Monday's ruling from India's Supreme Court that Novartis could not claim patent protection for an expensive leukemia drug throws a spotlight on India's limited intellectual property (IP) protections and may constrain much needed innovation both in the health industry and the broader economy.

The court's verdict upholds language in India's 2005 patent law that says new forms of a known drug must be significantly more effective in order to win a new patent. The court's move represents a win for India's booming generic pharmaceutical industry, but it may prove a pyrrhic victory as it threatens to fundamentally limit the government's ability to improve Indian healthcare over the long term. Foreign corporations with any IP concerns will now be more careful about operating in India. The ruling could also have the unintended consequence of keeping domestic makers of generic pharmaceuticals at the lower end of the value chain. 

The verdict is in fact the latest move by Indian authorities targeting international pharmaceutical firms' IP protections in order to help lower Indian healthcare costs. But, despite the government's hostility toward their business model, research and development-focused pharmaceutical firms such as Novartis are unlikely to exit India entirely. They will, however, proceed slowly and cautiously with the drugs they introduce and the patents they file.

The government's approach will also further box Indian pharmaceutical firms into their role as producers of low-cost, low-margin generic drugs. Over the long term, many Indian companies plan to invest substantially in research capabilities in an effort to develop new treatments and move up the value chain. These firms could become victims of their own lobbying and legal successes. Indian pharmaceutical companies will find it difficult to make the transition to higher value products if their IP protections are limited.  

More broadly, the verdict could constrain innovation in other areas of the economy as well. Any firm that depends on IP may find the Indian market either unprofitable or unwelcoming (or both). A clear medium-term risk is that foreign investment in Indian research centers will also probably decline, threatening India's long-term growth. The Indian government can ill-afford to stifle the virtuous cycle of innovation if the country's economy is to provide adequate jobs, healthcare, and social opportunities for a largely disadvantaged population of 1.2 billion. 

Sasha Riser-Kositsky is a researcher with Eurasia Group's Asia practice.

Note: Today is the ninth in a series of posts that detail Eurasia Group's Top Risks for 2013

With slow growth, persistent inflation, and large fiscal and current account deficits, India desperately needs to implement a range of economic reforms. But due to its own shortcomings and a constraining political environment, the ability of the Congress party-led United Progressive Alliance to tackle structural problems is limited -- and will wane further in the run-up to national elections.

Elections are due by May 2014, and the Congress party is scrambling to shore up its popularity in the wake of high-profile corruption scandals. Other coalition members and issue-based supporters, sensing weakness, will try their hardest to extract political concessions from the Congress while the opposition Bharatiya Janata Party (BJP) will likely remain relentlessly obstructionist in its quest to regain power.

Consequently, parliamentary gridlock will persist, with only minor administrative reforms politically feasible in 2013. P. Chimdambaram's return as finance minister in July 2012 has buoyed foreign investor confidence and market sentiment, but he needs to make deep, politically difficult spending cuts to improve India's chance of averting a sovereign credit downgrade to junk status.

And parliamentary elections are not likely to lead to an improved policymaking environment. Like the Congress party, the BJP is in the throes of a prolonged leadership transition and has been largely unable to capitalize on the decline in public support for Congress. This leadership vacuum has enhanced the influence of swing regional and state parties. Elections will likely result in a hung parliament and an even more unstable coalition that will be capable of approving only lowest-common-denominator policies.

Growth will improve in 2013 but India will likely miss its fiscal deficit targets of 5.3 percent of GDP for fiscal year 2012-2013, and 4.8 percent for fiscal year 2013-2014, without substantial subsidy cuts unprecedented in an election year budget.

Expectations for India's performance in 2013 are limited. While it can hope to accomplish just enough on fiscal policy and economic reforms to avoid a sovereign downgrade, India will make negligible progress on structural problems that have long vexed its economy.

On Wednesday, we'll profile Risk #10: South Africa.

By Anjalika Bardalai

On the face of it, India and the US have more differences than similarities: They diverge markedly in terms of income and a host of other qualitative and quantitative indicators. They seem like political opposites as well-one is a two-party presidential system, the other a parliamentary system comprising no fewer than 70 recognized parties (the newest was launched just this week). But Mitt Romney's defeat in the recent US presidential campaign has highlighted several weaknesses of the Republican Party that are mirrored in India's center-right national party, the Bharatiya Janata Party (BJP), which has been the main national opposition party since its spectacular loss in India's 2004 general election.

Most critically, both parties exhibit a split between a conventionally center-right, business-friendly faction and an overtly religious faction that tries to politicize social issues. In the US, the extremely conservative stance of a few Republicans on issues such as rape and abortion periodically overshadowed the presidential campaign and arguably alienated potential voters who favor the right's economic policies, but who found its social policies abhorrent. The BJP, too, exhibits a fault-line between one faction that is secular, pro-business, pro-economic reform, and (relatively) fiscally conservative, and another wing-the hardline "Hindu-nationalists."

The GOP's hardline stance and rhetoric on immigration reform in the US contributed to an extremely poor showing for the party among Hispanics, the fastest-growing minority group in the US.  Similarly, the consequences for the BJP of the Hindutva influence are grave, and will become ever more so as rising incomes inevitably weaken the bonds of religious, ethnic- and caste-based identity in India. For one thing, the BJP's perceived pro-Hindu stance means that it will be all but impossible to make serious electoral inroads among the roughly 15% of India's population that is Muslim.

In addition, the BJP's position is a serious liability in terms of its ability to form alliances with India's myriad regional parties. In an increasingly fractured political system, this could be an utterly debilitating political handicap. As a debate raged this week about whether or not a symbolic parliamentary confidence vote would be held on a the government's recent move to liberalize FDI in the retail sector, the BJP was unable to persuade key parties that are stridently opposed to the reform that they should side with it in a vote against the government. As much as they may fear the recent liberalization, the other parties may fear what they have termed the "communal forces" represented by the BJP even more.

The broader consequences of the BJP's schizophrenic identity are no better. In the absence of a strong, coherent policy platform, the party has relied on sheer obstinacy and obstructionism, preventing the legislature from attending to important legislation (some would argue echoing the behavior of the Republicans in Congress for much of the recent past). The Indian government certainly cannot be absolved of responsibility for the current disastrous policymaking environment, but the main opposition party is behaving irresponsibly.

Finally, the division between the secular and religious right complicates the choice of party leadership. Some analysts argued that with public approval of Obama relatively low and, crucially, the US economy still relatively weak, the presidency was the Republicans' to lose if only the party had been able to muster a stronger candidate than Romney. In India, the BJP has yet to anoint a prime ministerial candidate for the next general election, which is due by May 2014. The man widely hailed as the front-runner is the chief minister of the state of Gujarat, Narendra Modi. Having presided since 2001 over one of India's fastest-growing and most industrialized states, he has developed a sterling reputation for economic management and as such is well-placed to campaign on the main issue of the day: economic revival.

Unfortunately for him, however, he is also one of the country's most divisive figures, with a shadow still hanging over him from communal riots in the state in 2002 in which around 1,000 people-75% of them Muslims-were killed. Even if he prevails in the BJP's internal leadership struggle, this potentially bodes ill for the party's electability in 2014. The BJP urgently needs to reflect on finding a leader who could bring to the table both economic management and political cohesion. Both the Indian BJP and the US GOP have similar lessons to learn from recent history as they attempt to stake out a brighter political future.

Anjalika Bardalai is an analyst in Eurasia Group's Asia practice.

Today, The Call presents our top risks for 2012. Click HERE for Eurasia Group's complete report.

1. The End of the 9/11 Era -- It was a truism of globalization: economics drives markets, and national security drives geopolitics. No longer. Following the 2008 financial crisis, the killing of Osama bin Laden, the withdrawal of U.S. troops from Iraq, and an end date for the war in Afghanistan, politics and economics will overlap almost entirely in 2012. Political officials around the world will worry mainly over economic risks -- the eurozone crisis, the strength of U.S. recovery, and China's evolving role in the global economy in 2012. Market players, in turn, are anxious mainly about political decisions, especially those that will be made in Europe, America, and China this year, as shortsighted leadership from virtually all the major geopolitical players generates policy stalemate and uncertainty.

2. G-Zero and the Middle East -- The inability/unwillingness of major powers to bolster the region's balance of force will generate greater turbulence across North Africa and the Middle East as unresolved religious, sectarian, and ethnic tensions threaten more unrest. The lack of a viable regional security framework, continuing protests, autocracies at risk, and enormous challenges facing newly democratic regimes will add to the potential turmoil. As this dynamic plays out in Syria, Egypt, Iraq, Libya, Yemen and Bahrain, regional heavyweights -- Saudi Arabia, Iran, and Turkey -- will generate friction as they vie for proxy influence.

3. Eurozone: the rollercoaster ride rolls on -- In Europe, it's not the breakup of the Eurozone we need to fear in 2012 but the "reactive incrementalism" that could spin beyond the control of political officials. The uncertainty and volatility we saw in 2011 has only just begun.

4. United States: right after elections -- Once the votes are counted in November, lawmakers will take up the $5 trillion worth of tax and savings decisions that must be taken in the final nine weeks of the year. Investors face uncertainty about their taxes and government contracts as well as about the broader impact of lawmakers' choices on economic growth.

5. North Korea: implosion or explosion -- The world's most opaque nuclear-armed state enters a year of uncertainty as the battle for power and influence within the regime gathers force.

6 - Pakistan: turmoil, spillover -- The end of the 9/11 era threatens neglect of other hotspots, and none is more combustible than Pakistan, a terrorism-plagued, nuclear-armed power burdened with an unpopular civilian government, a meddlesome military, politically motivated judges and an increasingly dangerous security environment. The expected withdrawal of thousands of U.S. troops from Afghanistan this year will fuel regional competition for new influence.

7. China: trouble in the neighborhood -- The Obama administration's recent emphasis on Asia will embolden China's neighbors to take more assertive positions with Beijing. Rising nationalism in China, its ongoing political transition, and the leadership's unwillingness -- perhaps inability -- to resolve internal debates about the country's role in the world suggest Beijing is especially likely to meet provocation with provocation in months to come with both naval and economic muscle.

8. Egypt: a transition in trouble -- Egypt faces the risk of political disintegration this year as anger builds between military and civilian political forces, both Islamist and secular. Egypt's base-line stability, its economic recovery, and its broader regional influence will suffer.

9. South Africa: populism ascendant -- The struggle for leadership of the ruling African National Congress will slow the pace of both policy and economic growth at a time when the eurozone crisis already weighs heavily on South Africa's trade and currency.

10. Venezuela: a no-win election -- The country's big political story this year is October's presidential election, which incumbent Hugo Chavez, if healthy enough for a vigorous campaign, is likely to narrowly win. But the outlook for economic and political stability is bad no matter the election result. Should Chavez die or abandon the race, the deep fissures between the Chavista movement and the opposition could stoke violence.   

In addition, Eurasia Group identifies four red herrings, the big stories we don't believe will happen in 2012.

Fallout from the 2012 political transitions -- In 2012, we'll see political transitions in the U.S., China, Russia, and France, countries that together represent nearly half of global GDP and four-fifths of the UN Security Council. But there's surprisingly little at stake in the outcomes for geopolitics and the global economy.

Eurozone breakup -- This is probably the single most overrated risk of 2012. The political will to maintain the eurozone remains strong among all the major political parties in the core Eurozone states, almost across the board in the European periphery and, just as importantly, among eurocrats in the ever-growing European bureaucracy. And there's no effective political mechanism for a Eurozone breakup.

China's hard landing -- There are signs of overheated growth in China, but the state has the tools and resources to manage short-term trouble, and it will pull out every stop to prevent a serious slowdown, especially during a major political transition.

Mayan apocalypse -- Just isn't happening. And if it does, well, sorry.

Over the next three weeks, we'll be posting more ideas and information on each of these risks.

By Ian Bremmer and David Gordon

A wave of money flooding into emerging markets has lifted many boats. But when the tide goes out, certain countries -- and the investors betting on them -- may be left high and dry.

There are very different risk profiles among emerging markets, and even beyond the increasingly turbulent Middle East, not all are going to perform well this year. The risks facing these countries include negative economic policies (fiscal imbalances in some, premature austerity in others) as well as more purely political risks (including contentious elections and political violence). As these problems play out in 2011, they will contribute to poor investment outcomes, ranging from adverse regulatory changes to asset bubbles to weak stock market performance.

The most notable underperformers are Argentina, Hungary, Peru, South Africa, Sri Lanka, and Thailand.

In Argentina, investors appear overly optimistic that policy will improve -- either as a result of President Cristina Kirchner losing her re-election bid or a change in direction if she wins. In fact, she is likely to win, but policy is unlikely to change, leading to higher inflation and more populism.

In Hungary, markets have recently turned south, but still do not seem to be pricing in the scope of the potential impending crisis as the Fidesz government attacks asset holders across a range of classes. Hungary may once again have to turn to the IMF, but Prime Minister Viktor Orban has walked himself into a political corner with his vitriolic anti-IMF rhetoric.

Investors in Peru underestimate the potential for populist candidate Ollanta Humala to make a serious run at the presidency. He's a decided underdog to be sure, but it's too early to write him off. Even if the more market-friendly Alejandro Toledo wins, we're likely to see more resource nationalism -- and mild capital controls if the Peruvian sol continues to appreciate.

Despite its aspirations, South Africa won't improve its investment climate in 2011. Growing political pressure on President Jacob Zuma ahead of municipal elections in April-May and the ruling party leadership contest in 2012 will increase the risk of government inertia and erratic policy-making and reinforce the African National Congress (ANC)'s "single party rule" mentality."

Many people have become overconfident that the end of Sri Lanka's civil war will usher in a period of political stability. But President Mahinda Rajapakse, insecure in his position, is centralizing power while failing to address the country's structural challenges. That's a recipe for resurgent political and ethnic tension, and it will dampen growth prospects.

Finally, 2011 promises to be a year of political tension in Thailand, especially given the king's failing health. Allies of former Prime Minister Thaksin Shinawatra remain popular in much of the country, raising the risks of a violent, flawed election or a military intervention. There's real potential for serious and sustained unrest involving Thailand's incumbent elites and the pro-Thaksin "red-shirt" movement.

Ian Bremmer is president of Eurasia Group. David Gordon is the firm's head of research.

By Eurasia Group's Asia practice

Next in our series of regional outlooks is Asia, where most economies not named Japan are enjoying quicker and stronger recoveries than in other regions. Asian states have also gained new weight within the G-20 and the Bretton Woods institutions. But traditional strategic rivalries persist, and China's growing economic clout and North Korean belligerence are likely to generate most of the headlines in 2011.

Across the region, Chinese demand is a central driver of other countries' economic growth, and for many Asian countries, China is the top trade partner. In the coming year, China will boost its role at the center of a growing web of economic and financial connections that are gradually, but inexorably, integrating East Asia. Beijing will also strengthen its economic ties across South Asia, notably in Pakistan, Sri Lanka, Bangladesh, and even India, with a focus on investment in infrastructure. China-centric free trade agreements have proliferated. Beijing has also adopted its own standards in some areas of information and communications technology and will try to have them adopted internationally. China will continue to try to reshape the region's trade and investment architecture, largely on a pan-Asian basis and without the United States.

But Beijing's long-term strategic intentions inspire deep anxiety, and its foreign and defense policies have rattled its neighbors. Beijing will suffer consequences in 2011, as India, South Korea, Japan, Indonesia, Vietnam, Malaysia, Australia, and others strengthen their defense ties to the United States. Joint exercises, drills at sea, and weapons sales will periodically raise tensions. So too will trade conflicts, as debates over China's industrial policies at home and investments abroad mix commercial worries with national security fears.

Traditional geopolitical risks in Asia, including China-Japan and India-Pakistan frictions, should be manageable in 2011, but North Korea remains a wildcard. Pyongyang continues to make succession arrangements for an ailing Kim Jong-il, and the regime has used military action in the past to bolster its domestic legitimacy.

Further North Korean provocations are highly likely. We could see a third nuclear test in 2011, but additional conventional attacks would rattle markets with greater force. Significant military escalation is unlikely, however, unless Pyongyang strikes U.S. assets -- like ships participating in joint exercises -- or launches conventional strikes at peninsular South Korea. The former would prompt U.S. retaliation. The latter could lead to counterstrikes on peninsular North Korea, though an innately conservative Seoul will try to modulate its response to avoid an escalation of violence.  

This post was written by analysts in Eurasia Group's Asia practice.

By Maria Kuusisto

While Barack Obama's travels are focusing international media attention on India this week, rival Pakistan is on the brink of major political change. Increased violence, this summer's flooding, and the aftermath of the global recession has left most Pakistanis feeling increasingly insecure, and President Asif Ali Zardari's government has done little to ameliorate these anxieties.

Now it seems that just two years after the fall of former president (and general) Pervez Musharraf, the military may once more intervene. Only don't expect a coup like the one that brought Musharraf to power in 1999. Despite a long history of meddling in Pakistan's politics, the army is likely to stay behind the scenes this time and force the government to improve governance or face significant reshuffling.

The evidence pointing to intervention is unusually strong at the moment. Pakistan is beset by problems-political, economic, social, and security-related. Zardari's ruling Pakistan Peoples Party (PPP) is distracted by its battle with a hostile supreme court and largely disinterested in governing. The government has been unwilling and unable to introduce urgently needed financial reforms, which are necessary to bring the country's runaway fiscal deficit under control. Zardari has also failed to increase revenue collection by introducing a value-added tax. Instead, Islamabad has been resorting to a variety of quick-fixes, such as borrowing from the state bank, to finance its growing spending commitments. These moves are undermining the economy, hindering recovery, and fuelling inflation.

Meanwhile, social tensions-always a threat in this fractious, multiethnic country-are running high. People feel abandoned by the government: They're struggling to support themselves economically and afford basic food stables and services. These frustrations are manifesting themselves in protests, violence, crime, and terrorism. The law-and-order situation is particularly volatile in Karachi, the largest city and commercial capital. More than 1,200 people have been killed in the city's recurring waves of politically motivated clashes between rival groups and targeted killings this year. Hence, more and more of the public feels that the PPP's lassitude is leading to anarchy and undermining Pakistan's national interests.

The country's elites are looking for someone -- anyone -- to get them out of their current fix. Neither the PPP nor the opposition Pakistan Muslim League-Nawaz (PML-N) are up to the job of challenging and replacing Zardari. The president is highly skillful in intimidating his enemies and incentivizing his allies within the PPP, making it hard to form a united front inside the party against him. Moreover, the PML-N is more comfortable in being an opposition force and remains reluctant to take over the responsibility of running the country. That leaves the army as the only viable challenger. Pakistan's elites have begun calling on the military to intervene for the sake of national interest, before it's too late.

In the old days, everyone in Pakistan knew what this meant: a coup and a military government. After all, a military government has run Pakistan for more than half of its history. This time, however, Chief of Army Staff Ashfaq Pervez Kayani knows that stepping in directly would damage the military's domestic and international reputation, which he has carefully rebuilt since Musharraf's resignation in 2008, and could trigger a backlash. More importantly, Kayani knows that the military can't afford to jeopardize the aid it gets from Washington -- money (to the tune of $7.5 billion over five years in civilian assistance and $2 billion in military assistance) that the United States has linked to Pakistan's ongoing democratic process. The military's resources are already strained by its counterterrorism operations and flood relief efforts and it desperately needs those dollars from Washington.

Yet Kayani also knows he can't just sit and watch Pakistan's deepening crisis from the sidelines. He's under increasing pressure from others in the military and the country's influential elites -- who comprise his political power base -- to do something. In Pakistan, it is often said, only half-jokingly, that the country doesn't have a military, the military has a country. Now, the army's leadership is becoming worried that it may not have a country for long if it lets the political, economic, and security situation further deteriorate. As a result, expect Kayani to begin putting pressure on the PPP to improve governance, but from behind the scenes. The general, unlike his predecessor, will carefully evaluate the political mood (both domestically and internationally) and follow constitutional processes in challenging the current political set-up.

So change is coming to Pakistan, and the military may soon be sitting in the director's seat. But expect less drama than in its past performances; most of the action will stay behind the scenes for now.

By Maria Kuusisto

On 7 December, the Supreme Court of Pakistan started hearing a case that challenges the legitimacy of the National Reconciliation Ordinance (NRO), granting immunity to President Asif Ali Zardari and thousands of other politicians and bureaucrats against corruption cases dating back to the 1990s. Zardari has little option but to relinquish some of his powers if he wants to survive. While this may buy the president some time, tension is likely to continue, risking a major political shake-up.

The opposition Pakistan Muslim League - Nawaz (PML-N) and the military desperately want to push President Zardari into a ceremonial role. They see Zardari as putting Pakistan's national interests (as well as the military's institutional interests) at risk and are pressing him to give up his powers under the constitution, thereby empowering Prime Minister Yusuf Raza Gilani. Zardari's most significant power is his right to sack an elected government and appoint the military leadership. In return for giving up his key powers, the PML-N and the military say they will not support efforts to remove Zardari.

If Zardari refuses to give up his key powers, he is likely to face intensified pressure and potential removal. The Supreme Court, led by Chief Justice Iftikhar Muhammad Chaudhry, is likely to strike down the NRO case, using it as an opportunity to settle a long-standing political score with Zardari. This development could lead to the re-opening of corruption and criminal cases against him, some of which are suspected of having some real merit. If he's convicted, the opposition could bring an impeachment motion against him in the national assembly, where Zardari enjoys a narrow, often case-by-case majority.

Until recently, Zardari has refused to see the writing on the wall, thinking that he can manage the political pressures against him through a combination of political and judicial manipulation. However, on Nov. 29, Zardari handed over control of the National Command Authority (NCA), which is the agency in charge of the deployment and development of Pakistan's nuclear weapons, to Gilani. This could signal that Zardari is finally starting to realize he has few options but to give up his key powers. But he needs to act quickly, as the opposition and the military are growing impatient.  

Even if Zardari eventually gives up some of his powers, political tension will remain in Pakistan. The president is likely to try to dominate government. While Prime Minister Gilani is trying to take a more independent role, he remains a weak leader. He does not enjoy strong support within the PPP, which sees him as a political nobody and little more than Zardari's hand-picked choice. This makes Gilani highly dependent on Zardari's support. If Gilani refuses to fall in line, Zardari could sack him and replace him with someone else.

For the time being, the PML-N and the military want to work with the PPP government. The PML-N feels that an early fall of the PPP government would only invite the military to re-intervene in politics and undermine its longer-term political aims. Moreover, it feels that it needs more time to prepare the ground for national elections and it does not want to take charge of the government now when the country is facing multiple crises. Meanwhile, the military feels fears that a fall of the PPP government would strengthen PML-N's position.

While both Zardari and the PPP government may survive in the short term, pressure is likely to build up against them. Since the Feb. 2008 national elections, the popularity of Zardari and the PPP has taken a nosedive. They have become involved in a series of political scandals, which have undermined their credibility and distracted them from effective governance. Moreover, they have failed to meet their key pre-election promises of clean governance, pro-democratic reforms, and pro-people policies, and are perceived to be taking dictates from Washington. This weakened popularity is creating differences with the PPP's coalition partners and emboldening the opposition, which could lead to another crisis.

Maria Kuusisto is an analyst at Eurasia Group.

Chris Hondros/Getty Images

by Ian Bremmer

In Afghanistan, even the good news isn't so good. The country managed to hold a presidential election in August, but there aren't many people inside or outside the country who considered it free and fair. It looks increasingly like Hamid Karzai will win without a second round, but his legitimacy will remain under a very large, very dark cloud. He'll face open revolt from Tajiks in the north, who overwhelmingly opposed his candidacy. And as evidenced by the significant recent expansion of terrorist bombings in Afghanistan's major cities and the assassination last week of the country's second-ranking intelligence officer, it will even become harder to secure Kabul. No one should have much confidence that a second round would do much to restore Karzai's credibility.

In addition, military operations against the Taliban inside Pakistan achieved some actual success this summer, but that has probably pushed some militants across the border into Afghanistan to harass coalition forces there. U.S. casualties have increased, though that's not surprising given the more aggressive operations of larger numbers of US troops. But last week's U.S. bombing on a Taliban target, which killed dozens of civilians, is just the latest in a series of setbacks for coalition military operations.

More worrisome: It's becoming increasingly clear that Afghanistan won't be able to stand on its own anytime soon. U.S. military officials report that the training of Afghan soldiers is well behind schedule. For the next two or three years, with coalition forces at their present levels, Afghan troops won't be nearly strong enough to maintain even the current level of security, let alone make any meaningful contribution to an aggressive counterinsurgency effort.

Inside Afghanistan, more locals than ever want the US out, whatever the cost. There's also dwindling support for the war in the United States, as the American media increasingly turns its attention from an economy beginning to improve toward the growing death toll in Afghanistan.

Within the Obama foreign-policy team, there looks to be a growing divergence of opinion on what to do next. There appears to be an internal consensus that the current strategy isn't working. But senior officials appear more divided on whether to "go long" or "go home." In the go long group, those who want more troops and more resources because "failure isn't an option," we see Secretary Clinton, envoy Richard Holbrooke, most of the generals on the ground, and most Republicans in Congress. In the go home camp, those who want to pull troops out before things get much worse, are Vice President Biden, most of Obama's political team, and a growing number of senior Democrats. Even Defense Secretary Robert Gates appears to have grown much more skeptical.

In short, Afghanistan is becoming Obama's first lasting foreign-policy crisis. A major terrorist attack somewhere in the world carried out by militants trained in Afghanistan could shift international public opinion toward greater engagement. Short of that, U.S. public opposition to the war will likely grow steadily over the coming year, bringing the issue to a head just in time for U.S. midterm elections and driving a wedge between members of the president's own party.

MANPREET ROMANA/AFP/Getty Images