07/11/2012 04:54 GMT | Updated 06/01/2013 05:12 GMT

Obama's Second Term: Realist or Radical?

When he won his first election four years ago, he promised to restore America's reputation in the world. But as he starts his second and final term following a strong election victory last night, president Barack Obama resumes service in the White House with a reputation abroad as a hard-nosed leader who killed Osama Bin Laden and who sent drones to pursue extremists in far-flung places. For a president who was seeking to remake American's image, however, popular opinion of Obama in the Muslim world deteriorated as rapidly as political systems there changed.

During the presidential campaign, Obama did not trade much on his strongman credentials. He projected himself more as the responsible, realist leader who managed US foreign policy on a tightrope. As he begins his second term, will Obama revert to type or will he be able to live up to the rhetoric of 2008?

Certainly, president Obama's freedom of manoeuvre will be restricted given that the Republicans retain control of the House of Representatives which will force him to pursue bipartisanship. His wish to cut the defence budget through sequestration will be contested as part of the on-going debate about the ballooning government deficit. However, what is less certain is whether America's partisan differences will affect the immediate priorities of US foreign policy. Indeed, President Obama may resort to focussing more on foreign affairs as domestic policy constraints limit his actions.

The president will have to contend with continued instability in the Middle East as soon as he is re-inaugurated, if not earlier. Then there is the spectacle of the Iran brief that is far from being resolved as Tehran continues to insist that it will pursue nuclear development irrespective of any further sanctions that the US or Europe imposes against it. During the election campaign, Obama, along with his Republican challenger Mitt Romney, refused to take the military option off the table should one be needed to prevent Iran from acquiring a nuclear weapons capability.

However, that choice is unlikely to be thrust on the president as emphasis on multilateral support for punitive sanctions against Iran continues to gain traction. Moreover, with presidential elections due in Iran in June 2013 and ongoing internal strife in Iran over the economy, it may well be that the Islamic Republic will be more open to future dialogue.

Crucially, part of this diplomatic equation depends on policy actions in Israel also. Will the Israeli prime minister, for example, continue to lobby for a harder line against Iran, especially as his recent intervention in the US election was widely seen as taking sides with Mr Romney? Should president Obama wish to resist Israel's hardline on Iran and insist on progress in peace negotiations with the Palestinians, he may face opposition from a predominantly Republican Congress.

The Syrian civil war is yet another crisis that president Obama will confront and one in which US influence continues to wane. There is no appetite for US military intervention and there is growing wariness with the make-up of Syria's fractured opposition. Without an end game in sight, Bashar al-Assad's backers - Russia in particular - are likely to resolutely defend their man in Damascus.

President Obama promised to deliver much across the Middle East and Muslim world. Yet, by the time he stood for re-election, the Middle East region was engulfed in turmoil and anti-Americanism. Such was the level of instability that the US ambassador to Libya was even tragically murdered. Despite his conciliatory words towards the Muslim world, the initial lukewarm US response to the Arab Spring uprisings did not help burnish his image in Arab and Muslim eyes.

Indeed anti-Americanism seems to have increased in Pakistan, which is at the receiving end of drone strikes by the US military against militant targets in the north-west of the country. The biggest challenge for the Obama administration in the South Asian region will be to deliver an orderly withdrawal of US forces from Afghanistan by 2014. Coupled with this is a changed emphasis in policy on Afghanistan and Pakistan away from counter-terrorism and counter-insurgency. This would mean a reduction in drone strikes and a promise to engage more robustly with democratic and non-corrupt leaders in the region.

In the medium-term the greatest challenge will be policy towards China. Chinese policymakers may well breathe a sigh of relief over an Obama victory, given threats by Romney to brand China a currency manipulator and thereby potentially precipitate a trade war. Indeed, on the eve of the election, a Chinese news website suggested that "things may not get better with Obama, but they will certainly not get worse."

One of the major policy pronouncements of the first Obama administration was the 'pivot' towards Asia and policy that focussed more on China's economic ascendancy. Certainly, the US military is undergoing reform in order to deal with any military implications of China's rise. As China itself will shortly undergo a leadership transition, president Obama and US policymakers must learn to engage with China's growing ambitions. That will be difficult if the Republican dominated House of Representatives pursues more protectionist policies.

Overall, there will be a collective sense of relief in capitals around the world at the Obama victory. With growing global insecurity and a diminution of American power, president Obama will continue to provide a steady hand to manage US foreign policy at this critical juncture. Observers will also be closely watching to see if he becomes more ambitious in his second term and redoubles his efforts to pursue a more progressive and accommodative US foreign policy.