Canada and Saudi Arabia diplomatic ties resume

Canada and Saudi Arabia have reached an agreement to restore full diplomatic relations, a move that holds significant implications for Canada’s economy.

The reconciliation follows a series of diplomatic efforts by Prince Mohammed bin Salman to improve Riyadh’s global image and prioritize economic reforms and foreign investments.

Rift between countries

The rift between the two countries began in 2018 when Canada’s embassy in Riyadh criticized the detention of activists through a Twitter post in Arabic. In response, Saudi Arabia suspended trade deals with Canada, expelled its ambassador, and prevented the Canadian ambassador from returning. Furthermore, a scholarship program that enabled Saudi students to study in Canadian universities was also canceled.

However, in a joint statement released by the Saudi and Canadian foreign ministries, both nations expressed their desire “to restore diplomatic relations between the two countries on the basis of mutual respect and common interests.”

While it remains uncertain whether Canada will moderate its criticism of Saudi Arabia’s human rights record, Dennis Horak, Canada’s former ambassador, suggested that it is possible to address human rights concerns while maintaining diplomatic ties.

Economic implications

The economic implications for Canada are significant. Restoring full diplomatic relations with Saudi Arabia allows Canada to engage with a crucial player in the global arena, ensuring that its voice is heard at senior levels within the Saudi government. This is particularly important considering Saudi Arabia’s role as a major player in the international economy and its potential as a source of foreign investment.

Prince Mohammed’s efforts to improve Saudi Arabia’s image and attract foreign investment align with Canada’s economic interests. By repairing relations, Canada can capitalize on the economic opportunities presented by the Kingdom’s ambitious reform plans, including Vision 2030, which seeks to diversify the Saudi economy and reduce its dependence on oil. Increased collaboration and engagement with Saudi Arabia can open doors for Canadian businesses, boost trade, and foster economic growth.

Diplomatic shift

Moreover, the diplomatic breakthrough between Saudi Arabia and Canada is indicative of the broader diplomatic shift undertaken by Riyadh in recent months. The Kingdom has actively sought to mend regional relationships, including reaching out to arch-rival Iran, spearheading efforts for peace in Yemen, and playing a leading role in ceasefire initiatives in Sudan. These actions have garnered praise from the United States and demonstrate Saudi Arabia’s commitment to regional stability.

The restoration of full diplomatic relations between Saudi Arabia and Canada has positive implications for Canada’s economy. By reengaging with Saudi Arabia, Canada can access economic opportunities, attract investments, and strengthen its position as a global player in the Saudi market. This development aligns with Saudi Arabia’s efforts to improve its international standing and foster economic reforms, providing a mutually beneficial platform for both countries.