US pulls out of Iran deal. Ma­hathir sweeps back into power in Malaysia.

The Saturday Paper - - The Week Contents - Hamish McDon­ald

Don­ald Trump de­clared this week: “When I make prom­ises, I keep them.” At the same time he de­liv­ered the les­son that the United States can­not be re­lied on to stick to its agree­ments.

In an­nounc­ing US with­drawal from the Joint Com­pre­hen­sive Plan of Ac­tion, signed in 2015 with Iran by the five per­ma­nent UN Se­cu­rity Coun­cil mem­bers plus Ger­many to wind back its progress to­wards nu­clear weapons ca­pa­bil­ity, Trump has also told key At­lantic part­ners their views don’t count.

As a re­sult, Wash­ing­ton now has three key Euro­pean part­ners – Bri­tain, France, and Ger­many – vow­ing to work with China, Rus­sia and Iran it­self to coun­ter­act its pol­icy in this key strate­gic is­sue. Mal­colm Turn­bull says Aus­tralia will work with them too. Nice one, Don­ald, fol­low­ing with­drawal from the Paris cli­mate ac­cord and the Trans-Pa­cific Part­ner­ship.

The US ad­min­is­tra­tion is now work­ing to reap­ply and in­ten­sify sanc­tions on Iran within the next six months. Th­ese will pun­ish Euro­pean and Asian com­pa­nies do­ing busi­ness with Iran, or im­port­ing its oil, by re­strict­ing their ac­cess to the US bank­ing sys­tem.

The Euro­pean Union and mem­ber gov­ern­ments say they will do their best to im­mu­nise their com­pa­nies from the sanc­tions, and are send­ing for­eign min­is­ters to Tehran next week to as­sure the Ira­ni­ans. “The in­ter­na­tional reach of US sanc­tions makes the US the eco­nomic po­lice­man of the planet, and that is not ac­cept­able,” said French fi­nance min­is­ter Bruno Le Maire. The Bri­tish are in the most del­i­cate po­si­tion. The City of Lon­don would be crit­i­cal to evad­ing US sanc­tions, but Theresa May is des­per­ate for an early US free trade agree­ment as Brexit starts next year. Turn­bull said Aus­tralia “re­gret­ted” Trump’s de­ci­sion and would work with the Eu­ro­peans.

“We en­cour­age all par­ties to con­tinue to com­ply with the deal, and we cer­tainly are try­ing to sup­port that,” he said.

Bri­tish for­eign min­is­ter Boris John­son, who’d gone to Wash­ing­ton in a last-minute bid to dis­suade Trump, said there as “very lit­tle ev­i­dence of a plan B” to the 2015 nu­clear agree­ment, wind­ing back Iran’s ura­nium en­rich­ment ca­pa­bil­ity for 15 years.

Trump’s plan B seems to be that tighter sanc­tions will pro­duce ei­ther regime change or a dras­tic pol­icy re­treat. Many an­a­lysts think in the short term they ac­tu­ally help Tehran hard­lin­ers who op­posed the agree­ment and weaken mod­er­ates around Pres­i­dent Has­san Rouhani.

Iran’s econ­omy is al­ready in bad shape. The nu­clear deal un­locked frozen for­eign ex­change re­serves and let West­ern cor­po­ra­tions look at new op­er­a­tions in Iran. But cum­ber­some in­vest­ment rules, con­tin­u­ing US bank­ing con­trols and ac­tive in­ter­fer­ence by Ira­nian se­cu­rity agen­cies de­layed any in­vest­ment boom. A five-year drought has raised food prices, un­em­ploy­ment is deep­en­ing and the cur­rency is col­laps­ing.

For the time be­ing, Rouhani is in tune with Euro­pean ad­vice to show re­straint. In a TV broad­cast after

Trump spoke, he said Iran would take no im­me­di­ate steps to re­sume ura­nium en­rich­ment, and would talk to the five non-US sig­na­to­ries. If Iran’s in­ter­ests could be se­cured un­der the agree­ment, “we will con­tinue the process”, he said. “And if the deal is to be just a piece of pa­per, then our next steps will be clear.”

Talk­ing the walk

As Trump spoke, his new sec­re­tary of state, Mike Pom­peo, was on his way to Py­ongyang for his sec­ond meet­ing with Kim Jong-un to pre­pare for the North Korean leader’s ren­dezvous with Trump, likely to be in Sin­ga­pore in mid June.

Pom­peo brought back three de­tained US ci­ti­zens, to be greeted by Trump as a win. But while mak­ing this ges­ture, the North Kore­ans in­di­cated through a broad­cast last week­end they were irked by Trump’s brag­ging it was his mil­i­tary threats that brought them to ne­go­ti­ate. Kim also met China’s Xi Jin­ping on Tues­day for the sec­ond time in six weeks to cover his back.

Trump thinks his Iran de­ci­sion will strengthen his cred­i­bil­ity with

Kim. “To­day’s ac­tion sends a crit­i­cal mes­sage,” he said. “The United States no longer makes empty threats. When I make prom­ises, I keep them … Plans are be­ing made, re­la­tion­ships are build­ing. Hope­fully, a deal will hap­pen, and with the help of China, South Ko­rea and Ja­pan, a fu­ture of great pros­per­ity and se­cu­rity can be achieved for ev­ery­one.”

Kim is likely to con­clude that: (a) so far, US threats to North Ko­rea have been empty, and (b) prom­ises by a US pres­i­dent are worth­less if they can be re­v­ersed by the next pres­i­dent, or un­der­mined by a hos­tile congress, as hap­pened with the Clin­ton ad­min­is­tra­tion’s 1994 agree­ment with Kim’s fa­ther for en­ergy sup­plies in re­turn for a nu­clear cap.

Malaysia’s tsunami

For 60 years since the Bri­tish handed over power, the United Malays Na­tional Or­gan­i­sa­tion (UMNO) has ruled in the Malayan penin­sula, with Sabah and Sarawak later added to form Malaysia. Po­lit­i­cal con­test was all about lead­er­ship within UMNO. With Malays and other in­dige­nous com­mu­ni­ties 69 per cent of the pop­u­la­tion, it couldn’t be oth­er­wise – as long as they were happy.

And UMNO has worked hard to keep them happy. After anti-Chi­nese ri­ots in 1969, UMNO took up the mes­sage of a book writ­ten by one of its young guard, Ma­hathir Mo­hamad, to re­dress im­bal­ances in wealth and op­por­tu­nity by giv­ing Malays pref­er­ence in civil ser­vice jobs, fi­nance and con­tracts. The other big eth­nic mi­nori­ties, the Chi­nese (24 per cent) and In­di­ans (7 per cent) had to lump it, or leave.

Ma­hathir, who be­came prime min­is­ter in 1981 and stayed un­til 2003, per­fected the Malay bias and cen­tralised power in his of­fice, in­ter­ven­ing to curb the in­de­pen­dence of the courts and the monar­chy (ro­tated among the nine Malay sul­tans). After he stepped down, he con­tin­ued to pull strings in UMNO, in­stalling and re­mov­ing suc­ces­sors.

But this year, Ma­hathir de­cided UMNO it­self had to go. Its prime min­is­ter, Na­jib Razak, had gone beyond the usual Malaysia Inc crony­ism to an ob­scene de­gree. He is al­leged to have creamed a mas­sive kick­back on a French sub­ma­rine con­tract while de­fence min­is­ter, then had a Mon­go­lian trans­la­tor mur­dered for at­tempt­ing black­mail over the deal. As prime min­is­ter, he has been ac­cused by US au­thor­i­ties over $US4.5 bil­lion miss­ing from an of­fi­cial de­vel­op­ment fund, 1MDB, in­clud­ing $US681 mil­lion that went into his per­sonal ac­count.

Much of the money went into lux­ury prop­er­ties, a yacht, and jew­ellery via a high-liv­ing young fi­nancier, Low Taek

Jho, who had be­friended Na­jib’s wife, Ros­mah Man­sor, and step­son, Riza Aziz.

Ma­hathir’s switch gave him some strange bed­fel­lows. He aligned him­self with the Pakatan Hara­pan (Al­liance of Hope) coali­tion led by the fam­ily of his for­mer deputy prime min­is­ter, An­war Ibrahim, and in­clud­ing his for­mer Chi­nese-based op­po­si­tion. When An­war mounted a lead­er­ship chal­lenge in 1998, Ma­hathir had him put away on du­bi­ous sodomy charges, later over­turned. Na­jib con­jured up the same charge to jail the trou­ble­some op­po­si­tion leader An­war in 2015 for five years.

Na­jib tried ev­ery­thing to pro­duce an elec­tion win: ger­ry­man­der, cam­paign re­stric­tions, penal­ties for “fake news” on so­cial me­dia, polling on a work­day, state-con­trolled me­dia play­ing the race and re­li­gion cards, and bribery to keep the Malays on side. Wed­nes­day’s vote saw what Ma­hathir pre­dicted, a Malay “tsunami” against a cor­rupt leader.

A shat­tered Na­jib emerged to con­cede de­feat on Thurs­day morn­ing. Ma­hathir, with the sup­port of about

122 of the 222 mem­bers of par­lia­ment, was likely to be in­vited later by the king to form a govern­ment. Ma­hathir has promised to seek a par­don for An­war as soon as pos­si­ble, and if An­war re­turns to par­lia­ment in a by­elec­tion, to hand over lead­er­ship to him.

In a time of per­ceived demo­cratic re­gres­sion, it was a re­mark­able turn, from an elec­torate that seemed bribed into com­pla­cency and a 92-year-old for­mer leader usu­ally noted for his

• au­to­cratic ways.

US Pres­i­dent Don­ald Trump an­nounces the US is pulling out of the Joint Com­pre­hen­sive Plan of Ac­tion.

HAMISH McDON­ALD is The Satur­day Pa­per’s world edi­tor.

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