Obama's First Priority Should Be Economy

CFR President Richard N. Haass, who worked on previous presidential transitions, says that given the current world situation, he believes the first priority for President-elect Barack Obama lies in "the financial and economic side," and that "the near-term foreign policy challenges are probably Iran, Afghanistan, Pakistan, [and] a little bit of Iraq." He says that ironically, the sharp drop in the price of oil has created "significant economic problems for the Iranian government. It means the financial sanctions are having a lot more traction, and it's possible that this will create an environment in which a new diplomatic initiative could have some promise."

In the aftermath of Barack Obama's striking victory, there's been a large swelling of expectations around the world expecting great changes in the United States and marveling at how the United States could elect a president from a minority group. What kind of advice would you give the president-elect on how do how to handle all this anticipation?

First of all, you're right about the outpouring of positive reactions, and you're right about why it's happening. It's in part that people in many places are glad to see the end of the Bush presidency, but also there's a sense of marvel at American society. A lot of people around the world realize that the equivalent couldn't happen in their own countries and they are impressed that something like this could happen here. The danger for Barack Obama, as your question also suggests, is the phenomenon of high expectations. There will not be an agreement on climate change by February 1; there will not be a Palestinian state by February 2; and Afghanistan will not be solved by February 3. Inevitably, he will have to deal with these expectations abroad and here at home, and one of the best ways is by communicating, which is his strength. He should have a dialogue or a fireside chat, not just something with the American people but with the world as well. I also think he can buy himself some time by using his senior staff to do some listening, to send his secretary of state or others around the world to talk to people. He'll obviously have a succession of visitors to Washington as well, so there are various ways to manage the expectations.

First he has to pick a staff. Obama seems to have an organized system going, having asked John Podesta, a former Bill Clinton aide, to set up a transition office even before the election. How difficult is it when you are in a transition? You've been involved in a couple of transitions yourself.

He's likely to move fast, because it's not simply that you have only seventy-six days but that the moment calls for dispatch, particularly on the financial side, but also on the foreign policy side. You do not want to have a long transition. The world is not going to declare a time out and give Obama several months. The most important thing is to get the senior people named so that they can start the process of figuring out who are the deputies and the "unders" and the "assistants" and the rest. They need time to staff up so they can hit the ground as close to running as possible on January 20. There's no shortage of foreign policy advisers that have played some role around the campaign; plus Obama and the people around him are familiar with the potential universe of choices, so it'll be an early example of an ability or willingness to make big decisions. My own sense is that it's going to move quickly.

He has some questions he has to answer right away. Does he want to participate in this so-called second Bretton Woods conference that begins on November 15? Does he want to get involved with this Status of Forces Agreement with Iraq, which has been held up by wrangling, to send some message to the Iraqis?

In my experience, it's important to keep in mind that the United States can only have one president at a time, and for the next two and a half months President Bush is the president. My recommendation would not be to get in the middle of negotiations. Something, though, like the so-called Bretton Woods II meeting in mid-November is really just the beginning of a process, and there may be a role for Obama because these issues are going to be front and center and they will endure. The purpose of November 15 is not to redesign the architecture of international economic management in twenty-four or forty-eight hours. It's in some way to agree on a term of reference and a process for addressing some of those issues. So there's a case, if not necessarily for the president-elect's involvement, at least for the involvement of someone whom he deputizes.

Would it be useful for him to have a senior economic adviser sitting on the sidelines?

Again, so long as it's understood that Treasury Secretary Henry Paulson and others essentially have to carry the water. But because what's going to happen in mid-November will simply be the beginning of a concerted international effort to come up with reforms of the International Monetary Fund or new rules about regulatory policy, it would be good, particularly when it comes to the terms of reference of the effort, to have the incoming administration informally involved in the process.

And on issues like, say, the Middle East, there's great expectations from all sides. Do you sort of sit back a bit and digest what the situation is and invite leaders to come to Washington?

I don't know why there are great expectations on the Middle East. Years ago I wrote a book around the theme of ripeness, and it's hard to see where the Middle East is poised or ripe for progress, much less a breakthrough. You've got a divided Palestinian leadership and you've got an Israeli polity that's moving toward elections in early 2009. I would actually not recommend this as an early area of major focus. I just don't see the pieces there to work with. What I believe ultimately the next administration needs to do is to come up with a policy that would, hopefully over months or years, develop that ripeness and that would set in motion a process where hopefully Israelis and Palestinians could get leadership that is willing and able to make compromises for peace.

The area in the Middle East where potential exists for some ripeness is on the Israeli-Syrian front. It's something certainly worth exploring early on in 2009. And obviously there will be a lot of attention paid to the Iran situation given the Iranian advances in uranium enrichment. There's a piece of interesting hope, which is, ironically enough, the silver lining in the recession cloud: The halving of oil prices has clearly created significant economic problems for the Iranian government. It means the financial sanctions are having a lot more traction, and it's possible that this will create an environment in which a new diplomatic initiative could have some promise.