Ambassador
Speech by Ambassador James R. Keith
Carnegie Endowment for International Peace, Washington DC.
AS PREPARED FOR DELIVERY
February 27, 2009
Potential and Relevance in Malaysia
I am delighted to be here at Carnegie. I’d like to thank Doug Paal and his team for making this opportunity possible.
Clearly these are challenging times. It is hard to say anything new about the scope and severity of the global economic crisis. People are becoming inured to the comparisons and governments are having a hard time living up to the declarations as to what others should do to ensure international cooperation and avoid protectionist temptations. The G-20, G8, APEC, and regional meetings of other institutions have all underlined the core notion that we are all in this together and global coordination will be necessary to gradually resolve the current crisis of confidence and invest together in new institutions, policies, and structures.
President Obama and his team, most notably our Secretaries of Treasury and State, have been vocal in support of international solutions. Secretary Clinton was explicit during her trip to Asia: we are listening actively to our friends and partners to find productive means of managing the current crisis and investing in our shared future.
Secretary Clinton also made clear in her first trip as Secretary that Asia will be a priority for the Obama Administration. That commitment was reflected in the Secretary’s announcement in Jakarta last week that the US would launch a formal process to pursue accession to the Treaty of Amity and Cooperation in South-east Asia – a reflection of the Obama administration's desire for broader and deeper relations with Asia on regional and global issues. The coming months represent an opportune moment for U.S.-Malaysia relations. We have the chance to improve our ties across a broad range of critical issues.
This is not to say we have grave deficiencies in our bilateral ties, but rather we have for years now failed to realize the full potential of the relationship. Malaysia’s considerable strengths should not be ignored. It has produced decades of enviable economic growth rates, a solid foundation for future development in terms of superior transportation and communication infrastructure, and it has developed substantial human resources.
But like every country participating in the global economy, Malaysia faces a basic choice: either it makes the necessary changes or it runs the risk of falling behind. This is the reality we all face. And Malaysia is making some adjustments. The election in March of 2008 was just one of the signs of the new Malaysia that is emerging from the nation’s formative years in the 20th century. More fundamental questions remain for Malaysia as the first decade of the 21st century draws to a close. Will it keep pace with changes in an increasingly interdependent economy? Will it find ways to not only observe the letter but also the spirit of universal standards enunciated through the UN and other multilateral fora regarding export controls, nonproliferation, refugees, migration, labor, and the protection of fundamental human rights as well as the promotion of the rule of law? There is every reason to believe that Malaysia can and will make significant contributions in all of these areas, and more, as it pursues political and economic objectives in the coming decades.
These questions will come to Malaysia whether it is ready to deal with them or not. Like all of us faced with urgent economic, energy, environmental, and broad social and political issues, Malaysia could equivocate or delay, but as the current economic crisis has driven home to so many capitals, including Washington, as difficult as some of these issues might be to deal with now, it is unlikely that procrastination will make for easier policy decisions in the future.
Malaysia’s Potential
Today I would like to point to a few areas of possible cooperation or action in our relationship that represent the unrealized potential of our ties. I will not attempt in this setting today to capture exhaustively each and every facet of our complex ties. Rather, I want to convey a few ideas about means to accelerate improvement leading to higher standards of living and better quality of life for citizens of both the U.S. and Malaysia.
Trade
I am confident that our intense and in-depth discussion of global economic issues will continue as we seek to restore confidence in financial systems and set the stage for resumed global growth. But as we narrow the focus a bit there emerge some serious challenges. Our bilateral Free Trade Agreement (FTA) talks are stretching to the three-year mark and have now crossed a boundary from one Administration in the U.S. to the next. I will not predict how our new Administration will apportion priority among our global, regional, and bilateral mechanisms for advancing our trade objectives and promoting sustainable growth in the world economy. But our trade partners should be very confident of our sustained commitment to those broad trade objectives. Globally, regionally, bilaterally: we seek a more open and a more liberal global trading system. Our FTA talks in Malaysia are a representation of this commitment. In other words, we believe U.S.-Malaysia trade and investment relations have room to grow, but for that to happen Malaysia will need to reduce tariff and non-tariff barriers, create inducements to keep its investment climate competitive, and produce new policies in its domestic economy that in particular will lead to a more liberal environment for trade and investment in services. Why do this? One reason is to increase access to Malaysia’s biggest market while simultaneously raising Malaysia’s profile among potential new foreign investors. But our trading partners should think bigger. Only if there is shared commitment to the global trading system can we instill confidence that our populations will continue to support open, liberal trading regimes. If we’re all in this together, if we intend to share leadership of this system, we must also share the burdens of sustaining it.
These are turbulent times that could well lead to realignment of markets in the global economy. Those economies that adjust quickly to new realities will attract the most trade and investment. Malaysia will decide for itself the pace and scope of its domestic change, of course, as is the case for any sovereign nation. It cannot, however, expect international reaction to be directed by domestic Malaysian priorities. Businessmen and women will go where they can make the most money with the fewest hindrances and the most effective protections under the rule of law. Malaysia could be one of those preferred destinations, but it is reasonable to predict that it will only succeed if it chooses to make itself so by opening further its market, creating a level playing field for all businesses and business people, and investing in the future by strengthening protections of intellectual property rights.
Proliferation
Malaysia has made important contributions to global systems and institutions related to nonproliferation. It is, for example, a productive member of the Asia/Pacific Group on Money Laundering, a Financial Action Task Force style regional body, committed to the effective implementation and enforcement of internationally accepted standards against money laundering and the financing of terrorism. But Malaysia has frankly not acted with a sense of urgency to establish a critical component in the global system of high technology trade, namely a robust export control regime. An export control law has been pending since 2004. One reason this has become an increasingly urgent priority is trade diversion to Iran by entities who seek to exploit the Malaysian system in violation of UN Security Council Resolutions 1737, 1747, and 1803. That alone is a critical motivation for Malaysia to consider as an imperative the strengthening its export controls. But it is by no means the only one. Malaysia needs a strong system of export controls if it is to continue to attract trade and investment at the high tech end of the spectrum. As in many other areas of its foreign policy, Malaysia is moving in directions that point toward the international mainstream, but changes in the world are happening at a much faster pace than is evident within Malaysian society and its economy. Increased scrutiny by the international community of Iran’s quest for nuclear weapons capability and efforts to implement legally binding Security Council Resolutions has already brought Malaysia’s export control policies into international focus. This will only increase as the U.S. steps up its diplomacy with Iran. Malaysia has more to contribute to international mechanisms to manage the flow of sensitive technology, including nuclear and missile-related equipment. What is required is the political will to give priority to this set of policies. This also includes expanded attention by Malaysian authorities on the positive role Malaysia could play within the Non-Aligned Movement to press Iran to cooperate fully with the International Atomic Energy Agency and engage in negotiations to resolve concerns with its nuclear program.
Soft Power, Smart Power
Malaysia has done much to promote regional stability and prosperity. It has contributed to conflict resolution in East Timor and the southern Philippines. Going further afield it helped confront piracy in the Gulf of Aden. But there is a great deal more Malaysia could and should do to bolster the international system that has served it so well over the course of its export-led economic development. The software of the international system as well as the institutions and structures that provide mechanisms for countries to cooperate and co-exist need constant investment. I was surprised to learn upon my arrival last year that Malaysia was not party to some of the fundamental conventions and institutions of the global system. Migration, labor, refugee flows, and human trafficking are all examples of transnational issues that need international responses according to agree international standards. One key set of standards is embedded in the UN’s Convention on Refugees, which Malaysia has not signed. Malaysia’s voting record in the United Nations on a number of key human rights resolutions raises some questions about its commitment to international norms.
The U.S., too, faces severe domestic pressure on immigration and jobs issues, but we recognize that the international community has to create a starting place, a context against which sovereign countries must work through difficult issues. The Convention on Refugees is such a reference point for the international community.
Malaysia has taken significant steps in these areas, including the passage of its 2007 trafficking legislation. But international events are moving faster than Malaysia’s domestic adjustments. Forced labor and labor-trafficking remain key challenges requiring Malaysia’s attention. Of particular concern is the treatment of the millions of migrant workers in the country, who reportedly undergo abusive treatment. Recent press attention on the trafficking of Burmese refugees in Malaysia gives the government an opportunity to show the world its commitment to international standards of refugee protection and combating human trafficking.
If Malaysia were to step up its recognition of and adjustment to regional developments, it could do much more to create regional responses to such trans-boundary, trans-national challenges. Take for example refugee flows in Southeast Asia out of Burma. This has to be one of the Southeast Asian region’s top foreign policy issues. In light of the passage of the ASEAN Charter in 2008, is there more that ASEAN could do? Can Malaysia help alleviate Rohingya and Chin refugees’ suffering? And wouldn’t Malaysia’s adherence to a universal set of standards and policies as embodied in the Convention on Refugees make it easier for it to contribute to regional diplomacy on this subject?
Rule of Law is the Binding Concept
As we consider those steps that will help Malaysia accelerate its adjustment to an exceptionally dynamic international context, the one concept that broadly incorporates all that is required is the rule of law. From a political or trade perspective, looking to new domestic developments or expanded international contributions, the one most effective means of empowering the Malaysian population to fully realize its potential is the strengthening of the rule of law and the concomitant development of robust civil society. The relationship between our two countries will not reach its full potential unless and until the Malaysian people are contributing to their fullest potential.
Conclusion: Malaysia and the Global Agenda
It is Malaysia’s decision whether it wants to gather the political will necessary to take the initiative in our trade relationship--or to push through a strong export control law--or to face squarely the dangers to Malaysian society of failing to alleviate the suffering of Burmese refugees. It will determine how much can be done and how soon. We stand ready to help in any way that is appropriate. Our goal is to realize the potential of this relationship, hand in hand with the Malaysian people. And in so doing, we hope, Malaysia will find ways to increase the relevance of its people, its economy, and its contributions to the international community’s global agenda. We will all be better served it Malaysia decides to take such a course.