Why is Saudi Arabia Restricting German Business in the Kingdom? | Al Bawaba
By Eleanor Beevor
Over the past week, business analysts have balked at the news that Saudi Arabia appears to have imposed a boycott on German businesses wishing to strike deals with the Saudi state. Though the “boycott” is not enshrined in policy yet, multiple reports have quoted both German and Saudi sources confirming an impasse.
And until there is confirmation otherwise, rumours of the boycott should be taken seriously. It appears that attempts to divest state projects away from German companies have been in the making for a while – infrastructure projects that seemed likely to go to German firms have changed hands in the last few weeks. Dr. Courtney Freer, a Research Officer at the Middle East Centre at the London School of Economics told Al Bawaba:
Boycott mulled for months
“I do think that Riyadh will follow through on blocking German businesses, at least from government tenders. This decision has likely been mulled over for months, as diplomatic ties between the two have gotten worse. I imagine this measure will primarily hurt large German companies active in the kingdom like Siemens, Bayer, and potentially Daimler; these companies’ employees will also of course be affected as well inside the kingdom.”
What is striking is how narrow the grievances are that reportedly sparked the boycott. Der Spiegel quoted German business owner Detlef Daues, 65% of whose business revenues come from Saudi Arabia, as saying that Crown Prince Mohammed Bin Salman has been “deeply offended” by German government statements and policy of late. Specifically, Prince Mohammed is still apparently upset by a remark six months ago by the then-German Foreign Minister Sigmar Gabriel.
File photo taken April 10, 2018, shows Saudi Crown Prince Mohammed bin Salman posing upon his arrival at the
Elysee Presidential palace for a meeting with French President in Paris. (AFP File Photo/Ludovic Marin)