TO SELL OR NOT TO SELL TO SAUDIS?
Canada, Europe face dilemma over arms deals
The killing of writer Jamal Khashoggi has prompted soul-searching in Canada and some European countries about the sale of arms to Saudi Arabia, long one of the biggest buyers of sophisticated Western weaponry.
On Wednesday, Prime Minister Justin Trudeau appeared to be inching closer to cancelling Canada’s $15-billion deal to sell light armoured vehicles to the Saudis.
On Tuesday, Trudeau seemed reluctant to cancel the deal, billed as the largest arms deal in Canadian history. He cited significant financial penalties — as much as $1 billion or more — built into the contract signed by the previous Conservative government. But he is now suggesting the government is looking for ways to cancel the contract without triggering those penalties.
“We are a looking at ... suspending export permits, which is something we’ve done in the past,” he said on his way into a Liberal caucus meeting Wednesday.
“We’re also looking at the contract to try and see what we can do because obviously, as we get clarity on what actually happened to Jamal Khashoggi, Canadians and people around the world will expect consequences.”
Such is the sensitivity of dealing with the Saudis that several Canadian companies are refusing to even say whether they are attending a major Saudi Arabia investment conference — known as Davos in the Desert.
This week’s Future Investment Initiative in Riyadh has seen numerous highprofile cancellations after Turkey accused the Saudi regime of killing Khashoggi.
But SNC-Lavalin, which has extensive business ties with Saudi Arabia, refused to say whether it would attend this year.
“We opted not to answer anyone on this particular conference,” said SNC-Lavalin spokesperson Nicolas Ryan, referring to numerous inquiries from reporters.
Chantal Sorel, SNC-Lavalin’s executive vice-president and managing director of capital, was a speaker at last year’s conference.
A spokesperson for Canaccord Genuity Group Inc., whose executive chairman David Kassie is also listed as a 2017 speaker, said they would look into whether the company was attending but then did not respond to further inquiries.
Bombardier Inc., which has an office and transit projects in the country, did not respond to multiple requests for comment on whether it was attending.
Other companies that attended last year’s conference say they had no plans to attend this year, including the Canada Pension Plan Investment Board and Brookfield Asset Management Inc.
The Canadian government is also skipping this year’s conference, according to sources. Last year, then-natural resources minister Jim Carr attended the inaugural edition of the summit.
While the United States ranks first among Saudi’s arms suppliers, Europe, too, has been selling billions of dollars’ worth of weapons to the kingdom for decades.
Appeals have mounted in recent days calling for such deals to be halted. On Sunday, German Chancellor Angela Merkel said that arms exports to Saudi Arabia “can’t take place in the situation we’re currently in,” citing Khashoggi’s death.
But despite the outrage, no European country has yet taken concrete action to change how business is done.
Spain’s prime minister said Wednesday his government would fulfil past arms sales contracts with Saudi Arabia despite his “dismay” over the “terrible murder” of Khashoggi.
Pedro Sanchez told lawmakers that protecting jobs in southern Spain was central to his decision last month to go ahead with a controversial bomb shipment to Saudi Arabia.
In London, British Prime Minister Theresa May also rebuffed a call from opposition lawmakers to end weapons sales to the Arab kingdom, telling parliament on Wednesday that “the procedures we follow are among the strictest in the world.”
Spain, Germany, Italy and Switzerland each accounted for about two per cent of Saudi Arabia’s arms imports between 2013 and 2017, according to figures compiled by the Stockholm International Peace Research Institute, or SIPRI.
France accounted for about four per cent, while Britain took a 23 per cent share of the business — behind the United States with 61 per cent.
Merkel’s economy minister, Peter Altmaier, called Monday for a common European Union position on arms sales to Saudi Arabia, telling a public broadcaster that “only if all European countries agree would this make an impression on the government in Riyadh.”
Even if Germany were to stop the exports, “it will have no positive consequences ... if at the same time other countries fill this gap,” he said.
Britain’s foreign secretary, Jeremy Hunt, highlighted the difficulty in agreeing on a common EU stance on Saudi arms exports, when he pointed out last month that “with countries like Saudi Arabia, countries like China, the way you make the most progress is by talking to them in private.”
He added, “If you talk about these things publicly you lose the access, they say, ‘We don’t want to deal with you’ and you put yourself in a position where you have no influence over what’s happening.”
Should Western nations halt their sales, one country that might step in is Russia.
Russian and Saudi officials discussed possible arms sales including S-400 air defence systems during a landmark visit by King Salman last October, but no contract was signed.
Saudi Arabia also has expressed interest in setting up production of Russian Kornet-EM anti-tank missiles, TOS-1A rocket launchers and AGS-30 automatic grenade launchers and the latest version of the Kalashnikov assault rifle in their country.
A sizable Russian business delegation on Tuesday descended on the investment conference in Riyadh to show that Moscow is unfazed by the accusations against the royal family.
Kirill Dmitriev, chairman of the state-owned Russian Direct Investment Fund, told state-owned Rossiya 24 channel that “Saudi partners are appreciative of our balanced position.”
”We continue to co-operate with Saudi Arabia’s investment fund and other partners,“he added.
Dmitriev likened the investigation into Khashoggi’s killing to recent accusations levelled against Russia over the poisoning of a former Russian spy in Britain and cyber-attacks around the world.
“There’s a lot of speculation and unverified information around,” he said.