Saudi has zero tolerance on meddling
riyadh — In less than a year, Saudi Arabia has curbed ties with two members of the Group of Seven nations as Crown Prince Mohammed bin Salman implements assertive foreign policy.
Saudi Arabia suspended diplomatic ties and new trade dealings with Canada on Sunday in response to Canada’s call for the release of women’s rights activists. In November, the kingdom recalled its ambassador to Germany and cut back commercial ties with some German companies after the then-foreign minister suggested the kingdom had orchestrated the surprise resignation of Lebanese Prime Minister Saad Al Hariri, an allegation it denies.
Under Prince Mohammed, Saudi Arabia has reacted against countries that it perceives as intervening in its internal affairs.
The move against Canada “seems intended to convey that Saudi Arabia’s government will not yield to external pressure on what it views as national security issues,” said Emily Hawthorne, Middle East and North Africa analyst at Texas-based advisory firm Stratfor Enterprises LLC. The Canadian dollar declined as much as 0.4 per cent, and was trading little changed at 1.3003 per US dollar as of 1.15pm. In Toronto. The Tadawul All Share Index fell 0.2 per cent at the close in Riyadh, posting its fifth straight session of decline.
“I wouldn’t classify this as an overly aggressive move, as it’s largely symbolic, but I think it will definitely stoke uncertainty for investors, until we can gauge how long this chill will last,” Hawthorne said.
SNC-Lavalin Group Inc., Canada’s biggest engineering and construction company, is seeing “no immediate impact” to its operations in Saudi Arabia, according to Daniela Pizzuto, a spokeswoman.
“We trust that this situation will be resolved at the earliest opportunity,”
Crown Prince Mohammed bin Salman
Pizzuto said in an e-mail message on Monday. “We greatly value the relationships that have been built and our contributions to the Kingdom of Saudi Arabia.”
US-Saudi ties, which had suffered under president Barack Obama, are now on the upswing under his successor Donald Trump, who shares the kingdom’s antipathy towards Iran.
Paul Sullivan, a Saudi specialist at Georgetown University in Washington, said: “Taking Canada and Germany to task could disrupt things for a bit, but my sense is this will blow over and at the moment this is an example of signal-sending by MBS [Mohammed bin Salman].”
Canada and Germany are members of the G-7, a trading bloc that also includes France, Germany, Italy, the UK and the US. Canada is also a member of the Five Eyes, an intelligence alliance also comprising Australia, New Zealand, the UK and the US.
The standoff pits a Saudi government that’s slowly opening the door to women’s rights against Canadian Prime Minister Justin Trudeau, an outspoken champion of women’s advancement.
Just two months ago, Saudi women were given the right to drive.
Saudi investments in Canada include G3 Global Holdings Ltd., a joint venture between Bunge Ltd. and Saudi Agricultural & Livestock Investment Co., which purchased the former Canadian Wheat Board in 2015. Saudi Arabia has invested about $6 billion in Canadian businesses since 2006, data compiled by Bloomberg show.
Tanks, armoured vehicles and parts and motor vehicles accounted for about 45 per cent of Canada’s 2016 exports to the kingdom, while crude oil and copper ores made up about 98 per cent of imports, according to a Canadian government report. Saudi Arabia supplies oil to the Irving refinery in Saint John, New Brunswick. So far this year, Canada has exported C$1.4 billion ($1.08 billion) in merchandise goods to Saudi Arabia and imported goods worth C$2 billion, leaving it with a cumulative year-to-date trade deficit with the kingdom of about C$640 million, according to Statistics Canada data.
“The Canadian government was only voicing a frustration..., but was unwise to do it in comparatively strident language,” said Neil Partrick, a Saudi expert and editor of