Monday, December 22, 2014

A fine balance for Obama to strike

American presidents sometimes give interviews in the Oval Office. On this occasion Barack Obama chooses the nearby Roosevelt room, named after Teddy Roosevelt and his distant relative Franklin Delano Roosevelt, the last American president to be faced with a global economic crisis of this magnitude.

Then, like now, the president inherited a world economic summit in London that was scheduled just a few weeks after he took up residence in the White House (FDR came to office in March 1933, the summit was in April). Fatefully, Roosevelt chose not to attend.

Then, like now, the politics of domestic economic collapse crowded out much time for the rest of the world. Yet this time the crisis is even more global. Mr Obama also inherits an April crisis summit in London, the meeting this Thursday of the leaders of the group of 20 industrialised and developing nations.

Mindful, perhaps, that posterity blames FDR’s absence as the chief reason the 1933 summit failed to arrest global depression, Mr Obama emphasises the need for G20 leaders to be singing from the same song sheet: “The most important task for all of us is to deliver a strong message of unity in the face of crisis,” he says.

But his biggest challenges are probably at home. Dressed in a dark suit and a tie in the ruby-red he often favours, Mr Obama discloses that he reads global newspapers – an option not available to FDR: “I read the Financial Times before other people read the Financial Times [in Chicago in the 1980s],” the president says. “Now it’s trendy and everybody carries around a Financial Times.”

Seated opposite an imposing portrait of FDR and flanked by the famous “Rough Rider” portrait of Theodore Roosevelt, Mr Obama betrays few signs – other than a hint of fatigue – that the economic and political maelstrom around him has induced personal stress. Speaking without notes, props or assistance from aides, the president answers in the professorial “no drama Obama” manner which helped persuade America’s voters last November he had a better temperament than John McCain to cope with this multiplicity of emergencies.

These are immediate and tangible. Just 66 days into his new job, Mr Obama enters the interview having just unveiled a new strategic policy on Afghanistan and Pakistan, including sending another 4,000 American troops into the field on top of the 17,000 he announced last month.

Earlier he had also hosted a meeting with a group of Wall Street executives, including Lloyd Blankfein of Goldman Sachs and Jamie Dimon of JPMorgan Chase, who seemed grateful simply to be invited rather than pilloried by legislators on Capitol Hill.

Mr Obama speaks of the Wall Street executives with disapproval rather than resentment, in a clear moderation of some of the rhetoric he was employing until recently. “It was a constructive conversation,” he says. “But one of the points that I made is that at a time when everybody is needing to sacrifice there has to be a similar sense of sacrifice on the part of those various sectors of the economy that helped to precipitate this crisis.”

Shortly after his election, Mr Obama promised to “hit the ground running”. Even the highly ambitious president-elect could not have anticipated just how much running that would entail. Or how many opportunities there would be to trip up, one or two of which he has taken, such as the succession of nominees for senior posts who had to withdraw.

Following the failure of the first attempt last month by Tim Geithner, Treasury secretary, to announce guidelines for the removal of toxic assets from bank balance sheets, critics fear that Mr Obama still lacks a full strategy to revitalise the financial system.

Last week Mr Geithner unveiled the latest initiative to deal with toxic assets. The plan was attacked by some as insufficiently radical, but the president points to the stock market rally that followed. “Tim Geithner’s efforts to provide a market for asset-backed securities has helped [but] we still have a long way to go,” he says.

The president is also in the midst of increasingly tense negotiations with Capitol Hill over the White House’s breathtakingly ambitious $3,600bn (€2,700bn, £2,518bn) budget – incorporating the biggest pledges, notably universal healthcare and a cap-and-trade system for carbon emissions, on which Mr Obama campaigned before the economy started collapsing.

His budget could yet unravel amid outrage over the kind of double digit fiscal deficits last seen in the second world war when FDR was in the closing stages of his life. Then there is the small matter of managing a drawdown of US combat troops in Iraq, their redeployment to Afghanistan – the “graveyard of empires” – a continued global terrorist threat and, closer to home, the possibility of neighbouring Mexico being torn apart by a drugs war.

Much like FDR, who believed presidents should try everything, junk whatever fails and move swiftly on, Mr Obama conveys a pragmatic approach to the economic emergency, suggesting it is still a work-in-progress.

Nor, perhaps, can Mr Obama have anticipated the degree of high-wire balancing that is required of him – between the demands of increasingly populist politics and the need to take steps that will dig America and the world out of the economic crisis as quickly as possible.

Here the president faces an Everest. He concedes there is a gulf between what is politically possible and what may prove to be economically necessary. Ten days ago the House of Representatives voted to impose a 90 per cent tax retroactively on bonuses for those earning more than $125,000 who work at taxpayer-aided firms – the same firms who may now be deterred from participating in future government rescues.

The final version is likely to be diluted in the Senate next month. “That is one gap,” says Mr Obama. “Then there is a gap in ideas about how to approach a crisis like this, especially among economists – although on the issue of the stimulus there seems to be a much broader consensus [Mr Obama signed a $787bn two-year stimulus bill into law last month].”

He admits there is much less unity on how to repair the financial sector. Some, including liberal critics such as the Nobel-prize winning economists Paul Krugman and Joseph Stiglitz, argue for all-out bank nationalisation. Conservatives, meanwhile, believe the White House bail-out plan is the road to socialism.

Where consensus does reign is in the outrage felt across the political spectrum over the bonuses that recipients of US taxpayer largesse, such as AIG and Citigroup, have been awarding senior employees. There is also the balancing act of pumping lots of new spending into the economy while reassuring Treasury bond investors, particularly the Chinese, that the US remains committed to medium-term fiscal discipline. “In all countries there is an understandable tension between the steps that are needed to kick-start the economy and the fact that many of these steps are very expensive,” says Mr Obama.

This also requires balancing. The president is trying to share the public’s outrage over Wall Street’s runaway culture of over-remuneration without alienating the financiers whose co-operation would be integral to the success of his bail-out plans.

The admonition is calibrated. “To the extent that they [the Wall Street bosses] are showing restraint that compensation packages are structured so that there is some deferral until money is returned to taxpayers, that will be good for everybody,” he says. “That will put me in a stronger position to help them.”

Mr Obama has tried, with limited success, to persuade the US public that what is good for Wall Street is good for Main Street. Until bankers show serious restraint, it will be hard for him to return to Capitol Hill to ask for the hundreds of billions more that most economists believe will be needed to recapitalise the US banking sector. There is a limit to public largesse.

“If voters perceive that it is a one-way street, that we are just pouring more and more money into institutions and seeing no return other than avoiding catastrophe, then it is harder to make an argument for further intervention,” he says.

Moreover, the steps the White House has taken since Inauguration Day will take time to show results, assuming, that is, they ever do. The president believes they already are. He cites “glimmers of stabilisation” in the US property market, where housing starts recently rose, and in the markets for cars and student loans.

Only a handful of economists forecast a return to strong growth next year. Some fear that a contraction of between 3 and 6 per cent in gross domestic product this year could be followed by more of the same in 2010. “What is also difficult is the fact that the policies we initiate all take time to take effect and by its very nature politics looks for more instantaneous gratification,” the president says.

Then there is the international balancing act. Mr Obama wants to unite America’s potentially fractious partners behind a co-ordinated stimulus and new financial regulation in London this week while also arresting the threat of protectionism. Unlike FDR, Mr Obama does not inherit the Smoot-Hawley Act, which erected steep trade barriers that entrenched the Great Depression and helped pave the way to world war two.

However, the US and its partners broke their promise at the first G20 summit last November to restart the Doha round of world trade talks. According to the World Bank, which has accumulated 73 examples of protectionist measures since then, many countries are moving in the opposite direction.

The president is understanding towards his partners, not least perhaps because he recently signed into law “Buy American” clauses that discriminate against foreign suppliers. While pointing out the “Buy American” provisions are consistent with World Trade Organisation rules, he observes: “I think in a democracy there are always going to be some loose ends out there. That is true here and true around the world but overall I don’t think that we have seen a huge rush to protectionism,” he adds. “To the extent that the American people [and others] feel confident their leaders are doing everything they can to encourage and promote economic growth, I think we are going to be able to hold the line on any significant slippage.”

The modulated phrasing strikes a clear contrast to the stentorian tone favoured by many of the president’s predecessors, George W. Bush in particular. Yet there is still an underlying message. On the need for a co-ordinated stimulus, with which many European leaders – most recently Angela Merkel, the German chancellor, in an FT interview – disagree, Mr Obama says: “Each country has its own constraints, its own political rhythms and what we want to make sure is that everybody is doing something…and that we are prepared to step into the breach should current efforts prove inadequate.”

Likewise, time would convince Washington’s partners of the necessity of stronger steps. “You know the financial crisis hit the United States first…Not surprisingly we took some very aggressive action earlier than some other countries…I think the sense of urgency has grown and you are going to start seeing a convergence.”

At home Mr Obama has been criticised for displaying an allegedly light-hearted attitude towards the crisis. One interviewer even accused him of being “punch drunk”. Supporters say that while Mr Obama may not be able to “feel your pain” in the manner of Bill Clinton, for example, America’s 44th president is good at reducing your fever.

Mr Obama conveys a degree of pragmatism that may strike a contrast to Mr Bush with some of his counterparts this week – notably Dmitry Medvedev, the Russian president, and Hu Jintao, his Chinese counterpart, who will hold one-to-one meetings with Mr Obama in London. Neither has yet met him.

Along with the pragmatism, Mr Obama also shows an occasional flash of humour. “Obviously I admire economists – I have a whole bunch of them on my staff,” said Mr Obama, whose senior economic adviser, Lawrence Summers, is arguably the most powerful of that profession in the world. “But to start to make a whole host of plans about next year, without having better information on how the current stimulus efforts are working, is something that I think is of concern.”

Following the London meeting, Mr Obama will travel to Strasbourg for a Nato summit where he will attempt to drum up support for the expanded US operations in Afghanistan, then on to Prague for a meeting with the heads of the European Union and finally on Sunday to Turkey where he will deliver a set-piece address – his first visit as president to a majority Muslim country. It is an ambitious itinerary. Everywhere he goes, thousands of anti-globalisation protesters await him along with tens of thousands of celebrity-watchers hoping to catch a glimpse of America’s most popular leader since John F. Kennedy.

Many believe that the G20 summit will prove a vacuous waste of time and that the world economy will continue to be sucked into the recessionary vortex. Mr Obama, however, projects a Zen-like calm towards the emergencies that he faces. If his rescue operations fail to arrest the tide, history may show him to have been too unfazed. If things started to stabilise and improve, Mr Obama could be hailed as the new FDR.

On the eve of the most important world economic gathering in decades, Mr Obama is still keeping the drama at arm’s length. “I am confident that the American people, and I think people around the world, are looking to its leaders to lead and that some of the steps we have already taken are starting to bear fruit,” Mr Obama says with the same tone he has struck at home in recent weeks.

Politics demands that Mr Obama continues to rally the support of America’s increasingly impatient – and economically beleaguered – electorate. Governance requires he keeps trying to lower its pulse.

In the meantime, Mr Obama may yet to have settled on a lasting plan to revive the financial sector. “I am confident that if we are persistent and we don’t approach this with a thought that there is a silver bullet out there but instead we are willing to try a range of methods … that we will get out of this current crisis,” he says.

By Edward Luce, Lionel Barber and Chrystia Freeland
source: Ft.com

Touting religion, grabbing land

LONDON: The demonstrations across Pakistan last week that forced President Asif Ali Zardari to reinstate the nation’s former chief justice, following the attack by militants on the Sri Lankan cricket team in Lahore, were simply the latest phase in the broad destabilization of the country.

This was hardly to have been anticipated 18 months ago, when I flew to Islamabad with Nawaz Sharif, the former prime minister. At that time, the prospects were good: Mr. Sharif had made an agreement with his main rival, Benazir Bhutto, to return the country to democracy. “I am not afraid,” Mr. Sharif told me. “I am going home after seven years. My primary concern is to put an end to the curse of dictatorship and give some relief to the people of Pakistan.”

After we landed in Islamabad, I had dinner with the family of my brother-in-law, Sana Ullah. Sana’s family comes from the Swat Valley, a religiously conservative and beautiful region in the north known as the Switzerland of Pakistan. It is, or was, a prosperous holiday destination, attracting tourists from places like Japan because of its ancient Buddhist heritage, and it was where Pakistani film makers would go to shoot movies in a romantic mountain setting.

But the stories I heard that evening were full of foreboding. The Swat Barbers’ Federation had just forbidden “English-style haircuts” and the shaving of beards. Strange visitors — possibly Uzbeks — were engaged in military training in the forests. A teenage boy told me, almost in passing, that his female cousin’s school had been blown up.

Today the political situation is very different: Ms. Bhutto was killed in a suicide attack in December 2007, Mr. Sharif has been banned from public office, and Swat has become a killing field.

The region has been handed over to the Pakistani Taliban in a foolish bargain made on behalf of Mr. Zardari’s government. Like most violent revolutionary movements, the Taliban use social injustice and a half-understood philosophy as an excuse to grab land and power. Houses and property have been taken over, and the Taliban have announced that people should pay 40 percent of their rent to their landlords and 60 percent to “jihad.”

In the district capital, Mingora, decapitated corpses were dangled from lampposts with notices pinned to them stating the “un-Islamic” action that merited death. At least 185 schools, most for girls, have been closed. Government officials, journalists and security troops have had their throats slit. Little wonder that most of my brother-in-law’s family has fled, along with 400,000 others.

What many Westerners fail to understand is that the Swat Valley is not one of Pakistan’s wild border areas. It is only 100 miles from Islamabad. In the words of Shaheen Sardar Ali, a cousin of Sana’s who is a law professor at Warwick University in England and was the first female cabinet minister in the government of North-West Frontier Province, “Swat is not somewhere you could ever see as being a breeding ground for extremism.” She remembers going to school unveiled as a child in the 1960s and studying alongside boys. But today, any girl who goes to school is risking her life.

Shariah law has been imposed, allowing elderly clerics to dictate the daily lives of the Swati people. President Zardari’s foreign minister, Shah Mehmood Qureshi, describes this as “a local solution to a local problem,” but the deal with the Taliban represents the most serious blow to the country’s territorial integrity since the civil war of 1971, when the land that became Bangladesh was given up.

When territory is surrendered in this way, it is very difficult for the state to recover it. The central premise behind the war on terrorism was that extremist groups should not be allowed sanctuaries from which to threaten the rest of the world. In that context, the loss of Swat offers the Taliban and other extremist groups a template for the future.

Pakistan’s slide toward anarchy is similar to the conditions in Afghanistan in the 1990s: it was easier then for the Afghan elite to pretend that the political situation was likely to improve than to face the truth and do something about it. The bickering factions in Kabul allowed the Taliban to take control of large areas of southern Afghanistan, refusing to see that this would only embolden the Islamists to march on the capital.

Similarly, millenarian Islamists are now seeking to destroy Pakistan as a nation-state, and realize that they have won a strategic victory in Swat. President Obama’s hope of weaning “moderate” elements in Afghanistan and Pakistan away from violence, as happened with Sunni militants in Iraq, is stymied by the fact the Pakistani Taliban know they are winning. Making a deal with them now is appeasement.

Worse, the Islamabad government has gained nothing from it. The Lahore shootings showed how fragile the security situation remains. Radical Sunni groups are more powerful than ever in the Punjab.

The Pakistani Army has been given billions of dollars by American taxpayers to defeat the Taliban, and it has failed. Some of the money even appears to have been diverted to the militants. The army has limited skill in counterinsurgency tactics or in winning hearts and minds; its main achievement over the last two decades has been in training militants to fight Indian troops in Kashmir.

“The people in Swat have no employment, no money, and they are terrified of the army,” Professor Ali told me. “Force is not an alternative, it’s too late.” Pakistan’s civilian law enforcement agencies need to be urgently reformed and strengthened.

The only way forward is for the government and those opposition politicians, such as Mr. Sharif, who still have popular support to unite with progressive elements inside the Army, and to recognize the real and immediate danger of the Islamist threat. If they do not, their country risks becoming a nuclear-armed Afghanistan.

Patrick French is the author, most recently, of “The World Is What It Is: The Authorized Biography of V.S. Naipaul.”

Flailing, but not yet failing

LONDON: Growing up in Pakistan in the 1980’s, I lived in the shadow of a tyrannical state. Our president, General Muhammad Zia ul-Haq had seized power in a military coup, and his government intervened regularly in daily life.

Even the way we spoke was affected. To say goodbye, for example, we were advised to abandon the traditional “Khuda-hafiz” for the newspeak “Allah-hafiz.” Both expressions meant “God be with you,” but the former had roots in Persian (the language of suspect Iran) while the latter leaned toward state-promoted Arabic (and ally Saudi Arabia).

Getting a driver’s license, applying for a passport, requesting a telephone line: These and other mundane activities all required protracted dealings with an officialdom that demanded contacts, bribes and subservience in exchange for its grudging consent. As citizens we did not assert rights, we supplicated for permission.

Atop the state hierarchy sat the military. If you were out in a car late at night and had a young army officer with you, a cousin home on leave perhaps, you knew the police would never dare detain you, no matter what traffic rules you violated. Similarly, if you found yourself in a dispute with someone well-connected to a senior bureaucrat, you knew you would find no relief in the courts.

The restoration of democracy in the 1990’s did little to change this situation, as far as I could see. It merely added a new class — members of the national and provincial assemblies and their families — to those able to yoke governmental power to their own personal interests. We watched them roar past us with shiny insignia on their cars like epaulets on the shoulder of a general.

So I have a long familiarity with the tyranny of the state, and it frightens me. But recently, as I watched from London, something had begun to frighten me even more: The prospect of a state so weak and divided that it ceased to function.

A strong state, even one as unjust as Pakistan’s in my teens and 20’s, can be challenged, shamed, subverted and reformed. Anarchy, on the other hand, is home to half-seen monsters: Creatures too random and wanton for the individual citizen to learn how to avoid.

In my life, there had been times when Pakistan’s main democratic parties seemed paralyzed, and other times when Pakistan’s Army seemed paralyzed. But I could not recall a moment like this, when both of these alternating sources of state power, the politicians and the generals, simultaneously appeared so lost.

Deprived of direction and legitimacy, and consumed by infighting, the state was fraying. The recent peace treaty in Swat, effectively changing a region’s legal system at the barrel of a (nonstate) gun, was one example of this. This month’s terrorist attack in Lahore, targeting foreign cricketers and therefore cricket, perhaps the last potent symbol of the nation, was another.

Families from Peshawar and elsewhere in the Northwest Frontier Province had decamped to the relative safety of Islamabad. Even there, residents were forced to think twice before going to a restaurant or hotel or crowded bazaar. Girls’ schools in liberal Lahore had begun receiving anonymous telephone threats. Anecdotally, crime in all major cities was on the rise.

None of these problems have vanished because of this week’s announcement of the restoration of Iftikhar Chaudhry as chief justice of the Pakistani Supreme Court. But like many Pakistanis, I suddenly find myself gripped by an unexpected optimism.

For Pakistan is not condemned to, and hopefully will not suffer, a terminal decline. The population remains overwhelmingly moderate: In last year’s parliamentary elections, religious extremist parties captured only 3 percent of the vote. Poverty and malnourishment are not worse than that of growth-story (and neighbor) India. A substantial foundation of Pakistani institutions and infrastructure exists on which to build.

But a state long accustomed to casual despotism is facing an existential choice. It must respond to the legitimate aspirations of its people: for speedy and impartial justice, for education, for electricity and water and basic services, and  crucially  for a say in what wars are fought in their name. In other words, the Pakistani state must change its bias from tyranny to representation before it ceases to function.

This week, it took a step in the right direction. President Asif Ali Zardari had dismissed the government of the country’s most populous province and was refusing to reinstate the independent-minded Justice Chaudhry.

But civil society and the media were outraged. Public opinion turned against Zardari. Members of his own party and the provincial administration revolted. Thousands joined a protest march called by Zardari’s main political rival, Nawaz Sharif. Zardari conceded, and Sharif ended the march.

Without army intervention, without the bloodshed that has preceded major changes in the past, important precedents have been set: The independence of the judiciary matters, and democratically-elected governments cannot be casually dismissed. The Pakistani state has taken a significant step toward becoming more responsive to its people.

For the rest of the world, it is imperative that Pakistan succeeds in this difficult journey. President Obama seems intent on intensifying a war in Afghanistan that the United States cannot win without Pakistan’s help and that the Pakistani people do not support. He should reconsider: Continuing to push the Pakistani state in a direction at odds with the desire of its citizens risks a chaos that will not be contained by national borders.

By Mohsin Hamid
Tuesday, March 17, 2009

Mohsin Hamid is the author, most recently, of the novel “The Reluctant Fundamentalist.”

U.S. Weighs Taliban Strike Into Pakistan

WASHINGTON – President Obama and his national security advisers are considering expanding the American covert war in Pakistan far beyond the unruly tribal areas to strike at a different center of Taliban power in Baluchistan, where top Taliban leaders are orchestrating attacks into southern Afghanistan.

According to senior administration officials, two of the high-level reports on Pakistan and Afghanistan that have been forwarded to the White House in recent weeks have called for broadening the target area to include a major insurgent sanctuary in and around the city of Quetta.

Mullah Muhammad Omar, who led the Taliban government that was ousted in the American-led invasion in 2001, has operated with near impunity out of the region for years, along with many of his deputies.

The extensive missile strikes being carried out by Central Intelligence Agency-operated drones have until now been limited to the tribal areas, and have never been extended into Baluchistan, a sprawling province that is under the authority of the central government, and which abuts the parts of southern Afghanistan where recent fighting has been the fiercest. Fear remains within the American government that extending the raids would worsen tensions. Pakistan complains that the strikes violate its sovereignty.

But some American officials say the missile strikes in the tribal areas have forced some leaders of the Taliban and Al Qaeda to flee south toward Quetta, making them more vulnerable. In separate reports, groups led by both Gen. David H. Petraeus, commander of American forces in the region, and Lt. Gen. Douglas E. Lute, a top White House official on Afghanistan, have recommended expanding American operations outside the tribal areas if Pakistan cannot root out the strengthening insurgency.

Many of Mr. Obama’s advisers are also urging him to sustain orders issued last summer by President George W. Bush to continue Predator drone attacks against a wider range of targets in the tribal areas. They also are recommending preserving the option to conduct cross-border ground actions, using C.I.A. and Special Operations commandos, as was done in September. Mr. Bush’s orders also named as targets a wide variety of insurgents seeking to topple Pakistan’s government. Mr. Obama has said little in public about how broadly he wants to pursue those groups.

A spokesman for the National Security Council, Mike Hammer, declined to provide details, saying, “We’re still working hard to finalize the review on Afghanistan and Pakistan that the president requested.”

No other officials would talk on the record about the issue, citing the administration’s continuing internal deliberations and the politically volatile nature of strikes into Pakistani territory.

“It is fair to say that there is wide agreement to sustain and continue these covert programs,” said one senior administration official. “One of the foundations on which the recommendations to the president will be based is that we’ve got to sustain the disruption of the safe havens.”

Mr. Obama’s top national security advisers, known as the Principals Committee, met Tuesday to begin debating all aspects of Afghanistan-Pakistan strategy. Senior administration officials say Mr. Obama has made no decisions, but is expected to do so in coming days after hearing the advice of that group.

Any expansion of the war is bound to upset those in Mr. Obama’s party who worry that he is sinking further into a lengthy conflict in Afghanistan, even while reducing forces in Iraq. It is possible that the decisions about covert actions will never be publicly announced.

Several administration and military officials stressed that they continued to prod the Pakistani military to take the lead in a more aggressive campaign to root out Taliban and Qaeda fighters who are attacking American forces in Afghanistan and increasingly destabilizing nuclear-armed Pakistan.

But with Pakistan consumed by political turmoil, fear of financial collapse and a spreading insurgency, American officials say they have few illusions that the United States will be able to rely on Pakistan’s own forces. However, each strike by Predators or ground forces reverberates in Pakistan, and Mr. Obama will be weighing that cost.

Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff, said on “The Charlie Rose Show” on PBS last week that the White House strategy review addresses the “safe haven in Pakistan – making sure that Afghanistan doesn’t provide a capability in the long run or an environment in which Al Qaeda could return or the Taliban could return.” But another senior official cautioned that “with the targets now spreading, an expanding U.S. role inside Pakistan may be more than anyone there can stomach.”

As part of the same set of decisions, according to senior civilian and military officials familiar with the internal White House debate, Mr. Obama will have to choose from among a range of options for future American commitments to Afghanistan.

His core decision may be whether to scale back American ambitions there to simply assure it does not become a sanctuary for terrorists. “We are taking this back to a fundamental question,” a senior diplomat involved in the discussions said. “Can you ever get a central government in Afghanistan to a point where it can exercise control over the country? That was the problem Bush never really confronted.”

A second option, officials say, is to significantly boost the American commitment to train Afghan troops, with Americans taking on the Taliban with increasing help from the Afghan military. President Bush pursued versions of that strategy, but the training always took longer and proved less successful than plans called for.

A third option would involve devoting full American and NATO resources to a large-scale counterinsurgency effort. But Mr. Obama would be bound to face considerable opposition within NATO, whose leaders he will meet with early next month in Strasbourg, France. At the very time the United States is seeking to expand its presence in Afghanistan, many of the allies are scheduled to leave.

As for American strikes on militant havens inside Pakistan, administration officials say the Predator and Reaper attacks in the tribal areas have been effective at killing 9 of Al Qaeda’s top 20 leaders, and the aerial campaign was recently expanded to focus on the Pakistani Taliban leader, Baitullah Mehsud, as well as his fighters and training camps. American intelligence officials say that many top Taliban commanders remain in hiding in and around Quetta, but some Afghan officials say that other senior Taliban leaders have fled to the Pakistani port city of Karachi.

Missile strikes or American commando raids in the city of Quetta or the teeming Afghan settlements and refugee camps around the city and near the Afghan border would carry high risks of civilian casualties, American officials acknowledge.

By DAVID E. SANGER and ERIC SCHMITT

Thom Shanker contributed reporting from Washington, and Carlotta Gall from Islamabad, Pakistan.