A picture spoke volumes about the United States’ loss of global prestige and influence due to the shutdown of its government in a partisan standoff over the federal budget and debt.
Chinese President Xi Jinping and Russian President Vladimir Putin beamed front and centre in the family photograph of Asian leaders at last week’s Asia-Pacific Economic Cooperation (APEC) summit in Bali.
US Secretary of State John Kerry, standing in for an absent President Barack Obama, detained at home by protracted budget negotiations, waved forlornly from the edge, about as far from the centre as possible without falling off the platform.
For an administration that has focused its foreign policy on a “pivot” to Asia, the world’s most economically vibrant region, this may be more than a momentary setback. And not just in Asia.
Joseph Nye, the Harvard professor who coined the term “soft power” to describe a nation’s ability to wield influence through its culture, values and governance rather than by force, said the United States had suffered a serious blow from the shutdown.
“It’s clearly very damaging for American soft power in the sense that the reputation for effective management of government and of the world’s reserve currency are hurt,” Nye told Reuters.
Foreign governments and investors, from China to the Middle East, were bound to ask whether they should hold so much of their reserves in US Treasury bonds and dollars, he said.
Obama and congressional leaders agreed a temporary fix on Wednesday to keep the government running until January and raise the national debt ceiling, hours before it was set to lose the authority to borrow - a prelude to a potential default.
The president acknowledged on Thursday that the 16-day shutdown had hurt Washington’s global position.
“Probably nothing has done more damage to America’s credibility in the world, our standing with other countries, than the spectacle that we’ve seen these past several weeks,” he said in a speech at the White House. “It’s encouraged our enemies, it’s emboldened our competitors, and it’s depressed our friends who look to us for steady leadership.”
Nye said the fiscal crisis had compounded damage to trust in the United States from revelations about the National Security Agency’s tentacular global Internet surveillance by fugitive former intelligence consultant Edward Snowden.
“On culture and values, we are doing pretty well,” he said. “But on government policies, whether on surveillance or on our management of the world’s most important reserve currency, that’s where the danger is.”
While Obama was marooned in the White House, Xi and Premier Li Keqiang swept around southeast Asia, dispensing goodwill, big investments and promises of surging trade, including with US allies such as Indonesia, Thailand and Malaysia.
The Chinese state news agency Xinhua excoriated the United States for putting international financial stability at risk with domestic “political brinkmanship.” The lesson for America’s creditors was that “US Treasury bonds may no longer be a safe investment.”
Gloating over Washington’s paralysis, another Xinhua commentary said it was “perhaps a good time for the befuddled world to start considering building a de-Americanised world.”
The risk of severe damage to the global economy from the US government paralysis and a possible debt default now banished for a few months at least - dominated meetings of the Group of 20 world leaders in St Petersburg, Russia, last month and G20 finance ministers last week in Washington.
Putin berated the United States publicly over the uses and abuses of its power as he engineered a diplomatic deal to avert a US military strike on Syria.
“Millions around the world increasingly see America not as a model of democracy, but as relying solely on brute force, cobbling coalitions together under the slogan ‘you’re either with us or against us’,” he wrote in the New York Times on September 11.