U.S.-Malaysian Relations during the Bush Administration: The Political, Economic, and Security Aspects

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Bilateral Relations during the Clinton Presidency

In general, since Malaysia's independence in 1957, the United States and Malaysia have enjoyed cordial relations in trade, investment, defence, narcotics control, and cultural and educational exchanges. (1) Both nations also adhere to shared core values, such as the belief in democracy, in free enterprise, and in religious tolerance. Over the years, cooperation between them has outweighed tension. Briefly, past tensions have included the tin and rubber stockpile disposal plans, the Vietnamese refugee problem, the palm oil issue, the fears over America's withdrawal of its General System of Preferences (GSP) privileges for Malaysia, and differing perceptions on the Gulf War. During the first Clinton administration (1992-96), the relationship began very well. For example, on the political front, Clinton's first term saw an end to the Vietnamese refugee problem as all the remaining refugees in Malaysia were, by 1996, repatriated to Vietnam with U.S. assistance.

Clinton's second term (1996-2000) saw increasing bilateral tensions over several issues, making the closing years of the Clinton administration a very difficult period in U.S.-Malaysian relations, perhaps the most difficult to date. First, there was trouble over the 1997 Asian financial crisis, with a clash of views on its causes. To Mahathir, the crisis was due to the actions of currency speculators like George Soros, while to U.S. policymakers it was due to the lack of transparency in business dealings, the collusion between government and business, structural weaknesses in the Asian economies, and to other reasons like over-speculation, corruption, and cronyism. (2)

The two countries also held differing views on how to handle the financial crisis. Mahathir chose to use controversial currency controls which pegged the Malaysian ringgit to the U.S. dollar, required all ringgit to be sent back to Malaysia, and prevented the ringgit from being taken out of Malaysia for at least a year to stabilize the stock market and protect Malaysia from destabilizing short-term outflows of foreign capital. He also believed in priming the pump to jumpstart the Malaysian economy. His policies, however, meant going against International Monetary Fund (IMF) and World Bank prescriptions for the stricken Southeast Asian nations, such as fiscal restraint and the cutting of subsidies. Mahathir was criticized at the time for his currency controls but he has since been vindicated as the controls did work for Malaysia whereas some IMF and World Bank policies further weakened countries like Indonesia? Yet another source of irritation in 1997 was the U.S. attempt to investigate the Petronas gas deal in Iran. In protesting this move, the Malaysian government pointed out that it did not accept extra-territorial applications of Washington's Iran-Libya Sanctions Act of 1996 and that Malaysian companies would continue to do business in Iran and Libya. (4)

On top of these differences was growing disagreement with U.S. policy towards the Middle East, especially over what was perceived as America's pro-Israel stance, which was at odds with Malaysia's support for the Palestinian cause. Bilateral tensions were further exacerbated when, in September 1998, Mahathir sacked his deputy prime minister and finance minister, Anwar Ibrahim. Mahathir also expelled him from the ruling party and humiliated him with charges of corruption and sexual misconduct.

Tensions increased when Vice President AI Gore made some remarks supporting pro-Anwar demonstrators in a speech at the Asia-Pacific Economic Cooperation (APEC) meeting in Kuala Lumpur in November 1998. In that speech, Gore had hailed "the brave people of Malaysia" for seeking reformasi or reform in Malaysia. Relations deteriorated further when Anwar's second trial on sodomy charges ended with a guilty verdict in August 2000 and he was sentenced to another nine years in prison. The U.S. State Department's Richard Boucher said that the U.S. was "outraged by Anwar's conviction" and that the "co-operative relationship with Malaysia has been impeded by Malaysia's poor record on human rights."[sup 5] The Clinton administration ended, therefore, with much friction on the political level and with human rights as the main stumbling block in the bilateral relationship.

The New Bush Administration: Impact of September 11 on Political Relations

When the Bush administration began in January 2001, the political relationship was still at a low point. It remained low due to the continued use of the Internal Security Act (ISA) early that year to arrest and detain members of the Kumpulan Militant Malaysia (KMM), a Muslim group in Malaysia. There was also tension over the State Department's annual human rights report, released in February 2001, which criticized Malaysia's handling of the case against Anwar as being politically motivated and which questioned the independence of the judiciary. But the wide rift in US-Malaysian relations was soon mended through tragedy--the September 11 attacks. The attacks on the World Trade Center in New York and on the Pentagon, the first attacks on the U.S. mainland since the War of 1812, led to a great outpouring of sympathy and concern by Malaysians. Upon hearing of the attacks, Mahathir immediately phoned the U.S. embassy in Kuala Lumpur to condemn the terrorist attacks and to express his condolence.

The Malaysian premier also signed the condolence book at the U.S. embassy. In addition, he beefed up security at the U.S. embassy, at U.S.-owned factories, and at other strategic locations in the country. There were security concerns as an ex-army officer had phoned the U.S. embassy, threatening to blow it up, before he was arrested within 14 hours of his call. Moreover, there had been bomb threats at the Petronas Twin Towers in Kuala Lumpur and at the IBM Plaza in Taman Tun Dr Ismail. The Skybridge at the Petronas Twin Towers was closed temporarily to the public. The premier also offered the United States the services of the Malaysian Search and Rescue Team. In deference to the loss suffered by the United States, Mahathir cancelled his official visit to Germany and Russia and postponed Malaysia's National Day celebrations, originally scheduled for 12 September, to a later date. (6)

All these gestures of goodwill were much appreciated by the United States. First, the new U.S. Ambassador, Marie T. Huhtala, upon her arrival in Malaysia on 30 September 2001, said that the United States deeply appreciated the condolences from the Malaysian premier and his strong condemnation of terrorism and that she looked forward to working closely with the Malaysian government in the international effort to prevent further acts of terrorism. (7) Then, the following day, President George Bush also telephoned Mahathir to thank him for supporting America's efforts to combat terrorism. They discussed economic repercussions from the attacks and agreed that new types of tactics and new forms of international cooperation were needed. They also agreed to meet later that month at the APEC Meeting in Shanghai. Mahathir voiced concern about domestic terrorism in Malaysia and told the U.S. President that he would write to him to elaborate on Malaysia's position and views on terrorism. (8)

In mid-October 2001, just prior to the APEC meeting, U.S. Trade Representative Robert B. Zoellick called on Mahathir to convey Bush's appreciation of Mahathir's letter on his counter-terrorism proposals. At this meeting, the Malaysian premier reiterated Malaysia's stand against terrorism, adding that the fight against terrorism should be in unison with the international community, that the root causes needed to be tackled first, and that he wanted the U.S. to find a way to settle the problem in Palestine. Zoellick also pointed out that America was waging a war against terrorism and not against Islam. He then praised Malaysia, saying that the U.S. viewed it as a model for developing countries in terms of progress, development, and religious tolerance. (9)

On 20 October 2001, when Bush and Mahathir met face-to-face in Shanghai, Mahathir again stressed the need to remove the root causes of terrorism and singled out the Palestinian problem as the main cause. Bush replied that he believed that there should be a Palestinian state and a Jewish state. Both leaders agreed that the Palestinian problem had to be resolved, with Mahathir pointing out that its resolution would reduce the frustration and anger in the Muslim world. Both concurred too that, while they differed on certain issues, they were in broad agreement on fighting terrorism. Mahathir also related to Bush how Malaysia in earlier years had successfully overcome its communist insurgency problem. Neither side mentioned Anwar Ibrahim or Al Gore at the meeting. Their cordial exchange ended with Bush saying that the bilateral relationship should be strengthened. (10) Nevertheless, Mahathir spoke out against the U.S. when it launched attacks against Afghanistan--that the attacks could not be justified as there were Afghans who were not Taliban followers. To him, the main reasons for the recent terrorist attacks included the atrocities against the Palestinians and the grave injustices in Chechnya and Iraq. He called for understanding about the root causes of terrorism and for a definition of terrorism." (11)

In early 2002, the Malaysian government also submitted a memorandum to the U.S. embassy voicing its protest against the harsh treatment of Taliban prisoners at the American naval base in Guantanamo Bay, Cuba. Malaysia was then giving food, medical care, and supplies to the Afghan people. (12) Another source of irritation was the new visa restrictions on Muslim men wishing to enter the United States. This rule, enforced in late 2001, requires male Muslims aged between 16 and 45 to wait for 20 days for …