When I arrived in Bali last week for this year’s APEC summit, my van driver asked where I was from.

When I told him, his face broke into a huge smile. “Say hello to my brother,” he said enthusiastically, referring to President Barack Obama, who remains enormously popular in Indonesia, where he spent several years as a child.

Two days later, the U.S. budget stalemate forced Obama to cancel his trip to the APEC meeting and the subsequent East Asia Summit in Brunei, along with scheduled stops in Malaysia and the Philippines that had already been called off.

The hosts gallantly put the best face on it.

“The show must go on,” said Indonesian Trade Minister Gita Wijawan.

“We know that the president had no choice,” said a Bruneian senior official, speaking of the political pressures.

What Asians, and most of the rest of the world, find incomprehensible is not Obama’s decision, but the domestic political standoff that forced him to make it. 

“How can the United States be a global leader if it cannot even lead itself?” one Jakarta columnist asked rhetorically.

Other APEC delegates pointed out that their countries have provisions to prevent shutdowns over budget issues or would never contemplate actions that could lead to a default. 

The Chinese delegates were also disappointed. A former senior diplomat noted that when one great power is missing, the whole institution suffers.

“Most of all, Chinese leaders look forward to meeting their American counterparts,” he added.

Others were concerned such a crisis might embarrass China by preventing Obama from attending next year’s APEC Leaders Meeting at Yanqi Lake outside Beijing.

In countering speculation about a loss of American influence, Indonesian Foreign Minister Marty Natalegawa correctly noted that U.S. engagement in the region is long term, and does not depend on any particular event. But perceived uncertainties in power balances and economics have many Asian policymakers feeling that U.S. leadership is need-ed more than ever, and deeply distressed about the impact of U.S. domestic politics on foreign engagement.

One specific concern is trade. The U.S. is leading the drive to develop a “21st century” free trade agreement known as the Trans-Pacific Partnership, or TPP. Begun during the Bush Administration, negotiations accelerated after Japan joined a few months ago, and Obama seeks to conclude them by year’s end.

The most politically sensitive trade items require direct discussion and compromise among leaders. If Obama had been at APEC, he would have been intensively engaged with TPP negotiating partners in side meetings to resolve the remaining few issues. While U.S. senior trade officials offered reassurances, the business community was skeptical.

“The Americans have been negotiating hard with each of the other partners to bring this all together,” said a Canadian business delegate. “Without Obama, we’ll lose momentum.”

America’s rebalance toward Asia is not just a matter of recent policy and deployments, but a steady shift in strategic interests. Data analyzed by the East-West Center’s “Asia Matters for America” project demonstrates how systemically important the region has become, with long-term increases in trade and financial flows, business partnerships, international students and tourism.

But presence does matter. Allies and friends want reassurance. The shutdown makes a future Obama trip to Asia and other U.S. efforts all the more essential, as the United States seeks to restore its image and sense of engagement with the world’s most dynamic region.

More than any piece of military hardware, trade agreement or declaration, however, a long-term solution to the budget and debt ceiling wars is critical to the national security and foreign policy interests of the United States.