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Sweden-Saudi Arabia Diplomatic Row Intensifies

03.27.15

Sweden-Saudi Arabia Diplomatic Row Intensifies

03.27.15
Margot Wallstrom

By Havard Bergo for Global Risk Insights

It was perhaps not a surprise that Margot Wallström, Sweden’s Social-Democratic foreign minister, dared to criticize the – by any standards – abysmal state of human rights in Saudi Arabia. The feminist, progressive profile of her left-wing government hardly goes hand in hand with the human rights situation in the deeply conservative Islamic kingdom.

Yet, Sweden clearly did not anticipate the highly confrontational response from the Saudis and other Gulf countries.

In January, Ms. Wallström tweeted that the flogging and imprisonment of the Saudi blogger and human rights activist Raif Badawi, sentenced to 10 years in prison and 1000 lashes, was a “cruel attempt to silence modern forms of expression.” Soon after, speaking in the Swedish parliament she also publicly criticized the kingdom as a “dictatorship” where “women’s rights are violated.”

The Saudis responded swiftly and blocked her from holding the keynote address at the Arab league summit, accusing her of “flagrant interference in internal affairs, which is not accepted in international conventions.”

Ms. Wallstrom had been invited by the summit as a guest of honor after the Swedish government recognized Palestinian statehood last year, an act that at the time lead to praise from countries across the Middle East.

Tit-for-tat reprisals soon followed with Sweden cancelling a multi-million dollar arms deal while Saudi Arabia, followed later by the United Arab Emirates calling home their ambassadors to Stockholm.

Companies urge trade before human rights

Two starkly different countries – atheist social-democracy and Islamic absolute monarchy – Sweden and Saudi Arabia have nevertheless maintained healthy political and economic relations for years.

Saudi Arabia is Sweden’s 18th largest trade partner, accounting for nearly $1.3 bn of exported goods last year. Multinationals like Volvo, Ikea and H&M, as well as many smaller Swedish companies, have operations in the Gulf country.

Saudi Arabia is also among the biggest export markets for the powerful Swedish defense industry, with sales peaking at $350 mio. in 2011.

Sweden signed a detailed memorandum of understanding on military cooperation and weapons trade with the Saudis in 2005. The agreement has resulted in more than $567 million in arms deals since 2011 and is up for renewal for another five-year period this May. However, the Swedish government promptly announced that they intended to let it expire after the diplomatic humiliation at the Arab League summit.

More than 30 of Sweden’s leading business elite, including the influential Wallenberg family and the chairman of H&M, signed an open letter to the government pleading for the continuation of the arms deal, arguing that “Sweden’s reputation as a partner in trade and cooperation is at stake.”

The business community has also been concerned by the announcement that Saudi Arabia would no longer issue business visas to Swedish nationals.

Andreas Åström of Stockholm’s Chamber of Commerce fears that the escalating reprisals and increased tension will damage Swedish interests in Saudi Arabia, saying that “this is going to have a vast negative impact for the companies with interest in the region. This is not good for Swedish business society and, in the long run, jobs in Sweden.”

Progressive foreign policy meets realpolitik

Foreign minister Margot Wallström has vowed to pursue a “feminist foreign policy” aimed at strengthening women’s rights and representation around the world.

Sticking up for human rights issues is popular with Scandinavian voters, who have a low tolerance for sacrificing a liberal and progressive foreign policy on behalf of realpolitik and economic interests. This was demonstrated by the harsh public criticism the Norwegian government received for their (unsuccessful) attempts at mending relations with China, after they awarded the Nobel Peace Prize to Chinese dissident Liu Xiaobo.

Business communities in both countries have emphasized that a progressive foreign policy is likely to incur economic penalties, yet such international cynicism is decidedly unpopular among voters.

Swedish politicians are also appearing to be increasingly toughening their stance, with several supporting the notion that sticking up for human rights should come before arms trade with the Saudis.

Carl Schlyter of the Green party – member of the governing coalition – said that the diplomatic crisis “proves that those who argue that a military agreement with Saudi will help human rights have been completely wrong.”

Quickly making enemies abroad

The new Swedish government has not wasted any time making enemies in the Middle East. They fell sharply out of favour with Israel when they decided to recognize Palestine as a state, likely part of the explanation why Prime Minister Netanyahu recently claimed the Scandinavian countries were conspiring to overthrow him.

Now Sweden faces a backlash from the Gulf countries as well. Carl Bildt, a former foreign minister and prime minister, urged the government to quickly find a solution, arguing that what mattered most was Sweden’s credibility as a bilateral partner: “That credibility is important to a relatively small country like Sweden. This whole situation is unfortunate.”

The government has made next year’s re-election to the UN security council a key strategic goal, and the recent events have a real chance of undermining the support needed.

It is still possible for Sweden and Saudi Arabia to find a diplomatic solution to the crisis. However, the public cancellation of the military deal dramatically raised the ante in this case and made it far more difficult for the Swedish government to retract without losing face domestically.

It is worth remembering that Sweden has not shied away from foreign policy controversies before – the celebrated former prime minister Olof Palme was vocal in his harsh criticism of both the US and the Communist bloc during the 60s and 70s.

It is likely that the current left-wing government will decide to not stand their ground this time as well.

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