Stockholm ‘risks losing Arab allies’

Swedish political and business leaders have criticized Prime Minister Stefan Lofven’s government for its standoff with Saudi Arabia, saying it would lead to the Scandinavian country losing more allies in the Arab world.
Saudi Arabia recalled its Ambassador to Sweden, Saad bin Ibrahim Al-Brahim, on March 11 after Swedish Foreign Minister Margot Wallstrom attacked the Kingdom’s human rights record. Sweden then decided not to negotiate a fresh five-year defense-industrial trade agreement with Riyadh.
“The decision not to negotiate a new defense-industrial agreement has damaged Sweden’s reputation. This is about Sweden’s credibility as a contractual partner. That credibility is important to a relatively small country like Sweden. This whole situation is unfortunate,” Carl Bildt, a former foreign minister, was quoted as saying by Defense News.
The Lofven government’s decision will have serious implications for Swedish trade and political relations with Arab League countries, warned Leif Johansson, chairman of Swedish telecom giant LM Ericsson.
“Making oneself an enemy of the Arab League has the potential to cause very great damage. It will be several years before we know how this will play out, and it will depend entirely on what Sweden does to repair our relations with these countries,” said Johansson, a former CEO of Volvo Group.
The government’s action in canceling fresh agreement talks will “weaken Sweden’s voice globally,” said Anna Kinberg-Batra, leader of the Moderate Party. “It remains to be seen what effect this hasty decision will have on trade and jobs. We are a country that is dependent on exports,” she said.
Abdulkhaleq Abdulla, a UAE-based political scientist and analyst, said that pulling the Saudi ambassador may well be the boiling point of the crisis, but he expects it to start to cool off soon.
“It’s Saudi Arabia’s right to be dismayed by what has been said by Sweden as it is an involvement in its internal affairs especially when it comes into a sensitive subject such as the human rights issue,” Abdulla said.
“I hope this issue remains closed between the two kingdoms and I think it will, because this crisis does not deserve escalation,” he said.
Abdulla added that none of the Gulf capitals would want an escalation of this crisis. However, if they are called upon, they would support Saudi Arabia.
Sweden’s defense exports declined by 33 percent to $1.3 billion in 2014. Of this amount, around 14 percent of the export value that year was earned from sales to Saudi Arabia, the UAE, Qatar and Oman.
Sweden’s leading captains of industry, including Stefan Persson and Annika Falkengren, have petitioned the government to negotiate a new defense-industrial agreement in order to safeguard Swedish exports, and business interests among Arab nations.
In a joint statement, business leaders urged the government not to walk away from talks. “Without trade, Sweden will lose the opportunity to make its voice heard in a globalized world, and to achieve real change.”
Saudi Arabia is one of the world’s largest arms importers. “The repercussions of the Swedish move will not just be confined to the arms trade,” said Riad Kahwaji, chief executive of the Institute for Near East and Gulf Military Analysis in Dubai. “It will be more than this. The way it goes is if you don’t want to do business with Saudi Arabia — selling arms — the Saudis will not do business with you in everything else. Period,” he said.
“It will also have repercussions with arms deals in other countries in the Gulf because they are very close and they will start having fears that the Swedes will do the same thing with them,” he said.
“The impact on the Swedish arms market will be greater than just the Saudis, and most likely include other countries.”