Malaysia’s axis mysteriously shifting

By Ioannis Gatsiounis

Asia Times Online

KUALA LUMPUR – When Abdullah Badawi became Malaysia’s prime minister in 2003, many thought the mild-mannered leader would take a more moderate approach to international relations than his prickly predecessor Mahathir Mohamad, who often locked diplomatic horns with the United States and other Western countries.

But a string of scandals and crimes with international dimensions, some even linked to Abdullah’s family members, have put his government’s relations with Washington on an uncomfortable footing.

US authorities last month arrested and charged Pakistani national Jilani Humayun for his alleged role in shipping contraband military goods to Malaysia, from where they were re-exported to Iran. He was also charged with conspiracy to commit money-laundering and mail fraud. The sensitive dual-use hardware, which was funneled through an as yet unnamed Malaysian company, included parts for F-5 and F-14 fighter jets and Chinook helicopters.

In April the US imposed sanctions on 14 companies, individuals and government agencies it accused of dealing in advanced weapon technology with Iran or Syria. Two of the companies listed were Malaysian, the Challenger Corp and Target Airfreight.

Moreover, a federal jury in New York last year convicted Singaporean businessman Ernest Koh Chong Tek of smuggling dual-use US military parts to Malaysia for transshipment to Iran’s military – a violation of the 1995 embargo the US placed on all exports and re-exports of commodities to Iran without approval by the US Office of Foreign Asset Control. He was also charged with laundering millions of dollars through his Singapore bank accounts in the smuggling scheme.

The US and Iran are currently at diplomatic loggerheads over Tehran’s nuclear program, and Washington has frequently accused Iran’s military of arming radical Muslim militias in the Middle East, including the Lebanon-based Hezbollah as well as Iraqi insurgents who have targeted US troops. However, at least on the surface, bilateral relations with Malaysia remain cordial.

US officials who spoke with Asia Times Online would not comment on the investigations involving Malaysia on the grounds that they involve sensitive intelligence information. And so far there is no evidence to link recent violations of the US embargo directly to Abdullah. Yet security analysts say the recent incidents have put the crucial bilateral relationship on edge.

“I am absolutely sure that the US is watching these developments closely and pressing hard on Malaysia behind the scenes,” said Tim Huxley of the Singapore-based International Institute of Strategic Studies.

The US is Malaysia’s largest foreign investor, and the two sides are negotiating a wide-ranging free-trade agreement. Kuala Lumpur relies heavily on the United States’ military presence to maintain the region’s balance of power, particularly vis-a-vis its heavily armed neighbor Singapore. At the same time, Malaysia has been a key ally to the US administration’s “global war on terror” in the region.

“Malaysia needs the US and doesn’t want to do anything that will tilt the US toward Singapore, Thailand and Indonesia,” said Richard Bitzinger, a security specialist at the S Rajaratnam School of International Studies in Singapore. “Both sides will be willing to accept some [security] deficiencies, if they remain at low levels.”

Family matters

Yet the recent security lapses have been traced to the highest echelons of Malaysia’s business and political elite, raising questions about Abdullah’s underlying foreign-policy objectives. There are still huge question marks surrounding the 2004 proliferation case involving Scomi, a company owned by Abdullah’s son Kamaluddin, which was allegedly involved in supplying dual-use technology to Libya’s clandestine nuclear-weapons program.

Buhary Syed Abu Tahir, a Sri Lankan national with Malaysian permanent residency, sat with Kamaluddin on the board of Scomi-linked company Kaspadu. Buhary negotiated the controversial contract, which had Scomi Precision Engineering build components for centrifuges that were destined for use in Libya’s nuclear program. Scomi Group had since acknowledged that its subsidiary Scomi Precision filled a contract negotiated by Buhary to supply machine parts to Libya.

Documents obtained by the Associated Press reveal that Buhary was the chief financial officer of Pakistani nuclear scientist Abdul Qadeer Khan’s underground nuclear-proliferation network. How he was able to forge such high-powered alliances with Malaysia’s political elite is a question that remains unanswered. When the scandal broke, Abdullah said Tahir would remain free because there was no evidence of wrongdoing.

Months later, in May 2004, Buhary was arrested under Malaysia’s Internal Security Act (ISA), which allows indefinite detention without trial. Opposition leaders at the time accused Abdullah of detaining Tahir under the ISA rather than pursuing standard criminal procedures lest Kamaluddin be implicated. Now, Buhary’s whereabouts are unclear.

Amir Izyanias, assistant secretary of the government-sanctioned Human Rights Commission, says his staff made contact with Buhary on July 23 at Malaysia’s Kemunting Prison, where many ISA detainees are held. However, an official with the Department of Islamic Development said Buhary is not on his list of detainees.
This all comes on top of the 2005 independent inquiry into the United Nations oil-for-food scandal in Iraq, which cleared Abdullah of involvement but implicated two of his relatives. Abdullah’s sister-in-law Noor Asia Mahmood and her ex-husband Faek Amad Sareef were found to have paid US$10 million through their Mastek company, one of the largest payments among the the more than 2,200 companies implicated in the scandal.

The Iraq Survey Group, which the US set up to investigate weapons in Iraq, listed “Abdullah Badawi” on its names of recipients of the oil-for-food scam though did not clarify whether this was Malaysia’s prime minister. Abdullah has admitted to helping Malaysian business people to take part in the UN oil-for-food program, but said at the time the accusations surfaced that he was not personally involved. He has said he merely wrote letters supporting their bid in the program, but thereafter didn’t follow up what happened to their bids.

Diversified diplomacy

None of these scandals, of course, were necessarily state-sanctioned. Yet they have notably come at a time when Malaysia’s governing elite has shown resistance to democratic reform, clean governance and cultural pluralism, while strengthening ties with non-democratic states like Iran, Sudan and Russia.

It’s apparently all part of a larger foreign-policy shift, which Foreign Minister Syed Hamid Albar said in May would help Malaysia “avoid being too dependent on one particular segment” of the global economy – read by some as a reference to the US, which currently receives nearly 16% of Malaysia’s exports.

Abdullah’s son-in-law Khairy Jamaluddin this month attempted to silence an opposition leader by labeling him “a puppet of the United States and the Jews”. Meanwhile, Abdullah’s information chief and other ruling United Malays National Organization (UMNO) elites have recently moved to intimidate bloggers and Web portals for exposing high-level government corruption. Malaysia’s courts, meanwhile, have recently handed down hardline Islamic legal interpretations by denying several Muslims the right to change their religion.

Foreign Minister Syed Hamid recently dismissed a US State Department report that cited Malaysia’s “failure to show satisfactory progress in combating trafficking in persons”. Elsewhere Syed has said that Malaysia and Iran hold “identical views” on a range of global issues, including Iran’s right to develop a peaceful nuclear program.

Kuala Lumpur is also playing a key role in integrating Iran into the Asian economy at a time Washington is attempting to isolate that country economically. Last year Syed Hamid urged member countries of the Organization of Islamic Conference, in line with Iran’s policy, to consider sending weapons to Hezbollah.

To be sure, it could all be politics as usual. Amid Malaysia’s ethnic- and religious-tinged political landscape, UMNO politicians are wont to pander to Muslim sentiment, while cooperating with the US and West behind the scenes. Even as former strongman Mahathir blustered on about US-led neo-colonialism and protecting Malaysia’s national sovereignty, he simultaneously forged close military ties with the US.

For instance, the two sides in 1994 signed an acquisitions and cross-servicing agreement that allows US Navy ships to visit Malaysian ports for repair and replenishment. The contract was most recently renewed in 2005, during Abdullah’s tenure. Each year, US Special Forces train at Malaysia’s jungle-warfare school, and bilateral military-to-military cooperation is growing rather than diminishing. And the administration of US President George W Bush has generally applauded Malaysia’s security and counter-terrorism efforts.

Muted complaints

Nevertheless, some quarters are growing more wary of Malaysia’s geopolitical role.

“The UK has become more circumspect of dealing with Malaysian leadership,” said Alexander Neill, head of the Asia Security Program at the London-based Royal United Services Institute for Defense and Security Studies. He said in particular the recent zealously Islamic statements by senior Malaysian leaders “are problematic to a counter-terrorism policy”.

There are other geopolitical differences. For instance, while the US and other Western governments fret about the unfolding genocide in Sudan, Malaysia has recently invested heavily in the regime’s petroleum resources. Abdullah also cemented military and energy ties with Russia during a visit there in June, according to Foreign Ministry Parliamentary Secretary Ahmad Shabery Cheek. Some have suggested that that overture could be designed to counterbalance the close economic and military ties the US shares with Malaysian neighbor and rival Singapore. Ahmad has denied that Malaysia is in any way becoming a proxy for Russian influence in the Southeast Asian region.

While the US aims to build an international consensus in dissuading Iran from pursuing a nuclear-weapons program, Malaysia has recently strengthened ties to the Islamic Republic, including recent negotiations toward a $16 billion oil deal. Malaysia is also constructing a $7 billion oil pipeline that will traverse the north of Malaysia, which industry analysts say will help Tehran deliver more oil to East Asia. The National Iranian Oil Co reportedly has a 30% stake in the joint-venture project, though the Malaysian government has failed to disclose specific details of the deal.

Those opaque dealings have predictably caused a stir in Washington. James Keith, the US ambassador-designate to Malaysia, who is to begin his posting in Kuala Lumpur next month, said at his Senate confirmation hearing in May that he would “emphasize that we are vigorously opposed to business as usual with Iran”.

He also said investment ties “offer great promise for further development” and that while he would work to nurture them, as well as military and security cooperation, he stressed, “It will be critical … for my country team and for me to speak forthrightly about our commitment to fundamental values, including those enunciated in the UN’s Universal Declaration of Human Rights.”

US security and embassy officials here declined to comment on how the recent string of security lapses involving Malaysia have affected bilateral relations and what steps if any are being taken to prevent future misunderstandings. The two sides last year signed a treaty on mutual legal assistance covering a broad range of criminal matters, including evidence and witness sharing, though it’s still unclear whether the pact has actually been ratified by Malaysia.

But that doesn’t resolve the fact that US fighter-aircraft parts are, according to Koh during a secretly recorded conversation revealed in a US Justice Department press release, were regularly exported to Malaysia en route to Iran. Security analysts say one reason arms proliferators may gravitate toward Malaysia is that it does not have a comprehensive and specific law on export controls. According to the International Institute for Strategic Studies, “Malaysia lists only ‘radioactive and nuclear material, substances and irradiating apparatus’ for controls, and not dual-use items.”

Malaysia does not have any verification system in place to ensure that exported goods are used for their stated end use or truly sent to their listed end users. Officials with the Malaysian police, Defense Ministry, Internal Security Ministry, Foreign Affairs Ministry and International Trade Ministry did not respond to Asia Times Online’s requests to discuss how the government is acting to address these regulatory loopholes. Yet until they are closed, US-Malaysian relations will continue to be tinged with mutual suspicion.

(Ioannis Gatsiounis, a New York native, is a Kuala Lumpur-based writer)