Dubai: Saudi Arabia’s latest move to freeze all new trade and investment relations with Canada is unlikely to have a significant impact on the Kingdom’s economy, analysts said.
The Kingdom early on Monday recalled its ambassador to Canada, and declared the Canadian ambassador to Riyadh persona non grata, giving him 24 hours to leave Saudi Arabia.
But analysts don’t expect the move to have much of an impact on Saudi Arabia’s economy given that trade between the two countries isn’t very large. Saudi Arabia ranked 23rd in 2016 on the list of Canada’s import partners, with Saudi imports into Canada valued at $935.5 million, according to figures from World Integrated Trade Solution.
An analyst who chose to remain anonymous because the issue is politically sensitive said the move by Saudi Arabia was a political one that should not have a meaningful impact on the economy as bilateral trade is “quite limited.”
“I don’t think it’s going to have a big impact on either side,” the analyst said.
Bilateral merchandise between Saudi Arabia and Canada stood at $3 billion in 2016, according to figures from a report by Canada’s Library of Parliament. In comparison, the volume on non-oil trade between the UAE and Saudi Arabia is worth around $24 billion.
Asked whether the tensions are likely to escalate to involve Saudi allies such as the UAE, the analyst said, “It is a particular Saudi issue, so it’s between Saudi and Canada. It’s not a GCC-wide issue, and it’s specific to a Canadian citizen in Saudi Arabia.”
On Monday, following the statements from both sides, Saudi Arabia’s main bourse index ended the day nearly flat, seemingly unaffected by the move, and was down just 0.15 per cent.
Charles-Henry Monchau, managing director and chief investment officer of Al Mal Capital in Dubai, pointed that Saudi companies have very little exposure to Canada, hence the muted reaction in the Kingdom’s stock market.
Saudi Arabia’s decision to freeze new trade and investment ties came after Canada’s Minister of Foreign Affairs, Chrystia Freeland, said on her Twitter account that she was “very alarmed to learn that Samar Badawi, Raif Badawi’s sister, has been imprisoned in Saudi Arabia.”
The Canadian Minister said she continues to “strongly call for the release of both Raif and Samar Badawi.”
Saudi Arabia described Canada’s stance as “blatant and unacceptable interference” in the domestic affairs of the Kingdom.
“The Ministry affirmed that the Canadian statement is a blatant interference in the Kingdom’s domestic affairs, against basic international norms and all international protocols. It is a major, unacceptable affront to the Kingdom’s laws and judicial process, as well as a violation of the Kingdom’s sovereignty,” said a statement from Saudi Arabia’s Foreign Ministry.
