SCENESETTER FOR VISIT TO MALAYSIA BY CONGRESSMAN

C O N F I D E N T I A L SECTION 01 OF 04 KUALA LUMPUR 000010 SIPDIS FOR EAP/MTS AND H PLEASE PASS TO CONGRESSMAN FALEOMAVAEGA E.O. 12958: DECL: 01/07/2020 TAGS: PREL PGOV PTER ECON ETRD KDEM MY SUBJECT: SCENESETTER FOR VISIT TO MALAYSIA BY CONGRESSMAN FALEOMAVAEGA Classified By: Deputy Chief of Mission Robert Rapson for reasons 1.4 b and d. Summary and Introduction -------------- ¶1. (C) Mr. Congressman, Embassy Kuala Lumpur warmly welcomes your visit to Malaysia, which comes at a moment of opportunity in U.S.-Malaysia relations. In his nine months in office, Prime Minister Najib Tun Razak has demonstrated a more pragmatic and action-oriented approach than his predecessor and he appears to be more inclined to move Malaysia at least some distance toward the international mainstream on issues of importance to the United States. In this context, our efforts are focused on continuing our good security cooperation with Malaysia, expanding the trade and investment dimensions of our ties, and deepening our partnership on key global issues, including Malaysia's diplomacy towards Iran and Afghanistan. Non-proliferation and the passage of an export control law remain high on our mission agenda, with some successes on the counter-proliferation front but virtually no movement on the passage of an export control law. We are also concerned by the recent disappearance of two U.S. built F-5 engines that may have been sold illegally, as they were controlled military items by agreement. Since being ranked as a Tier 3 country in last year's Trafficking in Persons (TIP) report, Malaysia has taken initial steps to combat trafficking, but still has measured room for improvement. The domestic political tempo has slowed since the 'political tsunami' of the March 2008 general elections saw the opposition capture a record number of seats. The most recent political test for Prime Minister Najib, who took over in April 2009, involves his government's case against a Catholic newspaper for their use of the word 'Allah.' Malaysia's Legislature consists of an active 222-seat Parliament and a less active 71-seat Senate. While both houses will be in recess during your visit, you will have an opportunity to meet with a mix of ruling party and opposition parliamentarians. ¶2. (C) During your meetings with the Foreign Ministry and Malaysian parliamentarians, we recommend that you focus on the following themes and objectives: -- Emphasize President Obama's sincerity in reaching out to the Muslim world, noting that his speech in Cairo in June 2009 was not a solution, but a first step; -- Stress the importance to the global trading system of the GOM passing a credible export control law as soon as possible as a first step toward establishment of a robust export control regime. -- Highlight our ongoing commitment to diplomatic resolution of the international community's differences with Iran while also communicating our resolve to preserve stability and security in the Middle East; -- Seek out Malaysia's willingness to provide financial and appropriate forms of assistance in Afghanistan; -- Acknowledge Malaysia's recent efforts to improve their anti-TIP efforts, but emphasize that more needs to be done; --Remind Malaysian officials that we remain concerned with Burma, highlighting that we would appreciate Malaysia's continued support in releasing Aung San Suu Kyi and for the military junta to hold free and fair elections in 2010. End Summary and Introduction The Broader Relationship in Context -------------- ¶3. (SBU) Robust trade and investment ties remain the solid foundation of our relationship with Malaysia, our 18th largest trading partner (bilateral trade totaled USD 44 billion in 2008). The GOM has been an important partner on counterterrorism when it serves Malaysia's own security interests, and we enjoy expanding law enforcement cooperation as well as evolving military-to-military ties. Mil-mil engagement continues to expand in frequency and quality, as is evidenced by the increase in ship visits over the last four years, from approximately six per year to over 27 in ¶2009. Malaysia already hosts a regional Humanitarian Assistance / Disaster Relief (HA/DR),and we have been working to improve our disaster relief cooperation. Our people-to-people ties build on decades of Malaysian students studying in America (5,400 Malaysian students studied in the U.S. during in 2007-2008). The emergence of new KUALA LUMP 00000010 002 OF 004 administrations in both our countries has provided expanded opportunities to pursue vigorous public outreach to often-skeptical, but now more receptive, Muslim Malay audiences. Najib and His Cabinet Seek Better U.S.-Malaysia Ties -------------- -------------- ¶4. (C) PM Najib has a more nuanced sense than his predecessor, Abdullah Badawi, of international politics as well as Malaysia's place in the region and the world. Najib places a priority on foreign relations beyond Malaysia's traditional reference points of the Non-Aligned Movement (NAM) and the Organization of the Islamic Conference (OIC). Although it would be inapt to describe Najib as pro-Western, the UK-educated Prime Minister recognizes the benefits to Malaysia of engaging the U.S., sustaining access to our market and U.S. investment, along with rapidly developing ties to China and India, and of participating in international institutions. He has given explicit instruction to his cabinet to improve relations with the U.S. Over the past year, and with the advent of the new U.S. administration, we have seen an uptick in the tempo of our senior-level bilateral interactions, to include the President's extended phone conversation with Najib in June, Foreign Minister Anifah's meeting with Secretary Clinton in DC in May, and Deputy Secretary Steinberg's visit to Kuala Lumpur in September. Foreign Policy: Middle East, Iran, Afghanistan, and ASEAN -------------- -------------- ¶5. (C) Malaysia's foreign policy is not well aligned with that of the United States. Instead, it is Non-Aligned Movement (NAM)-centric which leads Malaysia to vote opposite the U.S. position on almost all important UN issues, and is unlikely to change dramatically. Although the GOM has recently expressed willingness to cooperate with international efforts to prevent Iran from developing nuclear weapons, its Ambassador to the IAEA on November 25 voted (along with only Cuba and Venezuela) against a German-sponsored IAEA resolution calling for increased cooperation from Iran. While the Foreign Minister subsequently reversed Malaysia's position on the vote and recalled its Ambassador, the incident undercut Malaysia's credibility on this issue. On the other hand, U.S. support for Malaysia joining the Somalia anti-piracy Contact Group was a useful start to moving Malaysia toward more engagement in multilateral security structures. We are encouraging Malaysia to play a more active role in helping build capacity in Afghanistan. Malaysia is a leading member of ASEAN, and could play a more positive role in Southeast Asian conflict resolution and ASEAN's approach to Burma to bring about democratic change in that country. The one foreign policy issue that resonates most profoundly with the Malaysian public is the Israel-Palestine conflict, where predominantly Muslim Malaysians (55 percent of the population) identify with the Palestinians and criticize U.S. support of Israel. CT and Law Enforcement -------------- ¶6. (C) Counterterrorism cooperation with Malaysia has been effective. Early round-ups in 2001-2002 of scores of Jemaah Islamiyah (JI) suspects helped prevent terrorist attacks here, but Malaysian extremists remain engaged in JI operations elsewhere. Two Malaysians were among the 14 high-value U.S. detainees transferred to Guantanamo in 2006; Malaysia has a pending request for their return. Growing domestic political pressure to do away with preventive detention laws, principally the Internal Security Act (ISA), could pose a long-term challenge to Malaysian law enforcement, which is overly reliant on administrative detention. Interagency engagement has also increased with the newly formed Malaysian Maritime Enforcement Agency (MMEA),which has broad maritime law enforcement, humanitarian, and security responsibilities similar to the U.S. Coast Guard. Non-proliferation and Export Control -------------- ¶7. (C) The GOM supports the Non-Proliferation Treaty (NPT) regime, with emphasis on the need for all countries to denuclearize. Malaysia claims to enforce the letter of UNSCR resolutions, but it has not entered into the spirit of putting pressure on Iran to relinquish its nuclear weapons development programs, perhaps primarily due to the widespread public perception here that Iran's denial of a weapons program can be taken at face value. We remain concerned that KUALA LUMP 00000010 003 OF 004 Malaysia remains a key transit point for proliferation activities. Equally of concern has been the lack of momentum in passage of an export control law, which is critical for Malaysia to be able to take the kind of actions we want to stem growth in transshipments of sensitive technologies to UN proscribed entities. Most recently, we are paying close attention to the recent disclosure that two F-5 jet engines have disappeared. The disappearance of the engines, whose use and distribution is regulated by an agreement between the U.S. and Malaysia, could be a simple case of graft, but we cannot discount the possibility that they were smuggled to a third country like Iran. The GOM is investigating and has indicted two individuals. The Economy and Trade Relations with the U.S. -------------- ¶8. (SBU) Malaysia's economy was estimated to have contracted about five percent in 2009 and is expected recover slowly in ¶2010. The global recession led to dramatic declines in exports and investment this year in Malaysia, resulting in a recession since the first quarter of 2009. Hence, the political stakes are high for Najib, who must ensure that the economy continues to provide growth and prosperity to a large middle class. Najib has used the recession to push forward economic reforms needed to keep Malaysia competitive. Najib's recognition that reforms are needed also presents opportunities for our trade and investment agenda specifically with regard to market access issues related to government procurement and competition policy, among others. While it is not yet ready to join, Malaysia is interested in discussions related to the Trans-Pacific Partnership regional trade agreement. If it decided to join, it could make use of much of the work done during the U.S.-Malaysia Free Trade Agreement negotiations. Domestic Politics -------------- ¶9. (C) The broader domestic context is more settled than a year ago, but worrisome factors are still embedded in the system. Najib came to power as Prime Minister in April 2009 in the midst of domestic political discord that raises long-term questions regarding the continued dominance of his ruling UMNO party, in power since independence in 1957. He replaced former PM Abdullah Badawi, who was eased out after the ruling National Front (BN) coalition lost its near-perpetual two-thirds majority control of Parliament--and five of 13 states--in the March 2008 general elections. Najib successfully presided over the recent UMNO national convention, which bolstered his leadership, but is finding it challenging to identify and implement popular political reform measures while maintaining UMNO's tight control over state levers of power and patronage. With a weakened ruling coalition, a consolidating opposition, and a more sophisticated electorate with access to more information, Malaysians are struggling to adjust to a new and more competitive political environment. ¶10. (SBU) Malaysia has a long record of religious tolerance, but non-Muslims are concerned about what they see as creeping Islamization of Malaysian society. A contentious issue in January was whether non-Muslim Malay-language religious publications could use the word "Allah" to refer to God, which has lead to widespread public discord and, on January 8, arson attacks on at least three Christian churches in Kuala Lumpur. Last year's court ruling to cane a Muslim woman, Kartika, as punishment for drinking a beer at a hotel drew widespread condemnation from human rights groups, although most Islamic groups have supported the punishment as a valid execution of Syariah law. ¶11. (SBU) Malaysia's judiciary is not independent and the ruling party retains broad power to circumscribe freedoms of assembly, expression, and the press. In particular, the ruling party has embarked upon an effort to modernize the Internal Security Act, which permits extended detention without judicial review. Opposition leader Anwar Ibrahim remains at risk of imprisonment over what most observers would agree are politicized charges of sodomy, a violation of criminal law in Malaysia. His trial is scheduled to begin on January 25. ¶12. (SBU) Malaysia's Parliament has taken on increased importance since the opposition coalition, known as the People's Assembly, captured 88 out of 222 seats in the March 2008 general elections. Once considered a rubber-stamp organization, Parliament now holds meaningful policy debates about political, economic and social issues. Parliamentarians function with little or no staff support and KUALA LUMP 00000010 004 OF 004 there is no committee structure to speak of. Increased cooperation between the Malaysian Parliament and the U.S. Congress is an area worth exploring. Trafficking in Persons and Human Rights -------------- ¶13. (SBU) In June 2009, the U.S. designated Malaysia as a Tier III TIP country, for lack of significant efforts to combat human trafficking. Areas identified in our annual TIP report where problems were especially acute included: labor trafficking, prosecutions of traffickers, and victim identification and protection. In the months following its designation and our comprehensive engagement, the Malaysian Government has taken a number of measures. The GOM has arrested immigration officials in connection with the trafficking of Burmese refugees at the Thai border (the subject of an US Senate Foreign Relations Committee report); shared with us a five-year National TIP Action Plan; issued prosecutorial directives on the handling of TIP cases under the guidance of the Attorney General's Chambers; and hosted a number of trainings designed to educate law enforcement officers on how to investigate and charge cases under the new Anti-TIP Act. KEITH