Author: Peter Drysdale

The Obama administration brought high expectations in Asia of a new era in America relations with Asia and for America’s global standing. Obama’s victory was a triumph of hope in America’s future and hope for America’s positive role in world affairs. Much has changed through 2009, with Secretary of State, Clinton’s historic inaugural visit to Asia (not to Europe) and Obama’s trip to Japan, APEC in Singapore, China and Korea in November. Clinton’s signing of the ASEAN Treaty of Amity and Cooperation set the stage for Obama’s dialogue with ASEAN leaders around the APEC Summit and a new direction in American engagement in the region. But through the year the reality had set in. The lukewarm press on Obama’s Asian trip back home was less a product of what the President had achieved on his travels and what markers he had laid down for the future of America’s Asian engagements than it was a measure of how the Obama administration was travelling at home.

This week Wendy Dobson, in her review of America’s Asian initiatives, reminds us what difficult a job the Obama administration still faces at home in managing the exit from the global financial crisis. The central domestic challenge for America in 2010 will be economic, she argues. Unemployment is above 10 per cent and probably has not yet peaked, the recovery in economic activity is anemic and the massive fiscal and monetary policy responses have yet to show that they can successfully bridge to the resumption of sustainable recovery. The recession was unprecedented in that its causes lie in the financial sector in which there is now deep risk aversion by traditional lenders and the weak recovery risks exacerbating protectionist sentiment. This is a very dangerous phase in the recovery process and, should things go wrong on the international economic front, they will go especially wrong with Asia, both economically and politically. And Nina Hachigian outlines what she calls merely the first steps in a new US relationship with Asia. These analyses remind us of the critical role that Asia will play in keeping American and global recovery on course and, in particular, the importance in that of the G20 meeting in Seoul, the first ever global summit that includes all the major Asian powers, next November.