Below is the full transcript of Prime Minister Datuk Seri Abdullah Ahmad Badawi’s interview with Al-Jazeera Friday which was aired Saturday evening. The interview was conducted by Teymoor Nibili and aired by the cable news operator on the ‘101 East I talk’ show.

Teymoor: A year ago at the height of the Danish cartoon crisis you said a huge chasm has opened between the West and Islam, and you said that Westerners see Muslims as congenital terrorists. Has much has changed since then?

PM: I do think if there is any change, it is not noticeable. We do not feel there is a change but the unfortunate part is that they continue to remain with their belief.

Teymoor: Why do you think that is?

PM: Because perhaps the tension in the Middle East still continues and so too in other places, which involves some acts of terror by Muslim fighters, if I can use the word, or Muslim terrorists. So that feeling continues.

Teymoor: You have been active in trying to propound a theory of Islam as a moderate religion and that in fact included a meeting with President (George W. Bush) where you reportedly tried to explain to him the common routes of Judaism and Christianity and Islam. How was his response? Did he?

PM: His response was very good. On the occasions where I met him, he had been very frank and very friendly and ready to discuss on anything. I raised some issues, he himself brought up some issues that he wanted to discuss with me.

Teymoor: Such as?

PM: Well on the issue of the Middle East, that is something he is very concerned about, and on issues in other places, he wanted to know my views and how I feel about them.

Teymoor: And yet we still, as you say, a year on, live in a world where the term Islam or Fascism has become common currency.

PM: Well there is one thing. I hate to mention this but I think it is good if I was to mention it. I told him about the Middle East, about Palestine and about Iraq. I’ve been trying to get them to form a government of national unity because I believe that if the people can speak with one voice that is truly representing their people, one government that represents the people, then it is easier to deal with that government.

Teymoor: But we have now a National Unity Government, do you think that’s going to work?

PM: Yes, in Palestine I hope they will work. I hope it will work that is all I can say. It’s not easy. They tried three times. Abu Mazen tried three times. I know this for a fact because whenever I met him, we spoke about this. I told him to continue to persevere to get the people united. All this requires a lot of patience.

Teymoor: What it really requires is Israel to actually recognize the Government and deal with it as an equal, is that going to happen?

PM: Israel must also recognize that there is now a government that represents the Palestinian people. That is very important and I need also to mention to President Bush that when such a government is formed, he should not right away start condemning it in the way that he did when Hamas came to power. At least Hamas should be given a chance. Let us see first how they manage because a group that has been engaged in activities branded as terrorism would normally change when they’re given the power to govern.

Teymoor: What role should the US now play in the Palestinian situation?

PM: The role, I think, is what they should do with the current government. With this government, they should first of all give it a chance. They know all the problems. They’re not stupid. They know all the problems they are facing. They know the history of their country. They know what they are facing. So it is important that the government be given a chance to sort things out. But if they want to engage, they should speak to the government. Of course this will be good. I always believe in engagement and not containment.

Teymoor: Going back to your conversation with President Bush presumably the question of Iraq came up. What is your feeling about the position in Iraq right now?

PM: I have always felt at the time that the US should leave and then let the Iraqis sort out their problems because in some way I believe the presence of US forces do give some reason to perhaps certain groups to continue to resort to the acts of terror in the way they have done. But of course President Bush did mention that. There is a very sizable portion of the people who would like to see the US continue fearing that its departure from the scene would trigger a civil war.

Teymoor: I was speaking recently to the Secretary General of the Organisation of the Islamic Conference (OIC), and he said that he thinks it would be wrong for the US troops to leave because it would leave a power vacuum there.

PM: That’s his opinion but my belief is somewhat different. But we have to consider the Iraqis. There is also this other thing that must take place at the same time to make every effort to reduce the sectarian conflict.

Teymoor: One of the problems that the US claims that it’s facing is interference from Iran. Do you see that?

PM: Well that has always been the perception. There has always been the perception that Iran is interfering. But we have to engage Iraq with Iran. We cannot ignore Iran. We just cannot ignore Iran. It is a big factor in the Middle East policy.

Teymoor: It’s a very clear policy of the US that it will ignore Iran. It refuses to hold a dialogue with Iran unless it’s on the US terms. You’re saying that’s a mistake.

PM: You cannot engage with any group by saying that these are my terms first, now we talk. You can’t do that. If you want to have a dialogue, talk about the terms, discuss the terms, engage them to talk about the terms. But this is not done. I have always had my belief even when I was the Foreign Minister that engagement is better than containment.

Teymoor: Iran’s nuclear programme is something that you have spoken of before and you suggested that you are in support of the idea that they should be allowed nuclear fuel, do you think that Iran is pursuing a nuclear weapon or do you believe their statement that they only want power?

PM: Of all the various discussions that we had with Iran, it agreed that there can be inspections by the IAEA (International Atomic Energy Agency) at anytime. These people from the Atomic Energy Agency can have their office close by and always watch how the programme is going and what the Iranians are doing. They’re willing to do that. It means they are prepared to be open.

Teymoor: Can we speak for a moment about President Ahmadinejad because his position in world perception is not a very good one. He is seen as a monster. Was it your sense when you met him that he is intent upon launching a military attack on Israel?

PM: You see President Ahmadinejad is a man who has been pushed, pressed against the wall. When a person is put in that position, he will react in ways that will make people think, and they will say don’t mess up this chap he is capable of anything. Don’t do that. So it’s going to be very difficult. It is a reaction of a person who feels that there’s so much against him and he’s reacting that way.

Teymoor: Many Americans, many Westerners feel that it’s the Iranian state’s position that Israel must be physically destroyed by military means. Do you believe that?

PM: I don’t think that they would go to that extent. It would be disastrous.

Teymoor: It’s also the belief of many in the West that President Bush is creating a situation with Iran that is identical to the situation with Iraq. Do you think there will be an attack on Iran?

PM: I wouldn’t believe that after having experienced the situation in Iraq. It is not a good experience in Iraq. He also had to face the increasing opposition by Americans towards his policy. I don’t think the President would then go for Iran in the way he has done in Iraq

Teymoor: Perhaps not in the same way but the possibility of limited military action?

PM: That is something that could happen but I think it would be better if no military action is taken against Iran.

Teymoor: Your predecessor, Tun Dr Mahathir Mohamad, has proposed that President Bush is a war criminal and should be tried as such. Do you think that’s too extreme?

PM: That’s his views.

Teymoor: You don’t agree with the opinion?

PM: That’s his views.

Teymoor: Some people say that the reason for that is the somewhat unusual economic policies that Malaysia has in place which favour the indigenous population over some of the minorities. The New Economic Policy as it’s known has been in place for a number of years. Do you see this being a permanent part of Malaysian economic policy?

PM: I don’t think it will be permanent. I don’t think it will be forever. It is important to continue to address the ethnic imbalance. This is absolutely important. The ambition, the vision of the New Economic Policy was, or is even now and we can say that, is not easily achieved. To restructure society we need to eradicate poverty. We are closing the economic wealth disparity between the indigenous people and the non-indigenous to bring about a situation where the indigenous people, who previously had only two per cent of the economic cake, would have a share of 30 per cent. At the same time, we are also creating a situation where the indigenous people can be actively involved in business and industry. That is not easily done.

Teymoor: How long do you think that will take?

PM: We are targeting that by the year before 2020, we should be able to achieve this.

Teymoor: To eliminate that policy entirely?

PM: Once we achieve it, there is no more reason why we should have that policy around anymore.

Teymoor: You have in the past called that policy a crutch and you’ve said continuing reliance on crutches will enfeeble and maybe we’ll eventually end up in wheel chairs, so that you do realize that it is in a way counter-productive.

PM: Yes, yes. That’s why I say we cannot go on with this forever. It is intended to be a policy to help, to assist them to obtain certain objectives. When the objectives are met, there is no reason for the continuation of the policy because the policy is anchored to that objective. The faster we get to that objective, the faster we’ll be able to throw away the crutches.

Teymoor: The foreign media seem to think that maybe one of the problems about foreign investments in Malaysia is the fact that the major political figures in the country, yourself, your predecessor and Dr Anwar Ibrahim are locked in a battle of suspicion and mutual, let’s say, misunderstanding to choose a calm word. How would you characterize that relationship and do you think it’s a problem?

PM: Whether it will be a problem or not depends on how you manage the situation. I have decided not to respond to whatever accusations that are being made against me because I’m concentrating on my job. I have a lot of work to do. I don’t want to be engaged in this kind of verbal war and that kind of things. I have a job to do and I’m doing it. I’m proving to the Malaysians and the Malaysians have noticed it. In Malaysia today, the economy is performing better.