Obama – an Australian view

The Institute of International Affairs in Melbourne has got a new life. The rather left wing President has been replaced by a “moderate” Liberal, Michael McKellar, (a Minister for Immigration under Fraser) and a new board, including sensible Graeme Barrett (whose articles The Age stupidly stopped publishing).

One result is that on 5 Feb we had a brilliant presentation by Greg Sheridan on Obama and what he might mean for US foreign/defence policies and for US/Aus relations. The black US Consul-General (a Bush appointment) attended. Despite the heat (and no air-conditioning) there was a very large crowd (two rows standing at the back), doubtless reflecting Greg’s international reputation as an authoritative journalist with ready access to most political leaders. Although I thought his presentation included a bit designed to help his role as a journalist who needs to obtain wide access in the right quarters (and was too praiseworthy of the State Department), it was brilliantly composed and presented (ad lib) and he had many amusing “digs” at various aspects of the foreign policy debate, including the use of “neo” to describe the views of various conservative groups (tongue-in-cheek he commented that perhaps we would get the non-sequitur, “neo-Christian”). Despite the rather mixed political views in the audience, he was warmly applauded.

The following points do not do him justice but may convey the general impression:

1. Obama is really a “third Bush” in continuing the substance of Bush policies while taking advantage of his (Obama’s) more outgoing personality which has produced a “love-in” that has arisen in response to Bush’s unpopularity (but which will diminish significantly over time). Obama has made generally “strong” picks as Cabinet members (Hilary Clinton will be an “alpha” as State Secretary and, like those State officers picked as responsible for various regions, will effectively continue a “third Bush” line). The inclusion of Bush personnel may help too (and Obama’s appointees may work better as a team, which Bush failed to achieve). Obama will do certain symbolic things to keep the left happy, like Rudd has/will in Australia, but the thrust of Bush will continue.

2. Obama’s approach is likely to strengthen the role of the US over time. Much of academia, the ABC et al will continue to run the decline thesis, but to no avail (Sheridan was most amusing in praising the ABC – and others, including US media – which praised Obama without realising they were often praising Bush policies).

3. Eight challenges are faced by Obama.

(i). The Global Financial Crisis problem is dominant but, as put by Walter Russell Meade in a recent book (a similar thesis to that put in Meade’s excellent talk at the IPA dinner last year), the US has a great natural capacity to recover. History shows that bank crises have occurred regularly but this has not resulted in the rise of minor powers. If anything the US will be more dominant after the crisis. By contrast, China faces real difficulties if, as appears likely, growth falls below 8% pa and social instability increases; Russia will face a setback because of lower oil/gas prices and is in any event much smaller now (Russia is “buggered” as a country); India will suffer too. There will be more suffering in these countries than in the US.

(ii). Climate Change – the recession is “good” for Climate Change. Obama will do something here but a lot will be symbolic like signing Kyoto as Rudd did – but Sheridan himself thinks we should adopt a “no regrets” policy provided that does not undermine economic growth. Importantly, China and India will not sign up (after his talk I told Sheridan that I was more worried about Climate Change with Obama than anything else: he said he agreed).

 (iii) Obama is 100% right in his Pakistan/Afghanistan policy and that is basically the same as the policy adopted by Bush post-Iraq surge. It recognises that you have to do violent things first – Obama will send more troops to Afghanistan and there will be more troops from Europe and Australia too. But Pakistan is insoluble – probably has 100 nukes. Obama’s appointment of Holbrook to handle the region recognises the need for a “tough” guy to handle this at State.

(iv) Iraq: Obama’s policy is to withdraw after 16 (?14) months but this is likely to be subject to whether conditions on the ground allow that. Iraq is going much better than expected because of the surge (a policy Bush personally can claim credit for) – Obama has acknowledged this.

(v) Bush’s nuclear deal with India is was an important initiative and is supported by Obama despite opposition from the left. Bush recognised the importance of India balancing China (it is absurd that Australia sells uranium to China but not India) and he had to convince international agencies.

(vi) Joe Biden was correct in saying that North Korea would test the Obama Presidency (Obama reproached Biden). North Korea wants to deal direct with the President. Obama’s State appointees to handle North Korea will be better than Hill who was not an “Asianist” enough.

(vii) China – Obama faces two difficulties. First, the massive build up of China’s military. The US policy response to date has been to improve technology (the F22 Raptor is a “wonderful” plane), but more US troops are needed too. Second, if China goes backwards economically then social instability could develop into a major problem (and its too late to envisage a “peaceful” break-up of China into separate countries). That would have serious consequences for the world.

(viii) Indonesia is already in Obama’s camp – about “20 million” are claiming to have attended the same school as him! Kenya is also in Obama’s camp. He may well use Indonesia as the place from which to make his promised speech from a Muslim country. It is important for Australia that the Obama connection means the US will likely be more involved in Indonesia than under Bush.

Rudd is like Obama in being self-seeking and not really believing his own mystic nonsense. Obama has already started to back off the protectionist statements he made during the election. Will Rudd be as close to Obama as Howard was to Bush (which inter alia produced the FTA and important additional access to US intelligence)? Rudd is undoubtedly pro-American and has no problem with the Australia/US alliance. He starts with the benefit of what Howard achieved with Bush and Australia’s reputation of having a strong (if small) military force that Australia has traditionally been prepared to use overseas.

In question time, Sheridan added that, while Obama will try to engage Iran in diplomacy (as Bush did through State), he has indicated that the US retains the military option on the table. There has been no change in US support for Israel: Hamas is impossible to negotiate with (have a look at its web).

Des Moore is the Director of the Institute for Private Enterprise.

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