President Obama’s Last State of the Union Speech: An FPRI Primer

Tonight, President Obama will deliver the last State of the Union Address of his presidency. This prime time speech offers him an opportunity both to celebrate his accomplishments and to sketch his priorities as his presidency enters its final year. News leaks suggest that the speech will not include many policy specifics, since the president has no plans to present any new initiatives to Congress. Presidents often spend their last years in office focusing on foreign affairs and international travel, where they still enjoy some possibilities for independent action, and reports of President Obama’s upcoming travel schedule indicate that will be the case for him as well.  That doesn’t mean that he will offer foreign policy specifics either, but it will certainly come up in the speech.

The world remains unpredictable, though State of the Union addresses are generally much less so.

  • ​The President will certainly highlight his efforts to break out of previously frozen relationships, such as with Cuba, where the U.S. Embassy has been reopened in the past year. Look for him to mention, if not insist upon, the need for Congressional action to reduce further political and economic barriers to trade, travel, and communications with the island.

What he will likely leave out: any discussion of Cuba’s continued imprisonment of political dissidents, or the Castro regime’s tight control on trade and economic benefits for the Cuban people.

  • This also means the President will accentuate the positive of the nuclear deal with Iran. It may be difficult for him to be too specific in his positives, considering the ongoing tension in the gulf between Iran and Saudi Arabia, and Iran’s recent missile tests, but we can expect that the President will paint the agreement, which he and his staff have already called one of the landmarks of his administration, as an important first step in reducing tensions in the Middle East. That will also likely include vague but hopeful words about how Iran can be induced to play a more constructive role in resolving the conflict in Syria.

What he will likely leave out: specific references to Iran’s missile program, or its irresponsible encouragement of the mob that attacked the Saudi embassy, not to mention today’s Iranian seizure of two US Navy ships.

For a more in-depth analysis of the Iran deal and its implications, see our recent E-Note by Oded Brosh, “The Problem with the Iran Nuclear Deal: It’s Not that Iran Will Violate It but that Iran Will Comply

  • He will also emphasize his commitment to improving the terms of global trade, which will include positive evaluations of the Trans-Pacific Partnership (TPP), the major trade deal with a dozen Pacific Rim states that has been negotiated and is now before Congress for ratification. This will require an uneasy balancing act between the President’s desire to cite TPP as a diplomatic success and his recognition that all three of the Democratic presidential candidates, not to mention the majority of Democrats in Congress, have expressed deep skepticism about free trade in general and the TPP in particular.

What he will likely leave out: in addition to his party’s ambivalence, he will also likely soft pedal his own dilatory handling of the equally important Transatlantic Trade and Investment Partnership (TTIP) with Europe, which was also supposed to be ready for ratification by now.

For some more background on the Trans-Pacific Partnership, see William Krist’s E-Note, “Why We Need the Trans-Pacific Partnership and How to Get It Right;” Felix Chang’s blog post, “U.S. Foreign Policy Aspirations and the Trans-Pacific Partnership: Economic Integration and Political Alignment?” and (re)watch our Google Hangout “The Trans-Pacific Partnership Debate: Prospects, Problems, and Implications” featuring Jacques deLisle, Shihoko Goto, and Minyuan Zhao

  • On ISIS and terrorism, the President will both reaffirm his resolve to defend the homeland and warn against allowing fear of terrorism to paralyze America’s relations with the world. As he links this general topic to the specific attacks in San Bernardino and Istanbul, as well as to the disturbing reports of migrant behavior in Germany, it is very likely that this discussion will lead into an effort to explain why legal and properly regulated immigration is important for the future of the United States, allowing him to place himself and his party on the side of immigration reform and to paint critics as alarmists and nativists.

What he will likely leave out: the security lapses that led US officials to miss the radical background of Tashfeen Malik, the female San Bernardino attacker, or his administration’s halting and uneven strategy against ISIS.

For the latest FPRI commentary on ISIS, read our Robert A. Fox Fellow Clint Watts’ essay “5 Questions on the Islamic State for GOP Presidential Candidates” from War on the Rocks, and John Haines’ recent E-Note “What Would Kennan Do? George Kennan, the Containment Doctrine, and ISIS.”
One should also expect certain international issues will be touched upon more lightly, such as:

  • China: the current economic upheaval will likely come up, though the President is likely again to accentuate the positive, holding up cooperation with China as crucial for global stability and prosperity.

What he will likely leave out: discussion of China’s provocative island building in the South China Sea, or their failure to live up to their commitments to monitor and rein in the North Korean nuclear program. For that matter, he is likely to avoid discussing how the failure of the North Korea nuclear deal might reflect on the deal with Iran.

For the latest FPRI commentary on China, see June Teufel Dreyer’s recent E-Note “China and Russia: The Partnership Deepens” and Felix Chang’s recent blog post “China’s “One Belt, One Road” to Where?

  • Russia: although significant differences remain over issues ranging from Ukraine and Crimea to Syria, the President will confine comments on Russia and President Putin to hopes for more constructive cooperation.

What he will likely leave out: the relationship between Russia’s aggressive behavior and his own failed “reset” with Moscow.

For an unusual take on Putin’s motivations, see Mitchell Orenstein’s E-Note “Vladimir Putin: An Aspirant Metternich?” from 2015.
One last thing. The President is unlikely to offer a coherent statement on American policy toward the EU. In this, he will be like too many Presidents, who have not made an effort to explain why the unity of our most important allies and trading partners is good for us as well as them.

Readers are welcome to follow the speech with us on Twitter, @fprinews and @RonaldGranieri to see how well these predictions hold up.

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Field Notes: Havana, Cuba

I never liked avocados.  Despite their increasing popularity as a health food, to me they taste like an oily vegetable butter.  Nevertheless, my recent week long trip to Cuba gave me a new perspective on this fruit.  Although the trip was organized by the Cuban government, my visit offered clues to the inner lives of this socialist country’s everyday citizens.

As part of the group visit, I sat through a local priest’s lecture on Santería, Cuba’s odd mix of Catholicism and the Yoruba religion.  At the presentation’s end, the priest and several of his assistants presented our group with large, ripe avocados in appreciation for our visit.   I had no interest in mine as we returned to our government-selected 5-star hotel, so our native Cuban professor suggested that I simply donate it to a hotel employee. 

 

 

 

 

 

 

 

 

 

 

 

Exterior and Interior shots of our government-selected 5-star hotel

I offered an avocado to our 35-year-old male, European-descended hotel clerk, who had a shaved head, a club bouncer’s build and a bus driver’s friendliness.  I expected him to either politely decline the offer or accept the two-pound berry with awkwardness since he was at work. But as soon as he realized I was serious, he joyfully accepted the gift, beaming with immense gratitude. Stunned, I retreated to my room wondering why that innocent gesture – re-gifting an avocado – had made his day.  Although I thought he was doing me a favor, in reality I was helping him circumvent Cuba’s dual currency system.

The Cuban monetary system, designed in 2004 to help remove foreign (mainly US) dollars from circulation in the country, uses the traditional Cuban Peso (CUP) for every day expenses. Tourists, however, are required to convert their money into the Cuban Convertible Peso (CUC), which is valued at one USD and twenty-four CUP.  According to the government pay scale, an average hotel worker earns 367 CUP a month, equal to $16 or 16 CUC. This gives him or her enough money – despite the ration system – to purchase food, but not for any luxuries beyond the basic necessities.  For example, the country’s national beer, the Bucanero Fuerte, costs 1 CUC or 24 CUP – an amount equal to two days’ salary for government employees who comprise 75% of the Cuban workforce

Despite his meager salary, a hotel employee is very lucky. His job in the tourist industry puts him near foreigners who tip in CUC, allowing him to live above a bare minimal existence.  For everyone else, the dual-monetary system keeps prosperity out of local hands and ensures dependence on and obedience to the government.  In Cuba, an avocado costs 0.50 CUC, internet access costs 4.50 CUC per hour, and the departure tax costs 25 CUC.  This immense, mandated disparity between the purchasing power of a Cuban income and the costs of a comfortable life leaves ordinary Cubans with little access to basic luxuries, let alone outside information or international travel.  Is the regime aware that it is hurting the Cuban people in its attempt to preserve Cuban socialism against supposed American imperialism?  Yes, but the Cuban monetary system also works to the regime’s advantage by hindering access to information critical of the one-party state.

10 Cuban Pesos (CUP) – About half a day’s salary or the price of an avocado

 10 Convertible Cuban Pesos (CUC) – Equal to 10 USD or 240 Cuban Pesos (CUP)

President Raul Castro has pledged to eventually do away with the two-currency system, but like other reforms, the regime alone will determine the pace and necessity of such change.  Nevertheless, a hasty simplification of the system has the potential for disastrously high levels of inflation.  A sudden executive decree reducing the CUP:CUC ratio from 24:1 to 1:1 would immediately increase demand for CUC-priced goods with the subsequently higher prices wiping out workers’ incomes and savings. 

As Cubans continue to debate the current reforms, few at the moment seem eager to acknowledge the elephant in the room:  Raul Castro announced he will step down as President after his current term ends in 2018.  The culmination of the Castro brothers’ 60 years of power could very well bring with it changes far more drastic than a simplified monetary system.  While the future holds both political uncertainty and economic hope, in the meantime, ordinary Cubans will continue to covet the brighter, cleaner, and more colorful CUCs—and the better life that they can buy. 

 

James Midkiff is a Research Assistant Intern to FPRI Senior Fellow David Danelo.

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