The Nuclear Security Summit in Washington D.C. suggests that Malaysia is siding with the United States with respect to the issue of Iran and nuclear proliferation. Apparently, even before the meeting between Prime Minister Najib Razak and President Barack Obama, Petronas, the state petroleum enterprise of Malaysia, has ceased shipping of gasoline to Iran in early March, anticipating an international, or at least a US-led trade sanction on Iran.[1] I say apparent because the Prime Minister claims the report is incorrect, stating it is only a spot sale instead of a stop of some long term contract.[1a] I am unsure what is the truth at the moment.
Notwithstanding the accuracy of the report, I seriously doubt the effectiveness of economic sanctions. I am not a fan of wide-ranging sanction and it is easy for me to rationalize this position.
I am also not a fan of the Iranian government for far too many reasons but if the proposed sanction is as wide ranging as I think it will be — adding gasoline into the list is a big thing — it is likely to hurt ordinary Iranians in Iran more than hurting Ahmadinejad government.
While the possible hardship may provoke popular Iranian sentiment against the Iranian government, such tactic appears too pragmatic — too realpolitik? — for my liking. Furthermore, the large protest immediately after the election in Iran demonstrates how hard it is for such sentiment to prevail.
This thinking of mine is a product of observing both Myanmar and North Korea. What exactly has trade sanction achieved there? Both regimes are still in power. In fact, their policies have hardly changed.
Sanctioning Iran may potentially further isolate Iran like how Myanmar and North Korea have been isolated without any real success in achieving the expressed goal of the sanction.
This has not even considered the fact that for the sanction to work — work in the sense that Iran will not be able to get its supplies from alternative source — the whole world must work together. A sanction by only the US and its allies will benefit others who refuse to participate, at the expense of countries like Malaysia. China for instance is dragging its feet in joining such sanction. If it refuses, the US-led sanction will be worthless.[3]
Despite this, I do appreciate Malaysia’s position and the reality on the ground. Malaysia has a lot more to gain by cooperating with the US than with Iran. Total trade between Malaysia and the US far exceeds that between Malaysia and Iran. Thus, I personally rather have Malaysia be diplomatically closer to the US than with Iran. I for one support better relationship with the US although, I can agree with Tunku Aziz that it should not be done “at any cost”.[4]
Still, ideally, I would prefer to have Malaysia to work with both the US and Iran. To have to choose between the two is an unfortunate choice to have.
[1] — Petronas, the Malaysian state oil company, said on Thursday it had stopped selling petrol to Iran. The move follows growing pressure from the US to shut off Tehran’s access to refined oil products.
The company, which is a long-term supplier of Iran, said it had not shipped petrol to Iranian ports since the middle of March. Petronas refused to give any further details on its decision to put an end to sales. [Petronas halts petrol sale to Iran. Kevin Brown. Financial Times. April 15 2010]
[1a] — NEW YORK, April 17 — Foreign news reports quoting Datuk Seri Najib Razak as saying that Malaysia had cut off gasoline supplies to Iran are incorrect, the prime minister said.
The prime minister said Petronas was involved in a spot sale to Iran in mid-March under a third party deal but since then there had been no requests. [Report On Gasoline Cut To Iran Incorrect, Says Najib. Tham Choy Lin. Bernama. April 17 2010]
[2] — Petronas gave no reason for the pullout but an industry source in Dubai said the company wanted to safeguard its business exposure in the United States.
On Monday, Malaysian Prime Minister Najib and US President Barack Obama agreed on the importance of Iran strictly abiding by its obligation under international nuclear non-proliferation pacts. [Petronas halts fuel sales to Iran as sanctions loom. Reuters via The Malaysian Insider. April 15 2010]
[3] — Companies around the globe have been reducing ties with Iran ahead of possible new U.N. sanctions against Tehran’s controversial nuclear program. But a Chinese-owned company is taking a different approach on trade with Iran.
Traders from Singapore say China’s Sinopec oil company is sending more than 200,000 barrels of gasoline to Iran. The move comes as more and more Western nations have cut or reduced business with the Islamic Republic fearing international sanctions. [Chinese Companies Pursue ‘Talk Now, Invest Later’ With Iran. Carla Babb. Voice of America. April 16 2010]
[4] — [The cost of Malaysia-US relations. Tunku Abdul Aziz Ibrahim. The Malaysian Insider. April 17 2010]