A world reeling from Bush's eight years of neo-conservatism rejoiced at Barack Obama's victory at the polls. The level of expectation world-wide about the incoming administration remains extremely high.
The US public, largely focused on domestic economic turmoil, expects a speedy recovery from the recession, and it is now widely understood that any Obama action in this regard would have repercussions for the rest of the world.
Meanwhile, the Muslim world is looking forward to a US leadership that can effectively deal with the divisiveness between the Muslim and the non-Muslim world, a legacy of the Bush years; together with abandonment of the policy of unilateralism and pre-emption - the hallmarks of the Bush era that caused the death of not only thousands of US soldiers in Iraq and Afghanistan but also of thousands of innocent Iraqi, Afghan and Pakistani civilians dismissed as collateral damage. All are agreed that Bush's neo-conservatism was a disaster - both in the economic arena as well as foreign policy.
The first order of business for president-elect Obama would be to confront the domestic financial crisis urgently and imaginatively. Innovative products by the largely unregulated financial sector caught up with the United States at last, impacting on the subprime rate from which the real estate sector is still reeling. The victims are not only the investment sector, for which sympathy is at a very low ebb globally, but also the average American unable to meet his/her mortgage payments.
The Bush administration initially resisted the move to interfere in the market and made some selective interventions through monetary injections, from the tax payers' money, to save some financial companies and not others. This created a furore in the US, a furore that no administration could afford to ignore. And with the additional compulsion that it was a presidential election year, the Bush administration was forced to propose the 700 billion dollar rescue package which, in effect, was a nationalisation of the collapsing financial giants - a policy thrust that the neo-conservatives are ideologically opposed to. That this package was passed is more a reflection of the scale of the financial crisis than any major change in economic thinking in the US.
This relief package was opposed by large sections of the US public who felt that the financial giants should be made to pay the price of poor governance. Members of the US Congress and Senate, in line with public opinion, began to denigrate the massive pay packages of Chief Executive Officers (CEOs) of these companies. In both the US and the UK there began talk of a 'claw back' of these hefty pay checks, whereby subsequent events like a financial crisis would legally enable the companies to force the CEOs to return part of their pay checks at a future date.
Last week a few CEOs of the US auto sector came to Washington DC to request a bail-out package. Their argument: the auto sector accounts for about 4 percent of GDP and over two million jobs, therefore a bail-out package is warranted. The lawmakers expressed their reservations on the fact that these CEOS came on private company jets to DC: 'when are you going to sell these private company jets to meet part of your financial losses?,' was their litany? Thus the mood of the people is not to support the fat cats but the poor.
That the two are inextricably interlinked is causing administrations world wide, including Pakistan, to be more sensitive to wasteful expenditure. This may well account for President Zardari's small entourage to Washington on the heels of a 250 strong entourage to Saudi Arabia, to request for assistance.
The 15th November summit to discuss the global economic crisis, organized by President Bush, called for another summit a mere 101 days after President-elect Obama would be sworn in. The summit forced President Bush to invite the developing nations as well, which gave considerable clout to their leaders. The communiqué issued at the conclusion of the summit was a document that allowed President Bush to save face by reiterating the basic economic principles of capitalism: free markets as well as no protectionism.
In the words of the communiqué, the leaders "underscore the critical importance of rejecting protectionism," and it was also laden with language about the importance of free markets. American sensitivities with respect to adherence to capitalism were thus safeguarded. Ignored was the fact that the relief packages world wide, including the 700 billion dollars US package, envisaged nationalisation. Also ignored was the fact that the financial sector would henceforth require regulations and monitoring. This would, however, be president-elect Obama's responsibility.
With respect to the Bush foreign policy of unilateralism and pre-emption, the outgoing US President added during the summit in a press conference: "America is the number one power in the world...Is it the only power? No, it isn't. We are in a new world." This in itself was a major revision in his thinking and may well be a reflection of his tacit acknowledgement that his foreign as well as economic policies, need revision.
Political scientists, no doubt, would have their own theories about what exactly he (Bush) meant, but for the world public his meaning is clear: US unilateralism in both the economic arena and in the military field is at an end. The US will have to take other powers along, not only military powers but also economic powers which must, henceforth, include emerging countries like Brazil and India; and the US must take steps together with other powers to not only combat a global financial crisis but also a global war on terror.
Working it alone is no longer an option for the incoming President if his objective is to bring in positive results in the long run. Thus the acknowledgement by Bush negates his own doctrine. It is not in doubt that, if asked a direct question, Bush would insist that he had no regrets about any of his policies and actions and that history would judge him a lot better than his contemporaries. Thus Obama mania is a reflection of not only expectations of what the new administration must undo and the end of the Bush doctrine but what the President-elect will do for the US to emerge as a respected world power again.
What does an Obama victory mean for Pakistan? Irrespective of the rather naïve approach taken by Prime Minister Gilani on the floor of the House, where he insisted that Obama would reverse the policy of launching attacks on our tribal areas, little is expected to change. There is little doubt that Pakistanis were rooting for Obama even though it was McCain who had adopted a softer line with respect to Pakistan. McCain argued in favour of a continuation of Bush policy which, as we all know, meant attacking the tribal belt whenever intelligence of Al-Qaeda and Taliban movement was received but not accepting responsibility for the attacks.
Obama, during the campaign, argued that the US must increase troops in Afghanistan, as opposed to in Iraq, and indicated he would authorise attacks on Pakistani tribal belt as and when intelligence of 'terrorist' movement was received. In addition he had queried the use of US assistance of about 10 billion dollars by Musharraf - a question that the Pakistanis are also asking in the wake of current high rate of inflation, the high budget deficits as well as depleting foreign exchange reserves of recent months.
So what can Pakistan expect during the next US administration? Pretty much the same with an escalation in the attacks on our tribal areas as well as settled areas, a policy already in effect. And there will be limited financial assistance based on the fact that the US is reeling from its own financial crisis and is likely to assist its own people over and above Pakistan in spite of the war on terror. However the US would support others investing in this country though the mood of bilaterals, reflected during the Friends of Pakistan meeting, did not appear upbeat in this regard.
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