10 août 2018 | Local, Terrestre

Saudis would only hurt themselves by cancelling Light Armoured Vehicle contract


Saudi Arabia is expecting a full apology from Canada for a tweet that raised questions about human rights issues in the Middle East country.

It is unlikely that would be coming anytime soon.

So the dispute between Saudi Arabia and Canada continues.

In recent days, Riyadh suspended diplomatic ties with Canada, expelled the Canadian ambassador and recalled its own envoy to Ottawa after Foreign Affairs Minister Chrystia Freeland and her department criticized the regime on Twitter for its arrest of social activists, demanding their immediate release.

Angered by the condemnation, Saudi Arabia has also tried to sting Canada's economy by halting future trade and investment deals and by cancelling lucrative scholarships that would have seen 15,000 of its citizens study in Canada. One media report said Saudi banks and pension funds were ordered to sell off their Canadian assets, although that report remains unconfirmed.

Bloomberg News has reported that any move by Saudi Arabia to stop new investments and unload assets in Canada is likely to have limited impact. Saudi assets in Canada are confined mainly to stakes in upscale hotel operators, some small stock holdings in companies like Canadian National Railway and grain facilities, Bloomberg noted.

What is interesting is what Saudi Arabia hasn't done.

It is still willing to sell oil to Canada and has not put any roadblocks on that money-making venture. The Saudi Press Agency confirmed Thursday that the “diplomatic crisis” wouldn't affect the kingdom's petroleum sales to Canada. But that has also raised questions in Canada about why we are buying oil from Saudi Arabia when we have such large reserves ourselves?

The big question is whether the Saudis will withdraw from its $15 billion deal to buy Light Armoured Vehicles from General Dynamics Land Systems of London, Ont.?

It could happen but such a move would likely only hurt the Saudis. They need the vehicles and to negotiate a new contract with another arms supplier, plus get delivery of that equipment, could take years.

Then there is the supply of parts and other support for the existing LAVs that the Saudis previously purchased from General Dynamics. Would shutting down all links to the LAV supply chain make sense for the Saudis?

Finance Minister Bill Morneau said Thursday he was still unsure if the General Dynamics contract would be affected.

Defence Watch submitted a series of questions to General Dynamics asking whether it would be halting production of LAVs destined for Saudi Arabia and would GD continue to provide spare parts for LAVs already delivered? “General Dynamics Land Systems-Canada declines to comment,” spokesman Doug Wilson-Hodge stated in an email.

Full article: https://ottawacitizen.com/news/national/defence-watch/saudis-would-only-hurt-themselves-by-cancelling-light-armoured-vehicle-contract

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