Announcement follows the blocking of Swedish Foreign Minister at Arab League meeting
Sweden has announced it will cancel a defence agreement with Saudi Arabia worth billions of crowns to its industry after criticism of Riyadh’s human rights record sparked a diplomatic row.
In response, Saudi Arabia recalled its ambassador to Stockholm on Wednesday, the Swedish Foreign Ministry confirmed.
“Diplomatic relations are not broken. But Saudi Arabia’s ambassador has been recalled,” said Erik Boman, the foreign ministry spokesman.
The oil rich kingdom also accused Sweden's foreign minister of "flagrant interference in its internal affairs, which is not accepted in international conventions."
Wallstroem's criticism of Saudi's human rights record was "harmful to the kingdom," the Saudi foreign ministry added, as an explanation for recalling its ambassador from Sweden.
Sweden’s Social Democrat-Greens coalition government, which came to power last October, has been vocal about its desire to pursue a more human rights-orientated foreign policy.
"The decision on the Saudi agreement had been made some time ago," Prime Minister Stefan Lofven was quoted as saying in the Swedish newspaper Dagens Nyheter. "What has happened in recent days hasn't been decisive."
Saudi Arabia is the third largest, non-western buyer of Swedish arms. In 2014, Riyadh bought equipment worth $39 mn.
On Monday, Saudi Arabia blocked Swedish Foreign Minister Margot Wallstrom from giving a speech to the Arab League in Cairo.
Wallstrom’s office that said the decision was due to Sweden’s criticism of Saudi’s human rights record, as well as labelling the lashing of liberal blogger Raif Badawi “mediaeval.”
Business leaders in Sweden criticised Sweden's cancelling of the arms deal which netted the equivalent of $561 million for Sweden from 2011-2014.
"Saudi Arabia is a very important market for us and a good customer," said Sebastian Carlsson, press officer at the defence firm Saab. "How Sweden handles this can affect us."
A spokesman for Saab told the SVT channel that the company would continue to export sensors and radar equipment to Saudi Arabia, which he said they were “allowed to do by law” in spite of the cancellation.
The Green Party, the junior partner in Sweden’s coalition, has long pushed for the deal to be scrapped.
“This is a win for a clear foreign policy based on respect for human rights and a moral compass where this type of far-reaching military cooperation agreement simply does not fit,” said Asa Romson, deputy prime minister and member of the Green Party.
However, Ulf Bjereld, a professor of political science at Gothenburg University, said the cancellation could isolate Sweden on the world stage.
"But it can also strengthen Sweden's role in that we treat everyone equally and we stand up for human rights," he said.
Dagens Nyheter published an open letter on Friday from 31 business leaders – including fashion retailer H&M's main owner, Stefan Persson, and Investor chairman Jacob Wallenberg – in which they warned that businesses outside the military industry would be harmed by the ending of the agreement.