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Cablegate: Malaysia Hosts Group of 8 Islamic Developing

VZCZCXYZ0006
PP RUEHWEB

DE RUEHKL #0591/01 1930551
ZNR UUUUU ZZH (CCY ADB3A7B1 MSI6094 538)
P 110551Z JUL 08
FM AMEMBASSY KUALA LUMPUR
TO RUEHC/SECSTATE WASHDC PRIORITY 1328
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUCNISL/ISLAMIC COLLECTIVE
RHEHNSC/NSC WASHDC
RUEHGV/USMISSION GENEVA 1592

UNCLAS KUALA LUMPUR 000591

C O R R E C T E D C O P Y (TEXT FORMAT)

SENSITIVE
SIPDIS

STATE PASS USTR
GENEVA FOR USTR
E.O. 12958: N/A
TAGS: ECON ETRD EINV EAGR PREL MY IR
SUBJECT: MALAYSIA HOSTS GROUP OF 8 ISLAMIC DEVELOPING
COUNTRIES SUMMIT (D-8) //CORRECTED COPY; TEXT FORMAT//

1. (SBU) Summary: At the Sixth D-8 Summit hosted by
Malaysia July 7-8, leaders from eight developing
majority-Islamic countries focused on the recent steep
global rise in food and fuel prices, and pledged to
increase their intra-group trade and investment. Iranian
president Mahmoud Ahmadinejad used the forum to attack the
U.S. and others for discouraging the "peaceful use of
nuclear energy" by any country, especially in a time of
high global oil prices. Senior GOM officials refrained from
commenting on the Iranian president's rants. End Summary.

2. (U) The sixth Developing Eight Countries Summit (D-8)
took place in Kuala Lumpur July 7-8, 2008. Established in
1997, the D-8 comprises Bangladesh, Egypt, Indonesia, Iran,
Malaysia, Nigeria, Pakistan and Turkey. Five of the eight
leaders attended the summit, including Iranian president
Mahmoud Ahmadinejad (Egypt, Nigeria, and Turkey were
represented by lower level officials). Malaysia is taking
over the group's chair from Indonesia, and will maintain
the chair until the next summit in Nigeria in 2010.

3. (U) The 25-point declaration issued at the summit's
conclusion emphasized trade and investment, noting at the
outset the D-8's call for a "meaningful and fair
conclusion" to the WTO Doha Round; the group also expressed
"full support" for Iran's accession to the WTO. The
group's leaders endorsed a 10 year trade roadmap aimed at
boosting economic cooperation and trade among the members,
with a goal of boosting intra-group trade to about 15-20
percent of their total trade by 2018.

4. (U) The summit's theme of cooperation was belied
somewhat by reported contention between Malaysia, which
wanted the summit to focus on rising food and fuel prices,
and Iran, which discouraged a discussion focusing on fuel
prices. In the end the summit declaration emphasized the
need to address food price increases. However, while
noting the "vital role of energy to achieve sustainable
development and growth", the declaration also urged the
international community to address oil price rises. In this
regard it called for enhanced collaboration in a number of
areas, including "peaceful uses of nuclear energy." In a
post summit press conference, Malaysian PM Abdullah noted
the group's intent to cooperate in efforts to raise
agricultural production of major crops. Before the summit
he had called for a halt to the widespread conversion of
arable land around the world to produce bio-fuels; after
the summit, he pledged that Malaysia would not increase its
oil palm acreage (though neither would it decrease current
acreage).

5. (U) Before the summit Malaysian Foreign Minister Rais
Yatim stated that the issue of Iran's nuclear program would
not be placed on the agenda. However, in interviews with
Malaysian press both before and after the summit,
Ahmadinejad stated that all countries should be able to use
nuclear energy without restrictions, and he suggested that
nuclear technology could be applied in certain
manufacturing and agriculture sectors to boost economic
development. Ahmadinejad said Western powers such as the
U.S. and the UK opposed Iran's quest for nuclear power
because they wanted to sell their own crude oil and gas to
Iran once Iran ran out of such resources itself. He also
blamed U.S. policies that fostered a weak dollar as
contributing to high crude oil prices.

6. (SBU) Comment: Although the D-8 purports to be a
grouping of like-minded countries seeking to enhance trade
and investment among themselves, its intra-group trade
remains relatively inconsequential. Malaysia's cumulative
trade with the other seven D-8 countries currently accounts
for only 4.9% of its total global trade, and only Indonesia
among the seven falls within the ranks of MalaysiaQs 20 top
trading partners. Although the summit declaration is
loaded with action verbs, the underlying thrust is that the
developed world must do more to address issues like food
and fuel prices (as exemplified by PM Abdullah's statement
that Malaysia would not consider a cut in oil palm
acreage).

7. (SBU) Comment continued. The D-8 Summit likely would
attract little attention outside its member states were it
not for the presence of the outspoken Ahmadinejad, for whom
such an event provides a platform to criticize the U.S. and
others. Local press widely covered Ahmadinejad's remarks,

who spoke out several times during his brief visit to
Malaysia. Although Malaysia tolerated the Iranian
president's statements, we did not detect any hint of
official Malaysian acquiescence to his more outrageous
claims, especially regarding supposed U.S. complicity in
the rise of global oil prices. While Ahmadinejad provided
ample opportunity to jump in, Malaysian officials also
steered clear of the Iran nuclear issue.

KEITH

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