IRAN-MALAYSIA TIES REFLECTED IN LATEST BILAT TALKS

C O N F I D E N T I A L SECTION 01 OF 03 KUALA LUMPUR 001045 SIPDIS FOR EAP, NEA, AND INR E.O. 12958: DECL: 11/28/2028 TAGS: PREL PGOV ETTC ECON IR MY SUBJECT: IRAN-MALAYSIA TIES REFLECTED IN LATEST BILAT TALKS AND PM PLAN TO VISIT IRAN Classified By: Political Counselor Mark D. Clark, reason 1.4 (b and d). Summary and Comment -------------- ¶1. (C) Malaysia and Iran held their Seventh Joint Commission meeting in Putrajaya, November 10-11. Trade and investment issues dominated the talks, which were conducted at the foreign minister level. Results from the Commission meeting appeared modest, according to press reports. Malaysian Foreign Minister Rais Yatim cited intentions to strengthen various trade and investments mechanisms, including a payment agreement between the respective central banks. FM Rais encouraged Malaysian firms to do business in Iran, noting the limited scope of UN sanctions. Deputy Prime Minister Najib, who also met with Iranian FM Mottaki, told the Ambassador that normal (in the sense of legitimate) commercial dealings with Iran "should proceed." Mottaki invited Prime Minister Abdullah to visit Iran, and Abdullah has tentatively accepted for December 22-23, according to GOM officials. Malaysia-Iran ties were in the spotlight prior to Mottaki's visit, as the Malaysian Foreign Ministry stopped Iranian Nobel Laureate Shirin Ebadi from taking part in a prestigious lecture series. The MFA told organizers that Ebadi's invitation to speak would damage Malaysia's "good and close" relations with Iran. Despite FM Rais' brief comments disowning his Ministry's decision, organizers have not received an official green light to reschedule Ebadi. ¶2. (C) Comment: The latest round of Malaysia-Iran bilateral talks demonstrated Kuala Lumpur's continued and unapologetic pursuit of strengthened trade, investment and financial links with Tehran. The November 10-11 meeting also reflects Malaysia's goal of increasing its economic ties with West Asian countries in general. Malaysia-Iran economic relations remain modest, focusing primarily on oil/gas, tourism and education. Senior Malaysian officials appeared consciously to avoid political statements and, except for FM Rais' inept comments, drew minimal attention to their dialogue with Iran, an indication of some GOM sensitivity toward international concerns. The Malaysian Foreign Ministry's actions to appease Iran by scuttling Ebadi's speaking engagement highlight the particular sympathy Iran enjoys in the halls of the MFA, a bias not as clearly evident in other Malaysian agencies. If we confirm that PM Abdullah will visit Teheran, we will request that Department instruct us to encourage Abdullah to use his visit to support international mediation efforts regarding Iran's nuclear program. End Summary and Comment. Trade Tops of the Agenda -------------- ¶3. (U) Malaysia and Iran held their Seventh Joint Commission meeting in Putrajaya, November 10-11, the latest iteration in a process begun in 1989 to coordinate bilateral cooperation and ties. The two countries held the preceding Sixth Joint Commission meeting in Teheran in November 2006. The Malaysian and Iranian delegations were led by their respective foreign ministers, Rais Yatim and Manouchehr Mottaki. According to the Malaysian Foreign Ministry, the Joint Commission addressed a very broad range of some 20 bilateral issues, including trade and investment, and cooperation in oil, gas and petrochemical areas, as well as science and technology. Public announcements from the two countries did not broach particular political or security issues. Mottaki paid a courtesy call on Deputy Prime Minister Najib during the visit and their discussion centered on economic matters, according to Iranian press accounts. ¶4. (SBU) Specific results from the Seventh Joint Commission appeared limited, according to Malaysian pronouncements. After the two-day meeting, FM Rais told reporters Malaysia and Iran would establish a bilateral payment agreement between their respective central banks needed to facilitate trade. (Note: One Malaysian central bank official told econoff he had not heard of any new agreements between the two central banks. End note.) Rais also noted the founding KUALA LUMP 00001045 002 OF 003 of an "executive council" to expedite bilateral trade; new efforts to improve cooperation between the Malaysian Industrial Development Authority and Iran's Organization for Investment and Technical Assistance; and a cabinet-directed initiative for the Export-Import Bank of Malaysia Bhd to approve loans to housing developers in Iran. A number of bilateral agreements on science and technology, higher education, and human resources were reportedly "in process." Rais and Najib: Business with Iran to Proceed -------------- ¶5. (C) Local press quoted FM Rais Yatim as encouraging Malaysian firms to carry out trade and investment with Iran despite sanctions imposed by the U.S. and the UN "because (UN) sanctions are imposed in only three areas, which are nuclear, defense and military... There is actually a lot of potential (for) investing in Iran and (the Foreign Ministry) will streamline any cooperation on this matter..." Separately, Deputy Prime Minister Najib emphasized to the Ambassador, in a November 11 meeting held only hours after Najib received the Iranian Foreign Minister, that Malaysia's "normal commercial business with Iran should proceed." Malaysia Avoids Extensive Coverage -------------- ¶6. (SBU) Beyond comments by FM Rais, the Malaysian government and the government-dominated mainstream press did not provide extensive coverage of the talks with Iran nor attempt to accentuate the importance of Malaysia's ties with Iran. Malaysian newspapers carried brief reports for one day only (November 12),and placed these far from the front page. Iran More Effusive -------------- ¶7. (SBU) As reflected in English-language reporting from Iranian media, FM Mottaki appeared more effusive than the Malaysians about the importance of the talks and bilateral relations. Mottaki's comments carried in the Iranian press described Malaysia as an important Asian country that played an active role in the Organization of Islamic Countries (OIC) and the Non-Aligned Movement (NAM),and shared many common views with Iran. FM Mottaki called for boosting cooperation on issues concerning Central Asia, Africa, and the Middle East, which would further upgrade the ties between Iran and Malaysia. Iranian media sources played up the importance of Iran-Malaysia economic relationship and intentions to expand trade ties. The Tehran Times printed a reported statement by FM Rais to the effect that, "Iran is regarded as one of Malaysia's major trade partners.... (Rais) added that Iran is the third trade partner of Malaysia in terms of the volume of trade exchange between the two countries." (Note: This is a gross exaggeration. According to official Malaysian statistics, Iran is Malaysia's 31st largest trading partner, and only accounts for .03% of all Malaysian international trade. End Note.) PM Abdullah Reportedly to Visit Iran in December -------------- --- ¶8. (C) There was no public confirmation that Mottaki met with Prime Minister Abdullah Badawi despite suggestions in the press such a meeting would take place. However, senior officials at the Ministry of International Trade and Industry (MITI) told Econcouns on November 25 that Mottaki during his mission extended an invitation for Prime Minister Abdullah to visit Iran. Abdullah has reportedly accepted the invitation and has begun to plan for a December 22-23 visit. A senior MITI official assumed Abdullah would focus on potential Petronas (the national oil/gas company) projects in Iran, as well as other trade and investment opportunities as he did during his recent visits to Uzbekistan and Turkministan. ¶9. (C) Comment: If we can confirm Abdullah's plans to travel to Iran, we intend to request instructions from the KUALA LUMP 00001045 003 OF 003 Department for the Ambassador to approach the Prime Minister in advance of the trip. We would recommend points that encourage Abdullah to use his discussions with Iranian officials to reinforce the necessity of making progress in international and EU-led mediation efforts on Iran's nuclear program. End Comment. MFA Halts Iranian Nobel Laureate -------------- ¶10. (SBU) Malaysia's ties with Iran were in the spotlight two weeks before FM Mottaki's visit, as information became public on the Malaysian Foreign Ministry's intervention to stop Iranian Nobel Laureate Shirin Ebadi from taking part in the prestigious "Bridges" international lecture series in Malaysia (scheduled to take place one week prior to Mottaki's visit). Organizers announced that the Foreign Ministry, after protests from the Iranian embassy, had advised them in writing to cancel Ebadi's participation. According to a lecture organizer, Iranian students at the University of Malaya threatened to hold a demonstration on the day of the lecture, and the Iranian embassy "advised" that the lecture should be canceled for "safety reasons." ¶11. (SBU) We obtained a copy of the MFA's letter to the lecture organizers dated September 10, signed by MFA Under Secretary for West Asia Hasrul Sani Mujtabar on behalf of Secretary General Rastam (the Ministry's senior-most career diplomat). The Malay-language letter stated, "The Foreign Ministry takes note of the intention of the University of Malaya to invite Nobel laureate from Iran Dr. Shirin Ebadi to deliver a lecture on November 3, 2008. In this case, in view of the good and close bilateral relations between Malaysia and Iran, the act of inviting Dr. Ebadi, who is considered by the Iranian government to follow the West's design and agenda, is not appropriate. The Ministry is also of the opinion that this would affect the bilateral cooperation between the two countries in the area of education." ¶12. (SBU) Within days of the story leaking that the MFA intervened to cancel Ebadi's lecture, and some critical international commentary, FM Rais publicly stated that Ebadi should be allowed to speak. Responding to reporters, Rais reportedly said he was unaware of his Ministry's objection and that the letter was "not official". Rais stated, "Malaysia should allow the freedom of expression and criticisms at the highest level. I will go and investigate this matter." According to our subsequent inquiry with University of Malaya officials, however, the university and other organizers had not received any official word from the Malaysian government reversing the MFA letter and Ebadi's lecture has not been rescheduled. Poloff subsequently contacted the MFA's Iran Desk and asked about Ebadi's situation, but officials had no other information to share with us. KEITH