That Barack Obama takes his presidency rather seriously was evident from the fact that he retook his oath of office the very next day after Chief Justice John Roberts goofed up the six-word phrase while delivering it at the formal inauguration on Tuesday, November 20. The do-over was not necessary but it did serve the purpose of dispelling any confusion over the original oath and averting any future doubts over the legality of Obama's presidency. Obama is America's president now. He has promised to change America. Whether or not he does it, his presence in the White House certainly gives a new "facelift" to the US. Globally too, there is a new mood altogether on the prospect of change in America's policies and outlook. The world wants to see an America which hopefully would be at peace with itself and with the rest of the world. But all this will depend on how Obama brings the difference in America's polices both at home and abroad. Obama acknowledges the gravity of his challenges and has vowed to meet them to bring about a change in the lives of Americans as well as those of the people of the world. He ran on an electoral platform to change the country and its politics. Domestically, he will focus on the economic crisis and seek to redress the systemic decay in social security, healthcare and educational standards. Globally, he said he will end the war in Iraq "responsibly" and finish the war in Afghanistan by after defeating the Taliban and Al-Qaeda in Afghanistan. Immediately after assuming his office, Obama has taken steps ostensibly aimed at restoring America's moral standing. While carefully avoiding "divisive" partisan and ideological stands, he did move to "break" sharply from his predecessor's legacy by focusing on fixing the economy, repairing a battered world image and cleaning up the government. In the highly scripted first days of his administration, Obama overturned some of the Bush policies with great fanfare. He signed executive orders on closing the notorious Guantanamo Bay prison camp and decreed interrogation methods to comply with the prescribed army field manuals. This was a cosmetic activity intended only to show that Obama was serious in his promise to bring change. There are no signs yet of any serious move towards addressing the major domestic and international challenges which apparently continue to pile up raising doubts on the prospects of any dramatic initiative or breakthrough. Obama's biggest agenda items - stabilising the economy and ending the Iraq war are complex tasks with results not expected soon. In other cases, he seems to be signalling only a slow and selective approach. On Afghanistan and Pakistan, representing America's "other war", Obama has gone ahead with an important initiative by appointing Richard Holbrooke as his special envoy. Given this high-profile move, he seems to have given a clear message that besides the planned military "surge" he would also be counting on the process of diplomatic "engagement" to pursue the long-term strategic goals in this volatile region. Holbrooke himself sees success in this "other war" predicated on new policies with regard to four major problem areas: the tribal areas in Pakistan, the drug lords who dominate the Afghan system, the national police, and the incompetence and corruption of the Afghan government. He envisions a regional approach involving Iran as well as China, India, and Russia but according to him, the toughest is the insurgent sanctuaries in the tribal areas of western Pakistan "which brings a special focus on Pakistan as a major stakeholder." President Barack Obama has already ordered a broader review of the US strategy in Afghanistan. A process of "getting US policy toward Islamabad is already afoot in the form of Biden-Lugar bill for more non-security aid to Pakistan devoted in part to developing tribal areas where Al-Qaeda militants are believed to be flourishing." The US has repeatedly said that Osama bin Laden and other top Al-Qaeda militants are hiding in the mountainous Pakistan-Afghanistan border region. No wonder, Pakistan is now considered the "single greatest challenge" facing the new American president. According to assessments being made for him, the US cannot afford to see Pakistan fail, nor can it ignore the extremists operating in Pakistan's tribal areas. Obama is convinced of the need for Washington to "rethink its entire approach to Pakistan." What does Obama's presidency portend for Pakistan? Pakistan lies in the eye of the storm that will be the foremost preoccupation of the new administration in Washington where terrorism is an issue above party lines and evokes equal concern over Pakistan's critical role in the US War On Terror. There will be no major change in Washington's policy focus on Pakistan. The modality of pressure might perhaps shift from direct military operations to greater diplomatic and economic engagement. The idea will be not to weaken democracy in Pakistan but to strengthen it to be a more effective and more reliable partner in our common pursuits. The new approach is evident in the bipartisan US aid package introduced in the Senate last July calling for $1.5 billion per year in non-military spending to support economic development in Pakistan. Vice President Joe Biden is essentially the architect of this approach which seeks to move from a transactional relationship - the exchange of aid for services - to the normal, functional relationship with Pakistan. This plan would fundamentally and positively shift the dynamics between the US and Pakistan. Here's how Joe Biden described the four elements of his strategy: First, triple non-security aid, to $1.5 billion annually for at least a decade. This aid would be unconditioned pledge to the Pakistani people. Instead of funding military hardware, it would build schools, clinics, and roads. Second, security aid will be performance-based. It will be linked to clear results. The US is now spending well over $1 billion annually, but it's not clear it is getting its money's worth. The US will spend more if it get better returns - and less if it doesn't. Third, help Pakistan enjoy a "democracy dividend." The first year of democratic rule should bring an additional $1 billion - above the $1.5 billion non-security aid baseline. And the future non-security aid will be again, above the guaranteed baseline subject to Pakistan's progress in developing democratic institutions and meeting good-governance norms. Fourth, engage the Pakistani people, not just their rulers. This will involve everything from improved public diplomacy and educational exchanges to high impact projects that actually change people's lives. This package seems to be gaining support in the US Congress and other policy-influencing forums. The Pakistan Policy Working Group had also endorsed this plan but insisted that "such assistance must be performance-based, and must be accompanied by rigorous oversight and accountability." The era of the blank checks is over, the report said while also recommending favourable US market access for Pakistani textiles and for products produced in tribal regions on the Afghan-Pakistan border. This signals the future direction of US policy towards Pakistan. President Obama will have to "mix deft diplomacy, security support and economic aid" to help Islamabad meet the challenge of extremist threat. In doing so, his approach must be one of supporting the democratic process in Pakistan. He will also have to show greater sensitivity to Pakistan's concerns on repeated violations of its sovereign independence and territorial integrity. A country under duress of drone attacks and military incursions has no motivation to cooperate with a san effective partner in the fight against a common enemy. It is also important as recognised by Joe Biden himself that the aid to Pakistani people must be unconditioned - that is, not subject to the ups and downs of a particular government in Islamabad or Washington. This will be a better way of fighting Islamic extremism and resultant terrorism. Vice President Joe Biden should now follow up on his own plan for "redoubling our efforts in Afghanistan - not just with more troops but with the right kind and with a reconstruction effort that matches President Bush's Marshall Plan rhetoric - would embolden Pakistan's government to take a harder line on the Taliban and Al-Qaeda." President Obama should perhaps come out with an adequate Marshall Plan of his own. In the ultimate analysis, the US-Pakistan relations will stand or fall depending on whether they benefit the people of Pakistan or any particular regime or ruler. It is an important relationship and must now be based on mutuality. With a new Democratic administration in Washington and a genuinely democratic government in Islamabad, both sides need to engage constructively to strengthen this relationship by making it more substantive and more meaningful through greater political, economic and strategic content. But the Democracy Dividend will not and should not be payable unless General Musharraf's legacy, the Seventeenth Amendment is repealed. The writer is a former foreign secretary