released a new cyber strategy. This is still in its early stages of formulation and senior officials assert that US objectives are defensive. However, our conversations with experts in this field lead us to conclude that the US is increasingly looking at enhancing its already robust offensive capabilities. We believe that the cyber dimension has the potential to transform traditional international relations.

Washington’s World: July 4th – July 10th, 2011

While President Obama’s news conference of June 29th addressed the two main foreign policy issues of the moment – Libya and Afghanistan – a political consensus on these matters remains elusive. Legal questions about the constitutionality of the Libyan expedition – raised by Democrats and Republicans alike – persist; the pace of Obama’s announced drawdown in Afghanistan continues to be hotly debated. The rising intensity of conservative critique ensures that Afghanistan will feature as the most prominent of the foreign policy issues in the 2012 campaign cycle. Obama’s two new national security appointments – Leon Panetta as secretary of Defense and David Petraeus as Director of the CIA – will be the key voices in the coming months. Petraeus has the more difficult task as he takes charge of an agency that has always been more skeptical about the military’s attachment to counter-insurgency strategy than the Pentagon. While defending Obama’s approach at his Senate nomination testimony, the new US commander in Afghanistan,General John Allen, also left open the possibility that he would recommend a slower withdrawal should he judge that to be advisable. As these changes and the July 4th holiday take place and the August 2nd deadline for extending the federal debt limit nears, something of a pause in foreign policy priority is taking place. Two matters are, however, unavoidable. The soon to take place flotilla protest against the Israeli maritime blockade of Gaza has drawn strong State Department criticism, but will pose awkward questions for the Administration should the Israelis take action against the participants, who include a number of prominent Americans. In the same Middle East context, the likely vote at the UN General Assembly in September on Palestinian statehood is also opening a gap between the US and some of its closest allies in Europe and the Middle East. Neither matter is welcome to the White House as it seeks to guard itself against Republican attacks for foreign policy weakness. With regard to the federal debt limit, the necessary consensus for a deal between the two parties is nowhere close to gelling. In Republican eyes, what they saw as Obama's confrontational tone at his press conference widened the gap. Most observers believe an agreement will emerge – perhaps at the last minute – but already thecredit rating agencies are issuing warnings that see the possibility of a default as a real possibility.

Washington’s World: June 27th – July 3rd, 2011

The recent foreign policy headlines have focused on President Obama’s statement on Afghanistan and the Congressional attempts to limit US operations in Libya. Of much greater import to US policymakers, however, was the decision to release 60 million barrels of oil from the strategic petroleum reserve. While presented as a response to the shortfall of Libyan production, officials tell us that this was, first, a direct response to the failure of OPEC to raise production quotas at their June 8th meeting and, second, a move to mitigate rising gasoline prices in the US. With the Federal Reserve pointing to a continued soft recovery in the US and threats to the international banking system increasing in Europe, concern is mounting in the White House about Obama’s re-election prospects. This concern was reflected in Obama’s decision about the pace of withdrawal from Afghanistan which has drawn statements of disappointment from liberal and conservative analysts alike. The underlying rationale was not, however, a foreign policy one. As a State Department official put it to us: “We know we cannot please the two ends of committed opinion about Afghanistan, so we have tried to split the difference. It is clear, however, that public opinion is losing interest in the war. So we feel that we are safe ground in winding things down.” Electoral considerations will also be in play in the likely September vote in the UN General Assembly on Palestinian statehood. While expert opinion within the Administration remains divided about the substantive wisdom of this matter, lobbying by well-connected domestic interest groups are making the decision more subject to electoral considerations. In the meantime, economic diplomacy will pre-occupy the White House. Obama and his top economic advisers have been applying consistent pressure to their European counterparts to find a solution to the Eurozone banking crisis. A Treasury official commented to us: “Negotiations on the US federal debt ceiling are at a fragile stage. We simply cannot absorb another blow to confidence.”

Washington’s World: June 6th – June 12th, 2011

If last week was devoted to the Middle East, this has been the week of Asia. Some important aspects of the US strategic posture are in play. On his farewell tour to Asia, Secretary of Gates has made a series of clearly-worded speeches reaffirming the US long-term commitment to remaining an Asian power – despite the deepening pressure for reductions in US defense spending. Additionally, Gates declared emphatically that the US is not looking to confront China. Pentagon contacts tell us privately that Gates was in part expressing US appreciation for the recent Chinese intervention with the North Koreans to tamp down tensions (which US officials fear will flare up over the summer) on the Korean Peninsular. Gates is also responding to an active debate among the Washington foreign policy community about China. Despite his moderate stance, our judgment is that the trend of relations between Washington and Beijing is unfavorable, the latest source of US suspicion being the attack on Google emails which US officials believe originated from official Chinese circles. Behind the scenes the US is also being encouraged by countries like Vietnam, the Philippines and Indonesia to stand up to what they see as unwanted Chinese assertiveness in South China Sea. The focus on Asia does not mean that the Middle East is losing priority. While officials wholly discount progress on the Israeli-Palestinian peace process, the dynamics of the 'Arab Spring' are increasingly troubling. The Administration's Libya policy faces mounting opposition in Congress. We doubt that this will much affect the already limited US engagement there, but the main US focus lies with Yemen, Syria and Bahrain. Administration policy continues to be drawn in the conflicting directions of reform and and stability. In charting its course, the US will pay great heed to the views of Saudi Arabia. On top of these major foreign policy dilemmas, domestically President Obama faces an increasingly uncertain economic landscape. The latest – and disappointing – job numbers have given the Republicans fresh hope that Obama may be more vulnerable in 2012 than appeared to be the case some weeks ago. Obama will certainly be devoting more time to domestic affairs at the expense of international issues.

Washington's World: May 16th - May 22nd, 2011

The aftermath of the killing of Osama bin Laden continues to bring political advantage for President Obama. Should, as some US officials increasingly hope, a breakthrough take place in Libya, he will enter the 2012 presidential campaign with formidable foreign policy credentials. Last week's round of the US-China Strategic and Economic Dialogue also produced a less contentious outcome than seemed likely at one time. There is no shortage of problems between the two countries but, for the moment, both sides find it convenient to negotiate quietly. Where this relatively benign state of affairs could most easily change is if the US budget talks run intio an impasse. Also in the background are tensions over maritime policy, with the US seeking to form groupings with Asian powers like India, Japan and Indonesia to counter what US analysts see as Chinese naval assertivenss in energy-rich international waters like the South China Sea. How Obama uses his moment of foreign policy eminence is fiercely debated in Washington. His most pressing problem is Pakistan. An NSC official put it to us like this: "We face a collision of US and Pakistan politics. Public opinion on both sides wants to cut ties with the other. However, we are mutually dependent. We have to find a way through the present crisis." Obama himself and top Congressional leaders are actively engaging with their counterparts in Islamabad to cool passions. The critical issue is continuance of US drone attacks against Taliban elements sheltering in the border regions. Pentagon and CIA officials to whom we speak are not confident about a satisfactory resoution. Elsewhere, the resignation of Middle East envoy George Mitchell confirms what we have been reporting for some time, specifically that no new peace initative will be forthcoming from the Administration before the 2012 election. Mitchell himself has been barely active for some months. His resignation reflects the realities of Washington politics. Finally, last week's meeting of Arctic littoral nations highlights an area that will repay attention. As global warming renders these waters more accessible, interest in natural resource exploitation and shipping lanes will intensify. With Russia making very broad assertions of exclusive sovereignty and many other claims overlapping, the potential for dispute is obvious. However, experts close to the process tell us that they are optimistic that the dispute resolution mechanisms now in place will prove robust and that conflicts can be avoided.

Washington's World: May 9th - May 15th, 2011

In our review of last week, we foreshadowed rising tensions with Pakistan. We did not anticipate the dramatic developments that would accentuate this trend. The killing of Osama bin-Laden has the potential to take these relations into uncharted waters. As an NSC oficial out it to us privately: "We look at the same events and arrive at diametrically opposed interpretations. One urgent task for us will be to avoid an anti-Pakistan overreaction in the US." The more immediate impact for President Obama, however, is domestic. The succesful operation has given his embattled Administration an impressive boost. A consitent charge levelled against him -- by friend and adversary alike -- was that he lacked the temperament to be commander-in-chief. Through this action and follow-up celebrations with the military, he is widely perceived to have laid these doubts aside -- at least for the time being. Commentators are divided on the long-term implications, but at first sight these may be as reviving for his Administration as was the Falklands War for British Prime Minister Margaret Thatcher.This is particularly the case as, among the declared Republican presidential candidates, foreign policy credentials are scant. Withiut doubt the euphoria will wear off and the ongoing battle over the federal budget will return Obama to earth, but for the moment he is riding high -- albeit not for the reason evisioned by the Nobel Peace Prize Committee. We do not anticipate, however, that the Administration will re-engage vigorously in the Middle East oeace process. An immediate debate is taking place on possible changes to Afghan policy, with familiar voices urging the Administration to seize the moment either to accelerate the drawdown or to push home the fight against the Taliban. From our conversations with senior US officials, our judgment is that efforts will quicken to find a political settlement that will allow a step-by-step US withdrawal. On a more down-to-earth note, the next round of the US-China Strategic and Economic Dialogue that takes place in Washington this week will see renewed arguments between the two sides on currency and military issues.

Washington’s World: May 2nd - May 8th, 2011

Over the coming weeks, US foreign policy attention will be focused on the Middle East. Here, the way ahead in the maze of conflicting pressures is not becoming any easier to discern. On the Middle East peace process, the announcement of a rapprochement between Fatah and Hamas has been greeted with caution in Washington. When Israeli Prime Minister Netanyahu addresses Congress later on May 22nd, US officials expect him to take a hard line against any accommodation with Hamas as well as to possible recognition of a Palestine state at the UN General Assembly in September. With Republicans rallying firmly to this position, President Obama’s freedom of maneuver is limited. As we have reported, a speech addressing the peace process is in draft, but we do not expect Obama to risk much if any political capital on this issue. In parallel, he faces political pressure to take a firmer line against Syria. The Administration’s cautious response is being contrasted to the ongoing military actions in Libya. State Department officials have sought to reconcile the two positions, but we see little possibility that the Administration’s actions will go beyond tougher economic sanctions. On Libya, Pentagon officials tell us privately that their assessment is that the war is headed toward a stalemate. They are also receiving private reports of atrocities committed against black African members of Libyan government forces. For the moment, however, the State Department is leading policy on Libya, with Secretary of State Clinton due to make the case for sustained engagement at the May 4th-6thmeeting of the Libya contact group.  Outside the Middle East, the crucial relationship to monitor is that with China. The latest human rights dialogue held in Beijing was unproductive. The next meeting of theStrategic and Economic Dialogue is due to take place in Washington from May 9th-10th and will bring new tensions to light on currency issues. As one NSC official commented to us: “This is not a happy relationship.” Finally, the reshuffle of top national security appointments will not herald any drastic shifts in policy. One issue to watch is Pakistan where the changes at the Pentagon and CIA bring to the fore men who have had troubled relations with the Pakistan leadership.

Washington’s World: April 25th-May 1st

The opposing dynamics underlying US policy toward Libya – humanitarian interventionism and realist caution – remain on display in the decision to commit predator drones to the NATO operations. While the military leadership continues to resist deeper involvement, an emerging coalition of liberal and conservative 'hawks' is pushing President Obama to remain engaged. Our White House contacts report that he is unenthusiastic. Nonetheless, the difficulties being experienced by the non-US members of NATO make it difficult for him to turn his back completely. We expect, therefore, a continuation of the present approach of background support rather than operational leadership. US officials are more concerned by the developing crises in Syria and Yemen. Additionally, negations about longer-term US military presence in Iraq are not making progress. Finally, with Israeli Prime Minister Netanyahu due to visit Washington next month for an address a joint session of Congressand with the prospect of a vote on Palestinian statehood looming at the forthcoming September session of the UN General Assembly, Obama's advisers are debating whether he should step in with a new offer of more hands-on US commitment to the peace process. Privately senior officials tell us that, while a presidential speech is in draft, the White House political staff does not believe that Obama should risk political capital at this stage by too high a profile on this issue. We believe that those waiting for a substantive new proposal from the US will be disappointed. Increasingly Obama is devoting priority to his reelection bid, conducting six fund-raising events during a recent 2-day visit to the West Coast. While these are early days, Obama remains the man to beat – albeit that his own poll numbers are only modest. He can take encouragement from a gradually improving domestic economy and continuing tensions between pragmatic Republican leaders and their more ideologically rigid foot soldiers.  As we have noted before, these will play out in the upcoming debate about the federal debt ceiling. Top Democratic and Republican officials are trying to work our a deal, but grass roots opposition mean that it is by no means sure that they will succeed.

Washington’s World: April 4th – April 10th, 2011

After a flurry of Congressional testimony on Libya by top State Department and Pentagon officials, the realities of US domestic politics are pushing the Administration toward a much lower profile inside NATO. President Obama has sought to refocus public attention away from Libya by highlighting some encouraging news on job creation and a major speech on energy. Secretary of Defense Gates who, opposed the intervention and, we are told privately, remains a reluctant convert, has repeated his view that Libya does not constitute a vital US interest and is on record as firmly opposing the deployment of US ground troops and arming the Libyan rebels. We are also hearing that some of the most influential advocates of intervention, for example US Ambassador to the UN Susan Rice, no longer have the inside track. Nonetheless, President Obama’s prestige is firmly nailed to the enterprise. If he succeeds in removing Colonel Gadaffi and installing a reformist government, he will enjoy a triumph. The opposite is also true. A settlement – or a stalemate as many Pentagon officials fear – that sees Gadaffi continuing in office would represent a significant setback for him. For this reason, we expect US non-military efforts to secure Gadaffi’s departure to remain at a high level. In the meantime, tensions between the White House and US commanders in Afghanistan are rising. The issue is the pace of withdrawal due to start this summer, with the White House insisting on a higher number than the commanders are currently proposing. This will be an awkward issue for Obama. With popular support for the war continuing to ebb, Obama has the opportunity to gain political advantage by fulfilling his earlier undertaking to draw down in 2011. He will, however, face Republican criticism that he is not listening to his generals. Alongside the Middle East, it is worth noting that relations with China continue to occupy senior official attention. As mentioned in a speech by Treasury Secretary Geithner, US officials remain concerned by what they see as a constant: the undervaluation of the Yuan. On the domestic front, a tense week lies ahead as Congressional negotiators struggle to find a compromise that would avoid a partial government shut down on April 8th. Both sides want to avoid a crisis, but passions are running high and there is no guarantee that a compromise will be found. The consequences would be felt more on domestic programs than foreign policy.

Washington’s World: March 14th – March 20th, 2011

The earthquake in Japan has temporarily diverted attention away from the Middle East. Once rescue and humanitarian operations are engaged there, the spotlight will return to developments in North Africa and the Persian Gulf. US officials are aware that this distraction may afford the Libyan regime just the time it needs to re-assert its hold over the country. Our sources advise that, although there was a vigorous debate within the administration, Defense Secretary Gates won the argument. As a result, short of a major turn of events, there will be no use of US military force in Libya. Gates set the tone in his speech of 25th February. Despite the flurry of diplomatic activity since that time and statements, including those by President Obama, that all options remain open, using the military in an offensive capacity is not one of them. The statement from the Director of National Intelligence to the effect that Washington expects the Libyan regime to prevail against the rebel movement reflected Gates’ position. Further as we have noted before, real concern continues to be focused on Saudi Arabia and Bahrain. Here the potential for Sunni-Shia confrontation is seen as having potential catastrophic implications for the US position in the Middle East. For the moment, US officials are encouraged by the atmosphere of relative calm they detect in the Kingdom. Gates was quietly asked by the Saudi government to postpone a visit scheduled for March 11th, but this does not presage any breakdown in relations. It is more a wish on the part of the Saudis to avoid what might be construed as, in the words of one senior US official, “inappropriate outside pressure” at a delicate time. Behind the scenes, contacts with the Saudi and Bahraini leadership continue. The preoccupation with the Middle East is deflecting attention from Afghanistan. Here, Pentagon officials tell us privately that, despite optimistic public statements by US commanders pointing to tactical gains, the underlying sentiment at the Pentagon is that strategic success will not be achievable. Relations with the Kabul government are fragile. Nevertheless, it appears almost certain that General Petraeus will success Admiral Mullen as Chairman of the Joint Chiefs in July. On another front, the State Department faces major cuts in its operating budget, including aid and contributions to international organizations, thus raising concerns that the US may find it difficult to maintain some of its international financial obligations.

Washington’s World: March 7th – March 13th, 2011

In answer to a journalist’s question this week about whether he would intervene in the National Football League’s labor dispute, President Obama replied that he had “a lot on.” This is certainly the case. On both the domestic and foreign fronts, he faces daunting problems. Despite the temporary agreement on authorizing government spending for a further 14 days, there is still no final resolution on the federal budget. More acrimonious debate lies ahead which will deeply engage Obama’s attention. With both Democrats and Republicans anxious to avoid public criticism for shutting down the government, the prospects for a compromise have been rising. Nonetheless, the time spent on the budget debate has consequences for foreign policy co-ordination. Obama’s top advisers, Secretary of State Clinton and Secretary of Defense Gates have sometimes seemed at odds on potential US military action with regard to Libya, with the latter raising serious reservations about the imposition of a no-fly zone and winning the argument. While some foreign policy experts have urged military intervention in Libya, our contacts at the White House and Pentagon tell us that the US will remain very cautious. Any action will, we understand, be humanitarian in nature and will only take place in close cooperation with allies and outside Libya’s borders. Out of the headlines, US officials are more concerned about Bahrain and the possibility that Saudi Arabia might intervene in support of the Khalifa monarchy. Efforts are underway to steer the parties toward an acceptable compromise. US officials are not confident that this is within reach. Beyond the Middle East, the Pentagon sees substantial risks ahead in an intensification of fighting in Afghanistan. In private, US officers are noticeably less optimistic than the public briefings, citing the difficulty of sustaining gains in the face of the Taliban’s continuing ability to open new fronts. The Administration’s advantage in this debate is that the war attracts little public interest, let alone controversy.

Washington’s World: February 28th – March 6th, 2011

Events in Libya that have now led to the temporary closure of the US Embassy have preoccupied President Obama and his top national security team. There is deepening concern about the course of developments there and about the US ability to influence them. Urgent efforts are underway to fashion an international consensus at the UN and elsewhere on the way forward. However, for all the frantic activity over Libya, US officials believe that the intensifying challenge to the Bahrain government provides the greater threat to US interests. As they explain it to us, State Department officials portray Libya as a crisis taking place within “understandable parameters.” This requires very substantial coordination measures on such matters as the evacuation of foreign nationals, refugee flows, the imposition of sanctions and possible no-fly zones. But Libya does not represent systemic risk to US strategic interests. By contrast, a collapse of the Khalifa monarchy in Bahrain would have direct implications for Saudi Arabia. The Saudis have told the US that they are prepared to intervene in Bahrain should that prove necessary to stabilize the government. This would be carried out by the National Guard (SANG) which is well tested in battle. An eventuality of this sort would prompt some very uncomfortable choices for the Administration – as one senior official put it to us, “between history and the oil price.” Intensive exchanges are underway with the Saudis and Bahrainis to seek a non-violent outcome to the tensions there. US officials draw some modest encouragement that their interventions are proving effective from the relatively moderate statements of the Shia cleric Hassan Mushaima on his return from exile. These dramas in the Middle East are obscuring what Pentagon officers privately describe to us as a “deteriorating security situation” in Afghanistan and the continuing stalemate with Paskistan over the detention of an American official now acknowledged to be a CIA contractor. Drama on the domestic front also continues over the federal budget that must be voted on by March 4th to avoid a government shutdown. Hopes are rising that a temporary compromise will be found that will allow government operations to continue, at least for another two weeks.

Washington’s World: January 24th – January 30th, 2011

Despite the heady expectations attached to the US-China summit, there is little evidence that any shift in opinion among policy-makers has taken place. In essence, the same dichotomy remains in place. Those who are suspicious of China – an unusual alliance of left-leaning human rights activists and conservative military hawks – remain suspicious; those who are supportive – led by major industrial and financial interests – remain supportive. We hear from contacts in Congress that the Democratic leadership there is upset that President Obama did not press his Chinese guests more forcefully on human rights. Conversely, senior Republican officials tell us they will continue to ‘beat the drum’ about China’s military build-up. Within the Administration, the visit did nothing to allay concerns that China is – as a matter of policy – determined to challenge the global preeminence of the US dollar and US military leadership in East Asia. With opinions divided in this way, our assessment is that US-China relations will continue to be unsettled. As one National Security Council official commented to us: “China’s friends will have to work hard to keep tensions under control.” China will continue to be the dominant issue in US foreign policy. With regard to Iran, the Istanbul P5+1 discussions brought little progress. However, US officials tell us that they remain committed to the sanctions track to bring about a change in Tehran’s nuclear program. We do not see any signs that the Administration is interested in a military option. Regarding Sudan, White House attention remains high. Any deterioration in the security situation there will attract sustained US diplomatic engagement. Domestically, the temporary suspension of ‘politics as usual’ arising from the Tucson shootings is coming to an end. Obama’s State of the Union address on January 25th will meet a forceful Republican rejoinder on government spending. The most difficult period in the Obama Administration will play out in the coming weeks.

Washington’s World: January 17th – January 23rd, 2011

In the first two years of the Obama Administration, initiatives were undertaken to ‘reset’ relations with the Muslim world and with Russia. With the visit to Washington of Chinese president Hu Jintao starting on January 19th, a third such initiative is underway. Secretary of State Clinton, Secretary of Defense Gates and Treasury Secretary Geithner have all made substantive speeches setting out their concepts for the evolution of the relationship with Beijing. The connecting thread between these speeches is an emphasis on the strategic importance of stable US-China relations and a rejection of the proposition that China’s rise to power and wealth necessarily presages a new version of the Cold War. However, the speeches establish specific and frankly worded US expectations for action on the Chinese side desired by the US to mitigate potential tensions. There is no shortage of these. President Obama has signaled his intention to raise human rights problems. Our Pentagon contacts tell us that Gates was dismayed by what he regarded as indications that the PLA has the upper hand in Chinese policy toward the US. Treasury and China-watchers in Congress are also worried that China is failing to address its inflationary pressures through currency revaluation. The outlook for US-China relations is thus, as pointed out by Henry Kissinger, clouded. As one State Department described it to us privately: “We have disagreements with China that are both broad and profound. The essential requirement is to reach a way to handle our disagreements within stable parameters.” Elsewhere, Vice-President Biden’s visit to Pakistan, Afghanistan and Iraq has revived debate about US policy in the region. The rising instability in Pakistan is of deep concern to US officials, with Obama expressing support for President Zardari. However, given the fact that most officials regard Pakistan through the lens of the US operations in Afghanistan, we do not anticipate any lessening of pressure on Islamabad to act against Taliban havens in Waziristan. Biden also warned Iraqi Prime Minister Maliki not to count on US intervention to control Moqtada al-Sadr. In the Middle East, the Administration’s long-standing criticism of Hezbollah in Lebanon is intensifying. Washington will not stand back from supporting Hezbollah’s opponents should Lebanon’s political crisis turn to civil disturbances or conflict. Amid this flurry of overseas trips, the visit by French president Sarkozy attracted little attention. US officials did, however, take the opportunity to express their continuing expectation that the Europeans will take more vigorous action to shore up their economies. Finally, Obama’s speech at the Tucson memorial service has allowed his political standing to improve, an important asset for him as he prepares to deal with the new Congress.

Washington’s World: Themes for 2011

Predictions have a predictable record of coming unstuck. We do, however, believe that it is sensible to identify a limited number of broad themes of probable salience. In that spirit, we offer 11 items for 2011 and extend to our readers our best wishes for the year.

1. President Obama’s attention will center on domestic priorities. Foreign policy issues will have to force their way onto his agenda, either by their intrinsic importance to US interests or as the result of an emergency. It is unlikely that the US government will reach for goals beyond those currently in play.

2. With Congress divided and ideological passions prominent, the ability of the US governance system to deliver timely decisions on the pressing issues of the day will be severely tested. Maneuvering for the 2012 elections will shape much of the debate.

3. US economic performance will steadily improve, but some sectors of the economy, notably housing, will continue to be fragile. Federal debt ratios will remain obstinately high. Obama's re-election prospects will depend on his perceived success in job recovery.

4. Emerging funding constraints will significantly limit the Pentagon's ability to achieve its goals abroad. Any new spending will focus on enhancing US capabilities in Asia.

5. The US will maintain its rhetorical commitment to human rights. This will complicate

relations with Russia, China and allies like Egypt and Saudi Arabia.

6. The search for a viable US policy with regard to China, steering between partnership and hostility, will be the dominant foreign policy theme. The US will encourage its partners in India, Japan, South Korea and the whole Pacific Rim to play more countervailing roles. The implications for global financial matters will be significant.

7. The Iranian quest for nuclear weaponry will come to a head in 2011 with Israel championing a more aggressive policy and finding increasing support in Congress.  The Administration will maneuver to avoid military action.

8. The Administration will attempt to maintain the fragile status quo on the Korean Peninsular. The US will do everything it can to steer clear of a confrontation.  

9. The Middle East peace process will lose priority for the Administration during 2011.

10. In Afghanistan, the US mission will point to growing numbers of trained Afghan security forces as the precursor to initiating a drawdown.  Strategic success against the Taliban will remain elusive.

11.  The Administration's efforts against al-Qaeda will see increased activity in the Yemen and the Horn of Africa as well as stepped up efforts to root out the "homegrown" threat.  These actions will offer a mixed record of achievement.

Washington’s World: December 13th – December 19th, 2010

President Obama is embarking on a new phase of his presidency in which he will seek to build a constituency for his reelection in 2012. His task is daunting. As shown by his defense of his compromise over taxation policy, he risks alienating his own supporters while picking up little compensating support from independents and Republicans. Whether he is able to resolve this dilemma will define the rest of his time in office. Republicans are publicly and privately confident that he will fail. Democrats hope that he will be able to repeat Bill Clinton's revival after 1994. The implications for foreign policy are already to be seen as foreign actors react to the change in US political dynamics. The Administration has abandoned its efforts to induce Israel to suspend settlement activities and is holding open further negotiations to Iran. We have never been hopeful that the Middle East peace process would prosper, but even those officials most closely associated with the effort concede that progress will not be attainable in the foreseeable future. Regarding China, NSC officials tell us that of their concern that Beijing is exploiting what it sees as US weakness to pursue an uncooperative line over North Korea. A senior State Department delegation will visit Beijing next week, to be followed by Defense Secretary Gates in the new year in an attempt to normalize US-China cooperation. In Washington the debate about China is intensifying. Obama’s critical remarks over the Chinese refusal to allow Nobel laureate Liu Xiaobo to attend the December 10th award ceremony are symptomatic of the ambivalence toward China felt by top officials. The emerging policy option in Washington is to maintain ‘leverage’ over Beijing. As one Pentagon official put it to us: “It’s easier to say that than to do it. But we do know that we must remain in a position to assert ourselves in China’s backyard.” On Afghanistan, the official line remains optimistic, but behind the scenes expectations are being lowered. While the incoming House foreign affairs leaders are hawkish on China and Iran, they are close to Administration thinking on Afghanistan. We do not expect any pressure to expand the US footprint. Instead, modest withdrawals will start in 2011.