Stymied U.S-Malaysia Relations

February 16, 2016

Stymied U.S-Malaysia Relations

By Dylan Kean

President Barack Obama’s Flawed Judgement of Character–Befriending the Most Corrupt Malaysian Prime Minister in our History

“Najib was no boy scout before the 1MDB scandal, but for many in the U.S. policy community he was at least a credible leader who could get things done. Now it appears that the embattled Prime Minister is more interested in protecting himself than accomplishing the grand reforms he had promised. It’s unclear whether Najib’s hold on power will last, but as long as scandal and corruption continue to plague Malaysia’s government, relations with the United States will have little hope of reaching their full potential.”–D. Kean

It was Christmas Eve 2014 and President Barack Obama had arrived in Hawaii with the First Family several days earlier for some much needed rest and relaxation, which meant golf. While neither golf nor the choice of venue were out of the ordinary, Obama’s partner, Malaysian Prime Minister Najib Razak, certainly was. Najib’s presence in Hawaii was not a happy accident, but instead a sign of the warming relations developing between the United States and Malaysia, strengthened by Obama’s state visit earlier that year – the first such visit by a sitting U.S. president since Lyndon Johnson.

At the time, the countries seemed poised to elevate relations to their highest point in more than a decade, buttressed by the seemingly friendly rapport developing between the two leaders. Less than a year later in a disappointing turn of events, Najib, the person to whom much of this optimism was attributed, would emerge as a new obstacle to overcome in the bilateral relationship.

So what went wrong?

It all began in 2009 when newly-elected Prime Minister Najib set up the strategic development fund known as 1Malaysia Development Berhad (1MDB). Najib would later distance himself from the fund, but as prime minister, finance minister and chairman of 1MDB’s board of advisors, his close ties to 1MDB could not be overstated. Flash-forward to 2015 and 1MDB is in shambles, owing in excess of $11 billion. In June The Wall Street Journal published a story claiming that Malaysian authorities investigating 1MDB had traced nearly $700 million in deposits to what they reportedly believed were Najib’s personal bank accounts. The revelation sparked outrage in Malaysia, dealt a body blow to Najib, and threatened to derail Obama’s upcoming visit to Malaysia.

In response to the article, Najib came under intense scrutiny from Malaysia’s Anti-Corruption Commission (MACC), the Malaysian Parliament, at least four foreign law enforcement agencies (including the FBI), domestic and international media outlets, his own party, and the Malaysian people. However, despite the unprecedented level of attention paid to the scandal, Najib has continued to avoid any legal consequences. This is due in large part to his powerful position within the ruling United Malays National Organisation (UMNO) and his support among the Malay ethnic majority. Najib has also been quite adept at silencing those who oppose him, including defiant members of his own party. When his deputy Muhyiddin Yassin publicly criticized the prime minister’s media crackdown and questioned the slow pace of the attorney general’s investigation, both he and the Attorney-General were sacked. The investigation limped along after that, but without any hint of credibility; the replacements were handpicked by Najib himself. As a result, when the new attorney general recently announced that Najib had been cleared of all charges regarding the deposits into his personal accounts, it did little to deter domestic and international critics.

Despite the negative impact of Najib’s scandals on Malaysia’s credibility abroad, the U.S.-Malaysia relationship remains deep and complex, based on mutual benefits that are often insulated to a certain degree from domestic political dynamics. As a member of the U.S.-led Global Coalition to Counter the Islamic State of Iraq and the Levant (ISIL), Malaysia has been a strong voice against violent Islamic extremism. With the very real threat of ISIL fighters returning to Malaysia and radicalizing new recruits, cooperation on this front is unlikely to cease.

Malaysia’s decision to join the 12-party Trans-Pacific Partnership (TPP) agreement also shows that it recognizes the need for better economic cooperation with countries like the United States in order to escape the middle-income trap. With the recent passage of the agreement through Malaysia’s upper and lower houses of parliament, progress on this front also appears steady.

Nevertheless, strategic cooperation only goes so far. Anti-corruption bodies in the United States, Switzerland, Singapore and Hong Kong are all actively investigating the 1MDB scandal, and French authorities recently announced a separate bribery investigation dated back to Najib’s time as defense minister. Meanwhile, civil society organizations like Human Rights Watch and Transparency International have harshly criticized Najib for his frequent use of sedition laws to silence opposition voices and his administration’s anemic response to human trafficking.

As a result of Najib’s worsening reputation and its effect on Malaysia’s international standing, the Financial Times recently penned a biting commentary, dubbing him “a disastrous prime minister for Malaysia.” At some point, the elites in Kuala Lumpur have got to be asking themselves whether defending Najib is worth the trouble.

Najib was no boy scout before the 1MDB scandal, but for many in the U.S. policy community he was at least a credible leader who could get things done. Now it appears that the embattled Prime Minister is more interested in protecting himself than accomplishing the grand reforms he had promised. It’s unclear whether Najib’s hold on power will last, but as long as scandal and corruption continue to plague Malaysia’s government, relations with the United States will have little hope of reaching their full potential.

Dylan Kean is a Graduate Fellow at McLarty Associates where he provides research and analysis to the firm’s Fortune 200 clients operating in East and Southeast Asian markets. He also serves as the Asia-Pacific Research Fellow at Young Professionals in Foreign Policy. The views expressed belong to the author alone, and do not represent the views of McLarty Associates.


22 thoughts on “Stymied U.S-Malaysia Relations

  1. Obama is so obsessed with getting Malaysia to sign the TPPA that he allowed Najib Razak to use their good personal relations to prop up his besieged regime. As a result, the incumbent US President has let many Malaysians down and in the process stymied US-Malaysia relations. We have to wait for 2017 when a new President takes office before we can know what the US will do about bilateral relations with Malaysia. Any one care to comment?–Din Merican

  2. No matter who becomes the next US president, the worst that can happen to Najib is that he will just be ignored and forgotten by Washington as the new president will be more interested to do the usual new-broom grandstanding on some issues of greater international consequences than a corrupt, tinpot 3rd world PM.

    So let’s not flatter Najib, or indeed the USA to think the latter really cares what happens to us, our GST, our slumping Ringgit, the foreign investments going to other ASEAN countries, etc, all of which have no significant impact on the US economy or US domestic politics. A few news article in the US press has less lasting popular impact than a white cop shooting a black drug dealer.

    It is all up to the people of Malaysia themselves.

    In the case of Marcos it was not the US president or FBI or the UN or God that finally brought him down. It was the people of the Philippines.

  3. Apparently a Chinese vessel has violated Malaysians waters and the Cousin (Hishamuddin) reminds Malaysia that Putrajaya is tolerant. That’s why “the Royal Malaysian Navy and the Malaysian Maritime Enforcement Agency have deployed ships which are anchored one nautical mile (1.9km) away from the Chinese vessel to monitor it.” –

    China “stressed that the territory is an “indisputable sovereignty” of China and pointed out that Malaysia did not lodge any official protest, according to Singapore Straits Times.” – from the same article.

    Meanwhile even Mindef wasn’t aware that our own troops were involved in military exercises in Saudi Arabia. “I have stated from the beginning that we are not involved militarily,” Hishammuddin said last night, when commenting on Saudi Arabia’s state news agency SPA’s report stating that Malaysia was participating in a massive military mission, deemed ‘critically important’, together with about 20 other countries.

    “Military training does not mean we are directly involved in operations. Besides, I will not allow it… as to what was reported today (by SPA), I have not seen the extent of involvement in the training,” he said. –

    Which just goes to show you that the Cousin is as ignorant as he is ineffective. What UMNO is good at is threatening the Non Malay/Muslim communities and apparently with their outsourced thugs beating up foreign (sic) workers.

    So all this TPPA stuff means very little to the other hegemonic power in the Region – so much for containment – and Islamic hate groups…as opposed to nationalistic race group(s)….will continue spewing their filth here because we have an ineffective Government.

    So should anyone really been troubled that the US has got JibRos suckling on its teat ?

  4. What much can you expect from the two high-strung cousins? They are there for one reason – to enrich themselves before the sky comes crashing on them. The welfare of the country and that of their supporters mean little. So bringing in 1.5 million Banglas to do their dirty work falls in their self- enrichment plan marvelously.

    While this is happening the fate of the unemployed graduates and school leavers is in a balance. And the majority of this unemployable are Melayus, the very people Umno is supposed to protect and help. Makes me wanna puke.

  5. International relations is all about your position on the scale of buying or selling. The former position means you have leverage while the latter means you have little or no leverage. Remember in the early 60s when we were the world’s leading rubber producer? Everytime the price of rubber reached a trigger point the US released rubber from its strategic stockpile to keep the price depressed. We made all kinds of representation but the US was not moved. And when the price fell below our trigger point the US just sat on its hands.

    That is why I have often repeated that the U.S. is a good umbrella but does not make a good roof. Their Emmbassies all over thr world collect information on leaders and personalities and use it to get what they want from you. By the time you know it you have been had it is too late.

    Do not place too much into relations with such nations. We have to depend on our strength and act accordingly. Do not try to emulate the style of the US if you do not have the substance. And today the financial strength of the nation plays a key role on how you are viewed on the international stage. In this regard prudent investments in quality education, quality rule of law and quality good governance based on principles on the four freedoms of the individual will go a long way to improve our international stage and be counted when it matters. If we do not already know these national qualities will attract good publicity without our Ministry of Finance having to allocate a single cent.

  6. Corruption = Donation

    Military Operation = Military Training

    Beating up foreign workers = Respect for Malaysia

    Threatening the Non Malay / Muslim communities = Defending Islam

    Criticizing the PM = A Jewish conspiracy against Malaysia.

    Perhaps others may wish to add to the list to compile a “Malaysia Boleh Phrasebook”?

  7. Tok Cik: Greetings. Pardon my ignorance for asking: Are these unemployed college graduates really unemployable or are they unwilling to take a lesser job because of ‘no face’? I am speaking from my own experience. When I got my PhD in Pharmaceutical Chemistry I could not find a job in my field for a year and a half, having to do odd jobs for survival. Then I found a lab assistant job with a pharmaceutical company, washing test tubes and beakers for more than a year, before getting a chemist position from within. Are the Malaysian education institutions today so bad, turning out unemployable graduates, or is it a cultural thing that the graduates do not lower their expectations for fear of losing face?

  8. My guess:

    If Bernie Sanders becomes the next President, we will have a Jimmy Carter-style Presidency in some ways i.e. attention will be given to human rights violations in Third World countries. Meaning that military cooperation, arms sales and sales of instruments of repression ( surveillance equipment, riot control equipment etc) will be restricted or stopped to some countries.
    The TPP agreement will meet its demise.

    If Hillary Clinton becomes President — more of the same as Obama.
    If “The Donald” Trump becomes President — God help the USA and the rest of the world!

  9. The reality is that Artificial Intelligence is threatening Human Intelligence by taking away traditional jobs. Just sit back and make a survey and you will find many job at the middle level have been taken over by AI. And in the 5-10 even more job will be lost to AI eating its way from the middle going both ways north and south. I am not an expert in this field. we need to make a serious study on this issue and find ways and means to retrain our youth to fit into the new jobs. The advent of the computer and the Internet Age started changing the way we work two decades ago. And three decades from now newer methods of working is going to going to be forced upon us.

    PS A new technology only has a life-san of 50 years. Take the steam engine, typewriters, photography and so on. Hence the advent of the mass use of computers two decades ago would most likely end its good run three decades from now with newer and more improved systems taking over.

  10. >Jimmy Carter-style Presidency in some ways i.e. attention will be given to human rights violations in Third World countries”

    He couldn’t stop the military-industrial complex from sanctioning/aiding the bloody Kwangju Massacre or providing arms to Indonesia that killed or wounded hundreds of thousands of East Timorese. There’s just a limit what a US president could do, unless he or she wants to end up like JFK. Still, Sanders would lift the US on the domestic front which might mean a better, people-oriented economy.

  11. Icrenoir: Given his Jewish background Sanders is fighting an uphill battle all the way. I wish him to win the White House but I do not wish him to become Jimmy Carter II. I remember those bad days during the Carter Administration, unforgettable. Interestingly, he has achieved more as an ex-president than he was in the White House.

  12. >Are these unemployed college graduates really unemployable or are they unwilling to take a lesser job because of ‘no face’?<

    Bravo, LaMoy. What you say is also true. There's no one simple reason for unemployment. Some ten years ago, my daughter, despite her several areas of expertise, was also willing to work for around 35K, something that even those with basic degrees were unwilling to accept. She did, and later got a job she was trained for, with a salary she'd expected. She has been a Republican (to my dismay) since high school, but at least she not only talks the talk and also walks the walk.

  13. Icrenoir: Why dismayed over your daughter being a Republican, bro? You know very well political affiliation in the US doesn’t mean a thing. I’m a Republican because I revere Abraham Lincoln but I generally vote Democrat, though I’d feel like slapping you if you called me one. When it comes to business interests and even some aspects of foreign policy both parties in our two-party dictatorship system are pretty much the same, so I usually go for the lesser of two evils and vote for the side that has a slightly more liberal take on social issues. I even consider myself somewhat of a fiscal conservative, even a libertarian on personal issues, and I’m not frightened by conservative ideas as such or naive enough to think that all liberal policies are sound, just, and feasible. In short, I am not the godless bleeding heart liberal for which many of my more conservative friends take me.

  14. LaMoy: I generally agree with what you say but there were greater differences between the Repugs and the Democrats I once knew. I know that the late Gore Vidal had once characterized them as two rightwings of the same party (a bit extreme, I think). But it’s precisely the more liberal aspects of the Democratic party that make it still worth supporting. You don’t know how extreme my daughter is – she thinks all unemployed people are lazy bums. That’s the kind of Reaganesque fiction that was popular during the 1980s, when talks of ladies in Cadillacs driving to collect welfare checks were popular, ignoring the much more serious social welfare given to corporations (think of the irregularities behind the Savings and Loan crisis, when it was headed by a son of the senior Bush, or the billion-dollar bailouts to corporations deemed “too big to fail” not too long ago). Beginning with the Clinton years, however, the differences between the two parties had diminished significantly, but there are still Democrats who remember when the American Dream was still something realizable, at least to a greater extent than today. That’s why Sanders is becoming a credible threat to the establishment.

  15. “I generally agree with what you say but there were greater differences between the Repugs and the Democrats I once knew. I know that the late Gore Vidal had once characterized them as two rightwings of the same party (a bit extreme, I think).”

    Although I disagree with certain positions Chomsky takes, what he said about the DNC and GOP is spot on :

    “In the United States, the political system is a very marginal affair. There are two parties, so-called, but they’re really factions of the same party, the Business Party. Both represent some range of business interests. In fact, they can change their positions 180 degrees, and nobody even notices. In the 1984 election, for example, there was actually an issue, which often there isn’t. The issue was Keynesian growth versus fiscal conservatism. The Republicans were the party of Keynesian growth: big spending, deficits, and so on. The Democrats were the party of fiscal conservatism: watch the money supply, worry about the deficits, et cetera. Now, I didn’t see a single comment pointing out that the two parties had completely reversed their traditional positions. Traditionally, the Democrats are the party of Keynesian growth, and the Republicans the party of fiscal conservatism. So doesn’t it strike you that something must have happened? Well, actually, it makes sense. Both parties are essentially the same party. The only question is how coalitions of investors have shifted around on tactical issues now and then. As they do, the parties shift to opposite positions, within a narrow spectrum.”

    Having said that I think the GOP has certainly become the party of racists, bigots and religious zealots all masquerading as “constituonalists”

  16. Icrenoir: When you mentioned the extremists from both parties, all hell starts. You’ve to have faith in the intelligence of us voters of average Joes. In fact, our political system, even our system of justice, is designed to depend on the intelligence of the average folks. Yes, sometimes we got fooled. But the famous adage attributed to Abraham Lincoln puts it well: “You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.” In our system of justice, the protection of our rights and liberty is largely achieved through the teamwork of an elitist judge and a jury of a group of average Joes who, working together in a common effort, put into practice the principles of our great heritage of freedom. The judge determines the law to be applied in the case while the jury decides the facts. In a very real sense, therefore, the people must rely upon their peers for the protection of life, liberty, and the pursuit of happiness. Not politicians.

  17. Conrad: Your quote on Chomsky is, in fact, spot on. That’s why I call it a two-party dictatorship. Few people today know that in Abraham Lincoln’s time the Republican was a progressive and liberal party, and that the Democrat was a conservative one. Today the party is hijacked by the neo-cons, especially those from the Tea Party, and membership is overwhelmingly white male. I stay with the party because I enjoy going to the local meetings to taunt and giving hard time to some white trash in there. They tolerate me because I am a generous contributor who has no ambition running for any office. Someone has to bring the Asian-American voice to the party, and I am doing my small part.

  18. LaMoy: When SCOTUS can arrogate to itself the right to decide who should be the president, all is lost. Your faith in the average Joe is ultimately correct – indeed, he/she is the only hope left for a broken system. Chomsky also opined that America’s sovereignty lies in its people.

    “There is one Democrat I will not vote for, Hillory Clinton”

    Whatever the reason, good for you.

  19. LaMoy, good for you, for reminding the GOP that the American experience is not and has never been a white only one. And yes most folks forget the progressive roots of the Republican party and that the DNC had the Dixiecrats , in my opinion precursor to the Tea Party.

    As I have said before I’m more conservative leaning but when it comes to the DNC and GOP P.J O’Rourke should have the last word – “The Democrats are the party that says government will make you smarter, taller, richer, and remove the crabgrass on your lawn. Republicans are the party that says government doesn’t work, and then they get elected and prove it.”

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