SCENESETTER FOR THE VISIT OF PACOM COMMANDER

S E C R E T SECTION 01 OF 04 KUALA LUMPUR 002089

SIPDIS

SIPDIS

FROM AMBASSADOR LAFLEUR FOR ADMIRAL FALLON

E.O. 12958: DECL: 10/31/2016
TAGS: MARR MASS MCAP MOPS OVIP PREL PTER MY
SUBJECT: SCENESETTER FOR THE VISIT OF PACOM COMMANDER
ADMIRAL FALLON

Classified By: Ambassador Christopher J. LaFleur, reasons 1.4 b, d.

Summary
--------------


1. (C) Admiral Fallon, we welcome your visit to Malaysia for
the Ninth Chiefs of Defense Conference, November 13-15.
Malaysian-American relations rest on a range of common
interests and have improved in the three years since Prime
Minister Abdullah Badawi's took the helm. This moderate
Muslim-majority state is our tenth-largest trading partner
worldwide. Although Malaysia is not a treaty ally, we have
increasingly strong military-military and counter-terrorism
cooperation. In international affairs, Malaysia strongly
opposed us on the Iraq invasion and more recently on our
stance on Israel's use of force in Lebanon. However,
Malaysia has stepped forward to offer troops for the UN force
in Lebanon and continues to contribute to peacekeeping
operations in places such as East Timor. While Malaysia
often takes positions opposing our own in the UN, Prime
Minister Abdullah has met regularly with President Bush and
has developed a useful dialog on Muslim world relations with
the West. Abdullah promotes a moderate vision of Islam and
Malaysia has worked to defuse ethnic conflicts involving
Muslims in the Philippines and elsewhere in Southeast Asia.
We hope your visit will further strengthen the mil-mil ties
between the U.S. and Malaysia. End Summary.

Political/Economic Landscape
--------------


2. (C) Malaysia has been a difficult political partner in
the past. Malaysians nurse strong anti-colonial sentiments.
They are fiercely protective of their sovereignty and (among
the Malay majority) resent perceived ill treatment of Islam
by the West. Malaysian intellectuals tend to hold a
"Euroskeptic" view of U.S. foreign policy in general and
like to cast themselves as defenders of "third world"
interests. Former Prime Minister Mahathir played on these
sentiments to generate political support for himself and his
ambitious economic agenda. When he relinquished his post in
2003, he left behind a modernized economy but also strained
relations with much of the West. Today, however, Malaysia
presents us with important transformational opportunities.
In terms of its economic development, educational
achievement, public welfare, and political stability,
Malaysia stands out among Muslim-majority nations. The
Malaysians project a moderate version of Islam, and, over the
longer term, could lend additional support to democratic
forces in the Middle East and Iraq. We also share strong
common East Asian regional interests in stability and
prosperity. Malaysian counter-terrorism cooperation is
indispensable in defeating Jemaah Islamiyah (JI) in the
region. Malaysia's economy is one of the most open, diverse
and well-developed economies in the Islamic world and in
ASEAN. Malaysia is our tenth largest trading partner, we are
Malaysia's number one foreign investor, and economic ties
could strengthen further if ongoing negotiations on a free
trade agreement are successful.

Bilateral Ties--Improving the Substance
--------------


3. (S) In our bilateral relations, the GOM has begun
matching improvements in tone with improvements in substance.
PM Abdullah has openly espoused improved relations with the
U.S., and values the good rapport he established in his
meetings with the President. In July, Secretary Rice met
with PM Abdullah and FM Hamid at the ASEAN Regional Forum and
President Bush met with PM Abdullah on the sidelines of the
UNGA in September. Last year the GOM acceded to our
long-standing urging and signed the IAEA Additional Protocol;
the Malaysians have also started sending observers to recent
PSI exercises; and the GOM is preparing to implement an
export control regime. The third round of our FTA talks is
underway in Kuala Lumpur at this moment.


4. (C) Although they keep the details closely held, the GOM
has been a key partner on counterterrorism. Early round-ups
in 2001-2002 of scores of Jemaah Islamiyah (JI) suspects
helped ensure there have been no terrorist attacks here.
However, Malaysian extremists, as illustrated by a series of
recent arrests in Malaysia's Borneo states, still have the
capability to support JI operations elsewhere. Two
Malaysian citizens were among the 14 high value U.S.
detainees transferred to Guantanamo earlier this year. In
2003, Malaysia established the Southeast Asia Regional Center
for Counterterrorism (SEARCCT),which runs a full sQedule of

KUALA LUMP 00002089 002 OF 004


multilateral training courses, many conducted with U.S.
support. We and our colleagues in Manila, Jakarta and other
Southeast Asian posts have embarked on a regional effort to
strengthen these countries' border controls. We are
currently seeking the GOM's concurrence to carry out a Border
Control Assessment Initiative (BCAI) in Sabah.

Security Cooperation
--------------


5. (C) The strong state of U.S.-Malaysia bilateral defense
ties finds expression in the very successful visit to the
U.S. of Malaysian Armed Forces Chief Admiral Anwar in
October, including Anwar's meeting with the Chairman of the
Joint Chiefs of Staff; the Mid Year BITACG review in
November; and the upcoming Chiefs of Defense Conference,
hosted jointly for the first time by PACOM-MAF. Mil-mil
cooperation between the United States and Malaysia has grown
in recent years particularly with regard to the greater
frequency of high-visibility ship visits. Security-related
training sponsored by the United States for military and law
enforcement participants has also been on the rise. Although
the possibility of a terrorist threat to the Malacca Strait
has received the bulk of international attention, the fact is
that although pirate attacks illustrate vulnerabilities, we
have never identified any terrorist activities in the
Straits. Conversely, terrorists operate regularly in the
Sulu/Sulawesi Sea corridor and we have redirected our focus
to this theater.


6. (C) Malaysia's recent success initiating regional aerial
monitoring of the Straits of Malacca (the "Eyes in the Sky"
program),has helped reduce piracy in the Straits though it
moves cautiously forward in its multilateral efforts in this
area. Malaysia has recently concluded a new 505 agreement
that will allow us to utilize 1206 funds to put CT equipment
into the vulnerable Sulu and Sulawesi Seas border areas of
Sabah where terrorists are known to transit. We are awaiting
approval of the 1206 proposals made in conjunction with
regional embassies. Malaysia has not signed either a PSI or
Article 98 agreement. In general, Malaysia remains open to
bilateral cooperation that strengthens its own defense
capacity, but the GOM will quickly raise the principles of
sovereignty and territorial integrity when discussing
international security regimes and coordination, such as for
the Straits of Malacca. Malaysia's only multilateral defense
arrangement is the Five Power Defense Pact with the UK,
Singapore, Australia and New Zealand.


7. (S) We have been pleased by the overwhelmingly positive
media coverage our ship visits have received, in contrast to
the quiet arrivals of past years. The flip side to this is
that our visits are getting increased attention from
ideological foes on the Islamic right, and lately from former
Prime Minister Mahathir. Deputy Prime Minister Najib has
stoutly defended our cooperation before Parliament, and we do
not see that our engagement is under threat. However, we do
need to be cognizant of our increased military visibility and
sensitive to GOM concerns, particularly with high tensions in
the Middle East. The GOM cited concerns about the growing
visibility of training in eastern Sabah when it recently
decided to review on a case by case basis proposed training
events involving foreign military forces in that region.


8. (C) Malaysia has one of the best records in UN
Peacekeeping Operations continues to be very active and
supportive. They have committed forces to operations in
Timor in the past and are presently engaged there in
operations. The GOM has volunteered forces for UNIFIL duty
as well. Malaysia has developed a Peacekeeping Training
Center and updated the facility in recent years to provide
specialized training for the troops it sends into the field.
USG has obligated almost 1.1 million dollars for GPOI funds
for training and equipment that can be but into action with
the signing of a new 505 agreement.

Recent Mil-Mil Talks
--------------


9. (U) On 6 October 2006, your staff and the Malaysian Armed
Forces conducted mid-term bilateral defense talks. This was
a good scene setter for your conference. There were a good
number of issues advanced during this regional forum such as
counter-terrorism cooperation in the Sulu/Sulawesi seas,
pandemic response, and peacekeeping.


10. (SBU) Brigadier General Dowd's recent visit to Malaysia
was well received and productive. He advanced several

KUALA LUMP 00002089 003 OF 004


initiatives that will broaden our military relationship with
Malaysia, namely the regional HA/DR center and Avian
Influenza. Both of these programs capitalize on Malaysia,s
unique position and capabilities within the region, and
provide access to Muslim nations that otherwise would be
difficult.


11. (SBU) The HA/DR Center initiative is promising, and has
wide support in the government. The MAF has identified
Subang Airfield as a likely choice for the center. Subang,
the former international airport, served as the focal point
for Malaysia's tsunami and Yogyakarta relief efforts. The
facilities are modern and are available. Malaysia is an ideal
location for a regional HA/DR center-centrally located,
modern, stable, and Islamic. Malaysia is no further than two
hours by air to almost any country in the region. Avian
influenza preparedness is another promising area of bilateral
cooperation. In September, PACAF conducted a successful AI
SMEE with the Ministry of Health. The US team recommended
changing Malaysia,s AI preparedness rating from High risk to
Partner Nation. Building upon this success, the ODC has
proposed a regional workshop on Bio-terrorism
Defense-Strategic and Tactical Planning for spring 2007 with
PACAF. Malaysia will co-host this multilateral/regional event
as it has demonstrated capacity as a regional partner in
preparing for the threat of avian/pandemic influenza.
PACOM,s efforts in furthering Malaysia,s capacity as a
regional responder are critical to the country teams in this
regard.

Malaysian Foreign Policy and US--A Mixed Bag
--------------


12. (S) Abdullah champions his moderate vision of Islam --
albeit with limited impact to date -- within the Organization
of the Islamic Conference (OIC),which Malaysia will continue
to chair through early 2008. Malaysia supports Abbas, the
Palestinian Authority, the MEPP roadmap, and Iraqi
reconstruction. However, the Malaysian public remains highly
critical of our Middle East policies, and the GOM is
consistently critical of Israel, with which it has no
diplomatic relations. Malaysia volunteered 1,000 troops to
participate in UNIFIL. After more than a month of lobbying,
and in the face of objections from Israel, UN SYG Annan
agreed to allow Malaysia to send a force of 376 soldiers to
support UNIFIL with deployment expected at the end of
November.


13. (S) In early September, Malaysia surrendered the
chairmanship of the Non-Aligned Movement, but as past chair
remains a member of the leadership troika. During Malaysia's
tenure it championed policies which supported the NAM stance
on the Iranian nuclear program, and engaged, often on overly
friendly terms, with such problematic international players
as Zimbabwe, Cuba and Venezuela. Abdullah hosted Hugo
Chavez for a visit to Malaysia in August, and assured
Venezuela of his support for election to the Latin American
chair on the UN Security Council (although they have
indicated privately since they could support an alternative
candidate once the UN voting stalemated.)


14. (C) The GOM issued a public condemnation of North
Korea's nuclear test and publicly supports UNSCR 1718,
although it has no enthusiasm for sanctions. They have
repeatedly called for a return to the six-party DPRK nuclear
talks and have criticized North Korea's truculence. Malaysia
has lent rhetorical support to Iran's right to develop
"peaceful" nuclear technology and is pursuing closer trade
ties. The Malaysian government is publicly supportive of
China's "peaceful rise", welcoming in particular China's
growing imports of Malaysian products, despite lingering
suspicions among some officials of China's long-term
intentions.


15. (C) In Southeast Asia, Malaysia has played an important
and constructive role. In August Malaysia completed its
earlier peacekeeping mission to East Timor following the
armed uprising that led to deployment of Australian,
Malaysian and Portuguese forces, while a new deployment of
Malaysian police personnel to East Timor is underway. The
GOM has also taken a leading role in the southern Philippines
peace process, hosting negotiations and contributing
observers to the International Monitoring Team in the
southern Philippines. The Malaysians have urged the Thai
government to resolve peacefully the unrest in Southern
Thailand and are hopeful that the new junta will take a more
conciliatory role in calming their northern border. Malaysia
is especially chagrined by Burma's intransigence because it

KUALA LUMP 00002089 004 OF 004


championed Burma's entry into ASEAN. Having publicly
criticized the Burmese regime though, FM Hamid appears to be
at a loss as to what to do next and Malaysia has of late
suggested it is up to the UN now to deal with the problem.

Malaysia's Moderate Islam
--------------


16. (C) Malaysia, with its entrenched majority coalition, is
hardly an ideal democracy, but it can still serve as a useful
model for evolving Islamic societies elsewhere. The Malay
people, long known for their tolerance, have become more
conservative in recent years, but Prime Minister Abdullah has
enshrined the Malay political elite's continued preference
for moderation in his "Islam Hadhari" or "Civilizational
Islam" policy. Abdullah's key message is that Islam can
become a leading world civilization again only if it embraces
economic development, education, innovation and tolerance.
While observers are wary of a longer-term trend toward
greater divisions between the Muslim Malay majority and other
ethnic groups, Malaysia has kept inter-ethnic tensions well
under control by regional and world standards for over 35
years.
LAFLEUR