Southeast Asia from Scott Circle: Trump-Najib Meeting Gives Malaysia-U.S. Relations Shot of Adrenaline

By Murray Hiebert, Senior Adviser and Deputy Director (@MurrayHiebert1), Southeast Asia Program (@SoutheastAsiaDC), CSIS

Malaysian prime minister Najib Razak’s visit to the White House on September 12 has injected new energy into a bilateral relationship that had slipped into a funk during the last two years of the previous U.S. administration. Some of this coolness resulted from Najib’s crackdown on his political opposition and the U.S. Department of Justice launching a corruption investigation into the dealings of a Malaysian state investment fund. 

Malaysia, for its part, was stunned when President Donald Trump pulled out of the Trans-Pacific Partnership (TPP), which would have given a boost to Malaysia’s economy and integrated the United States more deeply into Asia’s economy. 

But those issues were set aside during the meeting between the two leaders. The two leaders avoided a joint press conference, but Trump during a brief photo opportunity said “We’re talking about trade—very large trade deals. Malaysia is a massive investor in the United States in the form of stocks and bonds.” Trump also credited Malaysia for its strong role in combating Islamic State and other terrorist threats in Southeast Asia, and for helping to put economic pressure on North Korea. 

Najib also focused on trade and investment in his pre-meeting remarks, touting a deal between Malaysia Airlines and Boeing to purchase more than $10 billion in aircraft over the next five years. He cited $7 billion in pension fund investments in U.S. infrastructure projects and $400 million in high-tech investments by sovereign wealth fund Khazanah as the type of Malaysian investments in the United States that are intended to increase. And Najib reiterated Malaysia’s commitment to combating terrorism in order to keep both the United States and Malaysia safe from their mutual enemies. 

Trump and Najib discussed tensions in the South China Sea, where China, Malaysia, and three other countries have overlapping claims. According to their joint statement at the end of the visit, the leaders called on disputing countries to “refrain from action that erodes trust and confidence and escalates tension, including the militarization of outposts.” As if to signal that Malaysia seeks to carefully balance its ties between Beijing and Washington, a Chinese submarine was visiting a Malaysian port at the time Najib arrived in Washington.

The two leaders also talked about ways to press North Korea over its nuclear weapons program as Trump works to line up Asian countries willing to reduce their economic ties with Pyongyang. Trump said that Malaysia, which earlier had significant business dealings with the regime, “does not do business with North Korea any longer, and we find that to be very important.” 

Najib and Trump discussed the need to “end the violence” against the Rohingya Muslim minority in Myanmar and “ensure that humanitarian relief reaches victims immediately,” according to their joint statement. 

There was no mention in the leaders’ joint remarks before the meeting about the Justice Department’s ongoing criminal investigation into more than $3.5 billion missing from the 1Malaysia Development Bhd fund, some of which were laundered through American financial institutions. A court hearing into this case is scheduled to begin in Los Angeles a few days after Najib leaves the United States. 

Najib, the first Malaysian leader to visit the White House since 2004, probably would have liked to hear Trump tell him that he was ending the investigation, but the Malaysian prime minister will likely be happy if his visit demonstrates back in Malaysia—where he faces elections before August 2018—that the U.S. investigation is really a relatively minor issue and that he can still be welcomed into Trump's Oval Office as an important Southeast Asian leader. 

Economically, Najib wanted to get a read on future economic cooperation between Malaysia and the United States. Malaysia was one of the 12 parties to the TPP, which Trump pulled out of in his first days in office. Additionally, Malaysia is one of 16 countries that Trump has threatened to investigate and punish because of their large trade surplus with the United States. Najib was expected in his meeting with Trump to assure the president that Malaysia is exploring ways to reduce the deficit and buy more American products, with the Malaysia Airlines deal with Boeing being a prime example. 

U.S.-Malaysia relations had improved dramatically since Najib took over in Malaysia in 2009, shortly after Barack Obama won the presidency in the United States. The two countries stepped up military cooperation as China became more assertive in pressing its claims in the South China Sea. In 2015, Obama became the first U.S. president to visit Malaysia since Lyndon Johnson visited in 1966. 

But by the end of the Obama administration, relations had cooled because of Najib's crackdown on the media and political opponents, including throwing opposition leader Anwar Ibrahim back in prison on sodomy charges. With Trump in the White House and his administration's downplaying of human rights and democracy concerns, Najib's handling of the opposition was not likely a focus of the White House meeting. 

Two key areas of cooperation between the two countries continued in the final years of the Obama administration and the early Trump administration despite the general overall cooling: counterterrorism and military-to military ties. With the increased threats from Islamic State in Southeast Asia with the return of fighters from Syria and Iraq, Malaysia had stepped up counterterrorism cooperation with the Federal Bureau of Investigation and U.S. intelligence agencies over the past two years. 

Trump and Najib also pledged to strengthen defense ties, including in the areas of maritime security, counterterrorism, and information sharing between security forces, according to their joint statement. As China has become more assertive in the South China Sea, Kuala Lumpur has increased military cooperation with the United States, including ship visits and joint exercises. Malaysia is particularly anxious about the Chinese Navy's activities off the coast of Sabah and Sarawak where state-owned Petronas is pumping oil and gas. 

Murray Hiebert is senior adviser and deputy director of the CSIS Southeast Asia Program.
Biweekly Update

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Timor-Leste reaches deal with Australia on maritime boundary dispute 
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Myanmar government under pressure as violence against Rohingya escalates 
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Cambodian government cracks down on opposition and media 
Cambodian police on September 3 arrested Kem Sokha, president of the opposition Cambodia National Rescue Party, and charged him with treason on September 5 for allegedly plotting to overthrow the Cambodian government with U.S. support. The U.S. ambassador to Cambodia Bill Heidt on September 12 rejected the allegations and called on the Cambodian government to release Sokha. Radio Free Asia on the same day closed its Phnom Penh office, saying it had been forced to do so by a government that “has no intention to allow free media to operate” before next year’s elections. The Cambodian government previously forced the Cambodia Daily newspaper to close on September 4 on alleged tax violations and shut down the U.S.-funded National Democratic Institute on August 24.

Former prime minister flees Thailand before trial verdict 
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Malaysian opposition leaders testify for inquiry into 1990s central bank losses 
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Singapore declares first female president 

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Photo Credit: Alex Wong/Getty Images
Murray Hiebert
Senior Associate (Non-resident), Southeast Asia Program