Why in the world is Saudi Arabia sanctioning Canada?


Canadian Foreign Minister Chrystia Freeland speaks after receiving Foreign Policy’s 2018 Diplomat of the Year award June 13 in Washington. (AFP/Getty Images)

This is the tweet that has launched the oddest sanctions effort I have seen in a long time:

As Vox’s Jennifer Williams explains in great detail, it took just 48 hours for this tweet about Saudi Arabia’s treatment of a women’s activist to blow up. Saudi Arabia’s government rapidly deployed an array of sanctions against Canada, including a freeze on all new bilateral trade and investment, a suspension of all Saudia airline flights to Canada, and an order for 16,000 Saudi students to leave Canada.

There are some puzzling questions about what, exactly, Saudi Arabia is thinking here. As the Wall Street Journal’s Margherita Stancati reports, it’s not like the Saudis have a ton of leverage with Canada. And these sanctions are costly for Riyadh as well:

“Expelling an ambassador over criticism of human-rights issues is the worst thing you can do,” a Gulf-based diplomat said. “It confirms prejudices about Saudi Arabia that exist among businessmen in Europe, for instance, while helping investors from countries where business comes first and that aren’t too concerned about human rights issues.”

Saudi Arabia’s freeze on trade with Canada isn’t expected to affect the Canadian economy. Two-way trade between the countries was relatively small, totaling roughly 4 billion Canadian dollars (US$3.08 billion) in 2017, according to Canadian government data. Saudi Arabia accounts for just 0.24% of Canadian exports in 2016, according to the latest World Bank data.

This kind of move can cast a pall on foreign investors looking at Saudi Arabia, and it’s not like Crown Prince Mohammed bin Salman has been attracting a lot of investment after his takeover. In 2017, the Journal reported this year, foreign investment fell to a 14-year low. Unsurprisingly, Canada shows no signs of acquiescing.

Coming on the heels of Saudi Arabia’s unsuccessful attempt to blockade Qatar into compliance, one has to wonder what Mohammed is thinking. Indeed, that was the question being asked Monday night on Twitter by smart foreign policy observers:

As someone who has written a few things about sanctions, let me offer three not-mutually-exclusive explanations for what’s going on.

First, it might be that this is all about Mohammed. After taking power last year and consolidating it ever since then, Mohammed has attempted some cautious reforms while simultaneously cracking down on any social movement beyond his control. Bessma Momani, a professor at the University of Waterloo, proffered this explanation in the Globe and Mail:

Led by the young and very brash Crown Prince Mohammed bin Salman… this latest move is yet another red line that is being used to rile up nationalists and assert Saudi dominance. Expelling a Canadian ambassador is in keeping with the moves of a crown prince who allegedly took the Lebanese prime minister hostage, rounded up 200 of the most influential and richest Saudis and detained them until they paid part of their fortune back to the Saudi national accounts, and created a diplomatic firestorm with tiny neighbouring Qatar for not toeing the Saudi line on regional affairs.

So maybe this is Mohammed trying to demonstrate that he is in control, even if these sanctions will not lead to any Canadian concessions.

Another possibility is that these sanctions are less about compelling Canada and more about deterring other Western countries from criticizing Saudi Arabia. The Atlantic’s Sigal Samuel gets at this logic:

Picking on Canada, which is not one of Saudi Arabia’s most important allies, is a relatively low-cost way for Riyadh to send a message to the West as a whole. That message, according to [Thomas] Juneau, [a professor at the University of Ottawa who specializes in Middle Eastern affairs] is this: “We do not tolerate criticism of our domestic affairs. If you do criticize, you will be severely penalized.” Juneau argued that this is of a piece with MbS’s broader modus operandi, which involves implementing some reforms while exerting tight control over the process. “When he locks up women’s rights activists at the same time that he’s allowing women to drive—that’s not incoherent. It’s perfectly coherent. That’s his way of saying: am reforming socially, but you guys, you civil society, don’t get any big ideas.”

To be fair to Mohammed, this may have already succeeded in deterring Saudi Arabia’s most important ally from criticizing it on human rights grounds. The Huffington Post’s Akbar Shahid Ahmed reached out to the State Department and got the following response:

“We are aware of Government of Saudi Arabia’s statement recalling the Saudi ambassador to Canada and expelling Canada’s ambassador,” a State Department official wrote in an email Monday afternoon. “Canada and Saudi Arabia are both close allies of the United States. I refer you to the Canadian and Saudi Ministries of Foreign Affairs for further information.”

Saudi Arabia is not, in fact, a treaty ally of the United States ― though Canada, a member of NATO, is.

If this is an example of what Secretary of State Mike Pompeo meant when he said he wanted U.S. diplomats to get their swagger back, then he might be confusing “swagger” with “milquetoast.”

There is one final, more speculative explanation. There has been some recent international relations research into “prestige goods” or “Veblen goods,” things that states spend costly sums of money on with little tangible return. As I explained this summer: “Veblen goods are positional goods, in which demand increases along with price because the good is seen as a display of prestige. Veblen goods can explain why some countries choose to invest in aircraft carriers or space programs when they should be allocating scarce resources elsewhere.” See also Dan Nexon and Paul Musgrave’s 2018 paper in International Organization.

Maybe, just maybe, economic sanctions themselves have become a kind of Veblen good. Not many countries have the resources to impose economic sanctions of any kind on another state in world politics. The United States sanctions a lot, the European Union sanctions some, so do Russia and China, and then . . . crickets.

Except for Saudi Arabia. If Saudi Arabia is seen as a country that can sanction others, it starts to look more like a great power. The very fact that these sanctions are costly is what makes them such a compelling Veblen good. According to this logic, it does not matter whether they work: Most sanctions fail anyway. What makes them successful is that Mohammed has demonstrated that he can impose them in the first place.

These three explanations are not mutually exclusive, and all of them lead to the same prediction: Even if these sanctions are costly to Riyadh, they will be implemented indefinitely.

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