By Derek Pham, Research Intern, CSIS Southeast Asia Program

In 1998, President Bill Clinton declined to attend the APEC meeting hosted by Malaysia and had Vice President Al Gore take his place. It was hoped the meeting would provide a welcome opportunity for the administration to elevate ties with Malaysia, but the outcome resulted in embarrassment. Vice President Gore famously gutted the relationship in a dinner speech so awkward that he walked straight out of the room immediately after delivering it.

Twelve years later, America’s leading diplomat returned to Malaysia determined to not make the same mistake. The sense of magic that accompanied Hillary Clinton’s trip to Malaysia combined with Prime Minister Najib’s national vision provided for ideal diplomatic synergy. This helped Clinton achieve a feat which had eluded her husband: transforming US Malaysia ties from a relationship to a partnership.

In her first visit to Malaysia, and the first trip of a US cabinet member to the country since the fateful 1998 debacle, Secretary Clinton made clear that mutual interests, shared respect, and strategic determination on both side can change the relationship to a sustained partnership.  Clinton’s visit to Malaysia not only reaffirmed this potential, but also demonstrated the fast filling reservoir of goodwill between the two countries.

The image now of the US Malaysia relationship is a far cry from what it used to be. Under the 22 year rule of Dr. Mahathir Mohamed, Malaysia’s foreign policy rhetoric was antagonistic and divisive, belying close economic and security cooperation. Under President Bush and Prime Minister Abdullah, Mahathir’s successor, the positioning of the US in the Middle East and incessant focus on counter-terrorism so alienated Malaysia’s moderate Islamic population that three overtures for Bush to visit Kuala Lumpur were quietly waved off.

In contrast, Najib and Obama made different calculations.  Najib has chosen a new path, altering the words to match the reality – amove is paying dividends for his country. The Prime Minister saw clearly that Malaysian interests including economic growth, national security and global leverage could be enhanced by renewed relations with the United States.  Thus in his first cabinet meeting after taking office he told his team to “Look West.” On the other side of the ocean, Obama declared himself the “First Pacific President” and ran on a platform of multilateralism, respect for other cultures and countries and a broader spectrum of engagement than the war on terror.

This shift in both administrations’ attitudes towards engagement with the other was emphasized by Secretary Clinton’s visit. She recognized Malaysia’s leadership on several platforms.

On the war on terror, Clinton lauded Najib’s initiative to promote religious moderation in the face of Islamic extremism.  She hailed his push for a “Global Movement of Moderates” in his speech at the United Nations as important in mitigating the dangers of alarmist and fundamentalist rhetoric. A deep US commitment along with a willingness to promote the Global Movement of Moderates will help bring Malaysia to the forefront as a leading voice in religious moderation.

On nuclear non-proliferation, Clinton applauded Malaysia for passing its Strategic Trade Act, which mandates the interdiction of shipments of nuclear fuel, weapons parts, and other equipment intended to facilitate proliferation.

On trade, the Secretary said Malaysia’s entrance into the Trans-Pacific Partnership (TPP) demonstrates its desire to be on the cutting edge of new trade architecture and competitiveness in Asia. In both areas, Malaysia is uniquely positioned to use its resources and influence to lead the way in building a more peaceful and prosperous global order.

Perhaps most important of all is Malaysia’s recent economic accomplishments. Even Najib’s critics acknowledge tangible successes from his  New Economic Model.  Within the year, the 2010 World Competitiveness Yearbook ranked Malaysia as the 10^th most competitive economy in the world, well ahead of Germany (16), China (18), and Japan (27). Malaysia also moved five spots, from 22^nd to 17^th, in the World Economic Forum’s Financial Development Report, making it the only emerging market in the top 20. This progress can be attributed to serious efforts to strengthen institutions in the public and private sectors and encouraging increased private participation in developing human capital.

From non-proliferation to trade, Malaysia has begun the process of building the foundations necessary to develop a meaningful partnership with the US. But while the new found partnership may feel robust, of greater importance is whether the partnership can be sustained. Official statements documenting America’s “return” to Asia will not suffice. From the Malaysian perspective, a US “Forward-Deployed Engagement” [See CSIS expert Ernie Bower’s Nov. 2, 2010 blog] strategy must be backed up by a return to economic well being in the US and an American commitment to leadership on trade.  Economic capacity is a necessary condition for the US to sustain its engagement in the region, and Najib has made clear he has every interest in promoting that outcome.

Before leaving KL, Secretary Clinton said her first trip to the country was “the appetizer” and that she intends to return for the “full banquet.” It is likely that she will bring along a guest for that party named Barack Obama.  If the President visits Malaysia as part of his 2011 visit to Indonesia for the East Asia Summit, he will be the first US President to visit the country since Lyndon Johnson. His visit will surely signal a new chapter in US Malaysia relations, and underscore the bilateral transformation that is taking place.

The new US-Malaysia partnership is the result of mutual commitment and vision by two countries that respect one another and share interests in deepening ties.  Leaders on both sides deserve credit for creating a partnership to deliver peace and prosperity to their people. The US focus on Malaysia is a harbinger of deeper engagement with other countries.  Secretary Clinton will not just be making magic in Kuala Lumpur, but throughout the Asia-Pacific.