A diplomatic row between Sweden and Arab Gulf states caused by Foreign Minister Margot Wallstroem’s statements against Saudi Arabia has sparked backlash in Stockholm, as a low in relations threatens business interests between the Nordic country and its Arab trading partners.
Many Swedish business leaders – including those in the country’s large defense industry – are fearful that the rift with the Arab Gulf states, especially with Saudi Arabia, could have large economic implications.
Early this month, a group of 31 top Swedish business leaders - including Volvo’s head, fashion chain H&M’s chairman Stefan Persson and bank group SEB’s CEO Annika Falkengren - petitioned Stockholm to negotiate a new defense-industrial agreement with Riyadh in order to safeguard Swedish exports and business interests with Arab nations.
In a joint statement published by the DN Debatt newspaper, business leaders urged the government not to walk away from talks with Saudi Arabia.
“Without trade, Sweden will lose the opportunity to make its voice heard in a globalized world, and to achieve real change,” read the petition.
Leif Johansson, chairman of Swedish telecoms giant Ericsson whose devices are widely sold in the Gulf region, told business daily Dagens Industri that “if you make an enemy of the Arab League it can cause very major damage.”
Saudi Arabia and the UAE are regular buyers of military equipment from Sweden, according to U.S. arms industry journal Defense News.
In recent years, the Saudi Arabia bought two Saab aircraft and 200 anti-tank missile systems, while the UAE bought two aircraft, 16 light vessels, six radars and seven unmanned aerial vehicles, according to Defense News.
According to a report by U.S.-based analysts IHS, Saudi Arabia is the world’s largest arms importer. Meanwhile, the arms trade is key to other commercial agreements, according to one military analyst.
“The repercussions from such a move by Sweden will not just be confined to arms trade,” Riad Kahwaji, chief executive of the Institute for Near East and Gulf Military Analysis in Dubai, told Defense News.
“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, adding that a disruption in business with the kingdom – a regional powerhouse – could likely have a rippling effect on other nations.
In an attempt at damage control, Sweden’s government called Wednesday for crisis talks with business leaders to discuss their concerns over Gulf trade.
“We’ve invited company leaders who have business in the Gulf region to a meeting because of the fact that Sweden ended its military cooperation agreement with Saudi Arabia,” a spokeswoman for the Enterprise Ministry, Ann Wolgers, told AFP.
“There are a lot of questions around what happens now and there’s a certain amount of concern among business leaders,” she added.
The London-based Asharq al-Awsat newspaper reported on Thursday that the crisis meeting was attended by 40 Swedish experts representing different economic sectors, from industry and commerce to foreign relations. The meeting followed a stormy session in the Swedish parliament.
Finance Minister Magdalena Andersson was quoted by Asharq al-Awsat as calling for “containing the crisis with Saudi Arabia through diplomatic channels available.” According to the newspaper, the finance minister also said that direct contact with the kingdom should be made to strengthen cooperation and joint action between Swedish investment parties and the Saudi authorities, official bodies and companies.
The opposition center-right coalition called for questioning Foreign Minister Wallstroem in parliament over “the political troubles she stirred.”
Meanwhile, Sweden’s Ambassador to the Kingdom of Saudi Arabia Dag Yulin Danflet told Asharq al-Aswsat that his country was “seeking to contain the crisis and miscommunication with Riyadh.”
“Stockholm is trying to reach out to Saudi Arabia and is waiting for a response from them, hoping at the same time there will be a future visit by a senior Swedish official to Saudi Arabia after we receive an invitation in this regard,” the ambassador was quoted as saying.After Swedish Foreign Minister Wallstroem’s anti-Saudi statements in the Swedish parliament, the kingdom withdrew it ambassador in protest. The UAE followed suit by withdrawing its envoy and summoning the Swedish ambassador in Abu Dhabi.
Arab foreign ministers, rallying behind Saudi Arabia, last week issued a joint statement, “voic[ing] their condemnation and astonishment at the issuance of such statements that are incompatible with the fact that the Constitution of the Kingdom of Saudi Arabia is based on Sharia [Islamic law].”
Then on Thursday, amid the widening rift, Saudi Arabia refused to issue any business visas to Swedes, Stockholm’s Foreign Ministry said, according to Reuters.