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S E C R E T KUALA LUMPUR 000078 
 
SIPDIS 
 
PACOM PLEASE PASS TO RADM CONNOR 
 
E.O. 12958: DECL: 02/07/2030 
TAGS: MCAP MARR MASS MOPS PGOV PREL PTER OVIP MY
SUBJECT: SCENESETTER FOR VISIT TO MALAYSIA BY REAR ADMIRAL 
MICHAEL CONNOR 
 
Classified By: Deputy Chief of Mission Robert G. 
Rapson for reasons 1.4  b and d. 
 
Summary and Introduction 
------------------------ 
 
¶1. (C) Rear Admiral Connor, Embassy Kuala Lumpur warmly 
welcomes your visit to Malaysia, which comes at a moment of 
opportunity in U.S.-Malaysia relations.  In his ten 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, especially on the mil-mil 
front, expanding the trade and investment dimensions of our 
ties, and deepening our partnership on key global issues, 
including Malaysia's diplomacy towards Iran. 
Non-proliferation and the passage of an export control law 
remain very high on our mission agenda, as does securing a 
Malaysian commitment to providing assistance to Afghanistan. 
The domestic political tempo in Malaysia has slowed since the 
'political tsunami' of the March 2008 general elections that 
saw the opposition capture a record number of seats.  More 
recently, PM Najib and his administration have been 
confronted by the challenge of growing Islamic drift and 
managing the societal divisiveness of issues like the use of 
the word "Allah" by non-Muslims, which resulted in arson 
attacks against churches early in 2010. The trial of 
opposition leader Anwar Ibrahim for sodomy, which began on 
February 3, is likely to dominate Malaysia's domestic 
political scene for the foreseeable future.  End Summary and 
Introduction 
 
The Broader Relationship in Context 
----------------------------------- 
 
¶2. (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 and we enjoy expanding law enforcement 
cooperation as well as evolving military-to-military ties. 
Malaysia already hosts regional Humanitarian Assistance / 
Disaster Relief (HA/DR) related conferences and operations, 
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 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 
--------------------------------------------- ------- 
 
¶3. (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, Deputy Secretary Steinberg's visit to Kuala Lumpur 
in September, and Special Advisor Einhorn's visit in October. 
 
 
¶4. (C) DefMin Zahid Hamidi has also emphasized Malaysia's 
desire to strengthen our bilateral military relationship, 
Malaysia's role in anti-piracy, UN peacekeeping, humanitarian 
and Disaster Relief Operations and Malaysia's potential 
assistance to Afghanistan.  Zahid has indicated some concern 
with China's activities in the South China Sea, but has also 
encouraged broad U.S. engagement with China.  Zahid's 
proposed visit to DC in March 2010 followed by the PM's visit 
to Washington in April (for the Nuclear Security Summit) will 
impart additional momentum to improving bilateral ties. 
 
MIL-MIL Cooperation 
------------------- 
 
¶5. (C) The Malaysian military has consistently been more 
willing to engage with us and more willing to be seen doing 
so than its civilian government counterparts.  In contrast to 
some of its Southeast Asian neighbors, the Malaysian military 
is not a key player in either foreign policy or the 
maintenance of public order.  It is accordingly free to focus 
on the nation's defense and is keen to increase training and 
exercise opportunities with us, within well established 
boundaries and with the necessary concurrence of the Foreign 
Ministry.  The army-to-army training annual Keris Strike has 
been our premier command post exercise; it continues to 
evolve rotating different Malaysian Army Division's as our 
exercises partner and developing appropriate and challenging 
scenarios such as HA/DR operations. 
 
¶6. (SBU) 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.  With about two dozen ports calls per year, 
we have a robust program of naval exchange, our investment in 
maritime domain awareness in East Malaysia is developing 
well, and our nascent cooperation with the Malaysian Coast 
Guard is also maturing.  Although there have been some recent 
positive moves on this by their defense leadership, KL 
continues to resist active participation in prominent 
multilateral exercises, such as Cobra Gold, which it only 
observes.  Nevertheless, we are steadily expanding our 
cooperation, including by embedding a C-130 pilot in a 
Malaysian unit, increasing our senior NCO exchanges and 
looking for NCO training opportunities, and focusing on 
humanitarian assistance and disaster relief exercise 
opportunities, talking in mil-mil channels about pandemic 
preparation, and developing a more and more robust program of 
institutional and personnel exchanges and visits.  Under the 
BITACG (Bilateral Training and Consultative Group) 
arrangements we are deepening our engagement in areas such as 
exercises and training, intelligence exchanges, and logistics 
and communication. 
 
Foreign Policy 
-------------- 
 
¶7. (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.  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.  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.  The Malaysians are 
currently providing training to Afghan teachers in Malaysia, 
but at our encouragement have given indications recently that 
they will consider expanding their technical assistance and 
support into other areas.   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. 
 
CT and Law Enforcement 
---------------------- 
 
¶8. (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 those 
of the U.S. Coast Guard. 
 
The Economy and Trade Relations with the U.S. 
--------------------------------------------- 
 
¶9. (SBU) Malaysia's economy was estimated to have contracted 
about three percent in 2009 and is expected to recover slowly 
in 2010.  The global recession led to dramatic declines in 
exports and investment in Malaysia, resulting in a recession 
since the first quarter of 2009.  Hence, the political stakes 
are high for PM 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 
----------------- 
 
¶10. (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 October 2009 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.  Opposition 
leader Anwar Ibrahim remains at risk of imprisonment over 
what most observers would agree are politicized charges of 
sodomy; his trial began on February 3.  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 led to arson attacks 
on Christian churches. A surau, and a Sikh temple in five 
different states.  The government recently made four sets of 
arrests in connection with the attacks. 
 
KEITH