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A Peruvian shaman perfromed a ritual of predictions for the new year in front of a picture of President-elect Barack Obama in Lima, Peru.
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Great expectations for Obama abroad

Team Obama is more pragmatic and less ideological than its predecessors, say diplomats and campaign advisers. Afghanistan will be a foreign-policy priority.

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How will the global recession shape US policies?

Handled wisely, it could present an opportunity for closer international collaboration. Handled poorly, it could bring fractiousness, the break up of globalization, protectionism, new divisions among states.

For Obama at home the crisis could help force difficult choices and set foreign priorities; it may alter the current practice of paying for Iraq and Afghanistan by borrowing. America's war deficits could balloon from initial estimates of $200 billion – to $1.7 trillion in another decade, according to a recent study by the Center for Strategic and Budgetary Assessments.

Can Obama, Clinton, and Biden work together?

Initially, Sen. Hillary Rodham Clinton's appointment as secretary of State was spun into a Washington insiders "team of rivals" story. The team was called "hawkish." But most diplomats say Senator Clinton represents dramatic change. How closely Clinton will work with another foreign-policy player – Vice President-elect Joe Biden – is unclear. But Obama, Biden, and Clinton – are a unique team. At a practical level, one diplomat notes, in the early days when world leaders all want to meet Obama, having them meet Clinton instead will be no disappointment.

Gates and Jones will help Obama's relations with the Pentagon. But ending the Iraq war is not simple. Finding a way through the morass of Afghanistan is not simple. There are likely fewer basic divides between Obama's foreign-policy players than there were within the Bush team in its first year. The main divide may be between realists and liberal internationalists. "Will we impose a democracy litmus test on states?" says one Obama campaign adviser. "Or will we work with Russia and Saudi Arabia ... and leave aside the question of how they organize themselves?"

What wild cards lie ahead?

Former British Prime Minister Harold MacMillan was once asked what he feared most as a politician. He reportedly said, "Events." Such events may be a terrorist attack or a larger Mideast crisis emerging out of the Hamas-Israeli conflict in Gaza. Few pundits in January of 2001 would have forecast the turn the world took after Sept. 11.

One possible difference from the outgoing administration is that the incoming one seems aware of how bumpy the ride can get. In Berlin, Obama said that in a globalized world, the terror bred in poverty in Somalia, a genocide in Darfur, or loose nuclear material in the former Soviet Union has consequences for all.

"In this new world … dangerous currents have swept along faster than our efforts to contain them. That is why we cannot afford to be divided," Obama said.

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