VZCZCXYZ0011
OO RUEHWEB

DE RUEHKL #1334/01 2390924
ZNR UUUUU ZZH
O 270924Z AUG 07
FM AMEMBASSY KUALA LUMPUR
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9880
INFO RHEBAAA/DEPT OF ENERGY WASHDC IMMEDIATE

UNCLAS KUALA LUMPUR 001334 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT OF ENERGY FOR DEPUTY SECRETARY SELL 
STATE PASS TO USTR FOR AMBASSADOR BHATIA 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON OVIP MY
SUBJECT: WELCOME TO MALAYSIA'S 50TH ANNIVERSARY CELEBRATION 
 
¶1. (U) Welcome to Malaysia and its golden independence 
anniversary.  Our fifty-year relationship with Malaysia is 
strong and growing.  As President Bush has said: "The United 
States and Malaysia share strong trade and investment ties 
and a commitment to generating prosperity through openness, 
democracy, and freedom."  President Bush and Malaysia's Prime 
Minister Abdullah Badawi have met three times since 2004, 
most recently in New York in September 2006, and their direct 
communications, including letters and phone calls, are a 
testament to our relationship.  Now as Malaysia celebrates 
the 50th anniversary of its independence from Great Britain, 
we have much to remember and much to anticipate in the years 
ahead. 
 
Malaysia Celebrates 50 Years of Independence 
-------------------------------------------- 
 
¶2. (U) Popularly known as "Merdeka," Malaysia's Independence 
Day is celebrated on August 31, commemorating that date in 
1957 when Malaysia gained its sovereignty after years of 
British colonial rule.  Literally translated "Merdeka" means 
"Independent" rather than "Independence," but it arises from 
rally calls of pre-independence political movements in the 
1940s and 50s which championed the call for independence with 
frequent chants and slogans of "Merdeka!" 
 
¶3. (U) Malaysia's road to independence began immediately 
following the Second World War as popular sentiment for 
independence swelled and British imperialism began to 
retract.  The territories of peninsular Malaysia joined 
together to form the Federation of Malaya in 1948 and 
eventually negotiated independence from the British in 1957. 
A British-educated Malay aristocrat, Tunku Abdul Rahman, 
became the first prime minister and is revered as the father 
of the country.  In 1963 the British colonies of Singapore, 
Sarawak, and Sabah joined the Federation, and for the first 
time the country adopted the name Malaysia.  Singapore's 
membership was short-lived, however, and in 1965 it left the 
federation to become an independent republic. 
 
¶4. (U) The United States was one of the first 16 nations to 
recognize immediately Malaysia's independence, and we have 
shared formal diplomatic relations since Malaysia's first day 
of independence.  For its 50th anniversary, Malaysia has 
extended special invitations to all 16 of these countries, 
along with its Southeast Asian neighbors.  Malaysia's embassy 
to the United States was among the country's first diplomatic 
posts, and today Malaysia also has consulates in New York 
City and in Los Angeles. 
 
¶5. (U) As Malaysia celebrates its 50th anniversary of 
independence, foreign dignitaries from around the world will 
join in celebrating and congratulating Malaysia on its first 
fifty years of extraordinary economic and social development. 
 Heads of state from most Association of Southeast Asian 
Nations (ASEAN) states will be in attendance, as well as 
members of various royal families from the region.  The 
United Kingdom, with its special colonial legacy, will be 
represented by Prince Andrew, the Duke of York. 
 
Malaysia's Government 
--------------------- 
 
¶6. (U) Malaysia is a constitutional monarchy, nominally 
headed by the Yang di-Pertuan Agong, customarily referred to 
as the King.  Kings are selected for five-year terms from 
among the nine sultans of the peninsular Malaysian states. 
The king also is the titular leader of the Islamic faith in 
Malaysia.  The King and Queen will host you and other foreign 
delegations for a high tea on August 31. 
 
¶7. (U) Executive power is vested in the cabinet led by the 
prime minister; the Malaysian constitution stipulates that 
the prime minister must be a member of the lower house of 
parliament who, in the opinion of the Yang di-Pertuan Agong, 
commands a majority in parliament.  The cabinet is chosen 
from among members of both houses of parliament and is 
responsible to that body.  Malaysia's predominant political 
party, the United Malays National Organization (UMNO), has 
held power in coalition with other parties since independence 
in 1957.  Prime Minister Abdullah Badawi assumed his 
executive role in 2003, taking over from his long-serving 
predecessor Mahathir Mohamad.  The Deputy Prime Minister is 
Najib Tun Razak.  Both the Prime Minister and Deputy Prime 
Minister will be at all official events on August 31. 
 
¶8. (U) The bicameral parliament consists of the Senate (Dewan 
Negara) and the House of Representatives (Dewan Rakyat).  All 
70 Senate members sit for three-year terms, which are 
normally extended for an additional three years; 26 are 
elected by the 13 state assemblies, and 44 are appointed by 
the king on advice of the Prime Minister.  Representatives of 
the House are elected from single-member districts by 
universal adult suffrage.  The 219 members of the House of 
Representatives are elected to parliamentary terms lasting up 
to 5 years.  Legislative power is divided between federal and 
state legislatures.  The Prime Minister need not call the 
next national poll until 2009, but most people expect the 
election to be held within the next three to seven months. 
 
People to People Ties 
--------------------- 
 
¶9. (U) The United States and Malaysia share wide-ranging 
interests and strong people-to-people ties.  At any one time 
there are about 7,000 Malaysian students in the U.S. at a 
range of universities and colleges from the Massachusetts 
Institute of Technology to Indiana State to the University of 
California.  Even the Deputy Prime Minister's children are 
studying at U.S. universities.  These Malaysian students 
graduate and return to Malaysia, going on to play critical 
roles in Malaysian government, economy, and society.  They 
form a core of people dedicated to furthering U.S.-Malaysian 
understanding.  Similarly, American businesses, tourists, and 
students ensure a steady flow of thousands of Americans to 
East and West Malaysia each year, continually fostering our 
close cultural and business contacts.  With large minorities 
of ethnic Chinese and Indians, and ethnic groups in Borneo, 
Malaysia, like the United States, is a diverse, multi-racial 
society.  Malaysia is proud of its record of maintaining 
inter-ethnic harmony throughout most of its history. 
 
¶10. (U) In a gesture of friendship, the Malaysian government 
donated $1 million for Hurricane Katrina relief operations. 
Earlier this year, the United States provided a modest 
donation to the Malaysian Red Crescent society to help 
Malaysians cope with massive flooding.  Last month, a U.S. 
Navy helicopter took part in a search and rescue operation 
for a Malaysian military helicopter that crashed in 
mountainous terrain. 
 
Malaysia's Regional and Global Role 
----------------------------------- 
 
¶11. (U) Malaysia currently chairs the Organization of the 
Islamic Conference (OIC), and sits on the leadership troika 
of the Non-Aligned Movement (NAM) as the most recent past 
president.  Malaysia is also a current member of the U.N. 
Human Rights Council.  Malaysia is an active member of the 
Asia Pacific Economic Cooperation (APEC) and a founding 
member of the Association of Southeast Asian Nations (ASEAN). 
 Malaysia has been an active player in UN peacekeeping 
operations since the early 1960s and now has over 360 
soldiers assigned to the UN peacekeeping operation in 
Lebanon.   Malaysia is currently facilitating negotiations 
between the Philippine Government and the Moro Islamic 
Liberation Front and is working with the Government of 
Thailand to help foster peace in restive Southern Thailand. 
Indeed, Malaysia is an important player in securing regional 
and international security. 
 
A Robust Economic Partnership 
----------------------------- 
 
¶12. (U) The Malaysian and American economies are closely 
linked. America has been Malaysia's top trade partner since 
1999, and Malaysia is the 10th largest trade partner for the 
United States.  Two-way bilateral trade totaled $49 billion 
in 2006.  Additionally, the United States was the second 
largest foreign investor in Malaysia in 2006, and was the 
leading investor for many years before that. American 
companies are particularly active in the energy, electronics 
and manufacturing sectors, with the oil and gas sector being 
Malaysia's top recipient of foreign direct investment. 
Exxon-Mobil, Murphy Oil, Conoco-Phillips, Dell, Intel, 
Microsoft, General Electric and Western Digital all have 
substantial business interests in Malaysia.  The United 
States launched free trade negotiations with Malaysia in 
mid-2006; five rounds have been held to date. 
 
Energy Sector 
------------- 
 
¶13. (U) The Malaysian federal government holds the rights to 
the nation's petroleum reserves through its national company 
PETRONAS (Petroleum Nasional Berhad), established in 1974 to 
execute, oversee, and chart the course of development of the 
sector.  Malaysia's oil output has grown from 80,000 barrels 
per day (bbl/d) in 1974 to approximately 798,000 bbl/d today. 
 Malaysia's first deepwater oil field, Kikeh, is on track to 
begin production by September 30.  It is expected to add 
another 40,000 bbl/d within the first year of production and 
be ramped up to 120,000 bbl/d after one year.  The field also 
is expected to produce 120 million cubic feet per day of 
natural gas.  The Kikeh development is an 80:20 joint venture 
between Murphy Oil and PETRONAS. 
 
¶14. (U) Malaysian production of liquid natural gas (LNG) 
continues to grow, with the nation now ranking as the world's 
third largest exporter.  In 2005, Malaysia exported 21.2 
million metric tons of LNG.  U.S. petroleum companies 
operating in Malaysia are ExxonMobil, Murphy Oil, 
ConocoPhillips, and Hess, with Hess operating in the Joint 
Development Area between Malaysia and Thailand. 
 
¶15. (U) Petronas contributes approximately 40 percent of the 
federal government's revenue.  According to Oil & Gas 
Journal, Malaysian proven oil reserves have dropped from 4.6 
billion barrels in 1996 to 3.0 billion as of January 2007. 
Proven gas reserves are 75 trillion cubic feet.  As 
production tapers off from offshore wells in shallow waters, 
Petronas is focusing more on Malaysia's gas reserves and 
internationally with operations in 29 countries. 
 
A Strong Security Partner 
------------------------- 
 
¶16. (SBU) Malaysian leaders have taken a strong stance 
against terrorism and the United States is working closely 
with the Malaysian Government to fight this global scourge. 
Malaysia recently cemented its nonproliferation commitment by 
signing the International Atomic Energy Agency Additional 
Protocol and has sent observers to Proliferation Security 
Initiative exercises.  The United States and Malaysia also 
share a strong military-to-military relationship with 
numerous exchanges, training, joint exercises and visits. 
Although we are not allies, the U.S. and Malaysia collaborate 
closely in the military sphere.  The U.S. spends about one 
million dollars a year to train Malaysian military personnel, 
and U.S. military personnel train in Malaysia's jungle 
warfare training center.  Our militaries also conduct a 
series of bilateral exercises in the area during the year. 
During your visit, the USS Kitty Hawk carrier group will also 
be visiting the Kuala Lumpur area on a port call.  We have 
had fifteen US Navy ships visit Malaysia this year and 23 
last year.  This is up from only 3 ship visits in 2003.  Our 
military-to-military relations have improved further in 
recent years, and this close relationship greatly contributes 
to the overall peace and stability of the region. 
 
¶17. (U) We hope you will enjoy your visit to Malaysia.  We 
are sure you will be impressed with the organization and 
effort Malaysia has put into their golden anniversary.  Your 
participation in the 50th anniversary of Malaysia's 
independence reinforces the friendship we continue to foster 
with a strategic Southeast Asian partner. 
SHEAR