Sweden gave the worst possible Christmas gift to the Swedish communities in Malaysia and Vietnam when its government announced in late December 2010 the drastic decision to close five of Sweden’s embassies, including those in Kuala Lumpur and Hanoi. The decision, which took all parties concerned by complete surprise, came as a consequence of the decision taken by the Swedish parliament to drastically cut funding for the costs of its Government. Sweden’s foreign ministry described it as inevitable cost-cutting measures.
While Swedes and their counterparts in Southeast-Asia still find it hard to believe, the closures, to take place sometime during 2011, now seem inevitable. Unless Sweden’s parliament could be convinced to take up the matter and reconsider the decision taken by its government.
So while the preparations for their closure has commenced, the decision is however not going be implemented without protests and attempts to get Sweden’s politicians to reconsider the matter.
Professors, business representatives and even employees of Swedish government authorities signed an opinion piece (4 January 2011) in one of Sweden’s national daily’s, Svenska Dagbladet (SvD), saying that closing the embassy in Vietnam is no cost saving at all; on the contrary it constitutes significant capital-destruction.
And The Malaysian-Swedish Business Association, MASBA, is now protesting by pleading (sent to newspapers in Sweden) to all the political parties in the parliament to reconsider the so far announced closure of five Swedish embassies.
“We want to see broad political support regarding where Sweden should have embassies. We find that both Kuala Lumpur and Hanoi in this region are missions of the highest importance,” says Hans Bjornered President and Chairman of MASBA to ScandAsia.com.
“Our most affected members are critical and some are using various means to make themselves heard.”
Sweden’s Foreign Minister, Mr Carl Bildt seems to share their view: “I hope that the various voices will reach to the parliament as a whole so the harm could at least be limited onwards,” he wrote in a reply (SvD) already on 5 January.
“In my opinion it is the parliament which has made a decision which is strategic folly for Sweden. At a time when globalization is picking up speed, new economies increasingly become important and our dependence on the world in every way is increasing we need a Sweden which is increasing – not decreasing – its presence around the world.”
“Vietnam is a country of significant potential for the future,” Foreign Minister Carl Bildt went on to write while putting the entire blame on the opposition parties in the parliament, Riksdagen, that forced through the reduced budget for the government’s operational costs.
But to close the Swedish representation in countries of high significance to Sweden and Swedish trade such as Malaysia and Vietnam? The announcement certainly caused many raised eyebrows.
Sweden’s foreign ministry has failed to give any explanation regarding the selection of which embassies to close down.
“No impact analysis was provided. Several of the embassies that were listed have high importance when looking at areas such as development, trade and climate. But among those, I especially want Foreign Minister Carl Bild to reconsider keeping the embassy in Vietnam. It is simply utterly wrong to close it,” Désirè Pethrus (KristDemokraterna), foreign policy spokesman, and Member of Parliament and the Foreign affairs committee, pledged to Carl Bildt (26 January). “The Swedish government should find other ways to save money before it is too late and Sweden’s good reputation built during a long time will be ruined overnight.”
“Sweden has goodwill and constitutes a gateway to Vietnam that other countries are not anywhere near of. The political door-opener accomplished by the direct contacts from its embassy is fully necessary for Swedish companies in a country where business to a large extent also is controlled by politicians,” Pethrus wrote and went on to point out that the cost for the Swedish embassy is 9 million SEK. At the same time its trade is 3.5 billion SEK and Vietnam’s economy is the 12th largest in the world with 89 million citizens.
She also remarked that cost-cutting measures on allocations for the government’s current expenditures is wrong.
The other Swedish representatives of academies, businesses etc. in Hanoi protesting, were also especially critical in saying that the casual handling of the taxpayers’ money was not justifiable.
Furthermore they pointed out that bilateral trade between Sweden and Vietnam has increased by over 50 per cent since 2005 and amounted to 3.2 billion kronor in 2009 and went on to say that once the political storm in the Swedish parliament is over the country would have a scar in the relations to one of the world’s fastest growing economies which hardly can be repaired within the foreseeable future.
“Sweden’s goodwill in Vietnam has given us huge advantages in the trade but now we are sending signals of being uninterested.”
Meanwhile, MASBA (representing 75 members of which the majority are corporate members) points out that Malaysia is one of the most important countries within the growing region Southeast-Asia. There are a number of reasons why it is important for Sweden to keep its embassy here; the most obvious one being: “Business and trade between Sweden and Malaysia have been going on for years. Should then Sweden not still be represented via its own embassy?”
“Several of our Swedish corporations use Malaysia as a regional hub. A continuously upgraded infrastructure, good connections with the outside world, decent political stability, reasonable cost level, good selection of international schools and a multicultural society are factors behind this,” says their President Bjornered.
MASBA also highlights tourism as an increasing sector: “Several forecasts indicate an increasing influx of the number of tourists from Sweden and other countries. Malaysia is also investing in upgrading its healthcare with rehab programmes. The Malaysia My Second Programme started a few years ago and more Swedes will surely spend part of their time here.”
And an official Swedish presence caters for seriousness and guarding of security aspects within the sensitive business that is regular defence procurements.
Furthermore the IT-industry is supported by Malaysia as a priority sector which attracts Swedish companies to Malaysia, and which in turn leads to development and securing many jobs in Sweden.
“Our chamber of commerce MASBA and Embassy of Sweden Kuala Lumpur have during many years collaborated on many projects. In May we are involving a large proportion of the Swedish trade and industries in Malaysia in our so called Sweden Malaysia Innovation Week. Sweden has received many awards as a pioneer within innovations, highlighted by among them the Prime Minister for Malaysia,” Bjornered also highlights.
“Perhaps the effect of the cost saving measures will result in a net loss due to decreasing tax revenue and lost jobs in Sweden,” he asks rhetorically?
The MASBA members are now appealing to all political parties in the Swedish parliament to sit down and if possible come up with the basis for reconsidering the government decision.
“We are of the opinion that the future for Sweden’s embassies, especially those in the regions in the world growing incredibly fast and with strong Swedish interests, should be decided upon by an as wide political majority as possible.”
A similar pledge also comes from Jan Orrnert of MalaysiaSpecialisten, Kuala Lumpur, who promotes Malaysia as a tourism destination and second home country for Swedes: “Sweden’s international reputation is at stake. It is still not too late to save Sweden’s missions that are under threat of closure.”
In an open letter sent to Carl Bildt and the foreign ministry of Sweden Mr Orrnert describes Malaysia as a country of high importance for Sweden’s business and trade. Its export to Malaysia is increasing significantly. And a large proportion of this derives from sales to the Malaysian state.
“I have recently discussed the matter with a person with very close relations to the Malaysian government who reports that the Malaysian government has great difficulty in understanding this decision, especially in times when Sweden’s economy is described as among the strongest in Europe. And the matter is not helped by the fact that one keeps the Swedish embassy in Cambodia while closing the one in Malaysia. From Malaysia’s point of view it is irrelevant whether the budget for the embassy in Cambodia is covered with other budget resources.”
“The decision to close the Swedish embassy in Kuala Lumpur can lead to very severe consequences on several areas. Swedish companies risk losing government contracts here to other corporations in countries with governments which not only in words but also in action show that they take Malaysia seriously. This closure will for Sweden probably cost more then it will gain in savings from closing the embassy.”
Malaysia would most likely downgrade the status of its Stockholm mission and move its responsibility of the Nordic countries to another country. In that case Tourism Malaysia also considers moving its Stockholm office, Jan Orrnert has learned.
Sweden’s Ambassador to Singapore, Ingemar Dolfe, who had just returned from Kuala Lumpur with a business delegation of Swedish companies in Singapore this past week told ScandAsia that no decision has yet been taken how Malaysia will be looked after onwards.
