Malaysia-Iran Foreign Relations

Nuclear:

According to Datuk Seri Mohd Affendi Norwawi, a minister in the department of the prime minister of Malaysia, his country is willing to help Iran normalize its relations with the international community over its nuclear program.[1] Malaysia is a member of the Non-Aligned Movement, which released a statement in July 2008 stating that NAM “welcomed the continuing cooperation being extended by the Islamic Republic of Iran to the IAEA” and “reaffirmed that states’ choices and decisions, including those of the Islamic Republic of Iran, in the field of peaceful uses of nuclear technology and its fuel cycle policies must be respected.”[2]

Malaysia was one of only three countries to vote against a November 2009 IAEA resolution rebuking Iran. Shortly after the vote, Malaysia recalled its UN envoy, Mohd Arshad Manzoor Hussain, and the Malaysian Foreign Ministry issued a statement saying that “the voting [of the envoy] was not in accordance with the procedures of the government and therefore the minister of foreign affairs has instructed the permanent representative of Malaysia to the United Nations in Vienna to return to Malaysia for consultations.”[3]

Also in November 2009, Malaysian Deputy Foreign Minister A. Kohilan Pillay refuted allegations that Malaysia was aiding the Iranian nuclear program, saying that Malaysia “was not a center for nuclear weapons shipments to Iran” and denied any role in illegal export of nuclear weapons to the country. Kohilan did, however, name certain individuals and two Malaysian companies that were in violation of the International Emergency Economic Powers Act and the United States Iran Embargo.[4]

[Click here for more information on the Non-Aligned Movement.]

Economic Relationship:

Iran and Malaysia have cooperated in a number of large industrial projects, many of them in the energy sector. In December 2007, the two signed a $6 billion deal to develop areas of Iran’s massive offshore gas fields.[5] In addition, Iran and Malaysia are working towards an extensive multilateral oil refinery deal with Syria and Venezuela. The refinery would be expected to process 140,000 barrels per day in Hom, Syria.[6] In April 2009, the National Iranian Oil Engineering and Construction Company and Malaysian SKSD established a joint company in order to construct the Kadah Refinery in Malaysia.[7] According to an August 2009 statement by Iranian Deputy Oil Minister for International Affairs Hossein Noqrekar-Shirazi, the Kedah refinery will “be supplied with 100,000 [barrels per day] super-heavy and 150,000 [barrels per day] heavy export crudes coming from Iran." Nogreker-Shirazi also announced that Malaysia has asked for Iran’s assistance in the construction of yet another refinery, to be located in the south of Malaysia.[8] At the time of the deputy minister’s statement, the combined value of Iran-Malaysia oil cooperation stood at $22 billion.[9] 

In June 2009, the Iran-Malaysia Businessmen Council was established in Kuala Lumpur.[10] During the same month, Iranian Deputy Oil Minister Seyyed Noureddin Shahnazizadeh met with Malaysian International Trade and Industry Minister Datuk Mustapa Mohamed in Kuala Lumpur to discuss the strengthening of energy ties.[11]  

Malaysia attended the Iran gas forum on September 26-27, 2009 alongside Germany, the United Kingdom, Japan, the Netherlands, and South Korea.[12] In September 2009, Mustapa expressed Malaysia’s hope of boosting the volume of trade with Iran.[13] In October 2009, Iranian Foreign Minister Manouchehr Mottaki praised the diversified bilateral cooperation between Iran and Malaysia and pledged further progress in the areas of energy, banking, housing, and transportation in particular.[14]

In February 2010, the head of the Iranian Offshore Oil Company, Mahmoud Zirakchianzadeh, announced that Iran had reached an agreement with an unspecified Malaysian firm to help develop the Persian Gulf’s Resalat oil field. The $1 billion project is expected to result in a 10,000 barrel per day increase in output with completion within three and a half years.[15]

Although energy relations between the two countries have proved strong, fear of US sanctions resulted in Malaysia’s state-owned Petronas oil company opting to cease gasoline shipments to Iran. The decision took effect in March 2010, with the last reported delivery occurring on March 5.[16] Petronas’ actions notwithstanding, in April 2010, Noharuddin Nordin, the chief executive of Malaysia’s MATRADE, insisted that anti-Iranian sanctions have had little effect on Malaysia-Iran trade relations.[17]

In May 2010, Iranian Finance and Economic Affairs Minister Seyyed-Shamseddin Hosseini and the Second Minister of Finance of Malaysia Ahmad Husni Hanadzlah met to discuss avenues for enhanced economic cooperation. During their conversation, Hosseini indicated that Iran’s energy and banking sectors are open to Malaysian investment.[18]

On June 28, 2010, Iran and the Association of Southeast Asian Nations inaugurated the opening of a joint trade center in Malaysia. According to the ILNA news agency, Iran hopes that the center will increase demand for its products among the Association’s member states and broaden economic ties.[19]

[Click here for more information on Malaysia’s business activity with Iran.]

Diplomatic/Military Relationship:

Datuk Seri Mohd Affendi Norwawi, a minister in the department of the prime minister of Malaysia has said that his country maintains friendly relations with Iran.[20] Malaysian Higher Education Minister Datuk Mustapa Mohamed, in a November 2007 meeting with Iran’s Minister of Science, Research and Technology Mohammad Mehdi Zahedi, expressed his desire to reactivate a memorandum of understanding from 2003 that would allow the two countries to increase educational exchanges.[21] Both countries are members of the Organization of Islamic Conference (OIC) and the Non-Aligned Movement (NAM) and have used these forums and bilateral relations to develop political ties.[22]

In May 2009, Iranian Ambassador to Malaysia Mehdi Khandaqabi indicated that Iran and Malaysia enjoy a high-level cooperation and are experiencing deepening and growing cooperation.[23]  In June 2009, Malaysian Deputy Prime Minister Tan Sri Dato' Haji Muhyiddin Yassin said that “Iran and Malaysia have extensive potential for cooperation and they should try to use all the capacities available in the best possible manner through proper planning."[24] 

In his meeting with Malaysian Ambassador to Tehran Mohammad Sadeq on January 1, 2010, Manouchehr Mottaki praised the two countries' level of cooperation and said that growing ties between Tehran and Kuala Lumpur are the result of rich cultural commonalities and the existence of ample grounds for cooperation.  He further named the oil industry, power plants, infrastructure, and direct investment as areas of opportunity for the growth of joint cooperation. Sadeq, who submitted a copy of his credentials to Mottaki during the meeting, said that the two countries' economic ties should match their political ties.[25]

In March 2010, the head of the Iranian parliament's National Security and Foreign Policy Commission, Alaeddin Boroujerdi, met with Ambassador Sadeq in Tehran. Boroujerdi expressed his view that Iran and Malaysia “should utilize the existing opportunities and potentials to strengthen and consolidate their brotherly relations." He further underlined the importance of private sector business interaction in deepening bilateral ties.[26]

The smuggling of illicit narcotics has emerged as an issue between the two countries. Malaysia and Iran agreed in December 2008 to cooperate on antinarcotics measures through the former’s National Anti-Drugs Agency and Iran's Drug Control Headquarters.[27] Despite such activity, in roughly the first two months of 2010 alone, Malaysian authorities have arrested 41 Iranian citizens on drug-related charges. According to Iranian Ambassador to Malaysia Mohammad Mehdi Zahedi, “there may be mafia or gangs beyond the borders of Iran which are conducting and directing these activities.”[28]