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January 17, 2013
Big Bets and Black Swans: Foreign Policy Challenges for President Obama’s Second Term
Brookings Foreign Policy experts have created a series of memos addressing "big bets"—policies in which the president should invest his power, time and prestige—and "black swans," the low probability, high-impact events that could derail the administration’s priorities.
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A Plastic Moment
As Obama enters his second term, the state of the world is unsettled. The leading powers are beset with economic crises or are in various states of political transition or gridlock. The Middle East is undergoing political upheaval. Tensions are rising in Asia. The world's institutions are weakened and dysfunctional. The liberal world order established after the Second World War is fraying at the edges.
This time of uncertainty and instability is actually a moment of opportunity. Today, the world is at a "plastic juncture" and President Obama has a unique opportunity to strengthen and extend the liberal world order from which Americans and so many others around the world have benefited. He needs to place a series of "big bets" that can shape the emerging global order in transformational ways.
The map icons link to memos to President Obama on the major issues of our time. Big Bets are places where the president should consider investing his power, time and prestige in major efforts that can have a transformational impact on America and the world. The Black Swans are those low probability but high-impact events that can trip the president up and divert him from his higher purposes.
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Bringing Beijing Back In
The rebalancing strategy toward Asia has produced desirable results, including convincing China that the United States is serious, capable and determined to be a leader in the region for the long term. But this strategy is also generating dynamics that increasingly threaten to undermine its primary goals. It is therefore time to rebalance judiciously the rebalancing strategy towards China, and China's leadership change provides the president with an opportunity to do so.
President Obama should take the initiative to solidify and strengthen the core bilateral relationship with China while continuing to provide reassurances to allies and partners of our staying power in the region. Specifically, he should offer Xi Jinping a game-changing opportunity to put U.S.-China relations on a more predictable long-term footing that protects critical Chinese equities but also requires that China engage more positively on key bilateral, regional and global issues.
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The India Investment
The Obama administration has made the judgment that the rise of India and its increasing role and influence in the international system benefit U.S. interests. This assessment enjoys bipartisan support. While Indian policymakers have not been as vocal, their actions have indicated that they too recognize the importance of the relationship. The U.S.-India relationship today is broader and deeper than it has ever been, but the danger is that it will suffer from inattention.
The president has already made a bet on India. In his second term, he needs to ensure that the administration stays invested in that bet and perhaps even ups the ante. U.S. and Indian officials need to work to implement existing agreements, conclude current negotiations, and explore new areas of collaboration. The administration should also signal sustained commitment to the relationship through continued consultations, high-level visits and timely personnel appointments, and actively increase outreach beyond government.
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A Plastic Moment
As Obama enters his second term, the state of the world is unsettled. The leading powers are beset with economic crises or are in various states of political transition or gridlock. The Middle East is undergoing political upheaval. Tensions are rising in Asia. The world's institutions are weakened and dysfunctional. The liberal world order established after the Second World War is fraying at the edges.
This time of uncertainty and instability is actually a moment of opportunity. Today, the world is at a "plastic juncture" and President Obama has a unique opportunity to strengthen and extend the liberal world order from which Americans and so many others around the world have benefited. He needs to place a series of "big bets" that can shape the emerging global order in transformational ways.
Read more »
Turning Tehran
The persistent and intractable challenge of Iran—still the world's most dangerous state— presents the Obama administration with an epic threat and a historic opportunity. Iran's nuclear program and its effort to extend its negative influence, including through supporting Bashar al-Assad in Syria, inflame sectarian tensions and undermine prospects for peace in a region already beset by instability and upheaval.
The president should seek a deal with Iran to resolve the nuclear crisis. Specifically, such an initiative would include: quickly pursuing a stop-and-swap deal to end Iran's 20 percent enrichment; developing a comprehensive proposal of sequenced Iranian nuclear concessions and sanctions reform; and pressing for an intensified schedule of negotiations with Iran. A meaningful nuclear deal with Iran would represent a major step forward for nuclear non-proliferation. The spinoff effects of a resolution to the nuclear crisis would significantly advance America's broader national security interests in a particularly vital region.
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The Road Beyond Damascus
Syria is standing on a precipice reminiscent of Iraq in early 2006. The regime will likely fall, but the prospect now is one of a failed state that produces a toxic culture of extremism and lawlessness. If the United States does not take on a more active leadership role, the trend toward warlordism and sectarian fragmentation will likely prove inexorable.
The administration should change its approach to one of active intervention to help ensure a more stable transition to a post-Assad order. Specifically, the administration should provide lethal assistance to the Syrian opposition, forge a genuine national dialogue that includes Alawis and Christians, and create an International Steering Group to oversee and lend support to the transitional process, including the creation of an international stabilization force to provide protection to Syrian civilians. The President should engage directly with President Putin to overcome already weakening Russian resistance to these essential endeavors.
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Opening to Havana
During its first term, the Obama administration began the process of fostering change in Cuba by expanding travel and remittances to the island. There are signs that an inflection point is fast approaching and that now is the time to try a new paradigm—constructive engagement to encourage reforms already underway — for de-icing the frozen conflict.
President Obama should open a discreet dialogue, without preconditions, with Havana on a wide range of issues to resolve outstanding issues. He should use executive authority to facilitate trade, travel and communications with the Cuban people. New Cuba policies presented as a set of concrete measures to assist the Cuban people is well within current congressional mandates. A new approach will advance U.S. interests in a stable, prosperous and democratic Cuba and pave the way for greater U.S. leadership in the region.
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Energy and Climate: From Black to Gold to Green
Obama's second term offers a significant opportunity for the United States to strengthen its economic and geopolitical position by taking advantage of near-term global demand for oil, gas and coal, while bolstering its competitive position in the longer-term global market for lower-carbon technology and taking a leadership role in the battle to address climate change.
By adopting policies that encourage the development and export of U.S. hydrocarbons including oil, coal and gas, the United States can take advantage of the rising demand in developing and emerging economies around the world. As a condition of greater exploration, production and trade, the federal government should impose a modest but meaningful volumetric or carbon-based tax on their production, with the resulting revenues allocated specifically to the development of technologies essential to global efforts to fight climate change: carbon capture and sequestration; and advanced batteries, at the grid and vehicle scale.
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Free Trade Game Changer
World trade is expected to have stalled in 2012. Protectionism is on the rise everywhere. The Doha Round is essentially dead. At the same time, the United States and Europe need to stimulate their economies without resorting to fiscal spending. Furthermore, the United States needs to establish a broader and deeper economic presence in Asia. Achieving both a Trans-Pacific Partnership (TPP) and a Trans-Atlantic Free Trade Agreement (TAFTA) is the most realistic way to reclaim U.S. economic leadership and make progress towards the Obama administration's promised goal of doubling U.S. exports.
Signing the TPP and TAFTA would also have deep strategic implications, reaffirming liberal norms and a leading U.S. role in setting the global rules of the road. The TPP would help define the standard for economic integration in Asia, without necessarily antagonizing China. TAFTA would give American and European businesses an edge in setting industrial standards for tomorrow's global economy.
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Calming the Eastern Seas
Maritime East Asia is becoming increasingly dangerous. The past 12 months have seen a series of crises and spats in the East China Sea and South China Sea that threaten to spiral out of control. The twin sources of danger are how regional actors conduct maritime operations to assert and/or defend claims to territory and natural resources' rights; and their weak capacity to conduct crisis management under domestic nationalistic pressures. The United States risks becoming entangled in conflicts among countries that are our friends and partners.
The Obama administration should mitigate the danger of potential physical clashes through a concerted diplomatic effort to encourage the countries involved to jointly adopt conflict-avoidance mechanisms in the near term and to promote more institutionalized risk-reduction measures in the longer term. This will both serve the American interest in avoiding unnecessary entrapment as well as foster an environment that will enable cooperative exploitation of natural resources.
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New Rules of War
In its first term, the Obama administration worked hard to rollback one of the signature weapons of the 20th century, the nuclear bomb. Yet over the last four years, the United States also broke new ground in the use of new, revolutionary military technologies that may well become signature weapons of the 21st century. These encompass both physical systems, like unmanned aircraft ("drones"), and a new class of virtual weaponry, malware that can conduct a cyber attack with real world consequences.
The United States now has an opportunity to outline how it will deploy and use these weapons. This must address accountability, the applicability of existing rules of war and issues unaddressed, limitations on development or use, future scenarios, and the prospects for international cooperation. The effort to create a doctrine should draw upon past lessons from comparable situations such as Cold War nuclear doctrine, and culminate in a presidential speech.
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Right-Sizing Defense Cuts
The Obama administration is considering cuts to the defense budget beyond the reductions already imposed by the 2011 provisions of the Budget Control Act. The president has the opportunity to frame the debate as between two choices for U.S. defense policy. One set of defense budget cuts would pursue relatively modest savings from additional efficiencies—within the parameters of existing national security strategy. The second would seek fairly dramatic changes in how the Department of Defense goes about its global responsibilities, which would entail substantially greater risk to U.S. national security.
The president should pursue the first approach which, while difficult, is worth trying given the nation's fiscal plight. The risks associated with second approach would not be worth the benefits. Dramatic cuts will necessitate a dramatic change in strategy. Such a change is unwarranted given present conditions in the world today.
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Another New START
New START was one of the key foreign policy achievements of President Obama's first term. However, even once it is fully implemented, the United States and Russia will each maintain some 5,000 nuclear weapons, a level that makes little sense 20 years after the end of the Cold War. The president has the opportunity—provided that Vladimir Putin is prepared to engage—to significantly enhance U.S. and global security through further reductions in nuclear arms and a cooperative NATO-Russia missile defense arrangement.
Possible goals include the conclusion of a new treaty limiting the United States and Russia each to no more than 2,000-2,500 total nuclear weapons, with a sublimit of no more than 1,000 deployed strategic warheads; achievement of a NATO-Russia agreement for a cooperative missile defense of Europe; U.S. ratification of the Comprehensive Nuclear Test Ban Treaty, and preparing the ground to multilateralize the nuclear arms reductions process.
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China in Revolution and War
There are many serious problems in China that could trigger a major crisis, including slowing economic growth, widespread social unrest, vicious elite infighting, rampant official corruption, heightened Chinese nationalism in the wake of territorial disputes, and even the potential for military conflict with neighboring countries. Such a crisis could take the form of a domestic revolution or foreign war.
Either event would be very disruptive, severely impairing global economic development and regional security in the Asia-Pacific; a combination of the two would constitute one of the most complicated foreign policy problems of the President's second term. The best way to prepare in advance for either likelihood is for the White House to cultivate a deeper relationship with Xi Jinping and his new leadership team, to reach out directly to the Chinese people, and to use U.S. influence to dissuade any country in Asia from using force.
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Eurozoned Out
The Eurocrisis has been ongoing for three years now and the EU is beginning to get its act together to build a sustainable monetary union. But, the underlying causes of the crisis have not yet been addressed. The politics are diverging from the solution as populations on the periphery suffer from austerity measures and see no end in sight, while those in the core feel taken advantage of.
As long as an optimal solution remains elusive, the risks of failure will remain. If failure occurs, it could be devastating to the U.S. economy, surpassing the crisis of 2008. A related black swan is the fragmentation of the European Union, which would also damage U.S. interests. The United States should work closely with EU leaders to prevent new dangerous design flaws in reforms to the Eurozone. The administration should also oppose the withdrawal of the United Kingdom from the European Union.
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Confrontation over Korea
There is a serious risk of an acute U.S.-China confrontation or even a direct military conflict in Korea. The DPRK regime is facing an existential internal crisis and under such conditions it is prone to lashing out at neighboring states or engaging in other forms of risky behavior. If Washington and Beijing fail to coordinate and communicate, we could face the possibility of a U.S.-China confrontation almost unimaginable in its consequences.
To reduce the risks of a confrontation with China over North Korea, the administration should pursue four objectives with Beijing: disclose information on the location, operation and capabilities of each other's military forces that could soon intervene in North Korea; share intelligence on the known or suspected location of North Korea's WMD assets; initiate planning for the evacuation of foreign citizens in South Korea; and discuss possible measures to avoid an acute humanitarian disaster among North Korean citizens seeking to flee.
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Chaos in Kabul
As the 2014 transition to a radically diminished U.S. presence and mission in Afghanistan approaches, the United States will leave behind a perilous security situation, a political system few Afghans see as legitimate, and a likely severe economic downturn. Although severe security deterioration, including the possibility of a civil war that many Afghans fear, is far from inevitable, it is a real possibility. Such a security meltdown would severely compromise America's ability to prosecute its interests in the region, leaving the administration with few policy options.
Even though U.S. leverage in Afghanistan diminishes daily, U.S. decisions still critically affect Afghanistan's future. The U.S. can mitigate risks by withdrawing at a judicious pace, one that doesn't test Afghanistan's security capacity; continuing to provide security assistance; defining negotiations with the Taliban and Afghan government as a broader reconciliation process; and encouraging good governance.
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Revolution in Riyadh
Saudi Arabia is the world's last absolute monarchy, but it faces its most severe test from the Arab Awakening. Demographic challenges, high underemployment, and restrictions on freedom make it very vulnerable. The overthrow of America's oldest ally in the Middle East would be a severe setback to the U.S. position in the region and provide a dramatic strategic windfall for Iran. The small oil-rich monarchies of the Gulf and the Hashemite Kingdom of Jordan would be endangered.
The president should try to reestablish trust with the King and urge him to move more rapidly on his political reform agenda, while recognizing that this is likely to have limited results. The administration should also ensure the best possible intelligence is available to predict if a crisis coming, put in place measures to limit impacts on the global economy, be ready to support neighboring kingdoms and sheikhdoms, and then try to ride out the storm.
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Camp David Collapse
The United States has been resolutely focused on maintaining the Egyptian-Israeli peace treaty, a cornerstone of stability for the region, as an anchor for U.S. influence, and as an essential platform for efforts at Arab-Israeli coexistence. While Egypt's President Mohamed Morsi has signaled he is willing to set aside the Muslim Brotherhood's ideological opposition and most Egyptians' hostility to Israel, several factors could destabilize the situation, including terrorist attacks in Sinai or emanating from Gaza, the collapse of the Palestinian Authority, and populist nationalism.
The potential loss of this treaty would represent a profound strategic defeat for the United States in the Middle East, and could threaten a regional war. The U.S. should continue to deepen its security cooperation and coordination with the Morsi government and consider developing a new modus vivendi with Egyptian and Israeli partners that would advance the sustainability of the peace treaty.
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Ramallah Unravels
The collapse of the Palestinian Authority (PA) would represent the final nail in the coffin of the Oslo peace process that began in 1993. The PA's demise would eliminate the single most tangible expression of efforts to achieve a two-state solution—all but destroying chances for a peaceful settlement between Israelis and Palestinians for the foreseeable future.
Over the immediate term, the collapse could lead to large-scale Palestinian civil unrest and perhaps even a total breakdown in law and order in the West Bank, increasing the chances of a violent Palestinian uprising against Israel, a full Israeli reoccupation of the West Bank, and or a takeover by extremist elements. The immediate objectives for the United States are to prevent West Bank cities and towns from descending into total chaos and to contain any outbreak of Palestinian–Israeli violence in either the West Bank or the Gaza Strip.
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The Big Thaw
Global warming is happening faster than predicted by scientists. Temperatures are rising, icecaps and glaciers are melting, and extreme weather is more frequent and intense. If these trends continue, the results will be monumental and far-reaching. But if the warming accelerates dramatically and if polar ice melts even faster (particularly if the Greenland ice sheet or the West Antarctica Ice Sheet melts), the results could be catastrophic.
A significant rise in sea levels throughout the world would have particularly devastating impacts on the concentrated populations living in low-lying coastal areas, affecting the local economy, politics, community life and security. But perhaps the biggest impact will be climate-induced migration and displacement, placing strain on infrastructure and pressure on governments to deliver services. The United States can help mitigate these risks by giving climate change a higher priority in international and domestic policymaking—leading new multilateral initiatives and by increasing mitigation and adaptation.
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