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Yes it’s change, but no surprises

Emerging economies should be wary, Obama will protect his home turf first.

india Updated: Jan 21, 2009 10:20 IST

President Barack Obama likes to draw parallels between himself and Abraham Lincoln. One reason Obama seeks inspiration from the US’s greatest leader is the enormity of the challenges he faces. The new administration’s highest priority will be an economy heading for the severest recession since at least the 1970s. Obama also inherits two wars, and a lurking if diminished threat from terrorism. Though all this pales in comparison to the political landscape that confronted Lincoln, the newest US presidency sees climate change as an existential threat of a kind never before faced by a White House resident.

These constraints are exactly why Obama’s foreign policy will, in substance as opposed to style, be less about change than continuity. He can ill-afford to play roulette with the world when the global economy is teetering. In any case, much change has already taken place during the last two years of the Bush administration. The bad news out of Iraq forced the Bush administration to backtrack from much of its original unilateral convictions. It rebuilt bridges with Europe, accepted climate change, modified its Iraq strategy to allow troop withdrawals. Much of what Obama does in the next few years will build on the second Bush foreign policy – minus the image deficit George W. Bush suffered. There will be differences in emphasis: Obama is more at ease with China, less at ease with Iran and more enthusiastic about a West Asia peace process.

Where “change” will be more evident in the new administration will be in economic policy. This flows partly from ideological differences but more from the severity of the downturn. Disincentives against outsourcing, a huge diversion of the world’s capital to the US economy and protectionism cloaked as climate change are likely components of the US’s new external economic policy. Emerging economies should be wary on all counts. There is no reason to detract from the hope and excitement Obama has been able to bring to the global stage. But no one should have any illusions. Obama will be a hard-nosed advocate of US interests in a time of scarcity. Change at home can lose much of its positive sheen when it crosses a border.