Why Barack Obama's win matters to the world

EXPECT the US President-elect, with his true global appeal, to wield unprecedented influence.

THERE is a new dawn in America and a new opportunity for the world. Barack Obama's victory is inspirational and tantalising because its true meaning defies calculation. It can safely be ventured that Obama is an extraordinary political figure. Coming from behind he smashed the Clinton machine, mobilised the American people, outsmarted the McCain campaign, captured the world's imagination, concealed his policy flaws, summoned a rare rhetoric and became the first African-American to occupy the US presidency.

It is an awesome political performance. Ask yourself: how many people predicted just 18 months ago that Obama would be the next president? While the failures of George W. Bush's administration gave the Democratic Party its opening, there was nothing inevitable about Obama's ascendancy.

This was a remarkable candidate backed by a formidable machine. Obama has crushed the Republican Party, its crumbling ideology and its once impregnable conservative coalition.

This election is an affirmation of America's foundation ideal scripted in its 1776 Declaration of Independence of a nation where "all men are created equal" and "endowed by their Creator with certain unalienable rights". This ideal was contradicted by the institution of slavery, a contradiction that led directly to the Civil War, a contradiction that is finally resolved this week with an African-American being elected president.

It is tempting, therefore, to interpret Obama's victory as a rekindling of faith by Americans in their ideals. Indeed, this is the interpretation that Obama offered, invoking his win as proof that in America "all things are possible" and where "the dream of our founders is still alive in our time". By depicting his win as the latest realisation of the American dream, Obama is an agent of change yet continuity. For many white Americans he is giving their country back to them. For many black Americans he gives them a new stake in their country. In victory he invoked a new American patriotism.

If this is truly the meaning of Obama's victory -- the idea of America being renewed -- then it matters not just for the US but for the world.

Those founding fathers did more than create a new nation. They wanted to change the world. They intended the new American ideals to transform the world, with their Declaration of Independence asserting that "governments are instituted among men deriving their just powers from the consent of the governed" and instructing that "it is the right of people" to abolish any government "when it becomes destructive of these ends": a legitimisation of revolution, democracy and military intervention.

More than any previous US president, Obama is a candidate of the world. He spoke to the people "watching tonight from beyond our shores, from parliaments and palaces to those who are huddled around radios in the forgotten corners of our world", saying that "our stories are singular, but our destiny is shared".

Such atmospherics are dramatically different from Bush's post-9/11 battle cry that "every nation in every region now has a decisions to make": either you are with us or against us.

Obama, unlike Bush, presents as a candidate for an interdependent world. As the first African-American president-elect, reared partly in Indonesia, Obama's identity empowers him to relate to the rest of the world with a potential authority unknown in history.

His acceptance speech was founded in inclusion. And inclusion starts at home.

Obama knows that the intensity of red-blue division has weakened the US and he appealed to "young and old, rich and poor, Democrat and Republican, black, white, Latino, Asian, Native American, gay, straight, disabled and not disabled" in a repudiation of wedge politics and in recognition that inclusion is the only basis for governance by a black president.

All these are the reasons for hope. This is a time for "the better angels of our nature", to borrow from Abraham Lincoln's first inaugural address. But as a professional politician, Obama knows he will be judged by the challenges he faces.

Obama will be a president in recession, war, global financial crisis, for managing US relative decline, the rise of China, the threat from Islamist terrorism and the profileration of weapons of mass destruction, along with the threat of climate change. The range of crises is daunting. The US recession is in its inception, the US economic deterioration is the most serious since the 1930s and, in the words of US security specialist Richard Holbrooke, Obama faces "a more difficult opening day set of international problems than any of his predecessors" since World War II.

These problems broke the Bush presidency. If ever there were need for an extraordinary president, it is now. The expectations vested in Obama are huge. Frankly, this is a good thing. It means he starts with lots of goodwill and Americans will cut him much slack after the Bush debacle. But Obama, on election night, plunged into expectation management, warning his goals may not be achieved "in one year or even one term", an extraordinary comment.

Obama has become the vessel for everybody's dreams. He has won youth because of persona and style, the progressive Left because he is black and the antithesis of Bush, the media because he was an agent of change, the foreign policy realists who hope he can restore US authority and the foreign policy idealists who think he will restore respect for international norms. They cannot all be right. Americans are united in rejecting Bush but less united about the new direction they want. Obama's genius was to build a coalition for change while being elusive about the nature of that change. What will the future bring? Detailed prescriptions are useless at this time. But the logic of Obama's position is a focus on repairing America's domestic fabric. At present the US is crippled from within and that means an inward-looking priority on the economic-financial crisis. The task is to restore confidence, get US institutions lending, minimise damage to the real economy and sketch a long-term economic strategy.

During the medium term, the US budget deficit -- sure to spiral beyond $US1000 billion -- dictates an approach of restraint, discipline and prudence. This suggests a reduction in US commitments abroad. The US has been living beyond its means on too much debt and too many deficits. During the Bush era, the US fell into imperial overreach, and Obama will bring US means and ends back into harmony.

The past age saw the neo-conservative fantasy of an American-dominated unipolar world that assumed US capacity to impose its will, with its epic blunder being the Iraq invasion. Under Obama, expect US policy to recognise the limits to its power. The US needs to rebuild from within. There is no other mechanism. Under Obama, expect the US to give alliances a new priority and to expect more from its allies. This is a big message for Kevin Rudd. Note that Kim Beazley predicts that Obama, devoid of Cold War sentimentality, will be tougher with allies.

Expect Obama to strike a new balance between hard and soft power. In his Foreign Affairs article, Holbrooke said Obama "emphasises the need for diplomacy as the best way of enhancing US power and influence". Witness his pledge to talk to the Iranians. Obama will rekindle the great art of US negotiation last seen with Bill Clinton. That's fine within limits, but does Obama become the president who allows Iran to develop nuclear weapons? The risk is that Obama may look weak and the US too wounded, thereby encouraging its enemies. The president-elect sees the danger, saying in his acceptance speech: "To those who would tear this world down, we will defeat you." But some risks defy the best management; witness his triple task of trying to disengage over time from Iraq, reinforce Afghanistan and rethink Pakistan. Each is a nightmare challenge.

Obama will present as a modernist and new generation leader. Democratic pollster James Carville said in the Financial Times that Obama won two-thirds of the under-30 vote. This points to a structural realignment in US politics. It means Obama will focus on contemporary realities: improving health insurance coverage, getting a fairer tax system, addressing climate change and seeking more global co-operation on energy, nuclear proliferation, poverty and food security. In relation to Islam, might not Obama speak direct to the Muslim world and to its youth?

Beware false hopes on climate change. Australians misjudge this issue in the US, where it has nothing like the traction it has this country. Climate change, not a dominant election issue, will be further repressed by the financial crisis. The US Congress will not entertain action without some reciprocity in the developing world, notably China.

Obama's victory is a step towards greater but hopefully more enlightened government intervention. Always remember that Bush's regulatory failures have legitimised this path and made it inevitable. It is Bush who created Obama. The great test for Obama and the Democratic Party is what sort of government intervention and to what purpose? Does Obama have the brains and skill to fashion a viable more interventionist governance model?

Herein lies the great danger. The test is whether Obama's election has converted him into a genuine politician of the Centre or whether he stays true to his origins on the Democratic Party's anti-globalisation Left. Obama will betray the promise he offers and betray the US if he governs as a self-interested protectionist, turning the US away from the world, discriminating against China's products, using the crisis to impose a straitjacket of regulation and offering only the illusion, not the substance, of authentic global leadership.

This brings us to the condundrum at the heart of this inspiring moment: that Obama's presidency will work only if Obama himself has changed and been remade during this past year. His pledge to change America is redeemed only by having an evolving new Obama in place of the old one.