VZCZCXRO2974
OO RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHKL #0644/01 2040829
ZNY CCCCC ZZH
O 220829Z JUL 08
FM AMEMBASSY KUALA LUMPUR
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1398
INFO RUEHGP/AMEMBASSY SINGAPORE IMMEDIATE 4554
RHEHNSC/NSC WASHDC IMMEDIATE
RUCNASE/ASEAN MEMBER COLLECTIVE PRIORITY
RUEHAK/AMEMBASSY ANKARA PRIORITY 0123
RUEHBY/AMEMBASSY CANBERRA PRIORITY 2590
RUEHLO/AMEMBASSY LONDON PRIORITY 0454
RUEHKO/AMEMBASSY TOKYO PRIORITY 2547
RUEHWL/AMEMBASSY WELLINGTON PRIORITY 0565
RUEHBS/USEU BRUSSELS PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RHHMUNA/CDR USPACOM HONOLULU HI PRIORITY
C O N F I D E N T I A L SECTION 01 OF 04 KUALA LUMPUR 000644
SIPDIS
FOR EAP AND INR
SINGAPORE - PASS TO ASSISTANT SECRETARY HILL
E.O. 12958: DECL: 07/22/2028
TAGS: PGOV PREL PHUM KDEM KJUS MY
SUBJECT: MALAYSIA'S POLITICAL CRISIS
REF: A. KUALA LUMPUR 609 - UMNO RESISTS REFORM
B. KUALA LUMPUR 160 - ELECTION SHOCK
Classified By: AMBASSADOR JAMES R. KEITH, FOR REASON 1.4 (B AND D).
Summary and Introduction
------------------------
1. (C) The next four weeks will be a telling period in the
history of the United Malays National Organization (UMNO)
rule in Malaysia. For the first time in its fifty-year
dominance, UMNO is faced with a multi-racial opposition
alliance that has some credible prospect for forming the next
government. To date, it appears the ruling party finds this
situation intolerable. UMNO leaders, united behind but also
in a sense using Prime Minister (PM) Abdullah, have made it
clear that they are willing to blacken Malaysia's reputation
to ensure the end to opposition leader Anwar Ibrahim's
political challenge. The coming Parliamentary session in the
latter half of August is the next likely setting for a
showdown, and could precipitate another arrest of Anwar if he
is deemed to be doing to well politically between now and
then. Conversely, if the ruling party concludes it has him
boxed in UMNO may be content to use short-term measures such
as judicial restraining orders and the like to prevent him
from addressing and attracting a national audience.
2. (C) We should continue to speak out publicly in support
of the rule of law, taking care not to undermine our
principled position by being perceived to be too close to the
opposition. If the authorities escalate their rhetoric in
anticipation of another arrest of Anwar, we will need to
adjust accordingly. If, on the other hand, the ruling party
restrains itself from arresting Anwar again in August, we
will want to consider our longer-term approach to a period of
prolonged uncertainty. For the time being, we should continue
to press hard the bilateral initiatives currently underway as
these are tied directly to profound U.S. interests and
support the development of a more transparent and accountable
set of systems in Malaysian government and society. As we
begin to develop our public diplomacy programs for the coming
fiscal year, we will seek to give pride of place to the rule
of law. End Summary and Introduction.
What does UMNO want?
--------------------
3. (C) The ruling party wants to stay in power indefinitely,
and that means Anwar and the multi-racial opposition front he
is leading must fail. At least so far, there is scant
evidence of a more thoughtful and forward-looking analysis
within UMNO. In fact, the ruling party could find some common
ground with the opposition if it were willing to countenance
gradual development of a two-party system of checks and
balances. Instead, the ruling party defines national
security primarily as a matter of protecting UMNO's
superiority and ensuring that "people power," or a level
electoral playing field, cannot become the opposition's means
of toppling the ruling party.
How is UMNO getting what it wants?
----------------------------------
4. (C) The ruling party is relying primarily on its own
party structure and the embedded system of carrots and sticks
to keep party membership in line. As in other one-party
states, the party is seen opportunistically as a mechanism
for personal advancement and enrichment. There is an
ideological component, in terms of Malay supremacy, but that
is in practice a matter of institutionalized opportunism. In
good times UMNO can maintain control by distributing power
and money to get what it wants. In bad times, it uses the
stick, and for now that means intimidation. The ruling elite
maintains control over the security apparatus through party
stalwarts who run the security institutions, mainly the
police but also the military. We believe the military will
remain loyal to legitimate leadership and is not a likely
tool to overturn an elected, royally-approved and Malay-led
government from either the ruling or opposition side. The
police, on the other hand, follow orders from the ruling
party. The "commando-style" arrest of Anwar last week, the
roadblocks and security checks throughout the city of Kuala
Lumpur, the recent arrest of blogger Raja Petra, intimidation
of Sabah politicians, and the authorities' strident rhetoric
are all part of a broad message to the Malaysian people that
they had better not stand in UMNO's path. In today's
Malaysia, one can get along by going along (and of course one
can go farther as a Malay rather than a Chinese or Indian),
but it is also true that one can be run over. We only have
anecdotal evidence for this, but the sad spiral into past
patterns may have become the predicate for some middle and
upper class Malaysians who have the option of emigrating.
Rather than wait to be run over, it is far preferable to get
out of the game.
What happened to post-election reforms?
---------------------------------------
5. (C) It is deja vu all over again. Just as in Abdullah's
first term, characterized by lofty rhetoric in support of
political reform but virtually no action, after the March
elections Abdullah's prominent reform initiatives seem to
have evaporated into nothing (ref A). Despite strong popular
support for political reform, there is evidently even
stronger opposition to reform within the ruling party. Those
who have the most to lose through reform are the same ruling
elites, including Abdullah's own circle, who must be
persuaded to allow reform to happen. It would take strong
leadership to push that sort of initiative through the party
structure, perhaps going over the heads of party elites and
enlisting the support of the masses. Abdullah doesn't seem to
have that kind of leadership in him, even if that were his
goal.
6. (C) Instead, the ruling party seems intent on sustaining
the patina of reform without actually undertaking any step
that might genuinely involve systemic change or weakening of
executive power. For example, against the backdrop of
opposition leader Anwar Ibrahim's arrest, last week the
government arrested a number of immigration officials for
corruption. These men are to be forgiven for wondering, "why
me?" Of all who might be prosecuted, including the most
senior leaders or their families, why these relative small
fry? Through their sacrifice UMNO can claim action against
corruption without actually doing much of anything.
What does Anwar want?
---------------------
7. (C) This question is not as easily answered as one might
think. For the short term, he wants to be Prime Minister.
First and foremost Anwar is a pragmatist, as evidenced by his
ability to yoke together in an opposition front the Islamist
party (PAS) and the Chinese. What are his firm guiding
principles? What are the limits of his ability to compromise
or accommodate? We are not sure. It was clear, for example,
that he tolerated PAS's use of America as a political foil
during the recent campaign season, and opposition foreign
policy announcements on Mideast issues since the election
have tended to follow PAS lines. But broadly speaking, he
wants political liberalization and he can be expected to be
an ardent supporter of the rule of law and a market economy,
given his personal history. Malaysian foreign policy might
not change as much as we would like to think under and Anwar
government, especially in areas relating to Islam and the
Middle East in which PAS will have an important say.
8. (C) For now, we may have to content ourselves with
identifying what Anwar does not want. He does not want to be
boxed in and made irrelevant by UMNO, or jailed. Anwar
currently speaks in terms of "becoming Prime Minister or
going to jail," as an either/or proposition. At age 61, he
does not want to let slip what may be his last, best chance
to lead the Malaysian government. He also does not want
arch-nemesis DPM Najib Tun Razak to become Prime Minister, as
Anwar believes Najib is much more likely than Abdullah to use
harsh authoritarian measures to stop him and the Opposition.
What will happen in the months ahead and what should we do?
--------------------------------------------- --------------
9. (C) UMNO will try to keep Anwar on the defensive and
prevent him from winning defections to his opposition front
from the ruling party's coalition. The loose coalition of
UMNO loyalists who seem to have banded together around
Abdullah will likely try to limit the cost of each step they
feel they must take to contain and eventually eradicate
Anwar's influence. If they can preserve the status quo
without putting Anwar in jail on the sodomy charge perhaps
they will do so, content to keep it as a ready tactic to
deploy against him whenever necessary. If Anwar is unwilling
to remain boxed in by that tactic, and history suggests
precisely this outcome, the authorities seem entirely
prepared to put him in jail for a longer period of time. The
government has taken a strong stand against popular street
demonstrations, hoping to prevent Anwar from developing the
kind of national popular response that will be necessary to
create an environment in which he can win converts from the
ruling party coalition.
10. (C) The skirmishing around these objectives will
continue throughout July and August, and we can expect the
opposition to seek to up the ante the closer we get to the
Parliamentary session in the latter half of August. The
initiative rests with Anwar. If he goes quiet, his political
hopes fade and his personal freedom is more secure in the
coming weeks; over a longer period Anwar sees himself as
vulnerable to jailing or government action unless he removes
himself from politics. The greater his political success, the
greater a threat he is to UMNO, and the more his personal
freedom becomes problematic.
11. (C) We need to continue to speak with authority from
Washington and this Embassy in support of the broad
principles underlying the debate in Malaysia. We should avoid
undermining our principled position, and the opposition
parties themselves, by appearing too close to the
personalities involved, especially Anwar. Publicly, our words
should continue to revolve around universal values, the
criticality of the rule of law to every dimension of our
bilateral relationship and Malaysia's political and economic
success.
12. (C) Privately, we will want to underline the futility of
the Malaysian effort to deny the political nature of the
crisis before them. Whatever they believe about the "facts"
of the sodomy case, at this point the ruling party has no
chance of success in conveying to the Malaysian or
international audience that this is merely a case of one
citizen's charge against another. The authorities themselves
betray that fiction on a daily basis in the pages of the
domestic press, and barely one in ten Malaysians are buying
into the party line a survey tells us. UMNO leaders may fail
to grasp the consequences of upping the ante; they hear what
we are saying, but do not understand sufficiently well how
difficult it will be for them to overcome the shadows they
are casting on the country. They no doubt thought they were
choosing the more palatable path in using the criminal law,
and thus the sodomy charge, rather than detaining Anwar as a
matter of national security under the Internal Security Act.
But contrary to their intent, many in the international
community will take this as escalation. Now the criminal law
is laid bare as a political tool, just as useful to the
ruling party as the national security law.
What is the long-term horizon for bilateral ties?
--------------------------------------------- ----
13. (C) Most of our relationship already hews tightly to the
principle of mutual benefit. Our liaison, law enforcement,
military, and commercial ties are well developed and tied
directly to key national interests on both sides. Regardless
of the heat of the rhetoric between us, I would expect
Malaysia to seek to preserve the core relationships it has
with us. With regard to the political dimension of our
policy, Malaysia already has a less than inspiring record at
the UN and is keen to preserve its options with the likes of
the Nonaligned Movement. It may not be possible for Malaysia
to become less helpful in international political areas
identified with the United States, and it is unlikely to
retreat in areas that are primarily multilateral
(peacekeeping, for example). The biggest costs to us over the
long term if Malaysia continues to undermine its own legal
system are precisely in the domestic legal arena.
14. (C) Much of the promise of our bilateral ties is rooted
in the notion of a transition towards a thriving civil
society and robust rule of law in Malaysia. We wish to expand
our export control and non-proliferation cooperation with
Malaysia, for example. It is neither in our interest nor
Malaysia's for this country to become increasingly a place
where smugglers can do good business. Thwarting such a
development (or rolling it back) requires a sophisticated set
of export control laws and robust enforcement by a strong and
secure government, not one struggling to justify itself to
its citizens. Despite the local paranoia about U.S.
intervention in internal affairs, our influence is actually
being brought to bear to support and promote precisely those
objectives that most Malaysians want for their own benefit.
15. (C) If the authorities are able to get through the next
several months without doing fatal damage to the rule of law
in Malaysia, I hope the public diplomacy dimension of our
bilateral ties will take on a decidedly more legal and
judicial cast. We should push ahead with our FTA talks if
possible because that serves both our own economic interests
as well as the broader goal of establishing more transparent
and accountable systems in this country. In addition, to try
to bring public focus to the centrality of the rule of law in
our ties, we might want to organize visits in the short and
medium term by a Supreme Court Justice, the Attorney General,
and representatives of the American Bar Association. We will
also review our international visitor program and other
people-to-people exchanges in the coming fiscal year to
ensure a central focus on the rule of law. My speeches and
those of my staff will put the rule of law at the center.
16. (C) We will continue to monitor closely the situation
for signs that more robust policy responses are needed. In
the meantime, we should continue to exploit every opportunity
for authoritative bilateral exchange to ensure we have done
all we can to open Malaysian leaders' eyes to the
international costs of efforts that diminish the rule of law.
KEITH