Search

Saudi Arabia Falling Behind on Payments in Arms Deal with Canada

Saudi Arabia’s condition is not only following the downward trajectory over the poor record of human rights, but also because it is lagging behind on payments. According to a financial report from the Crown Corporation, which acts as a broker between Saudi and General Dynamics Land System, the kingdom has fallen behind on payments of about $1.8 billion.

The report highlights that the Canadian Commercial Corporation trade receivables increased slightly less than $1 million to $1.8 billion in less than a year.

“Trade receivables are considered past due when the payer has failed to make the payment by the contractual due date,” the report says. “The significant increase in the past due trade receivable is mostly attributable to the ABP contract.”

ABP is an acronym used for “armored brigade program”, according to which Canada is to supply Saudi’s with vehicles, equipment, and training to the Saudi government for over 14 years.

Prime Minister of Canada, Justin Trudeau said last week, that his nation is looking for a way out of this deal, besides citing that confiscation of such a deal would cost Canada $750 million. His consideration to scrap off the deal also implies that Canada duly puts humanity over and above the revenues.

His political opponents however, are not willing to take no for an answer and want the government to scrap the deal without further ado.

“Because there is this gap in payments, it’s another complicating factor that would incur another set of financial liabilities if the prime minister does what he says he’s trying to do,” said David Perry, vice-president of the Canadian Global Affairs Institute.

The talks to scrap the deal have also instigated tensions between the Canadian government and General Dynamics, who need to decide if they should carry on with the production or not.

Correspondingly, if the deal gets scrapped, the government would then have to compensate all the people that it needs to maintain relationships with, within the supply chain – a move that would de-pocket the Canadian government.

Additionally, as per the blueprint prepared after the release of Saudi 2019 budget, the kingdom is on course for the 6th consecutive financial deficit, estimated at $35 billion.

Write a response

Leave a Reply

Your email address will not be published. Required fields are marked *

Close
True News Source © Copyright 2018. All rights reserved.
Close