US looks on as Malaysia wobbles

Protests for greater democratization have spurred a strategic Muslim ally of the United States to clamp down and prioritize security concerns over civil liberties. Opposition parties have promised more protests, while the government states it will not tolerate any more public demonstrations that it deems a threat to national security. All of this takes place with critical democratic elections on the horizon.

Although this scenario could apply to Pakistan, a key ally in the US-led "war on terror", it applies equally to Malaysia, a country that in recent years has been on the periphery of US foreign policy and now suddenly is at risk of becoming another regional political hot spot. Malaysia is important both strategically and economically as the world's 34th largest economy and currently the US's 10th-largest trade partner.

Geographically, Malaysia straddles the Strait of Malacca through which approximately 50% of the world's oil supply flows, including over 70% of China's imports. The US navy has pushed to play a larger role in patrolling the strategic waterway, including protecting against possible seaborne terror attacks.

Malaysia is also home to the Southeast Asia Regional Center for Counterterrorism, which has trained over 1,000 police and military personnel on strategies to combat terrorism in the region. Multilateral security agreements between Malaysia, Indonesia and Singapore have recently helped to hobble Indonesia-based terror group Jemaah Islamiyah and other al-Qaeda-linked operations in Southeast Asia, including in the southern Philippines.

On the surface, Malaysia is precisely the type of moderate and modern Muslim country that the US should prioritize for improving relations. The current prime minister, Abdullah Badawi, is a third generation Islamic scholar and has advanced a concept known as "Islam Hadhari", which focuses on progressive values, moderation, and social justice in Islam. He is currently the chairman of the Organization of the Islamic Conference, the premier global forum for Muslim country leaders.

Abdullah was appointed to power in 2003, ending the autocratic reign of the previous prime minister, Mahathir Mohamad, who had earlier anointed Abdullah as his eventual successor. In 2004, his United Malays National Organization (UMNO) won an overwhelming majority, winning 198 of 220 parliamentary seats and gaining electoral ground against a radical Islamist party, though the polls were somewhat tainted by restrictions that prevented full participation by opposition parties.

Although it has many blessings, Malaysia also suffers from a growing number of dire domestic problems. Mahathir's 22-year reign saw dramatic economic growth, but at the same time entrenched social discrimination, with preferential government policies drawn on ethnic lines that pit the majority ethnic Malays against the minority Chinese and Indians. As a result, endemic corruption, ethnic tension and uneven economic development now threaten to overwhelm Abdullah's once popular administration.

While Malaysia is relatively prosperous compared to other countries in the region, many areas of the country are still impoverished. The sharp ethnic and religious divide between Muslim Malays, Buddhist and Christian Chinese and Hindu Indians has clearly been accentuated by recent events. Earlier, a high-profile court case pitting the state against a Malay woman who attempted to officially convert from Islam to Christianity stirred fundamental tensions over ethnic identity, religion, and civil liberties. (By law Muslims in Malaysia are not allowed to change their faith).

Most importantly, the government remains largely unresponsive to these mounting tensions. Proposed anti-corruption measures have stalled, the police are still largely unaccountable and electoral barriers for opposition parties remain in place. All of these problems have in recent months fueled some of the largest protests in Malaysia's history. The government has responded by cracking down hard on peaceful demonstrators and banning further protests - an order that the political opposition and non-governmental organizations have defied.

Further instability could imperil US interests, as well as the security of key neighboring US strategic allies, including Singapore.

The US has a surprisingly large lever to push for democratic change in Malaysia. The two sides have been engaged since June 2006 in extensive talks about signing a new free trade agreement (FTA), which if implemented would give Malaysian export products preferential treatment in US markets. Because exports represent roughly 130% of Malaysia's gross domestic product, potential greater access to US markets is a big economic deal.

The administration of US President George W Bush has made it clear that it is committed to successful negotiations, but could also use the talks to wring important political concessions from Abdullah, in particular towards good governance and democratic change, reforms that could help to relieve the pressure surrounding the ongoing protests and government crackdowns.

For instance, a US push for a gradual easing of electoral restrictions on opposition parties and greater freedom for non-governmental organizations to put a check on government would allow some of the pressure now building on the streets to be vented in parliament. Abdullah's UMNO party, which has ruled the country uninterrupted since achieving independence in 1957, currently enjoys an overwhelming majority in parliament.

The US could also pressure Malaysia to more effectively implement its anti-corruption legislation. Endemic corruption continues to weaken the Malaysian state and provides a big hurdle to US investors who must abide by the Foreign Corrupt Practices Act. In return, the US could offer preferential concessions in an FTA to groups that increasingly are being left behind by Malaysia's development, including fisher-folk and agricultural workers.

Pakistan serves as an increasingly grim example of what can go wrong when the US fails to engage a strategic ally by lobbying for democratic and economic reforms that could go to redress underlying socio-economic problems. And the US could also arguably enhance its ongoing fight against terrorism by improving and re-engaging its relationship with Malaysia. Indeed, a more democratic, prosperous and religiously moderate Malaysia could serve as a valuable conduit for future US engagement with the broader Muslim world.

Tony Wilson is an intern with the national security team at the Center for American Progress in Washington DC. He is a graduate of the University of California, Berkeley.

--www.atimes.com--