IT is too early to know the state of US-Pakistan relations under Obama’s second term. These relations are a derivative of America’s overall foreign policy which is not quite evident yet. But one can at least project its broader theme and anticipate its impact on Pakistan.

America is undergoing something of a silent transformation. Obama’s second term is going to be about authentic change while the first one was about gaining political power and changing the national discourse. The focus will be domestic not foreign affairs.

The push for transformation has been provoked by the demographics, excesses of capitalism, rising income inequality, unholy alliance between money and politics, high government spending including on wars and an overextended foreign policy and economic challenges of globalisation. All this has contributed to unsustainable debt and deficit levels threatening the so-called American dream.

This is a critical situation calling for full attention and marshalling of all the political capital the president can muster. For that he would need a relatively peaceful external environment.

That means pulling back from the world for a time so that America can concentrate on nation-building at home. And that is precisely what the world also needs — for the US to step back a bit. American power still remains supreme and decisive in ensuring a stable international order in a world that has changed in many complex ways.

But this power will have to be exercised differently now than in the past. President Bush tried to exercise it purely militarily and unilaterally and failed. It was a collision between the old America and the new world and it exploded in America’s face.

First of all, Obama might ‘demilitarise’ the US foreign policy a bit. The generals’ scandal may have thus come at an opportune time. Secondly, foreign engagements will be more selective, focused and purposeful, anchored where possible in regional arrangements. There will also be more openness to internationalism.

How does it affect the ground situation? Relations with China and Russia will continue the present pattern of competition and cooperation, engagement and containment, and avoidance of conflict but preparing for it. Traditional ties with Europe and Japan, and emerging relations with India will be maintained and new alignments developed in Asia focusing on the need to balance China and continue its benign encirclement. But there will be no drama, flair or wars or game-changing initiatives.

New initiatives if any are going to be on the Middle East and Iran. The Middle East means three different sets of challenges — the Israeli Palestinian question, the so called Arab Spring and Syria, all tough issues that will test the mettle of US diplomacy.

Whether Obama attempts a resolution of the Palestinian issue would depend on two critical factors — his initial success on the home front and resolution of the Iran conundrum as without it Israel is not going to give any concessions on the Palestinian issue.

And where does Pakistan figure? The fact is America’s post 9/11 wars have had a major impact on the regional environment and Pakistan’s internal dynamics affecting US-Pakistan relations. These relations have in turn left their own imprint. By inciting anti-Americanism and mobilising public opinion they have on one hand spread and deepened extremism in Pakistan. On the other, by focusing on nationalism and democracy, they have opened up an intense debate about security, national interest, sovereignty and the role of the army. In sum, the relations have created a crisis and have been affected by it. What is needed now, from Pakistan’s perspective, is their reconstruction on an equitable footing.

Washington too may also be rethinking. While Pakistan will remain relevant in many respects — especially in the fight against terrorism, and the Afghanistan war — it could lose its status of a leading foreign policy challenge. And this may not be a bad thing. A less high-profile relationship would mean less tension.

Given its fiscal problems at home and the need to rebalance its foreign policy priorities abroad America may disengage from the strategic embrace that the Kerry-Lugar initiative had envisioned. But the aid relationship will be maintained though it may have to struggle through America’s budgetary constraints and Pakistan’s own policy weaknesses. Intelligence and military cooperation in the fight against terrorism will also continue but at a lower level of expectations. Drone attacks will not stop but will be scaled down.

Pakistan still remains a big player in the Afghanistan endgame. Washington will no doubt make an effort to have a political arrangement in place before the withdrawal in 2014. But the time for peace with honour is long gone; the best that can be hoped for may now be peace without dishonour.

To that end there may be a serious attempt to accommodate the Afghan Taliban with some power-sharing and then build firewalls against a total Taliban takeover, hopefully, with the help of regional players including Pakistan, India and Iran and a strengthened anti-Taliban alliance dominated by non-Pakhtun political forces. Pakistan’s help would be critical in both.

But Pakistan does not know how to give this help as it does not know what is in it for Pakistan and what kind of Afghanistan and what kind of relationship with the Taliban it wants. That is the dilemma — both the main protagonists, the US and Pakistan, are at a loss. They have both failed, and not for the first time.

The writer teaches at Georgetown and Johns Hopkins University.