SCENESETTER FOR THE VISIT OF PACOM COMMANDER

S E C R E T SECTION 01 OF 04 KUALA LUMPUR 000184

SIPDIS

SIPDIS

FROM AMBASSADOR LAFLEUR FOR ADMIRAL FALLON

E.O. 12958: DECL: 01/30/2027
TAGS: MARR MASS MCAP MOPS PREL PTER OVIP MY
SUBJECT: SCENESETTER FOR THE VISIT OF PACOM COMMANDER
ADMIRAL FALLON

Classified By: Deputy Chief of Mission David B. Shear, reasons 1.4 (b,
d).

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


1. (C) Admiral Fallon, we welcome your visit to Malaysia.
Malaysian-American relations rest on a range of common
interests and have improved in the three years since Prime
Minister Abdullah Badawi 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 often bases
its policies on Non-Aligned Movement and Islamic world
solidarity. Malaysia strongly opposed us on the Iraq
invasion and our stance on Israel's use of force in Lebanon,
and Malaysia is developing closer relations with Iran.
However, Malaysia has stepped forward to provide 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 Muslim 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. Last summer, 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 fifth round of our FTA talks will
get underway in Malaysia in early February.


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 last year. In 2003,

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Malaysia established the Southeast Asia Regional Center for
Counterterrorism (SEARCCT),which runs a full schedule of
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. In cooperation
with GOM, we are undertaking a Border Control Assessment
Initiative (BCAI) in eastern Sabah with participants from the
Department of State, Homeland Security, USCG and JIATF West.
The heads of the Embassy's Defense Attache and Defense
Cooperation offices are attending the field portion of this
assessment that will conclude prior to your visit.

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 Chiefs of Defense Conference in November
that was 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
are focusing increasingly on 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 concluded a new 505 agreement last year 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
congressional 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 from some
mainstream politicians pandering to the conservative Islamic
vote. 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. They have committed forces to
operations in Timor in the past and are presently engaged
there in police operations. 360 Malaysian troops are
currently participating in UNIFIL and the GOM has offered a
contingent of up to 1000 soldiers. 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 as well as personnel from foreign
militaries. The USG has obligated almost 1.1 million dollars
for GPOI funds for training and equipment that can be put
into action with the signing of a new 505 agreement.


9. (C) Malaysia maintains strong relations with Iran,
including a growing commercial relationship. Malaysia has
lent rhetorical support to Iran's right to develop "peaceful"
nuclear technology. Recent actions by Malaysian firms have

KUALA LUMP 00000184 003 OF 004


generated concerns of violations of U.S. laws and the
Wassenaar Arangeement and a Malaysian company was among those
recently sanctioned under the Iran Syria Non-proliferation
Act (ISNA) for its role in shipping proscribed materials to
Iran. While the GOM consistently maintains that it will
support UN sanctions regimes, the activities of local firms
doing business with Iran need to be closely monitored and we
continue to request Malaysia's assistance in investigating
suspicious activity. One Malaysian firm has signed an
agreement for a multi-billion dollar investment to develop
enormous natural gas fields in Iran.

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


10. (U) On 6 October 2006, your staff and the Malaysian Armed
Forces conducted mid-term bilateral defense talks. 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.


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


12. (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 U.S. 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 U.S. -- A Mixed Bag
-------------- ---


13. (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. These soldiers deployed to Lebanon in
January.


14. (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 Chavez of his
support for Venezuela's election to the Latin American chair
on the UN Security Council. This was followed by a well
publicized visit to Venezuela by Abdullah in December to
explore stronger commercial ties.


15. (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 repeatedly
called for a return to the six-party DPRK nuclear talks and
criticized North Korea's truculence. The Malaysian

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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.


16. (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 government that takes over
from the junta will take a more conciliatory role in calming
their northern border. Malaysia is especially chagrined by
Burma's intransigence because it championed Burma's entry
into ASEAN. Having publicly criticized the Burmese regime,
however, FM Hamid appears to be at a loss as to what to do
next. Malaysia spoke out against the UNSC draft resolution
on Burma, which we championed before the UN Security Council
in January, and firmly backed the ASEAN argument that Burma
was not a threat to international peace and security.

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


17. (C) Malaysia, with its entrenched majority coalition, is
hardly an ideal democracy, but it can still serve as a
reference point 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. Observers are wary of a longer-term trend
toward greater divisions between the Muslim Malay majority
and other ethnic groups, and religious minorities
increasingly complain of growing Islamization. Nevertheless,
Malaysia has kept inter-ethnic tensions well under control by
regional and world standards for almost 40 years.
LAFLEUR