HONG KONG — The president of the American Chamber of Commerce in Hong Kong said the world is paying attention to America’s fiscal cliff negotiations, and the consequences of failure may not be only financial, but a blow to America’s ability to sell democracy abroad.
“This is one of the biggest non-sales events for democracy abroad, to see a U.S. Congress not be able to handle something that is quite obvious for the person in the street all the way up,” Dr. Richard Vuylsteke told The Daily Caller in an interview in his organization’s office last week.
If President Obama and Congress fail to “compromise in a tradition of American politics that we try to sell overseas,” Vuylsteke said, “That is going to be a hugely bad message — not only financial, but on democracy as a functioning system.”
“And I’m not sure people really see that so clearly in the states.”
“They are frustrated Congress’ approval rating is very low, but, you know, ‘that’s alright, you know, politicians blah blah.’ It isn’t alright. And, you know, you’ve got places like China looking at the legislature, the Congress of the United States, the way legislature works in Taiwan, the way the LegCo works in Hong Kong, [they] are saying, ‘Why do you want democracy?’”
Vuylsteke said while democracy is sometimes a barrier to quick action, “it shouldn’t be an impregnable barrier.”
“You know, it’s a barrier to getting things done,” he said. “It’s always going to be that way. But it shouldn’t be an impregnable barrier. And so I think there’s a lot of attention internationally on the U.S., not just for financial reasons. And of course that would lead to some serious recession probably in the United States and maybe have a spin off elsewhere … As a form of government, we’re being watched.”
Businessmen abroad, he added, are also worried about the potential financial effects of falling off the cliff.
“We can’t afford to fall off this cliff,” he said, referring to reports in the press of potential economic catastrophe if Congress and President Obama fail to come to a compromise by Jan. 2. “If we do, I mean, the ripple effect — immediately it’s a big splash to begin with — but its ripple effect long-term is it’s going to really impact confidence from abroad [of] the United States.”
“They’re not investing,” he added, speaking of companies overseas. “They’re holding off on decision making.”
If Congress and President Obama do nothing, on Jan. 2 income tax rates will increase for all Americans to their levels before President George W. Bush took office, and deep spending cuts will automatically go into effect.
Vuylsteke said he suspects that initially President Obama and Congress are “going to kick the can down the road a little bit, as much as they can, for a while so they can really work a big deal.”
But, he cautioned, the world needs to see a “serious game plan” from the United States.
The American Chamber of Commerce in Hong Kong has a loose association with the U.S. Chamber of Commerce, but the two are not always in alignment, noted Vuylsteke.
TheDC’s trip to Hong Kong was sponsored by the Hong Kong Special Administration Region government.